Money Losing Strategy? Be Careful.
I was just thinking about a money losing strategy and the best way to do it. I just read a blog in the Harvard Business Review entitled For Breakthrough innovation, Focus on Possibility, Not Profitability. It is a great article. It points to the success of Google, Keurig and others. And it was written by somebody for whom this strategy worked.
The problem is that it is not always valid. Keurig achieved its success when it was acquired by Green Mountain Coffee Roasters, who had the deep pockets to enable the reduction in costs and acquiring of partner companies to broaden the product line. Keurig was wildly successful for Green Mountain.
Many other companies have gone to the dogs by focussing on possibilities and not profits. If you don’t have the money to lose for longer than you expect to lose it, you may be betting your ranch. If it is other people’s money and they are willing to pursue the strategy, then it may be the making of a good story.
Is a money losing strategy right for your business? Will it pay off in the end? Email me to set up a time to discuss at kputnam@me.com