7 comments on “The buggy whip industry

  1. The thing that drives me crazy about the buggy whip analogy is that it is not terribly predictive. I guess an 1890’s buggy whip maker should have been keeping up to date on what Daimler was doing in Germany? There is a huge opportunity cost to that.

    The buggy whip analogy is only useful as “when to sell”- if a buggy whip/vinyl record manufacturer sees the future- and realizes that his company can’t adapt- he needs to know when to sell.

    That’s not easy with a new technology

    Example- everyone with an 80 IQ knows that DVD rentals were going to be replaced by movie downloads. So dump your rental plan and move to a download strategy.

    Problems- well lots- downloads can be pirated- so many content providers are loathe to do so- and you need a good internet connection- one that costs you $100 a month.

    What happened? Well I believe Blockbuster went bankrupt- as predicted- but Netflix- with its ludicrously old formula of DVD’s by snail mail- has discovered that people like the DVD’s instead of downloads- because the downloads are erratic.

    So- if you are a movie guy- do you stay with Netflix? Hulu? or come up with a new system?

    No one really knows right now- and buggy whip analogies don’t really help.

    • Appreciate your thoughts. Actually, it is a good analogy for those that refuse to change or adapt while new industries and opportunities are created around you. I don’t think you had to worry about what was being done on the other side of the world back then. It was enough to see that diversification of your product line could have provided a way to stay in business and transition to an auto parts retailer around those Ford folks here on this side of the pond. Small and large business owners need to be more aware than ever of emerging opportunities. Find a need in the market and bring a skill, service and / or product to address that need.

      The mistake was staying rigid and unwavering in the whip industry while the auto industry took away your only source of income. True, DVD is something still playing out but where are the VHS tapes? CD’s don’t require the bandwidth with mp3 audio files as video does. I guess that’s why the Apple company enjoys their success and CD’s get cheaper all the time. Lady Gaga had her amazing traffic creating idea with Amazon and looking at ways to create revenue outside the norm.

      The moral of the story for me was to continue to review your product and /or service as well as your market. Keep one eye on what you’re doing with another scanning the horizon for opportunity or threat.

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