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Just Because You Can Make Money at Something, Doesn’t Mean You Should

I often see people want companies to do X because they are sure that the company will make money doing it. One such example was +Dan Frommer lamenting the fact that Wordpress does not have a hosted solution for its product.

As a wordpress user who hosts his blog on a 3rd party server, I get where Dan is coming from. I would like a solution with this too. However, I often understand why companies should not do everything that makes money.

Those who read me regularly know I’m really all about focus. The problem with pursuing every revenue opportunity out there is that you are usually going to spread yourself too thin in areas you have no expertise in.
I've seen it happen all too often. A company who has been successful in one way expands to get the "low hanging fruit" of a complimentary business. They don't really have expertise in that area but its not that hard and it would bring in some decent revenue. They send a small team to go build out something, diverting resources away from the core business. The team cobbles something together and comes up with a decent but not great solution. Now you have a product that doesn't really stand out and you have fallen a little bit behind in your core strength since you diverted resources away. Doing one thing well always beats doing two things mediocrely.

I mean, don't you think In-N-Out could make money selling Onion Rings? Or maybe include Bacon in the menu? Of course they could. And it would be really easy. I'm certain they have probably been given this suggestion a million times but they stick with their core and it serves them well.

How do you think companies should try and balance this? Can you think of other examples of companies that stuck to their core even when there were other, really easy, revenue opportunities?
Jerry Johnson's profile photoChristopher Ortiz's profile photoErik Kim's profile photoTerrence Lui's profile photo
It's like Graphic Designer and Web Designer used to be two different jobs (which, in reality, they still are). These days, companies want a graphic designer to also do web design and vice versa. Of course, because they don't want to pay two different people.

I guess those companies/people who think that way just need to be educated. On the other hand, it seems like it's already gone too far.
This is something I see a lot of, companies adding extra services, extra product ranges just to grab a little extra. I have one supplier who have done just that, their core work (laser cutting) is one of the biggest, most successful and efficient operations here in the UK. But then they added a weld shop and powder coating plant.

With that, parts started being delivered incorrectly, late and the whole of their core operation suffered until they split their workshop and even so, the second division has struggled against established engineers and fabrication companies as, for them, it is just a side line.

On the subject of just because you can make money, doesn't mean you should. On my 3rd business I recently had a perfect marketing opportunity, it was made for our industry but to take the chance would, to me at least, been immoral and wrong, using other peoples misery and personal difficult times to our own advantage. I decided not to take the chance and although its technically a lost promotional opportunity, I lost it with my morals and head held high that I made the right choice for my business.
+Simon Wareham , as a business owner myself, I obviously know the temptation to make just a little bit more money and can sympathize with companies that want to do this. But I don't think I would ever do that at the expense of my core business. I know a lot of companies don't think that's what they are doing but if you don't actually have a plan on how you will manage and accelerate that growth, you can end up hurting your core way too much as you pointed out.
+Terrence Lui... as a Graphic Designer (print), I was facing the same issue as well. Although, I did learn Web Design too. But...

I think it all comes down to greediness. To a majority of companies/the world, it's all about money!

I mean, I want money too but, just enough to pay the bills and have a tad extra for fun would be nice. Man... I need a job like right now!! LOL
+Elvira Gallegos , I don't blame anyone for wanting to make money or as much money as they want, even if they don't know what to do with it. I think what a lot of businesses fail to realize is that the best way to make money is not always a straight path to the nearest revenue source.
+Terrence Lui... true. You are correct, anyone should be able to make as much money as they want and as you said "businesses fail to realize is that the best way to make money is not always a straight path to the nearest revenue source." :-)

I need to work on getting my design business up and running! :-)
I think that wordpress's reasoning is likely more along the lines of them not thinking that they can offer the hosting services being requested at a competitive price point (yet), rather than them not modifying their offerings to include the kinds of services the author wants. Based on the article wordpress can already technically handle all of the authors desired features/functions, namely hosting his sites on's infrastructure and allowing him to run his own ads. They already host many sites and the VIP option already allows for 3rd party ads, so the only issue is the price tag. Obviously some of the "white glove" VIP services figure into the VIP price tag, but the author is wanting to pay 3.5% of the VIP rate for VIP without the frills, the frills do not make up 96.5% of the expenses on wordpress's end or even close to it.
+Tony Homier , I think WP could offer a price competitive product but at what margin and at what cost in terms of focus. I don't think its lost on them that they could, at a profit, host these blogs like Dan's and mine. But probably not at the same level, nor without some level of resources, that would make it worth their while.
+Terrence Lui I agree that it is likely not that they couldn't come up with a price point on paper that is competitive and shows some level of profit, but that they don't think they could maintain their desired profit margin. Another factor may be that some (almost all) of their VIP level customers would downgrade for that 96.5% price reduction. Also I know from my personal experience in IT that many customers will be more than willing to sign up for the no frills level offering b/c it is cheaper but when the shit hits the fan and their site is down, the customer seems to forget that they don't have VIP level service at which point it becomes a customer sat issue whether or not we give them a higher level of support than they paid for, and given the current economy we tend to let the customer have their way.
+Tony Homier totally agree that a lot of customers don't remember what they actually paid for :)
+Terrence Lui Chick-fil-A stuck to its guns on being closed Sundays and it has kept its menu pretty much the same over the years. Their quality is second to none and the places are always packed.
I think sticking to your guns is easier when you're not a publicly traded company, and have core values that are consistent and supportive of profit generating activities. It reminds me of the classic piece by Michael Porter on "What is Strategy." This is perhaps the gold standard of how businesses should operate, and it seems to always hold true--stick to activities that are mutually beneficial and reinforcing in your value chain.
There are good comments here that reinforce the OP. The flip side to this is that growth is the cornerstone to a business to remain relevant in a heavily contested sector of industry. Take Google for an example. They're so much more than a search engine.

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+Erik Kim , totally agree with you actually. As a business, looking for smart growth opportunities is generally a must (I would take the view that sometimes, a large cash machine is large enough but that's a different post). There is a very subtle line between chasing profit for profits sake and chasing good growth opportunities. The companies that really win learn to tell the difference.
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