If, in 1998 Yellow Pages was the king of search, why did the Google overtake them? If Blockbusters were the king of video rental, why did Netflix overtake them?
In this vlog Grant explains that it was all about their failure to use their own data and asks if are you sitting on data, or knowledge, that you are simply not utilising at the moment? In other words, are your competitors up to something you don’t quite understand?
A man walked into a restaurant in New York on a hot sticky day, and as he sits down to order his meal, he calls the waiter over and he says, ‘Waiter, it’s too hot in here. Can you turn on the air conditioning?’ And the waiter scurries off. A few moments later, he’s back waving at the waiter. He says, ‘I’m too cold. Can you turn it off again?’ And again the waiter scurries off. This happened a number of times with the customer complaining and asking the waiter to turn the air conditioning on and off and on and off… And eventually another customer pulled the waiter over and he said, I don’t know how you’re staying so calm, that customer is driving you mad. And the waiter said, ‘you don’t understand, I’m driving him. We don’t have any air conditioning’.The way we perceive things affects our reality and sometimes we need to zone out to see a bigger picture, to be able to spot opportunities and make sure we don’t miss out on things.
For example, if you think about Yellow Pages, what were they if they weren’t in the business of search? And yet they didn’t really think of their business in that way. And who would you have trusted more in 1998; the search engine Yellow Pages or a company you hadn’t yet heard of called Google. Similarly, a lot of people think that Blockbuster lost out to Netflix because of the streaming of films, but that actually isn’t the case. Netflix already damaged Blockbuster’s market share when they were a mail order business. But that’s crazy, because surely it was much easier to go to Blockbusters on a Saturday night when you wanted to watch a film, than think about it on Wednesday so you could receive it by mail in order to ensure you had it for the weekend.
Although apparently more inconvenient, the reason why people liked Netflix is because it was a recommendation engine. It used the data and things that people liked and didn’t like in order to be able to recommend new films and take the risk out the purchase. Many of you will remember going to Blockbusters on a Saturday night and looking at all the films and simply not knowing which one to pick and which one you’d enjoy. The fact is that Blockbuster could have competed and also got that data. They just didn’t see the value.
So are you sitting on data, on knowledge, that you’re simply not utilising at the moment? Are your competitors up to something you don’t quite understand? Or could you look at your business in another way and see value that at the moment you’re missing? Sometimes trying to look at your business and the market in a different way is an important part of business strategy.