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Diversification is one of the most challenging decisions a company can make, especially if the company is fresh on the market. The rewards are astonishing, as a successful process ensures that the company stays on top of the industry for a very long time. There are many success stories out there. For example, Apple conquered technology markets with the iPod and iPhone launches in 2001 and 2007, respectively, while Pepsi and Coca-Cola expanded into snacks and other drinks and now own nearly all the successful beverage brands in the world.

However, as James William Awad explains, the process itself holds many pitfalls and carries huge risks, and an unsuccessful expansion campaign often results in a company's shutdown. On top of that, most of the diversification success stories are examples of horizontal diversification, something that is almost exclusive to traditional companies with a centralized organization.

James William Awad is a proponent of the revolutionary concept of decentralized companies, and he is the founder of TripleOne, the first and only decentralized company in the world for now. According to James William Awad, the world needs to evolve at a faster pace, and the traditionally organized companies are slowing it down.

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"Horizontal diversification means that a company develops a new product that is related to the original idea. For example, if you are selling clay flower pots, it's simpler if you also start selling soil, flower seeds, or flower seedlings," he says. "It's a decision driven purely by profits, and this kind of thinking slows down the world's evolution. Decentralized companies are not driven by profits but progress, and they can easily make a decision to jump over ten industries and go from making and selling clay pots to selling jewelry."

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As James William Awad explains, decentralized companies have this ability because, besides being driven by progress, everyone in the company has an opportunity to voice their opinion on where to go next. "In a decentralized company, any new venture is treated as an independent entity and is funded by previous successful ones," he says. "The decision-making process in such companies is also a lot faster than in traditional counterparts, as the decision-making power is spread between all employees instead of a handful of people."

For him, the combination of quick decision-making and independent funding fueled by progress is a winning strategy, as it allows the company to quickly react to any shifts in the market and seize the opportunity to expand into new industries and territories.

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Traditional companies have to protect their profits and shareholders, and they won't easily make a decision to jump into some non-related industry," says James William Awad. “On top of that, in traditional companies, such decisions are often made by people who have narrow expertise and lack the needed experience to work within the new market. On the other hand, a decentralized company can quickly make the shift, as the subject matter experts are always in charge. That lowers the risk of diversification by a mile, and makes it easier for decentralized companies to penetrate new markets more efficiently.”