The Business of Spawning

Every successful business has done at least a few things right if not many. They have to find a product or service that they are good at. Possess some characteristic that differentiates them from their competitors. Find a market to sell to. And be profitable at the same time.

Businesses in itself are a beast of an animal.

Then there is this special breed of businesses. That can not only do all of the above, but can spawn off other businesses at the same time. By spawning off, I don’t mean extending an existing product line or expanding into nearby verticals. But building entities that are not in their primary field of expertise and building them into independent businesses.

Amazon is a good example of this. Starting from selling books online and expanding that to other verticals is quite logical. But the spawning off of businesses like Amazon Web Services, Amazon Prime, Kindle, not quite. But that did not come for free.

There were 2 major factors that enabled them to do this. Access to capital and ideas for businesses that have the possibility to return high ROI. Internet based businesses have a very high ROI, given the low investment required.

Having both access to capital and serially trying one idea after an other is a deliberate effort for sure. And the more tries you get, higher the chances of success.

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