The power of focused growth

Andrew Carnegie, the American industrialist and steel tycoon who later devoted much of his wealth to social welfare, once said, "Put all your eggs in one basket and then watch that basket." At first, it may sound like the line of a risk seeker, which it is from an entrepreneurship perspective. Carnegie was not promoting recklessness. He was talking about focus, conviction, and belief, the kind that turns small ventures into lasting institutions. Many will follow the words of famous investor Warren Buffett, who advises spreading investments, and that is where the difference between an entrepreneur and an investor lies.

In business, that lesson has never lost its relevance. True growth rarely comes from spreading resources too thin. It comes from concentration, from nurturing what one already understands best and making it stronger, smarter, and more efficient. Sustainable success is not about chasing every opportunity that appears on the horizon. It is about recognising where value truly lies and giving that pursuit complete attention.

Those who built enduring enterprises understood this truth well. If we look at successful firms that grew into groups of multiple ventures, a clear pattern emerges. Almost all began with one strong, focused business, one product, one service, one vision that they believed in completely. They poured every ounce of effort and belief into it until it became strong enough to stand on its own. Only then did they diversify. Diversification is valuable, but it must come at the right time. When it happens too early, it dilutes purpose.

Retained earnings, the profits kept within a business, often decide whether a company grows or simply survives. They are among the most powerful and underappreciated sources of capital. They cost nothing, require no external approval, and signal confidence in the future. When reinvested, they strengthen the organisation from within, improving systems, upgrading machinery, building talent, and expanding capability. Growth funded from within might seem slower, but it is far more sustainable. Over time, it compounds quietly, turning steady enterprises into resilient institutions.

In Bangladesh, however, the pattern often looks different. Many entrepreneurs, once they begin making profits, prefer to withdraw them and invest elsewhere, often in land or unrelated greenfield projects, simply because someone else succeeded, without truly understanding the market. The reasoning may feel safe, land may seem exciting. But land prices have remained stagnant, and idle cash loses value every day to inflation. A new business without knowledge or skill may result in losses at the cost of the profit-making one. It becomes an expensive gamble.

Meanwhile, the businesses that earned those profits could deliver far higher returns if the same money were reinvested in growth and innovation. The irony is that many owners borrow from banks at high interest to fund expansion while their retained earnings lie untouched in other investments. Over time, the cost of capital becomes greater than the returns it generates. The enterprise begins to weaken quietly even as it appears stable from the outside. Non-performing assets drain the life out of the profit-making one.

Each reinvestment cycle fuels the next, creating a continuous loop of improvement. But when profits are withdrawn too early, that rhythm breaks. Many once leading enterprises in Bangladesh have faced this quiet decline. Years of underinvestment slowly eroded their advantage through blind investments.

Warren Buffett later reinterpreted Carnegie, saying, "Do not put all your eggs in one basket," encouraging investors to diversify their portfolios. His advice, however, mainly applies to investors or mature entrepreneurs. An investor manages risk across many ventures, while an entrepreneur creates value by mastering one. His renowned investments reflect this principle.

Not everyone is suited for focused growth, and blind diversification makes little sense. Sensible asset allocation and diversification matter. But when someone is truly committed to winning a vertical, that focus deserves backing and belief. Focus on the basket and nurture it with care. If we look at China, we can see clearly what focused growth can achieve for businesses.

The writer is co-founder and CEO at Accfintax and associate director at Hoda Vasi Chowdhury and Co