Pre-Internet Entrepreneurs: John Jacob Astor
Most people, including most investors and businessmen, hate volatility. It can be a sign of mismanagement or inadequate planning. For venture capitalists and startup entrepreneurs, though, volatility is a sign of the best opportunities, as long as you know how to take advantage of them.
The Lesson: Make Friends, Not War
No matter what the past decade’s news might suggest, the business environment in the United States has probably never been as volatile as it was at the dawn of the 19th century. A brand-new country, still developing its own laws and customs while struggling to forge relationships with foreign governments and trade partners, made it difficult to carry out business ventures with any certainty of success and profitability.
It was this environment that made John Jacob Astor one of the country’s wealthiest men.
The fur trade was big business during and after the American Revolution, prone to conflict and rapid, sometimes violent shifts in market share. Rather than throw himself headlong into the fray against his competitors, Astor made partnerships with local populations and foreign trading companies that helped his business see near-constant growth. His network of trappers and suppliers eventually spanned the North American continent, and he sold his fur goods at his own shop in New York City and through partners in London and throughout Europe.
The Action: Make Potential Competitors Partners Instead
All companies face competition, and you’ll never be able to fully avoid it—nor should you try to. But you can take much of your competition and turn it into an asset if you plan carefully and spend time forging relationships.
Reach out to related businesses in other regions, or with tangentially-related products or services, and offer to help them create value in exchange for the same consideration. Share useful information with their clients in exchange for access to their marketing lists, use “in kind” exchanges to offer your current clients more value, and build a network that will enable you to keep growing no matter what disruptions occur in any given sector.
Turn potential enemies into friends, and you’ll all see better bottom lines.