Prove, Add Adjacencies, Then Globalize
Use success in one offering to earn permission for disciplined expansion
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 97%
This framework sequences diversification so that each expansion is supported by credibility earned in the previous one. First, build a strong record in a narrow core offering. Next, invite existing customers to support one adjacent capability, explicitly connecting their trust in the core to the new proposition. Validate that adjacency before repeating the process across additional disciplines. Once the organization can operate several offerings successfully under one brand, replicate the model geographically. The mechanism is cumulative trust: demonstrated performance reduces perceived risk for the next product, while a validated multi-product platform makes international expansion more credible. The sequence avoids the confusion and operational strain of launching many products and regions simultaneously.
Origin
Rubenstein described Carlyle's initially unusual strategy of adding investment disciplines under one brand and then establishing funds across Europe, Asia, Africa, Latin America, Japan, and the Middle East.
Core principles
- 01Establish a strong core before diversifying
- 02Let proven performance transfer trust to adjacent offerings
- 03Expand one adjacency at a time
- 04Globalize a validated multi-product model
- 05Use one coherent brand across complementary capabilities
How to run it
- 1
Prove the core
Build a measurable track record in one primary product, service, or strategy.
Pro tip Choose evidence customers already use when deciding whether to trust you.
Watch out Do not diversify merely because the core has generated attention.
- 2
Choose a close adjacency
Select a new offering that uses related capabilities or serves the same customers.
Pro tip Prefer an adjacency that existing customers can understand without extensive education.
Watch out A distant opportunity may require an entirely new reputation and operating model.
- 3
Transfer earned trust
Ask successful core customers to evaluate the adjacent offering based on the relationship and performance already established.
Pro tip Make the bridge explicit rather than assuming customers will see it themselves.
Watch out Past success creates permission to be considered, not proof that the new offering will succeed.
- 4
Validate before repeating
Establish results, talent, and operating discipline in the new area before adding another.
Pro tip Use clear performance gates for each expansion.
Watch out Too many simultaneous adjacencies can weaken every offering.
- 5
Build the multidisciplinary platform
Repeat the adjacent-expansion cycle until the firm has several complementary, proven capabilities under one identity.
Pro tip Centralize shared strengths while preserving specialist teams.
Watch out Brand unity should not erase the expertise each discipline requires.
- 6
Globalize the proven model
Enter selected regions with the capabilities, brand, and operating lessons already validated at home.
Pro tip Adapt execution to local markets while preserving the platform's core logic.
Watch out Do not treat geographic expansion as simple duplication.
In the wild
Carlyle first established a buyout fund. Rubenstein then asked investors who liked the firm's buyout performance to consider adjacent strategies such as venture capital. After developing multiple funds, the firm established offerings across several major regions of the world.
→ Carlyle became a multidisciplinary and global investment firm rather than remaining a single-strategy buyout shop.
Common mistakes
Diversifying before earning trust
A weak or unproven core cannot provide credible support for adjacent offerings.
Launching every adjacency together
Simultaneous expansion disperses talent and prevents the firm from learning which extension actually works.
Globalizing an unstable model
International expansion compounds flaws when the underlying platform has not already been validated.
Is it for you?
Best for
Firms with a successful core product and customers who need related services or investment strategies.
Not ideal for
Early ventures whose original product has not yet demonstrated strong, repeatable results.
From the transcript
“If we did well in it, I'd say to people, we'll give us a chance to do something in venture capital.”
“And then I decided, once we had multiple funds that we would globalize it.”
“So we became a multi discipline firm and also a global firm.”
From the episode
Entrepreneurship, the American Presidency, and Baseball with David Rubenstein
David Rubenstein