In 1982, members of the pop band Tommy Tutone wrote “867-5309/Jenny,” a song about a guy desperately trying to get in touch with a girl named, of course, Jenny. It was at the top of the music charts for 40 weeks and made the band members rich and famous. At least for a while.
A couple of years – and a failed follow-up album – later, the lead singer was making a living as a software engineer, while his band mates were relegated to playing in bars. The band’s problem? They never wrote another hit song – not even a reasonably popular one. In musical history terms, Tommy Tutone was a one-hit wonder.
In the world of entrepreneurship, we have one-hit wonders too. In fact, they are probably more common among entrepreneurs than they are in the music industry. Tomima Edmark, a Dallas entrepreneur, released the Topsy Tail hairstyling gadget to widespread acclaim in 1992, but never produced another hit product (despite several attempts). Steven Wozniak co-founded Apple, but failed to make a mark (except in techie circles) with other ventures after leaving the company. Roy Raymond made millions with Victoria’s Secret, but when he sold it and tried his hand at children’s fashions, the business went bankrupt within a couple of years.
Are You a One-Hit Wonder?
The thing about being a one-hit-wonder is that you don’t feel like you are one while it’s happening. You feel like a big success. You’ve created or sold a product and it’s doing really well. Your business is growing. You are making plenty of money. It feels like you are living the American Dream. But then, suddenly, you lose everything.
Often, one-hit wonders fail because they put all their eggs in one basket. They have the wrong idea about how businesses are built. They’ve seen movies and read books that depict one-hit-wonders – people getting rich and living happily ever after because of a single invention or product – and they buy into it.
But business in the real world doesn’t work that way. To develop a business that will thrive, you have to create a machine that will produce new products and advertising campaigns all the time. You have to put the people and processes in place to continuously produce more and more. You can’t stop or even rest just because you’ve had a single success. You have to recognize that things change as time passes. If you are still trying to sell yesterday’s products tomorrow, after things have changed, you will be slammed so hard you won’t know what hit you.
I’ve not done any formal research on this, but I’d bet that most “successful” businesspeople are one-hit-wonders, either actual or in waiting.
I can think of a half-dozen people I know – including a few friends of mine – who are running one-hit-wonder enterprises. They are happy as can be, because they are making money and keeping busy. But when I look at their businesses, even from the outside, I can see the writing on the wall: Sooner or later, their one product or one promotional scheme or one market will change and their businesses won’t have any way to adjust to it. At first, sales will slow gradually. And they will respond by cutting costs and laying off people. “Things will turn around soon,” they’ll tell themselves. But things won’t turn around and their profits will disappear. Eventually, they will close down their businesses and wonder what went wrong.
Are You a One-Hit Wonder in Waiting?
Your business may be working fine right now. But if you have too many business assets in one basket, you may be a one-hit-wonder in waiting. Ask yourself the following questions:
- How many products do I sell right now?
- How many new products have I sold since I began?
- How many new products have I sold per year since I began?
- How many new products have I sold in the last three years?
- How big was my production budget three years ago?
- How big is it today?
- How big was my marketing budget three years ago?
- How big is it today?
It should be easy to pinpoint where you’re at. The more products you have, the more growth you’ve experienced and the further you are from being a one-hit wonder.
The problem with the one-hit-wonder mentality is that it cannot imagine good things going bad. It has no capacity to understand the universal principle of entropy – which tells us that everything naturally disintegrates. The one-hit mind believes that any success enjoyed is somehow deserved, perhaps even divinely given, and therefore destined to last a lifetime. The one-hit mind refuses to accept the overwhelming likelihood that its great product or promotion will one day be a thing of the past, and so it will not prepare for that by inventing or creating another.
The one-hit wonder problem affects most businesses in Stage One and Stage Two of their growth. (If you’ve read Ready, Fire, Aim, you know that means when they’re making from zero to 10 million dollars in revenue.) To get beyond that threshold, and thus beyond the risk of being a one-hit wonder, you have to focus on two things: innovation and speed.
As I said in Ready, Fire, Aim:
“It probably took you several years to produce and market your first product. To take your company to the next level, you will have to move much faster – at least twice as fast as you are comfortable moving right now.
“I’m talking about increasing the velocity of innovation. This includes the time it takes to brainstorm, develop, test, and produce new products. In Chapter 10, I talked about how you can get better at coming up with good ideas. But I also pointed out that if you don’t execute good ideas quickly, they will degenerate over time.
“Innovation matters. And so does speed. Combined, they give your business extraordinary growing power.”[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]