Monday, October 17, 2011

Focus v Diversification - Sneaking Duck

Originally posted to NETT.

Earlier this year I wrote a post about whether it's better in a startup to focus purely on the one business or diversify into related areas. When I wrote that post I had in mind the online glasses retail concept Sneaking Duck that we've just launched.

We initially had the idea for Sneaking Duck 18 months ago, not long after we launched Shoes of Prey. Spending a lot of time in China we could see all sorts of products which would be great to sell in Australia, but the one that stood out most was prescription glasses. Jodie, Mike and I all wear prescription glasses and in China it was easy to get very fashionable frames at very reasonable prices. After our second or third trip we each had 5 different pairs of glasses and were accessorising with them, matching them to different outfits. As entrepreneurially minded folk tend to do, we put together a business plan for an online retail glasses business and loved what we saw.

At the time though we were super focused on launching and ramping up Shoes of Prey so we left the business plan on the 'to think about' pile. As time went on we couldn't shake off the idea. We saw Warby Parker launch successfully in the US with a near identical concept. We were keen to go ahead but Shoes of Prey was tracking very nicely and we didn't want to lose focus on that business.

So we decided the only way we could go ahead with Sneaking Duck was to bring another person in as a co-founder and CEO. They would take the lead on the new business and utilise the experience, relationships, team and infrastructure we've built up with Shoes of Prey. Mark Capps joined us in this role and we think we've struck the perfect balance between diversifying into a fantastic new business opportunity, while maintaining our focus on the Shoes of Prey business.

That's not to say it's been an easy decision and it's not been a clear case of black and white as to whether we should be maintaing a laser like focus on Shoes of Prey or diversifying with Sneaking Duck. We've been speaking with a number of investors about potentially investing in Shoes of Prey and the response from them to this decision is indicative that this is a grey area. Some love the move we're making and see it as a plus, others dislike the loss of focus on one business.

We're confident we've made the right decision and that we've taken a smart approach in bringing on Mark to co-found and lead Sneaking Duck and we'll be keeping in mind the focus issue so that any impact on Shoes of Prey is limited.

Do you think we've struck the right balance? How would you have approached this?

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