Business Growth Strategies – If at first you don’t succeed – learning from business failure

As business owners there are many opportunities to learn from others, whether it be from successes or  failures, and in the dot com age there have been

Max Delivery a case study for business growth strategies

Max Delivery a case study for business growth strategies

many failures to learn from.  Kozmo was a high flying company that had grand dreams of   delivery of nearly any product you could want, sent to your home in one hour or less, the result, no delivery charge and small orders meant millions of dollars lost by growing the business too quickly and then unable to change the pricing structure. Chris Siragusa who was the former Kozmo Chief Technology Officer still held onto the dream and has now built up and is succeeding in the same market that Kozmo failed, with a major difference. Chris is building his model with less speed and haste. This  is where the business growth strategies between the two companies has varied, calculated and steady (Max) or fast and uncontrolled (Kozmo).


 Business Growth Strategies – If at first you don’t succeed – learning from business failure

While Kozmo crashed and burned, Siragusa learnt to take things slowly, defining and refining his business model. Finding out what works and what didn’t, building a strong foundation, working on pricing strategies before expanding and of course, listening to the needs of it’s customers.

Here’s how Kozmo fell:

“There were people who would literally order one candy bar.” By the time the company realized its model was a money-loser, it was too late. Customers had grown accustomed to getting something for nothing, and they left in droves when Kozmo tried implementing a $10 delivery fee. When it was still relatively small in 1998, the site lost only$813,000. One year later it lost $26.4 million on $3.5 million in revenue.


Max Deliveries business growth strategies follow a what could be called a more academic approach.


Professor Andrew Zacharakis, the author of five books on entrepreneurship and former chair of the entrepreneurship program at Babson College, says that by taking a slow approach, Siragusa seems to be doing it right this time. Small businesses sometimes get caught in the trap of thinking they can fix weaknesses in their cost or revenue structures as they expand, but it’s a rare company that can pull off such a feat—think Facebook or Amazon. “Growing is all-encompassing,” Zacharakis said. “It takes up all of your time, and staying on top of the current business at the same time is a Herculean task.”

Siragusa spent the first five years his business was in operation making a series of seemingly minor innovations in an effort to refine its model. In order to compete with similar services from larger companies like Fresh Direct and Food Emporium, he did not want to rely solely on superior delivery time (the other services do next-day delivery during a two-hour window, rather than one-hour same-day delivery). Max Delivery also had to make sure its service was comprehensive enough to offer most of what its major competitors offered and competitive enough pricewise to offer an affordable alternative to local supermarkets. This meant constantly playing with the product the full article here


Of course I want to grow my business. I’ve looked at others who seemingly grow overnight and comparing my business to their’s I feel like less of a success and more of a failure. However, after reveiwing the failure of Kozmo and the growth Max Delivery I can see now that businesses require time to develop. And business growth strategies are the key. Sure some can hit on the right formula quickly, for others it can take years.

What do you think? Are you in a rush to build your business which may not be sustainable  in the long term? Or are you the slow and steady type, refining your business model for your market? I would love to hear your views.


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  1. rebecca says:

    This is a big goal and it is too bad he could not adjust and continue but great that he learned and revamped. I guess when they taught that history repeats itself, it is possible that this is in reference to any history including business.

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