Case Scenario: One thing that savvy, growth-minded start-ups do is configure their products or services in ways that have built-in growth potential. Producing "one-off" products or services leads to limited growth potential. Instead, it's best to produce products and services that, if successful, provide natural segues to complementary products and services that can be added later. SwitchFlops are sandals with interchangeable straps. Lindsay Phillips developed the original idea for these products when enrolled in high school, as part of an art project, when she was 16. Amazed by the response, Phillips continued with the project. She started designing functional flops with colorful straps, each adorned by a unique button. She realized that by using a hook-and-loop fastener on each flop, she could create a shoe that accommodated interchangeable straps. This was the birth of SwitchFlops. A shopper buys one pair of SwitchFlops sandals, and can then purchase interchangeable straps. During her college years, Phillips fine-tuned her design, merchandising, and manufacturing skills working summers at Polo Ralph Lauren's leather goods division in new York City. She also traveled to Europe for classes and enrolled in the Semester at Sea program. These last two experiences exposed her to a variety of colors, cultures, and patterns that helped her fashion unique strap designs. A patent on her unique approach was granted in 2004.

SwitchFlops made its retail debut in January 2007 at the Surf Expo Trade Show in orlando, Florida, where it was showcased as a new, creative product. SwitchFlops started with several basic sandal designs and 10 straps. Most customers bought more than one pair of sandals and several straps, allowing them to "customize" their look by trading out sandals and straps. Most customers seemed to enjoy this experience. SwitchFlops's value proposition was both versatility and value. Today, SwitchFlops sandals cost between $24.05 and $59.95, and the straps cost between $7.50 and $16.95 each. To make it fun, the sandals and straps all have names. Sandals include Rosie neutral Snakeskin, Lulu Flop Gray, and Brenna Brown wedge. Straps include Arlene Snap, Dhana Strap, Franny Snap, and Joanie Snap. There are now multiple SwitchFlops sandals and straps to choose from. Phillips has evolved her footwear line and currently sells ballet flats, wedges, and espadrilles along with sandals and has added shopping bags, scarves, and sandals for children to her firm's product lines. SwitchFlops sandals benefit from being both fashionconscious and economical. Instead of owning 10 pairs of sandals, a customer can own two or three, and have multiple "looks" by changing out straps. By making a product (sandals) that is based on buying add-ons (straps), the strategy has also benefited SwitchFlops and helped fuel its growth.

Questions for Critical Thinking

1. As an up-and-coming entrepreneur, what things did Lindsay Phillips do to equip herself to lead a growth oriented firm?

2. Think of a company that sells a product or service that's similar to Switch Flops, in that the product or service provides a natural segue to add-on products or services. Briefly explain the product and its built-in avenues for future growth.

3. Of the companies profiled in the "You Be the VC" features in the book, which company has a product or service that is best positioned for natural segues for future growth? Explain your answer.

4. Why do you think Switch Flops has been so successful? Draw lessons from several chapters of the book to formulate your answer.