Specialized Businesses Drive Better Bottom Lines | Ankit Khare | TEDxSGGSCC
URL: https://www.youtube.com/watch?v=qal5g_a1X_0 Video ID: qal5g_a1X_0 ============================================================ Hi everyone, hope you're doing great today. So I'm talking about uh the startup culture. Uh today people are uh talking about uh the all the entrepreneurs are talking about different startups that they started and uh they're trying to solve different problems through various ways and means, right? uh but we all uh we all forget one thing when we are actually launching something uh in the startup world that profitability is the is the main key metrics of every business right and that's where uh you know I come from uh all the investors that I've been meeting to all the founders that I've been meeting to uh most of them told me that uh the top line the revenues are taking the back seat you and uh profitability is something that everybody wants to see in the balance sheets. So those days are gone when every entrepreneur was showing the scales uh or a growth story and trying to attract the investors, consumers and try to uh take their startup to a next level. So everybody today talks about what's the bottom line and how you're driving the profitability. Speaking of which, uh my today's topic is all about how you get the profitability in your business by becoming more specialized. Of course, uh that's one of the uh that's one of the liver that we have it. There are so many founders who are trying to solve so many problems in so many different ways and uh and they are trying you know every nook and corner to figure it out how they can drive better profitabilities. For some of them it worked for some of them it did not you know and there was definitely different reasons for that what it worked for me is something that we are talking about today right so of course uh what if I tell you that uh uh to get growth uh it's the focus is not about more it's about less isn't it very opposite right uh to uh because everybody in today's world talks about uh you know how you are growing what's your revenue what's your top line and what's the scale of the business right and if I'm telling it to you that no you should trim down the scale and focus more on the profitability it's very opposite to what we are talking about today right but that's not the case uh imagine when you uh when you walk into a bakery and you see they're selling everything right from uh cross to cakes to uh milkshakes or coffee even pizzas right how confident uh you'll feel about their uh cakes? Not much, right? And you will you will you will not likely to buy that and your decision making of buying such thing will be delayed, right? On the other side, imagine you walk into a bakery which offers just only cakes, you know, and they're specialized in that. How would you feel and how confident you feel about that? Right. Very much, right? Isn't it very obvious uh in today's uh I mean in our day-to-day life we all want something very specialized we all want someone to manage the things which they are expert into right but we tend to forget that when we are running our own businesses most of the entrepreneurs forget that even I did the same mistake when I was running my own company a digital marketing company we were actually trying to do everything for everyone right and uh We said yes to every businesses which was coming to us be it in real estate be it in healthcare uh retail you name it and we wanted to have that that was not the right approach and I realized I was burning lot you know in terms of money in terms of my resources everything you know and uh I was doing lot of efforts for very less amount of money and when I say less amount of money is not the revenue by the way it's the profits we were literally bleeding profits we're not able to make money through that. So what changed you know uh so one thought of course uh you know someone told me that if you're doing everything for everyone you're doing for you're doing for now no one so become specialized is something that that makes lot of difference. So the game changer move for me was the power of focus where we uh decided to go with just one domain and for us it was education. It's not like because uh education was profitable and that's why we selected education to be in but it's all about we wanted to be focused towards one sector one specific segment so that we can understand we can own that segment and we understand that audience and things better. Right? I'm sure you all will relate what I'm talking about if you think about how specialization works uh in your day-to-day life. Right? So everything changed that time when I decided to focus in just one segment and the learning that I got after that is something worth sharing here for every with every entrepreneur or startup founder that that wants to listen this. So why specialization work for me? Why you know there were multiple reasons to it of course but uh you know but we we actually realized we started understanding our clients better. My clients understanding my company better. They started understanding my capacities my skill set better. I was trying to understand I understood better their audience targeting. So everything was worked in a proper sync and that's where the magic happened right but to be very precise first thing first what happened is we we able to build that trust that expertise helped us to build that trust right so uh we were able to uh we were able to deliver what we are committing to in a nutshell we were able to walk the talk right so uh so we were we were very precise in our pitches we were very accurate In our projections we were very true to what's delivered what's not delivered possible all that client like really liked it you know and that expertise helped us to build that trust to follow after that what happened is because we had established that trust and uh credibility we are able to command a high premium pricing as well trust me we were the we were the highest uh uh price point as compared to what our compet competitors were offering to. But clients were ready to pay that because like I said, we we knew what projections to follow. We knew what their audience is. We knew what they want and what their problem is. And we were actually solving it pretty pretty good way. Really damn good way. And that helped us to get right pricing and we were actually getting it more. And the third thing that happened is uh the marketing cost gone down. Uh so we all know that the word called CAC right everybody is aware about it customer acquisition cost that's the biggest pain in today's balance sheet of every entrepreneur right the customer acquisition cost is something that if you're able to control it your profitability index goes up that directly hits your impacts your prof profitability right so our customer acquisition cost gone drastically down because we were able to like I said we were able to walk the talk we are delivering what we committed to And because of that we were able to retain our clients better. We were getting more and more referrals. So we never like we we didn't realize that we should we never thought about doing marketing for that and we never thought spending so much amount of money to get clients on board. So eventually my customer acquisition cost down. So and all this was happening because we were specialized. We knew what client want. We knew their problem areas. We knew their pain and we were actually solving them one by one better than anybody else in the market and speaking of which my system and processes became very very robust. Okay. So what it means I was able to follow I was able to do that job with less number of resources in place whereas my competition was for example my competition was uh taking 20 people to finish their work I was able to do it in just five now here we're talking about almost 200% optimization in the cost right so I was able to do that solve that problem and pretty god go good damn way by the way it's not like quality was not compromised at all. So I was able to do that delivery with less number of people less number of cost in place and boom that happened you know we we got the profitability in place but that was that conviction I mean that came that conviction came to me because I was living that I was doing that practically when I came out in the market and started talking to all my uh fellow founders people in the community they were literally not very up for it. They said no, this limits my scale of business, right? Uh then I really thought that does this really limits your scale? I mean, if I'm just doing one segment or if you're just doing one segment, will this limit your business? I don't think so. Because like I said, you have to own that space. If you're doing everything for anything, you're not owning it. You're just doing what everybody else is doing in the market, right? So the learning that I got was immense right from that specialization or focused approach that I took in that and that learning was way ahead than the competition they were not able to catch up and that's where you get that cutting edge that's your winning streak right so if you really want to have a great cutting edge and winning streak in your business try to approach try to have that strategy in place being focused towards it. You need more validations for this. Some companies doing it amazingly well, right? Uh my favorite uh Birkenstock uh they they're like they're just they were a footwear company, but then they realized uh they're mixing it with healthcare. They're actually trying to solve uh healthcare problem issues with footwear. So, it's not just another mom and pop shop, not just another lifestyle footwear brand. They're actually trying to uh combine it together with healthcare issues. And that's where they they wanted to be. The positioning is very strong in that. And because of that niche that they took, they they've been valued at $8.7 billion, right? Hit the IPO, boom. Right. Uh what else? Right. The flow is one of the one of the great example. I follow this because uh uh because they selected to be just with one audience women that's the niche that they that that they created. They adopted that strategy and because of that they got repeated customers. Their loyalty was very high. The customers loyalty was very high. They they were not spending good high amount of money for CS and all that. Right? Because of this, they were able to become profitable and that's why they've been valued at $1 billion plus in 2024. Right? Do you need more validations? I can share more over the internet, but I could cover two here. Uh, but there are so many companies who are doing so many things in a specialized segment, taking their niche, doing that stuff, shaking profitability in their balance sheets. And why uh by the way I'm not talking about uh when you're saying differentiation I'm not talking about price differentiation or specifications and product or feature differentiations it's a it's a cutting edge mode of your business that we are talking about right uh so it says uh focus doesn't limit your business it empowers it right like I said I will still repeat it and time and again it says you got to own the space you got to be the best in the room You can't be just a be another guy in that room. If you follow that path, I'm sure the profitability will follow you for sure. So, uh before we end, uh I would I would like to ask this question to the audience is uh when you imagine you are in a room and you're pitching to a client and there are 10 or more people in in that room offering the same solution and your competitions. I'm sure you will think about what best you do, right? You have to think about it that what are you good at? What do you do best? What do you serve best? If you already have that answer in place, that's your magic salt. You're building that up. Your recipe of profitable business is already ready. If you have that answer, if you don't have it, I'm up for a conversation, guys. Please come with me. We'll have a coffee together and we'll conversate about it. Great. Thank you so much uh everyone. Thank you.