They had it all, and they blew it.
For more than fifty years record companies had the world by the tail. They were the gate-keepers. They held all the cards. They decided which artists made it, what to charge for the records, and even which songs were played on the radio.
The money was deep and the power was immense. Why think of the future? Why anticipate new technology and its impact on your business model when everything is going so well?
Why? Because a kid from Northeastern University was developing a peer-to-peer music sharing site called Napster, and the world was to never be the same.
The digital cat was out of the bag. The virtual toothpaste was out of the tube, and there was no going back.
This is when the story gets interesting.
We all remember the response of the record companies. Protect. Sue. Circle the wagons. Shut down the competition.
At a time when the world was at a crossroads made of ones and zeros the record companies – those gatekeepers of all things music – loudly slammed the gates shut and tried to protect their turf. I guess that’s the synaptic response of all legacy industries. It’s human nature to protect what we have.
Couldn’t there have been a better response? One that didn’t drive their customers to hate them? One that didn’t disillusion their artists and the entire music community?
In hindsight we can all ask, “Why didn’t the record companies just develop Napster first?” That’s a legitimate question.
In the same vein you could also ask, “Why didn’t Blockbuster develop Netflix?” Or, “Why didn’t Encyclopedia Brittanica develop Google?” All legitimate questions.
But a better question is a more personal one. It’s a question best directed to the bathroom mirror.
“What am I not thinking about?”
Is there a new technology (or use of technology) that could be a threat to your business model?
Are there changes coming to your industry that demand you rethink the way you do business?
What social currents are occurring that might shift the sand beneath your feet?
The record companies are proof that winning today doesn’t equal winning tomorrow. Blockbuster is proof that status quo doesn’t mean a thing. Brittannica should be a reminder that, like water flowing to the lowest point, our customers will always find new, easier and better ways of getting what they want.
It takes thought and dreaming and creativity. It takes humility to admit we don’t know best. It takes openness to new ideas and new paradigms. It takes fresh blood, innovative perspectives, and a willingness to let go of our legacy.
But getting ahead of the curve sure beats trying to protect our turf and fight a losing battle with the new. Someone will offer it. It might as well be you.
Just ask the record companies.
1 Simple Thing action point: Take a hard look at what you do and ask the question, “What am I not thinking about?” Then have a conversation centered around that question with the most innovative, creative people you know. And be willing to listen to them.