Jack of all trades and master of none, goes the phrase. There are equivalents in other languages: Hungarian has “Egy fenekkel nem lehet ket lovat megulni” (you can’t ride two horses because you only have one butt) and Portuguese has “O homem dos sete instrumentos não toca nenhum” (The musician of the seven instruments doesn’t play any). There are countless other examples throughout different languages.
Yet so many businesses strive to become this huge one-stop-shop of everything. This can lead to disaster, especially when they stray too far from their original purpose.
Core Purposes: Some Companies Do Well at Diversification
When you think about it, it’s fairly obvious: When a company grows due to its core purpose, it usually means it’s good at focusing on its core purpose. From a management perspective, the brand is aligned from top to bottom and working hard towards that singular goal.
Some core purposes are broader than others.
Apple, for example, defines its core purpose as so: “To make the best products on earth and to leave the world better than we found it.”
This core purpose is emphasized throughout the company, and it works towards creating a complete ecosystem of products. All of these products interact with each other in a closed ecosystem. You can communicate on an iPhone, work on a Macbook, take notes on an iPad, listen to music using your EarPods and check the time (and your steps) on an iWatch.
Each one of these was carefully designed around how the consumer used them and became (usually) a success for the company. That’s because Apple didn’t deviate too far from its primary strategy: Computing and smart wearables. After all, tablets and smartphones are effectively tiny computers.
And even then, Apple had its failures: the iPod Hi-Fi (late to the market and too pricey), the Homepod (late to the market and cost too much compared to Amazon’s Alexa), and even the 20th Anniversary Macintosh (way too expensive at $10,000 in 1997!). But these were quickly removed and Apple learnt lessons from each one.
Other examples of focus include companies such as Michelin. The company started with its tires, and it has barely deviated from this over the past 130 years. Even its travel guides and its Michelin star ratings for restaurants were originally there to advertise and promote its tires — which they do successfully.
Michelin is now the default choice of tire for many industrial purposes, including the military, NASA, Formula One and numerous other motoring applications. One of the reasons suggested for the failure of the Russian advance on Kyiv in 2022 was that the military tires used for the trucks and support vehicles were cheap knockoffs of the Michelin X‑Force tire. They failed, which forced the column to a halt and an eventual retreat.
Ultimately, this focus has helped it survive in an increasingly competitive market.
… And Some Do Less Well
Then you have heavily niche products, such as the Instant Pot. This cookery device is a combination pressure cooker and slow cooker, and it sold phenomenally well. But its success was in many ways its failure. The immediate hype meant that it became a fixture in kitchens around the world — but it’s not a consumable product. The company tried to use its name recognition to get away from the Instant Pot. This led to a predictable lineup involving rice cookers, air fryers and blenders, but these areas are already well-served by other brands. This investment caused it to declare bankruptcy, something that may have been avoided had it focused on its core niche.
Even Microsoft has had heavy failures, as once it moves out of its main niches, it starts to struggle. It couldn’t enter the phone market (the Windows phone was a spectacular failure) and its vision for wearables was heavily flawed. Despite its leading position in the Gartner Magic Quadrant, it’s widely regarded as a clunky solution with a heavily flawed backend, leading to issues with integrations and compatibility. It’s easy to speculate that had it not been for Microsoft’s inclusion of Teams in the Office 365 suite, it wouldn’t have much of a presence in the unified communications market.
It will also be interesting to see what the impact of treating Teams as an add-on solution will have after the EU declared that automatically including Teams in Office 365 was anti-competitive.
Other Companies Fail to Innovate
Moving further to the world of telecoms, we can look to the example of BlackBerry. The company was huge, with devices owned by businesses around the world and high-powered individuals — including then-president Barack Obama. Its standout benefits included a responsive physical keyboard system and generous screen size as well as its security features.
As a result, it was easy to send email on a BlackBerry phone, far easier than on a standard device.
Yet BlackBerry failed to move forward with innovation. It didn’t help that the company had a multiday outage in 2011 across Europe, the Middle East, Africa and North America, which meant people started to move away from BlackBerry in favor of the new iPhone and Samsung models. In addition, the company didn’t develop a voice assistant in time, and it held off on touch screens even though other models considered them essentials.
All of these factors meant that it strayed from its core purpose: To be the world’s leading provider of end-to-end mobility solutions that are the most secure and trusted.
It stopped leading and became a follower, struggling to keep up with market trends.
We can also look even closer to home at Avaya. The company declared bankruptcy twice in five years (2017 and 2023) due to taking on too much debt and failing to innovate. The problem was that Avaya never really developed a good UC&C product that worked, and it eventually had to rely on a strategic partnership with RingCentral to deliver cloud UC&C services. It never entered the Gartner Magic Quadrant for UCaaS.
These missed opportunities came about because it failed to capitalize on its dominant market position and missed the opportunities that cloud unified communications would bring. It also borrowed too heavily, gambling that its market position would see it through. Although it’s exited the bankruptcy proceedings, it now has a long way to go, particularly in terms of catching up with the cloud communications market.
What’s the Core Lesson?
The core lesson is simple: If you do decide to diversify, you need to do it right, pushing forward with products that complement your core mission. If you end up too far outside the bounds of what you’re good at, you can end up not being able to gain market recognition.
This isn’t limited to one industry, of course. An MSP who starts pushing the envelope too far might find themselves stranded and unable to focus on their core business model, whether it’s simply connecting people through phone lines and UCaaS or perhaps offering highly targeted CCaaS solutions. Ultimately, every MSP needs to look at their core offerings, work out if they’re still relevant to the market, make necessary changes and then heavily target their audience with what works best for them.
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