It’s 2000 and you’re about to finish work for the day. Before leaving the office, you check the weather. A massive snowstorm is about to hit and any sort of plans you had will be out the window for the next day. You call your family to tell them you’re going to stop at the grocery store and Blockbuster to pick up some movies. Your kids ask you to pick up "Dinosaur," which just came out on VHS and to pick it up some chicken nuggets for dinner.
As you arrive at Blockbuster, you immediately find "Dinosaur" on display in the new releases. You also grab "X-Men" along with some popcorn while waiting in line, as you know one movie isn’t enough and chicken nuggets only go so far with your kids. When you return home, your kids are ecstatic that you brought two movies and additional snack for the “storm of the year.” All is well in the world.
If you’ve read this far, you likely know where I’m going here. Most know the story of Blockbuster and its lack of willingness to innovate, stay on top of trends, and understand what its customers’ needs and expectations were. If you don't, here's a quick recap. In 2008, then Blockbuster CEO Jim Keyes told Motley Fool, "Neither RedBox nor Netflix are even on the radar screen in terms of competition." In fact, Blockbuster had an opportunity to purchase Netflix in 2000 and passed as it viewed it a “niche market.” This costly oversight to an emerging market happened due to an unwillingness to explore future business models and a failure to keep up on customer expectations, needs. and trends — which has a name.
How Do You Spell Short-Sighted? Ego-vationEgo-vation is the ego’s unwillingness to innovate (Ego + Innovation = Ego-vation), which unfortunately is something we've seen time and time again.
However, I’m using this article as a wake-up call so you can avoid the same fate that so many previously listed Fortune companies have succumbed to.
Ego-vation occurs when businesses put their instincts to the side and focus too much on the business they have already built. In the case of Blockbuster, it was able to identify Netflix as a business in its space, but failed to see beyond its “niche” nature and what the future could potentially hold. Additionally, Blockbuster looked at the organization as a money-making opportunity, not as an investment and an additional service it could offer current customers. Essentially, Blockbuster failed to innovate because it was stuck in the mindset that “what is today will always be.”
If Blockbuster did adopt this niche model, the family I mentioned earlier could have watched multiple movies from the comfort of their home without the worry of venturing out into a snowstorm to return the movies they rented, saving them time and peace of mind.
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What Is Today Won't Necessarily Be Tomorrow
The key point here is what you did as a business for your customers yesterday means NOTHING. That’s right, I said it. Your customers don’t owe you anything. Your businesses goal is to woo and dazzle customers with experiences that meet and exceed their expectations. Just because Netflix wasn’t profitable at the time didn’t make it a bad business idea or avenue to pursue. When Netflix started its video streaming in 2007, Blockbuster should have noticed. But instead, it assumed because its customers weren’t yet using Netflix, they wouldn’t use it in the future. And that’s the point. Blockbuster doubled down on its current business instead of embracing trends and niche markets, which was its fatal mistake.
Of course, it’s not always easy to predict future events, and it’s easy for me to point out poor business decisions years after they happened. Even more challenging would be for me to suggest a “silver bullet” solution that you could use to avoid this peril — it simply doesn’t exist.
However, I am hoping that this article serves as a reminder to be open to the art of the possible within your business. The future is an unknown place, and your customer expectations are changing on a daily basis. That’s right, daily. Your customers are purchasing various products outside of what they buy from you. In doing this, they interact with ordering experiences they like and adopt on the spot as the benchmark for all future-state experience expectations.
So, use this as a reminder to embrace the weird ideas this world has to offer. It's OK to go against the grain, as these weird ideas are likely being adopted in some form by your customers and are silently creating their future expectations. To paraphrase Mark Twain, “Whenever you find yourself on the side of the majority, it’s time to pause and reflect.”
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