Planning to stay in business 10 years from now?
While your project manager gets to work on running the day to day operations, you as a business owner should work on a far more exciting job: keeping up with the latest trends and adapting your business accordingly.
Staying relevant takes a lot of work, energy, and money. You need to read everything you can get your hands on, be ok with spending billable hours on education and adapt to the ever-changing business environment - even change your whole business if you have to.
It's difficult to stay relevant when you’re an agency
Ten years ago you could make good money in web design. Today, it's a completely different picture. Nowadays, anyone can make a good-looking, responsive website with no technical skills in minutes. Why should a client hire you to make a custom website when they can take something off the shelf for the fraction of the cost?
And if you somehow manage to find a client, you have so many things to worry about besides the work itself, like:
- What will be new in my industry in several years?
- Will my employees know how to use new technologies?
- How am I to finance their education?
- How will the new technology change my clients' needs?
Keeping up with all the new things is exhausting. For instance, if you offer full-service digital solutions, you need be an expert in: CMS, web design, usability, UX, graphic design, SEO, PPC, social marketing, content, mobile, accessibility, CRO, email marketing, SEM, community management, site performance, copywriting, branding, animation, analytics, security, PR, strategy... No person can keep up with one field, let alone all.
Things are even worse if you’re a development shop. Angular is so last year; React is where it’s at now. And who knows what the next big thing will be tomorrow. Maybe as a business owner you don't have to worry about keeping your skills updated, but what about the skills of your employees?
Keeping up with new things is like climbing a mountaintop you’ll never reach, and yet can’t stop climbing or you'll fall down. You have to constantly learn new things, not so you can be ahead - you have to do it just so you don't fall behind.
In the past, if you were a carpenter with a few years of experience, you'd be extremely good and have those skills for life. You could feed your family and pay off the mortgage using the same skills without having to chase the latest buzzwords. (Though you’d still have to worry about IKEA taking away your business.)
This unrelenting pace of change isn't limited to just people working in IT. It affects everyone. Think about how Uber changed the taxi industry, how Amazon changed bookstores, how iTunes changed the music industry, etc.
Or take for example marketing agencies. In the past, an agency would create branded content, buy media space, and that's it - instant engagement. But today, consumers don't have any interest in branded content. Big brands have to compete with organic, user-generated content that's a lot more engaging than a thinly veiled ad for a new body spray.
Marketing agencies have a problem with short-term thinking. They are used to doing things a certain way and are afraid to change things in fear of losing a client; then they create a campaign that fails and clients lose faith in them. It's a vicious cycle of doing the same thing hoping for the same result in a completely changed market.
Sometimes, the whole market can change overnight. For example, Dave Nevogt, the co-founder of Hubstaff, had to start and sell several businesses because of the changes in the marketplace:
The golf business I started in 2004 brought in $1 million in annual revenue for six years. After that, competitors came in, advertising rates increased by 300%, conversion rates dropped, Google changed their advertising rules, and so on. We had built a database of over 500,000 golfers, but they stopped buying as much. The cost of buying traffic went up 20-fold which made it extremely difficult to acquire new customers profitably. The business model no longer worked. [..] The SEO company I bought made over $1 million in annual revenue for five years. We primarily sold to SEO agencies and most of them went under after Google’s algorithm changes in 2011-2013. Their clients were scared and slashed their SEO budgets. About 60% of our clients went out of business and the other businesses changed their strategies - Dave Nevogt, the co-founder of Hubstaff
12 tips for staying relevant through continuous improvement
In order to stay relevant, you need to actively work every day on keeping up with the latest trends and - this is crucial - you must enjoy it.
- Go to meetups. The real value of meetups (and conferences) is that you get to see people from your industry you haven't seen in a long time, ask what they're up to, get new ideas, and meet new people. The lectures themselves are just gravy. Meetups are also a good place to meet your next great employee. New potential clients are also there, but keep in mind that you’re not there to sell but to learn.
- Treat hiring as a unique opportunity. Sure, you're looking for someone to do the job, but bringing on a new person can give you so much more than just a bigger pool of billable hours. This is your chance to see your business through a fresh pair of eyes, review your processes, and challenge your assumptions. This is also an opportunity to bring someone who does things differently so you can learn new things.
- Write about your business. There are several benefits: 1) writing forces you to really think about your business and explore new ideas; 2) by educating your customers about your industry you're providing them value and position yourself as an expert; 3) you make it easy for someone to reach out to you and form a business partnership; 4) you’ll attract the right kind of talent who care more about doing good work than simply finishing work and getting paid.
- Read every chance you get. Books are great if you're new to something and need a general overview, a thorough analysis, or simply an introduction to a complex topic. Blogs, on the other hand, are great to keep up with the latest trends or when you’re interested to know a bit more about a topic but don’t have the time/will to read 300 pages.
- Spy on the competition. See what the top players in your industry are doing. Do an SEO analysis of their website, see what tactics they use, and emulate. They've done most of the hard work for you - you just have to see what they do and improve in every regard (or do what they've missed out to do).
- Use Twitter. Find people who are influential in your industry and follow them. See what they're reading and who they follow. The great thing about Twitter is that everything is public so you can peek in the minds of your role models and see how they keep up with the latest trends.
- Don't celebrate your success too much. When you're celebrating, you get comfortable and complacent. Suddenly, you don't have to try so hard anymore and you start resting on your laurels. That is when you stop challenging yourself and stop growing. Instead, remind yourself that tomorrow will be even more difficult and you should work even harder. Remember that you're only as good as the work you did in the last 6 months.
- Keep your business processes fragile. When a problem happens, it’ll be much harder to sweep them under the rug. Having fragile processes helps you surface problems on time so you can deal with them immediately. If one error stops everyone from working, you'll be sure it's fixed right away. To contrast, with robust processes, it's easy to put fixing a problem on your to-do because there won’t be that much damage; but the real problem is you’ll never get around to fixing the problem and they’ll just keep piling up.
- Train your idea muscle. Come up with 10 business ideas each day. They can be improvements related to your business or someone else's, it doesn't matter. The point is to keep your brain primed for solving challenges. Thinking is hard if you're not used to it, so make sure you practice.
- Study your environment. Keep an eye on what your family members/kid/employees buy, what they think about different products, who their idols are, and how they use gadgets. While observing the people in your environment, you'll get new ideas and stay on top of the latest trends.
- Invest in training. Your company is only as good as your least skilled employee. Instead of ordering a pingpong table or sodas, invest that money in training. Not only will you have more qualified employees, but you'll also attract and retain talented individuals.
- Reward even the smallest improvements. Toyota became famous for their Kaizen philosophy of continuous improvement, which says that instead of focusing on big improvements (which are rare and far apart), everyone should try to incrementally improve whatever it is that they do, even at the expense of productivity. Each tiny improvement doesn’t matter in itself but they add up, and more importantly, it encourages the right type of culture.
Be ready to completely change your business
Using the above techniques, you’ll get better and more relevant one day at a time. These are your bread and butter of staying relevant, the things you’ll do each day.
But every once in a while, you need to stop, examine your position and see if you’re moving in the right direction, and make a radical change if needed.
It’s like having a car. You should constantly wash it, change oil, keep tires pumped, etc. But there will come a time when no matter how many repairs you do, you have to replace it. Same in business.
To stay relevant (and profitable), you must know when to keep up and when to chip out.
A lot of big companies started out as one thing before completely changing their business in order to stay relevant:
- Avon started out by selling books before realizing that customers were more interested in free perfumes that came with the books.
- Nintendo started out by selling playing cards and then branched out to love hotels, rice, TV network, etc.
- Starbucks started out by selling espresso makers and coffee beans before focusing on a much more lucrative coffee-shop business.
- IBM started out by making clocks which recorded a worker's arrival and departure time on a paper tape.
- Facebook started out as a "Hot or Not" app for college students.
- Toyota started out as a producer of wooden looms.
- Lego started out as a wooden toy company.
- Nokia started out as a paper mill.
A lot of agencies transition to a product company. For example, Rand Fishkin from Moz first started out by doing web design. In the beginning, it was good money but soon he had trouble paying the bills and was in serious debt. But, he saw a great need for SEO services and so he pivoted to making software that helps SEO professionals.
The point is, a good entrepreneur isn't tied to their business. If something is underperforming, they're not afraid to take it behind the barn and shoot it. You always need to keep one eye on the future and see how your business fits in the great scheme of things
Take for example an SEO agency or a creative agency. They can't compete in a global marketplace with their prices because there are plenty of people out there willing to do what the agency does for less money. For an agency, the globalization and outsourcing is a big problem - but it doesn't have to be.
Instead of offering services like link building or creating landing pages, they should offer professional guidance. Forget "client brief" - instead, offer your expertise and focus on strategy.
Anyone can hire a freelancer for nothing to code what they need but finding a specialist who has a deep understanding of your target audience and knows how your whole marketing strategy should look like - that's extremely rare.
By offering strategic aid, you're differentiating yourself from everyone else on the market and you can charge a premium as a result. This means you'll need to get out of your comfort zone and work harder than you're used to, but it's better than complaining how the rates are going down and how the client demands go up. You just have to see where the new opportunities lie and leverage your skills.
Keeping up with the latest trends and adapting to them takes a lot of work, but it's your only option. Stay hungry, open to change, and always keep one eye on the future. Sure, it means a lot of work and leaving your comfort zone, but what else can you do?