When Something is Happening in Your Sector…

Posted on Wednesday, April 3rd, 2019

In his 1965 song, Ballad Of A Thin Man, Bob Dylan wrote these famous lines:

Something is happening and you don’t know what it is/Do you Mr Jones?

This week, at the regular MEG Meet-up, we discussed change, and what happens if you fail to see what’s coming in your sector.

A Flawed Model

The danger for established market leaders is that they become too invested in the culture they have helped create.

Then when this culture changes, they are too slow to respond, and so begin to lose their market share.

There are famous examples of this, such as Blockbuster Video failing to recognise the threat from a fledgling company called Netflix.

This story is interesting because the plot hinges on a less obvious detail. It wasn’t about Blockbuster failing to appreciate the digital revolution and the rise of online viewing.

It was about fines. Blockbuster penalised its customers for late return of videos, to the extent that the company’s revenues were heavily dependent on these late fees.

Netflix needed to charge no such fees. Customers could watch something for as long as they wanted to, because Netflix ran a subscription model.

Blockbuster was caught in a bind. It couldn’t afford to alter its business model without damaging its profitability, by losing the revenue the late penalty fees brought in.

Netflix was originally a niche player, but it would go on to become worth billions of dollars.

Blockbuster went bust in 2010.

Bouncing Off the Board

One of the most valuable aspects of MEG is that for business owners it acts like an informal board of directors, where people can bounce ideas of each other, and receive feedback from the group.

When it comes to being aware of changes in your sector, having this kind of support on hand can make business feel like a far less lonely place.

It means sharing information, and insight, and having others keep an ear to the ground for you, helping to minimise the impact of any nasty surprises but maximise the opportunities that networking brings.

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