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On larger business transformation journeys it is hard to prioritize across multiple opportunities. The challenge increases when you pursue these opportunities across a diverse customer base. A simple chess board can support you in planning your expansion strategy.
Nail it before you scale it
What is in play here is an expansion of the generic challenge of how to develop one opportunity. A journey from an idea, via first customer to a successful ramp-up. The new element here is to manage a portfolio of opportunities. The end goal is the same for each opportunity. But the complexity grows when you are handling multiple new opportunities at the same time.
The issues you are likely facing are
- Which customer/s you will target first for each new opportunity
- How to secure that you don’t have too many new opportunities coupled to the same customer
- How many new opportunities you can develop in parallel with available resources
- How different the customer buying process is for these new opportunities compared to your core business
- Finding the right balance between initial direct or sell-with channel and when to scale with channels.
Map out the opportunities and customers on a chess board
A common mistake is to rely on a combined funnel for all opportunities. One where you have both the opportunities you need to nail first and the ones representing scaling the business. This merged funnel can give you wrong perspectives on the resource needs when you have the two types in one funnel. Further it is not clear that the biggest opportunities are the ones you should aim for first. They can be hard to streamline your execution flow around.
The proposed way forward is to limit your portfolio of business expansion opportunities. Both in the opportunity and the customer dimension. A chess board with 8×8 fields represents the upper limit of what most organizations can master at the same time. To get a grip of the portfolio of opportunities you can create a two dimensional structure as follows
- One opportunity dimension. Aspire to label up to 8 customer opportunities rather than solutions or products you sell. Think about each opportunity as something applicable to more than ones customer. Your end-goal is to map out an opportunity where you both can win the first deal and as soon as possible to replicate success for similar opportunities.
- One customer dimension. Aspire to label up to 8 customers. Where each customer can be either the launch customer for a new opportunity. Or be a customer where you have good relations and can replicate successes from launch customers.
The simplest and fastest ways to scale a new business is to maximize traction across limited base of customers and opportunity types with limited resources.
Framing of opportunities
It is easy to believe each opportunity and customer combination to be unique. But business expansion planning is about framing opportunities in a way suiting both the launch customer and the expansion customers.
A suitable level of opportunity mapping is for a frame where need, solution and business model are similar. Your frame gets even stronger when you can articulate how success with one opportunity can bridge to another opportunity type in your portfolio. The work with the launch customers builds a solid understanding of insights for a given opportunity.
One aspect of the framing is the channel aspect. Even if an opportunity can be addressed via channels the initial opportunity will likely be of a direct nature.
Launch customers for each opportunity
For new opportunity types you expect a steep learning curve in the initial pursuit. The resources required to nail a new opportunity is high. Needs, offering and business model aspects all need to be nailed. Launch customers can be of different types. A customer who is buying large volumes on their own. A customer who represents a high value as reference customer. A fast moving customer who takes you fast to your first customer reference. Or friendly customers close to home base. The launch customer for a given opportunity can be of all 4 types. Expect the optimal type to vary across opportunities.
Even though you are resource constrained in early stages it is important to develop an idea of cross pollination potential.
Initial funnel for scaling in customer and channel dimension
In parallel with the work of succeeding with the launch customer you need to prepare for the scaling phase. The first handful of customers you can scale with. The opportunities where you plan to scale with indirect channels. Your go to market model need to include these initial scaling opportunities. Once you have passed the initial scaling phase you can move the opportunities into the business as usual bucket.
Few organizations business expansion ambitions that do not fit on a chess board
The reason for picking a chessboard as your frame of reference is multi-facetted. Few organizations have the potential to drive more than 8 new types of opportunities in parallel. Few organizations have close enough relations to 8 launch customer candidates at the same time. When concentrating to less than 8×8 customer/opportunity combinations you push to maximize initial footprint. Such a strategy is likely to pay off well as a base for further expansions
Questions for you and your team
- Have we articulated the business expansion opportunities clearly – start from an outside-in perspective on each opportunity
- What are the commonalities across customers for a given opportunity – start with how you view needs, offerings and business models.
- How many new type of opportunities can we drive in parallel – Expect the first opportunity to nail to be most resource intensive and resources to be the limiting factors.
- What does the customer buying process look like to each opportunity type – expect new opportunities to be procured in new ways that your classic offerings.
Additional reading suggestions
- 5-step primer to enter new markets [ARTICLE] – by Inc
- Growth through focus: A blueprint for driving profitable expansion [ARTICLE] – by Columbia Business School
- Big Idea Canvas [TEMPLATE] – by Nail it then scale it