• by Kristine Shine , November 22, 2010

I am frequently asked about the various revenue streams of our company -- currently we have four -- and if they lend themselves to success or potentially distract us from our primary focus. Recently, I've found myself increasingly discussing this topic, which has led me to analyze the necessity for a diverse business model, especially when seeking the attention of Generation Y.

When our company, Sugar, Inc., began four years ago, the intent was to develop original content with a focus on women, ages 18-34, and their core passion points. Though we were one of the first blogs in this space, we found the competition stiff and the battle for mindshare getting tougher in no time. We were quick to take stock in our business and examine the core audience and what they were doing digitally -- we were born in the digital space and had no intent of building offline.

We made a calculated decision to pivot on one central theme -- Gen Y women -- and took note of where they were spending time and what they were doing online. As a result, we built a business model that expands and adapts to the changing online landscape and generates revenue through multiple sources.

Basically, we followed Gen Y in a sense by mimicking their behavior and becoming multi-faceted -- in this case by building a business inclusive of e-commerce, community, video, gaming, local offers and more. We recognized early on that you couldn't pin this generation down, that diversity and personal expression is everything to them. We realized that if we built a one-dimensional business, we risked losing Gen Y's attention -- and, potentially, our shirts!

To be successful in today's ever-changing business world, follow a few of these lessons Gen Y has involuntarily delivered to us:

• Ask "What's next?": Gen Y is the first to discover and test new concepts and products. We know they don't like to follow the crowds. They are constantly innovating and aligning themselves with brands that do the same, expecting the core ideal to remain as innovation keeps pace with them. They are not the boomer generation that gets disgruntled when a brand evolves.

• Diversify: Rest assured that what was "in" today will become a hazy memory tomorrow. The best way to protect your business is to have multiple revenue streams, and quick. When one part of the business gets hit, the others should help safeguard against destruction. The landscape is changing so quickly that rapid, decisive diversification is your only protection.

• Keep a core focus: Gen Y has core values -- the environment, reliance on one other, social causes, family. What are your company's core values? Identify the one thing that ties your businesses together and becomes the driving force as you build new revenue streams. We pivot on the audience of Gen Y women and their digital behaviors. What is it that your company pivots on?

• Don't discriminate: Gen Y is one of the most open-minded, accepting generations. They have a deep respect for all of humanity and each other. They are veritable sponges and want to explore everything around them. Take a lesson from this and explore what may not initially seem a natural fit for your business.

When we built ours, we thought of ourselves as a global publisher and anticipated growing globally, not locally. Over the course of the last few years, we saw an explosion in the local marketplace. We recognized through mobile and other platforms that local exploration and region-specific special offers were generating a significant reaction from Gen Y. We wanted to position ourselves like the audience, so we bought a company called FreshGuide and are now emphasizing all local initiatives.

This isn't a case of the old dog learning new ways to roll over. Generation Y continues to adapt and embrace new forms of communicating, connecting and expressing themselves, which should be viewed as an example worth following rather than a threat. Though they exhibit consumer behavior that's tough to predict, it's something that can teach all businesses, and in the process, makes them poised to succeed.