Brands are like living organisms. They grow, change and sometimes take you in interesting and unexpected directions. For example take the Minnesota Mining and Manufacturing Company which began it's life as a company that extracted stone from quarries for use in grinding wheels. Of course, few of you would be unaware that it became 3M, known for products such as Post It Notes and Scotch Tape.
Or think about IKEA, the flat-pack furniture company. In the last year they have unveiled pre-fab homes, pop-up airport lounges, cardboard cameras and now, beer. The first three in that list make sense; The pre-fab homes, that's an extension of the brand, they are all about the home. The pop-up airport lounges; that's a great way to give people with time on their hands the chance to "test drive" some of their products. The cardboard cameras; they were more of a promotional item than a product. But that last one, the beer, that's interesting. Yes, they sell food in their stores, but it still seems like a bit of an outlier. All these products represent their desire to constantly question, grow and innovate.
This made me wonder, when does the brand transcend what it does? In other words, when should you branch out into new areas of growth. I have seen, again and again, agencies where it seems as if the leadership has become bored with being an agency. They begin to focus on efforts far from their core business. Here's the questions I ask myself when thinking about ventures our agency might launch:
- Is there a process we are already executing for a client that could be productized?
- Is the idea I'm considering consistent with the agency's brand? In our case, since our agency is named Curiosity, does it represent the brand equity of "always questioning, always seeking, always wondering."
- Can we launch it with our infrastructure and current staffing? While ultimately a venture may be spun off to its own business, it must begin within an agency environment.
- Can I clearly define a problem the venture solves?
- Is it scalable? We analyze this by projecting the cost structure based on modest success. For example, what happens to the profit margin when we have 5 customers? 10 customers? 100 customers? 1,000 customers.