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  #1  
Old April 15, 2003, 10:58 AM
Michael S. Winicki
 
Posts: n/a
Default The Inside Secrets of "The Pampered Chef"...

I recently had the privilege of sitting in on a lecture featuring the founder and chairman of “The Pampered Chef,” Doris Christopher…

It was one of the most enlightening talks on entrepreneurialism and growing a business I’ve ever heard.

Here are some of the highlights…

Doris claims she isn’t an entrepreneur in the classic sense. She isn’t a risk taker. She didn’t know anything about business when she started. She isn’t interested in starting more businesses.

Doris was a teacher by trade until she married and starting having children. It was her wish to be a stay-at-home mom BUT ALSO have the ability of earning extra income.

She was an economics teacher in school who also loves to cook. She especially loves kitchen “gadgets”. Her kitchen was full of them… But unlike other people she knew how to use them correctly. Friends visiting her house would marvel at her “gadgets” and the amount of time they saved Doris in the kitchen.

The idea hit Doris…Why not put on home parties showing and selling kitchen gadgets? She borrowed $3,000 from a life insurance policy to start the business, which consisted of 71 different products that would be carried in six large trunks. By the way, this $3,000 is the only money she ever borrowed to fund the business.

She spent a long time putting her first Kitchen Show together. Finally the night arrived to go out and do it. She remarked how it poured that night, literally drenching her to the bone. On top of that the big trunks she carried her products in were too big. They couldn’t be carried through the doors. The hand to be pushed through awkwardly. While she was doing this she thought, “This was the stupidest thing I’ve ever done.”

Needless to say, at this first home party she sold $175 worth of products and had four more parties scheduled… and “The Pampered Chef” was born (as a side note the average Kitchen Consultant today sells $525 worth of products during an average home party). Doris said that she didn’t do surveys or marketing studies or even a business plan. She just did what she felt was right and natural for the business.

That’s not to say she was doing everything herself because her husband was a source of support. He helped where he could and didn’t complain. He would go out on Saturdays and help deliver the products Doris sold during the week.

Doris admits she was scared to death. But she knew what she was doing was the right thing.

Her “business” consisted of 400 square-feet in her basement amongst the pipes and bugs. This served as her headquarters until 1983.

Another woman approached her in 1981 to be a “Kitchen Consultant” but Doris didn’t feel she was prepared for that commitment. Her husband pushed her to do it. She did and soon had 12 women working as independent Kitchen Consultants.

Doris remarked, “How each consultant brought something new to the business.”

After spending a few years making the deliveries on Saturday’s, they struck upon the idea of using UPS to deliver the products. This allowed the business to expand well beyond its home base of Chicago.

Doris says, “I never imagined people outside the mid-west wanting to be consultants”.

At the 10th anniversary of the company the statement was made that it was the goal of the company to have 600 consultants…at the time they had 300.

At one point in the 90’s they actually had to stop recruiting consultants in order to let the business “catch-up”.

Along the way they hired employees also, but these folks are never referred to as employees. They are “Co-workers” and everyone is on a first name basis.

Today the “Pampered Chef” has 75,000 Kitchen Consultants worldwide. And their main building is over 700,000 square-feet in size.

Today they have approximately 200 items, 15 of which are holdovers from the original 71 Doris took on her first Kitchen Show.

Today the “Pampered Chef” has annual sales of over $700,000,000.

Notes:

When it comes to the “Secrets” of her success, Doris says, “Look at all the business books listed at Amazon, there are no secrets.” Her success can be attributed to 3 things:

1. “Working hard with determination and persistence.”
2. “Have total focus.”
3. “Commitment to the highest standards in your work.”

Along the way Doris stuck her thumb in the eye of two principles often held with great reverence in the entrepreneurial community.
1. Multiple Streams of Income-She remarked that they had opportunities to take the business in different directions at many points in time. Such as when they were offered the chance to distribute other product lines. But she always felt by doing this it would take their focus away from their core business. Or in the late 90’s when they put up a web site, everyone thought they would start selling direct to the consumer and bypass the Kitchen Consultants, which did not and would not happen according to Doris. She knows what the “Pampered Chef” does well and doesn’t deviate from that path. Repeatedly throughout the lecture she talked about how important focus was in the growing of their business. I know from my perspective that focus is more of a problem with most entrepreneurs and not a lack of finances. I use to think multiple streams of income was where it was at but over the past few years I’ve changed my mind completely on the subject. Most people do not have the capacity, and not necessarily financial but mental and managerial, in order to create several successful business units at the same time. How often does Multiple Streams of Income end up being Multiple Streams of Mediocrity?
2. Doris never had an “Exit Strategy”. Even though she sold the business to Warren Buffet in 2002, she insisted (which I’m sure he supported fully) that she stay on as the head of the company. She said, “I’ll never retire” and added, “Why exit something that you love doing?” Warren Buffet said he shared the same point of view. This one hit me hard… “Exit Strategy” is such a fundamental belief in the entrepreneurial community but if you are doing something you love how could you just jettison it and go on to something else? And if you can do it, how connected to the business could you have been in the first place and how much did that hamper your ultimate success?

Incentives still work. The “Pampered Chef” uses with great success incentives like trips. They started using them in the late 1980’s and are still a powerful tool today. We’re not so educated or cultured that free trips aren’t effective as a sale’s tool.

Doris had mentors along the way. She allowed and welcomed the help of others. Quite often today I see small businesses stay “small” because the owner thinks they know all the answers. Impossible. The fastest way to grow a business is using the skills and insights possessed by others. What doing everything yourself limits is your paycheck.

When I first received my invite for this lecture, the card gave some background information on the “Pampered Chef”. I looked it over and read the annual sales volume of $72,500,000 and thought, “That’s pretty impressive”. Yesterday before the lecture I was re-reading the card and it suddenly occurred to me that I had left out a “0”, and the sales were $725,000,000. That is a huge figure no matter how you slice it and it speaks highly of Doris’ management style.

Her core beliefs fully supported her core competencies. She believes companies go wrong when the two no longer support each other. Many entrepreneurs I come in contact give very little thought to their core competencies… not too mention their core beliefs. Their entire focus is “making money” and they don’t care how they get there or what they sacrifice.

“Hard work is necessary,” according to Doris. You can’t fake it. I guess I can’t imagine someone sitting around in the underwear growing their business to ¾ of a billion dollars per year. If I would have had the time I would have asked her about what she thinks of the folks trying to get rich without sacrificing anything. But, I already know how she would have answered.
If you think about this, the concept Doris put together is extremely simple. And that is why is so darned profitable. Now look at this…

Doris did not manufacturer any of the products she sold. All she did is show people how to use existing high quality products more efficiently. This is where she created value. Yes the products she sells are very good products. Are they the best out there? Probably not. But the value is in the showing how to use them. This is what people pay money for. The high quality of the product is just an adjunct. The Kitchen Consultants put on a show, they entertain. Remember people will spend their last dollar to be entertained.

Are you boo-hooing how your business is going or how the economy sucks so badly that you can’t start a business? Doris pointed out that when she started her business in 1980 the prime lending rate was 15% and inflation was double digits. Unemployed was several points higher than it is right now. But people still bought expensive kitchen gadgets. Do you still think it’s a bad time to start or grow a business?

Doris knew nothing about sales and marketing. She didn’t wait to find the one book or audio program to “inspire” her to greatness. The only thing she knew was how to use kitchen tools better than most and had the ability to teach others how to use them too.

I’m sure I’ve missed some other key points from the talk, no matter how fast you write you can never get everything. But I think I got the main points and those main points I gladly give you the reader and hopefully they make your entrepreneurial life a little easier.

Take care,

Mike Winicki
  #2  
Old April 15, 2003, 05:51 PM
Sandi Bowman
 
Posts: n/a
Default Re: The Inside Secrets of "The Pampered Chef"...

> I recently had the privilege of sitting in
> on a lecture featuring the founder and
> chairman of “The Pampered Chef,” Doris
> Christopher…

> It was one of the most enlightening talks on
> entrepreneurialism and growing a business
> I’ve ever heard.

> Here are some of the highlights…

> Doris claims she isn’t an entrepreneur in
> the classic sense. She isn’t a risk taker.
> She didn’t know anything about business when
> she started. She isn’t interested in
> starting more businesses.

> Doris was a teacher by trade until she
> married and starting having children. It was
> her wish to be a stay-at-home mom BUT ALSO
> have the ability of earning extra income.

> She was an economics teacher in school who
> also loves to cook. She especially loves
> kitchen “gadgets”. Her kitchen was full of
> them… But unlike other people she knew how
> to use them correctly. Friends visiting her
> house would marvel at her “gadgets” and the
> amount of time they saved Doris in the
> kitchen.

> The idea hit Doris…Why not put on home
> parties showing and selling kitchen gadgets?
> She borrowed $3,000 from a life insurance
> policy to start the business, which
> consisted of 71 different products that
> would be carried in six large trunks. By the
> way, this $3,000 is the only money she ever
> borrowed to fund the business.

> She spent a long time putting her first
> Kitchen Show together. Finally the night
> arrived to go out and do it. She remarked
> how it poured that night, literally
> drenching her to the bone. On top of that
> the big trunks she carried her products in
> were too big. They couldn’t be carried
> through the doors. The hand to be pushed
> through awkwardly. While she was doing this
> she thought, “This was the stupidest thing
> I’ve ever done.”

> Needless to say, at this first home party
> she sold $175 worth of products and had four
> more parties scheduled… and “The Pampered
> Chef” was born (as a side note the average
> Kitchen Consultant today sells $525 worth of
> products during an average home party).
> Doris said that she didn’t do surveys or
> marketing studies or even a business plan.
> She just did what she felt was right and
> natural for the business.

> That’s not to say she was doing everything
> herself because her husband was a source of
> support. He helped where he could and didn’t
> complain. He would go out on Saturdays and
> help deliver the products Doris sold during
> the week.

> Doris admits she was scared to death. But
> she knew what she was doing was the right
> thing.

> Her “business” consisted of 400 square-feet
> in her basement amongst the pipes and bugs.
> This served as her headquarters until 1983.

> Another woman approached her in 1981 to be a
> “Kitchen Consultant” but Doris didn’t feel
> she was prepared for that commitment. Her
> husband pushed her to do it. She did and
> soon had 12 women working as independent
> Kitchen Consultants.

> Doris remarked, “How each consultant brought
> something new to the business.”

> After spending a few years making the
> deliveries on Saturday’s, they struck upon
> the idea of using UPS to deliver the
> products. This allowed the business to
> expand well beyond its home base of Chicago.

> Doris says, “I never imagined people outside
> the mid-west wanting to be consultants”.

> At the 10th anniversary of the company the
> statement was made that it was the goal of
> the company to have 600 consultants…at the
> time they had 300.

> At one point in the 90’s they actually had
> to stop recruiting consultants in order to
> let the business “catch-up”.

> Along the way they hired employees also, but
> these folks are never referred to as
> employees. They are “Co-workers” and
> everyone is on a first name basis.

> Today the “Pampered Chef” has 75,000 Kitchen
> Consultants worldwide. And their main
> building is over 700,000 square-feet in
> size.

> Today they have approximately 200 items, 15
> of which are holdovers from the original 71
> Doris took on her first Kitchen Show.

> Today the “Pampered Chef” has annual sales
> of over $700,000,000.

> Notes:

> When it comes to the “Secrets” of her
> success, Doris says, “Look at all the
> business books listed at Amazon, there are
> no secrets.” Her success can be attributed
> to 3 things:

> 1. “Working hard with determination and
> persistence.”
> 2. “Have total focus.”
> 3. “Commitment to the highest standards in
> your work.”

> Along the way Doris stuck her thumb in the
> eye of two principles often held with great
> reverence in the entrepreneurial community.
> 1. Multiple Streams of Income-She remarked
> that they had opportunities to take the
> business in different directions at many
> points in time. Such as when they were
> offered the chance to distribute other
> product lines. But she always felt by doing
> this it would take their focus away from
> their core business. Or in the late 90’s
> when they put up a web site, everyone
> thought they would start selling direct to
> the consumer and bypass the Kitchen
> Consultants, which did not and would not
> happen according to Doris. She knows what
> the “Pampered Chef” does well and doesn’t
> deviate from that path. Repeatedly
> throughout the lecture she talked about how
> important focus was in the growing of their
> business. I know from my perspective that
> focus is more of a problem with most
> entrepreneurs and not a lack of finances. I
> use to think multiple streams of income was
> where it was at but over the past few years
> I’ve changed my mind completely on the
> subject. Most people do not have the
> capacity, and not necessarily financial but
> mental and managerial, in order to create
> several successful business units at the
> same time. How often does Multiple Streams
> of Income end up being Multiple Streams of
> Mediocrity?
> 2. Doris never had an “Exit Strategy”. Even
> though she sold the business to Warren
> Buffet in 2002, she insisted (which I’m sure
> he supported fully) that she stay on as the
> head of the company. She said, “I’ll never
> retire” and added, “Why exit something that
> you love doing?” Warren Buffet said he
> shared the same point of view. This one hit
> me hard… “Exit Strategy” is such a
> fundamental belief in the entrepreneurial
> community but if you are doing something you
> love how could you just jettison it and go
> on to something else? And if you can do it,
> how connected to the business could you have
> been in the first place and how much did
> that hamper your ultimate success?

> Incentives still work. The “Pampered Chef”
> uses with great success incentives like
> trips. They started using them in the late
> 1980’s and are still a powerful tool today.
> We’re not so educated or cultured that free
> trips aren’t effective as a sale’s tool.

> Doris had mentors along the way. She allowed
> and welcomed the help of others. Quite often
> today I see small businesses stay “small”
> because the owner thinks they know all the
> answers. Impossible. The fastest way to grow
> a business is using the skills and insights
> possessed by others. What doing everything
> yourself limits is your paycheck.

> When I first received my invite for this
> lecture, the card gave some background
> information on the “Pampered Chef”. I looked
> it over and read the annual sales volume of
> $72,500,000 and thought, “That’s pretty
> impressive”. Yesterday before the lecture I
> was re-reading the card and it suddenly
> occurred to me that I had left out a “0”,
> and the sales were $725,000,000. That is a
> huge figure no matter how you slice it and
> it speaks highly of Doris’ management style.

> Her core beliefs fully supported her core
> competencies. She believes companies go
> wrong when the two no longer support each
> other. Many entrepreneurs I come in contact
> give very little thought to their core
> competencies… not too mention their core
> beliefs. Their entire focus is “making
> money” and they don’t care how they get
> there or what they sacrifice.

> “Hard work is necessary,” according to
> Doris. You can’t fake it. I guess I can’t
> imagine someone sitting around in the
> underwear growing their business to ¾ of a
> billion dollars per year. If I would have
> had the time I would have asked her about
> what she thinks of the folks trying to get
> rich without sacrificing anything. But, I
> already know how she would have answered.
> If you think about this, the concept Doris
> put together is extremely simple. And that
> is why is so darned profitable. Now look at
> this…

> Doris did not manufacturer any of the
> products she sold. All she did is show
> people how to use existing high quality
> products more efficiently. This is where she
> created value. Yes the products she sells
> are very good products. Are they the best
> out there? Probably not. But the value is in
> the showing how to use them. This is what
> people pay money for. The high quality of
> the product is just an adjunct. The Kitchen
> Consultants put on a show, they entertain.
> Remember people will spend their last dollar
> to be entertained.

> Are you boo-hooing how your business is
> going or how the economy sucks so badly that
> you can’t start a business? Doris pointed
> out that when she started her business in
> 1980 the prime lending rate was 15% and
> inflation was double digits. Unemployed was
> several points higher than it is right now.
> But people still bought expensive kitchen
> gadgets. Do you still think it’s a bad time
> to start or grow a business?

> Doris knew nothing about sales and
> marketing. She didn’t wait to find the one
> book or audio program to “inspire” her to
> greatness. The only thing she knew was how
> to use kitchen tools better than most and
> had the ability to teach others how to use
> them too.

> I’m sure I’ve missed some other key points
> from the talk, no matter how fast you write
> you can never get everything. But I think I
> got the main points and those main points I
> gladly give you the reader and hopefully
> they make your entrepreneurial life a little
> easier.

> Take care,

> Mike Winicki

Thanks, Mike, for sharing with us. I'm relieved to hear that I'm not the only one disillusioned with the multiple streams of income thing. I tried the multiple this, that, and everything else...even related ones...and y'know what? When I concentrated on one site, one product, I finally made a bit of money. Best of all, I stopped having to work every day, 18 hours a day...much to my, and my family's, relief.

Very interesting post.

Sandi
  #3  
Old April 16, 2003, 07:26 AM
Michael Ross (Qld, Aust)
 
Posts: n/a
Default One point of contention (meaning, perhaps)

Good post, Michael.

I have one point of contention about what was said...

> Along the way Doris stuck her thumb in the
> eye of two principles often held with great
> reverence in the entrepreneurial community.
> 1. Multiple Streams of Income-She remarked
> that they had opportunities to take the
> business in different directions at many
> points in time. Such as when they were
> offered the chance to distribute other
> product lines. But she always felt by doing
> this it would take their focus away from
> their core business. Or in the late 90’s
> when they put up a web site, everyone
> thought they would start selling direct to
> the consumer and bypass the Kitchen
> Consultants, which did not and would not
> happen according to Doris. She knows what
> the “Pampered Chef” does well and doesn’t
> deviate from that path. Repeatedly
> throughout the lecture she talked about how
> important focus was in the growing of their
> business. I know from my perspective that
> focus is more of a problem with most
> entrepreneurs and not a lack of finances. I
> use to think multiple streams of income was
> where it was at but over the past few years
> I’ve changed my mind completely on the
> subject. Most people do not have the
> capacity, and not necessarily financial but
> mental and managerial, in order to create
> several successful business units at the
> same time. How often does Multiple Streams
> of Income end up being Multiple Streams of
> Mediocrity?

With regards to MSI, a person can have MSI while owning one single business.

In her case, I would say she has 75,000 income streams. (That's the number of distributers she has, right?)

I think it would be clearer to say she wanted to stick with one business and not many businesses. Otherwise, to say she does not want multiple streams of income, makes her a hypocrit as she has multiple streams of income coming in from all over the world.

Okay, so it's a matter of interpretation of what one takes MSI to mean.

> 2. Doris never had an “Exit Strategy”. Even
> though she sold the business to Warren
> Buffet in 2002, she insisted (which I’m sure
> he supported fully) that she stay on as the
> head of the company. She said, “I’ll never
> retire” and added, “Why exit something that
> you love doing?” Warren Buffet said he
> shared the same point of view. This one hit
> me hard… “Exit Strategy” is such a
> fundamental belief in the entrepreneurial
> community but if you are doing something you
> love how could you just jettison it and go
> on to something else? And if you can do it,
> how connected to the business could you have
> been in the first place and how much did
> that hamper your ultimate success?

Great point. Although, I don't know how embedded this "exit strategy" thing is, I do agree it exists to some extent. And there are some "gurus" who constantly preach about having an exit strategy BEFORE you even begin the business.

Also, from what I know of Buffett, he WANTS the owners of companies he buys to continue working in the company. They were what got the company where it was and know more about it, and making it profitable, than anyone. So her "insistance" of "staying on" could be a little white one :o) But her advice is good so perhaps we can forgive her that one.

> Doris had mentors along the way. She allowed
> and welcomed the help of others. Quite often
> today I see small businesses stay “small”
> because the owner thinks they know all the
> answers.

Maybe Dien can answer this one more correctly... but didn't Einstein say something along the lines of "as soon as I say/think I know something, it shuts off my brain from learning anything more."?

Impossible. The fastest way to grow
> a business is using the skills and insights
> possessed by others. What doing everything
> yourself limits is your paycheck.

Part of her "not knowing" appeared to be evident from the start. So it was part and parcel of her beginnings and she continued to stick with what worked - getting help from others. Another lesson not to change what works.

> “Hard work is necessary,” according to
> Doris. You can’t fake it. I guess I can’t
> imagine someone sitting around in the
> underwear growing their business to ¾ of a
> billion dollars per year.

HAHAHA. Love the analogy.

> Doris did not manufacturer any of the
> products she sold. All she did is show
> people how to use existing high quality
> products more efficiently. This is where she
> created value. Yes the products she sells
> are very good products. Are they the best
> out there? Probably not. But the value is in
> the showing how to use them. This is what
> people pay money for. The high quality of
> the product is just an adjunct. The Kitchen
> Consultants put on a show, they entertain.
> Remember people will spend their last dollar
> to be entertained.

For us "foreigners" who don't have a clue what Pampered Chef is, my understanding of your explanation is: she sells kitchen gadgets via party plan AND educates the buyers on how to use those gadgets during the party. In essence, she educates First, which then entices the party-goers to buy the gadget.

Is that right?

> I’m sure I’ve missed some other key points
> from the talk, no matter how fast you write
> you can never get everything. But I think I
> got the main points and those main points I
> gladly give you the reader and hopefully
> they make your entrepreneurial life a little
> easier.

Thanks for sharing, Michael. I can see this article being picked up by a business journal, if you would submit it.

Michael Ross
  #4  
Old April 16, 2003, 10:14 AM
Michael S. Winicki
 
Posts: n/a
Default Yes...you are correct.

> For us "foreigners" who don't have
> a clue what Pampered Chef is, my
> understanding of your explanation is: she
> sells kitchen gadgets via party plan AND
> educates the buyers on how to use those
> gadgets during the party. In essence, she
> educates First, which then entices the
> party-goers to buy the gadget.

> Is that right?

Yes, you described the operation perfectly. I should have described the nature of the business at the beginning of the article for the folks that aren't familiar with the company.

Thank you for your input,

Mike Winicki
  #5  
Old April 17, 2003, 10:42 AM
Dien Rice
 
Posts: n/a
Default More on Multiple Streams of Income...

Hi Mike,

That was a great post....

I thought the part about Multiple Streams of Income was interesting. However, when I read them, it made me think about Richard Branson. He seems to be the opposite example, perhaps of someone who takes "multiple streams of income" to the extreme.... His "Virgin" brand name is in many different industries. Even from his early days, he was diversifying....

His first venture was "Student" magazine. Then, he had the idea of selling music albums (in the pre-CD days for you youngsters) by mail. He advertised this in his own "Student" magazine, and soon it eclipsed the magazine. Eventually, the magazine folded, but the mail-order record business survived.

Now, I wonder... If he hadn't experimented with selling the records through the mail, and instead had "focused" on the magazine, would he have survived? The magazine could have folded, and he would have been out of business.

One way to look at Doris Christopher's story might be that she was a bit "lucky".

You said that she never did any market research, and so on. She started one business, and stuck with it, and she's still doing the same business 23 years later (though on a much larger scale). It sounds to me like she was very lucky - she hit on a "winner" with her first shot. But how common is that?

Now, what if her first business was not one that was viable. Nobody, let's say, was interested in her products. In that case, would she still be where she is today? Or would she have given up and gone back to teaching?

I think the main benefit of experimenting with multiple streams of income is it gives you little "windows" into many different businessses. Then you can compare, and see that one business is better than another.

For example, in Richard Branson's case, he was in the magazine publishing business. But he "experimented" with the mail order records business. He found his magazine wasn't viable, but his mail-order records business was. So he folded the magazine biz, and kept the mail order records business going.

To me, this is the "correct" way to use multiple streams of income. Keep what works, and ditch what doesn't.

I actually think this is "safer". That's because not everyone is going to be as "lucky" and get a "winner" with their first business. Many people "strike out" several times before they hit on a winner - Richard Branson is one example, but it seems to be a common story.

I really did like your article and thought it was EXTREMELY valuable.... But I read it, and Richard Branson sprang to mind, and raised these questions....

A part of me wonders whether it's a personality thing....

Perhaps SOME people do better when they stick with just one thing. And perhaps others do better when they have their multiple little windows into many businesses, so they can see what works best.

- Dien Rice
  #6  
Old April 18, 2003, 02:58 PM
Avis
 
Posts: n/a
Default Re: More on Multiple Streams of Income...

I think you are very correct in determining it depends on the personality. For me, reading these types of posts only give me "insights" as to which options are open to me.. and thats about it. I must find my own path..there is no "cookie cutter" available.

Avis

> Hi Mike,

> That was a great post....

> I thought the part about Multiple Streams of
> Income was interesting. However, when I read
> them, it made me think about Richard
> Branson. He seems to be the opposite
> example, perhaps of someone who takes
> "multiple streams of income" to
> the extreme.... His "Virgin" brand
> name is in many different industries. Even
> from his early days, he was diversifying....

> His first venture was "Student"
> magazine. Then, he had the idea of selling
> music albums (in the pre-CD days for you
> youngsters) by mail. He advertised this in
> his own "Student" magazine, and
> soon it eclipsed the magazine. Eventually,
> the magazine folded, but the mail-order
> record business survived.

> Now, I wonder... If he hadn't experimented
> with selling the records through the mail,
> and instead had "focused" on the
> magazine, would he have survived? The
> magazine could have folded, and he would
> have been out of business.

> One way to look at Doris Christopher's story
> might be that she was a bit
> "lucky".

> You said that she never did any market
> research, and so on. She started one
> business, and stuck with it, and she's still
> doing the same business 23 years later
> (though on a much larger scale). It sounds
> to me like she was very lucky - she hit on a
> "winner" with her first shot. But
> how common is that?

> Now, what if her first business was not one
> that was viable. Nobody, let's say, was
> interested in her products. In that case,
> would she still be where she is today? Or
> would she have given up and gone back to
> teaching?

> I think the main benefit of experimenting
> with multiple streams of income is it gives
> you little "windows" into many
> different businessses. Then you can compare,
> and see that one business is better than
> another.

> For example, in Richard Branson's case, he
> was in the magazine publishing business. But
> he "experimented" with the mail
> order records business. He found his
> magazine wasn't viable, but his mail-order
> records business was. So he folded the
> magazine biz, and kept the mail order
> records business going.

> To me, this is the "correct" way
> to use multiple streams of income. Keep what
> works, and ditch what doesn't.

> I actually think this is "safer".
> That's because not everyone is going to be
> as "lucky" and get a
> "winner" with their first
> business. Many people "strike out"
> several times before they hit on a winner -
> Richard Branson is one example, but it seems
> to be a common story.

> I really did like your article and thought
> it was EXTREMELY valuable.... But I read it,
> and Richard Branson sprang to mind, and
> raised these questions....

> A part of me wonders whether it's a
> personality thing....

> Perhaps SOME people do better when they
> stick with just one thing. And perhaps
> others do better when they have their
> multiple little windows into many
> businesses, so they can see what works best.

> - Dien Rice
  #7  
Old April 22, 2003, 06:26 PM
Mike Feury
 
Posts: n/a
Default I agree

I agree, great post :)

I also agree with Dien. Doris's story needs to be put beside that of presumably thousands of others who did much the same as her and failed miserably.

My guess is there are relatively few who find their 'winner' first-time round. Even for those who do, there are so many external factors which affect business which one cannot control--'luck' may be necessary, but I'll settle for the absence of 'bad luck' :)

I do think personality has a lot to do with which suits best, focus or diversity. Some people live all their life in one location, others like to move around every few years. Some will work decades for one company, others... etc.

One can over-focus to the extent of missing obvious opportunities--or one can over-diversify to the extent of never giving anything a decent shot.

Your approach has to suit your personality--that's what keep you going during the tough periods, the passion which is sustained by the alignment with your inner needs.

Great story though--and I love the Pampered Chef products we've bought :)

Mike.




Atlantic Bridge Publishing
  #8  
Old April 25, 2003, 08:06 AM
Brian
 
Posts: n/a
Default Perhaps?

> Hi Mike,

> That was a great post....

> I thought the part about Multiple Streams of
> Income was interesting. However, when I read
> them, it made me think about Richard
> Branson. He seems to be the opposite
> example, perhaps of someone who takes
> "multiple streams of income" to
> the extreme.... His "Virgin" brand
> name is in many different industries. Even
> from his early days, he was diversifying....

> His first venture was "Student"
> magazine. Then, he had the idea of selling
> music albums (in the pre-CD days for you
> youngsters) by mail. He advertised this in
> his own "Student" magazine, and
> soon it eclipsed the magazine. Eventually,
> the magazine folded, but the mail-order
> record business survived.

> Now, I wonder... If he hadn't experimented
> with selling the records through the mail,
> and instead had "focused" on the
> magazine, would he have survived? The
> magazine could have folded, and he would
> have been out of business.

> One way to look at Doris Christopher's story
> might be that she was a bit
> "lucky".

> You said that she never did any market
> research, and so on. She started one
> business, and stuck with it, and she's still
> doing the same business 23 years later
> (though on a much larger scale). It sounds
> to me like she was very lucky - she hit on a
> "winner" with her first shot. But
> how common is that?

> Now, what if her first business was not one
> that was viable. Nobody, let's say, was
> interested in her products. In that case,
> would she still be where she is today? Or
> would she have given up and gone back to
> teaching?

> I think the main benefit of experimenting
> with multiple streams of income is it gives
> you little "windows" into many
> different businessses. Then you can compare,
> and see that one business is better than
> another.

> For example, in Richard Branson's case, he
> was in the magazine publishing business. But
> he "experimented" with the mail
> order records business. He found his
> magazine wasn't viable, but his mail-order
> records business was. So he folded the
> magazine biz, and kept the mail order
> records business going.

> To me, this is the "correct" way
> to use multiple streams of income. Keep what
> works, and ditch what doesn't.

> I actually think this is "safer".
> That's because not everyone is going to be
> as "lucky" and get a
> "winner" with their first
> business. Many people "strike out"
> several times before they hit on a winner -
> Richard Branson is one example, but it seems
> to be a common story.

> I really did like your article and thought
> it was EXTREMELY valuable.... But I read it,
> and Richard Branson sprang to mind, and
> raised these questions....

> A part of me wonders whether it's a
> personality thing....

> Perhaps SOME people do better when they
> stick with just one thing. And perhaps
> others do better when they have their
> multiple little windows into many
> businesses, so they can see what works best.

> - Dien Rice

Focus is an important ingredient. As I've read and heard before - if you try to be everything for everyone, you'll end up being nothing to everyone.

I would venture to say that both of the people discussed here focused on something... Doris found what worked for her and decided to focus on that. Branson's strength and focus was in the marketing of a business and not necessarily the products themselves which may explain why his ventures cut across a number of different industries (from telecom's to airlines).

I think the examples described indicate that the question of whether or not to multi-stream isn't valid unless you consider whether it leverages a core strength or advantage you have. If it does leverage some advantage or strength and doesn't detract from what you have or other more worthwhile opportunities then its probably a good risk. Multi-streaming that doesn't build upon some advantage would be relatively less attractive.
 


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