What we can learn from Blockbuster & Netflix
We are well underway into the 2023 business year, and I don’t know about you, but my Instagram feed is flooded with founders and entrepreneurs telling us all about how they never gave up and are now living their dream. Oh, and since they’re living their dream, you should hire them to live yours too.
Don’t get me wrong, I am a HUGE proponent of always having an advisor and mentor, which is why I encourage my clients to spend up to 10% of their gross profit on business investments. But, what I don’t see a lot of on the ‘gram right now is these women talking about how they invested, pivoted, and learned from their own mistakes.
In the world we live in, and certainly in the online business space, pivoting must be part of your business plan. Expect pivots to happen, because they will. You will either be ready for them, or you won’t.
Take Blockbuster and Netflix for example. In the 1990s and early 2000s Blockbuster was the largest video rental company in the world with over 9000 stores, and now there is only one left.
There were a few very strategic errors Blockbuster made that ultimately ended the life of the business too early:
They could have bought upstart Netflix in 2000 as its budding online business.
They didn’t see the trend of movie rentals moving online fast enough, it took SIX years to launch a similar program once they saw Netflix gaining traction.
Blockbuster struggled financially even in the height of their success. (take note here! Big sales & revenues does not mean your business is financially healthy!)
They made a financial deal that brought in more debt than they could handle
On the flip side, Netflix was founded in 1997 by Reed Hastings after being frustrated about the ridiculous late fees Blockbuster charged him. Hastings had the vision to build a business different from Blockbuster - lower costs and more ease for the customer. It took him 10 years of experimenting and pivoting. “Hastings always thought big but started small, failed quickly and scaled fast. Netflix has mastered the art of the disruptive innovator.”
As we steamroll ahead into a new year, I encourage you to think about longevity for your business, to start small, fail quickly, and scale fast. Your biggest support for running your business this way is going to be real-time and accurate data. It’s the key to knowing what to drop quickly or plunge forward. Marketing data, customer data, and financial data. Watching trends, knowing what’s happening to each of your revenue streams, knowing what marketing is working, and knowing what your customer wants vs what they need.
And what I tell all my clients, data is just that. Data. Nothing more, and for sure nothing emotional. It helps us make quick and confident decisions, that simple.
