Do You Know What The Latent Potential of Your Business is?

It's easy to be fooled in the initial days when things go your way. Don't be a vain rookie!

The first business deal I cracked was a sale of around half a million dollars. Well, I was finally, and officially, a salesman with a much-needed closure for my first startup and I was on cloud nine. I still vividly remember that evening and the tiny celebration that followed in German Bakery.

What I did not know then is that it was much easier for me to close the deal than I would have thought because of factors that were favorable to me. Where there is a new offering in the market, or an enhanced one, there are always going to be takers who will pick it up. That number can be a few to many, but there will be some for sure. Of course, you still have to reach out to them, or be seen by them, and do the basics of sales and marketing the right way. Goes without saying, that the offering has to make sense and address a market need or want.

Photo by Diana Polekhina on Unsplash

This is something I’ve observed over and over again in my own journey and in conversations with other founders: latent potential that exists in a business can either be deceptive or a great enabler.

When you launch a business, there’s usually a market for it—sometimes large, or small. If it’s large, great because the latent potential of the market will carry you further. But often, it’s somewhere in between.

I’ve seen businesses show early promise and then hit a plateau. The excitement of those initial wins makes founders believe they’ve cracked something big. I’ve been guilty of this myself. The early traction feels validating, and you start forming theories about why things are working. But then, growth slows down or even stagnates, and it’s confusing. What happened, you wonder?

The reality is that the business had latent potential—a certain number of customers who were already inclined to buy what you offered. The real challenge is growing beyond that, and if you assume that your early success is purely because of what you’ve done, you don’t prepare for what comes next.

The Humane AI pin managed to sell 10,000 units, and that was the latent potential of something crappy. I loved the idea, the promise, the future potential, but the product was bad. If their target was to sell 10,000 units, they would have called themselves a success at that point in time.

When I launched my first business, nearly everyone in the Indian internet industry was interested in what we had to offer. Checkmarks across scale, quality and speed. What else could go wrong? But even the early traction and positive sentiments, which were valid, did not mean that the business was identifying and addressing what it really needed to scale and grow in the future.

Imagine setting up a water stand on a busy desert road. The people passing by are naturally thirsty, so the water sells itself. It’s easy to think you’re doing something right, and you are as well, but in reality, the demand exists regardless of your value proposition. The question is: what happens when the same travelers stop needing as much, or new vendors set up nearby? If you don’t plan beyond the initial demand which was fueled by the latent potential, growth stalls. Understanding this, and planning accordingly for the future, is a game changer. Don’t let the latent potential of your business fool you.

Latent potential is a gift—it gets businesses moving when resources are scarce in the initial days. But it can also be a trap if you don’t realize what’s really happening. Founders assume that things are working because of our efforts, when in fact, we were largely benefiting from an existing demand that was always going to be there. And when that demand settles, reality kicks in. Suddenly, there are fewer customers to convert, and the performance marketing stops working as much. To top it all up, there’s an upstart, just like us, showing tremendous potential!

So what’s different when you recognize this early on? You wisely use the gift of resources, time and revenue included, the latent potential has given you. Instead of riding the wave and assuming it’ll last forever, you start working on how to grow beyond what will sell anyway. I’ve found that value addition, working on the brand, community building, and anticipating future market needs are some of the best ways to break past the plateau. The key is not to sit back and assume you’ve cracked it but to actively work on what’s next, beyond the latent potential of the business. In a way, that is where the real deal is.

This realization has changed how I think about business. The real success isn’t in the early wins—it’s in what you do after that. Growth isn’t automatic. It takes foresight, strategy, and constant evolution. And if you’re not paying attention, you might mistake the inherent business available to you as a latent potential for a disruption you have caused in the market, or the like, only to be caught off guard when it slows down.

I’ve been there, and I’ve learned that the businesses that survive and thrive are the ones that prepare for what comes after the initial traction.