Blockbuster, R.I.P. — Lessons for us All
You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead. Let’s have the intelligence, let’s have the decency to sign the death certificate, collect the insurance, and invest in something with a future.
(Lawrence Garfield — “Larry the Liquidator” – played by Danny DeVito, in the movie, Other People’s Money)
news item: Blockbuster finally files for Chapter 11
Born, 1985: (The first Blockbuster store opened in Dallas, Texas on October 26, 1985 at the corner of Skillman and Northwest Highway. By the way, I used to rent videos at that specific store. I had no idea that it was the first).
Died, September 23, 2010: (though some smaller version might last a little longer).
The lessons are many. Like:
#1 Customer loyalty is dead. Really dead.
#2 Someone intends to go right past you — you’d better beat them to the punch.
#3 If the product you are selling is no longer the product that works best, you have no future.
#4 If these three are true, then you will go under – it’s just a matter of when, not if.
These are the thoughts that I have as I reflect on Blockbuster going into bankruptcy. Netflix, and redbox, and youtube, and iTunes, all simply passed them by. And Blockbuster simply was not nimble enough, not quick enough, not able to react and change fast enough, and now they are on the verge of gone.
Lots of thoughts, from plenty of books, come to mind, like:
Verne Harnish, in Mastering the Rockefeller Habits, reminds us that all business starts with the functions of Making or Buying something. So, if people no longer want to buy what you offer, you’ve got real trouble…
In Get There Early: Sensing the Future to Compete in the Present (Using Foresight to Provoke Strategy and Innovation) by Bob Johansen (Institute for the Future), we learn about the VUCA world of (VUCA originated at the U. S. Army War College – the graduate school for Generals-to-be):
It’s the volatility that helped doom Blockbuster.
In The New Experts: Win Today’s Newly Empowered Customers At Their Decisive Moments by Robert (Bob) Bloom, Bob basically wrote Blockbuster’s obituary. Consider these quotes from his book:
Today’s buyers – empowered by the Internet, assured by the enormous choice in every segment of commerce, and capitalizing on the acute vulnerability of sellers struggling in this new selling climate – have taken control of the entire purchase progression.
Buyers no longer care who they buy from.
Today, buyers are in control.
This reversal of supremacy has placed every business around the globe in a perilous situation.
This confluence of technology and choice started customer loyalty down the slippery slope – ultimately, customer loyalty died.
It is a scary world out there. Somebody is out to beat you in tomorrow’s market.
I’ll end with a well-known quote from Gary Hamel (quoted by Tom Kelley in The Art of Innovation):
To those few companies sitting on the innovation fence, business writer Gary Hamel has a dire prediction: “Out there in some garage is an entrepreneur who’s forging a bullet with your company’s name on it. You’ve got one option now – to shoot first. You’ve got to out-innovate the innovators.”