Oprah: 25 Years of Focus
The tempting business opportunities sitting in front of Oprah Winfrey, and why she was brilliant for not taking them.
The iconic companies and individuals of past decades tend to take one of two paths to success: hyper-focus, or ruthless diversification.
Bill Gates spent 30+ years laser-focused on Microsoft. But Elon Musk, the man of the hour these days, has split his career across payments, car making, rockets, and now Twitter.
This dichotomy can just as easily be drawn at the corporate level as the individual level. TikTok does one thing so well that it’s become a health and national security topic for America, while Meta balances Facebook, Instagram, Whatsapp, and now “metaverse” ambitions, all built for different audiences and use cases.
This begs the question: what are the pros and cons of focus vs diversification in technology businesses?
Breaking out of the traditional Silicon Valley mold: Oprah Winfrey built one of the greatest cultural machines of a generation, and I find the raw longevity of her career and relevance to be thought provoking.
A 2009 New York Times article (archived version linked here will circumvent the paywall) by media & culture columnist David Carr explores Oprah did (or rather didn’t do) to hold her place as Queen of Daytime TV for 25 years. Hat tip to Auren’s blog Summations for surfacing a link to this gem.
She never took her company public, which meant that she remained in control of both her operation and her destiny (see Martha Stewart).
She never christened her own book imprint even though she created best sellers with the flick of the wrist (see Miramax/Talk).
She never stuck her name, a very powerful brand, on any merchandise (see Martha again, along with a host of chefs and athletes).
She did not license her name to a magazine, she built one in her own image and tweaked it until it became a big publishing success (see Donald Trump, et al).
She never engaged in behavior that tarnished the luster of her name. (Martha again, plus David Letterman).
She also never made big deals just for the sake of synergy (AOL-Time Warner), never got addicted to doing deals (see Barry Diller), never made dubious investments that put a strain on her core business (Sumner Redstone and Midway), never let in-house corporate politics boil into public view (Michael Eisner). And, while building a murderer’s row of daytime programming including shows with Dr. Phil, Rachael Ray and Dr. Oz, she never got involved in businesses she didn’t understand (Edgar Bronfman, Jean-Marie Messier and, well, just about everybody else in the media world).
There are a number of references to other ways in which business leaders have led themselves astray. I would highly recommend googling those you’re not familiar with. I certainly learned of a few interesting stories by doing so.
Discussing this with a venture-backed founder friend, we came to the conclusion that in reality most cases are far too nuanced to be categorized into focus plays or diversification plays. The tech industry’s winners are largely predicated on the notion of platform power and network effects to own customers and maintain leverage with relevant financial metrics.
Is Google, for example, unfocused by building Gmail and Maps and buying YouTube? Or are those venture purely in service of protecting the Search business — one of the greatest cash cows to ever exist. As long as they don’t screw up Search, the core of the business will persist for decades to come.
What makes the Oprah story so compelling is how incredibly easy it would be to expand:
“I don’t think of myself as a businesswoman,” she told Fortune back in 2002. And that’s sort of the point. A business type would have said that to sell books through her book club’s endorsement without dipping your beak in was silly. A licensing agreement with a gold-plated retailer — they line up every year to be part of her “favorite things” episode — would be low-hanging fruit for any other media company. And a movie production deal, given the platform she had, was a no-brainer.
Google building Gmail was non-obvious. But selling books through Oprah’s book club is such a no-brainer next step. It must have taken enormous amounts of 1) discipline, 2) humility, and 3) control over Team Oprah to avoid the temptation. But in the long run, it kept her purely aligned with her viewers, and on top of the ratings.
The media business is certainly unique and lessons drawn from it don’t easily map onto technology startups. But Oprah’s core message — owning everything, not getting in over her ski-tips, and staying laser-focused on having the world’s best relationship with the customer — are not to be overlooked.