Something I saved from years ago that is very relevant today:
The buggy whip industry has long failed and ceased to exist (except for a few remaining artisans making a handcrafted product for a very small and discerning equestrian client base and one small community in the Pennsylvania Dutch country). But, despite popular opinion, it was not the advent of the automobile that caused the demise of this once prosperous industry. The industry failed because makers of buggy whips thought they were actually in the buggy whip business.
Clear? No? Really?
Ok, let’s look at it this way, they were so involved in worrying about their “product” they forgot to focus on the “industry” in which they existed. More to the point, they failed to clearly define the “service” their product provided to their client base. Therefore, with product moving off the shelf everyday, it was difficult for them to see the end of the need for their product was approaching. They confused “product” and “product sales” with “market” and “market potential.” It is like throwing a rock into the air: before it falls, it reaches it highest point. So up until the very last minute, you look good. What service did the buggy whip industry provide?
When automobiles were still in the minds of visionaries, everybody who had somewhere to go within a certain radius of their home rode a carriage, coach, or a buggy. It might have been his or her own buggy, a rental, or a cabbie, but whatever it was, it inevitably had a horse on the front end to make it go. To make the horse go, you had a buggy whip. In essence, a “personal convenience starting mechanism.”
The “new fangled automobiles” had starting cranks located in the front of the car. This item had to be provided for every automobile manufactured. Why? Because this item was used to make the engine start, a “personal convenience starting mechanism.” The original cranks were often lost or broken and needed to be replaced — the first replacement “auto part.” Therefore, isn’t it logical that, rather than disappear as the need for its existing “product” declined, buggy whip companies convert from a “buggy part” company into an “auto part” company? But they didn’t. They just kept making buggy whips until nobody was buying them anymore.
So the buggy whip industry disappeared not because cars made their product obsolete, but because they forgot the service that their product provided was “ignition.” As the product needs of the client change, you change your product or service or go the way of the buggy whip.
Is this a unique instance of self-directed obsolescence? No, not really. The railroad passenger business all but disappeared in this country, as they competed with the airline industry in the 1950s and 1960s due to the fact they forgot they were transportation companies that happened to own trains. They could have just as easily become transportation companies that owned trains ! and planes. The steamship industry waited twenty years to shift their focus from “transportation” of travelers to the “partying” of vacationers, a shift in “end product” that saved an industry that has been in distress since the late 50s. (Of course, movies like Titanic” do not help a lot.)
Every industry needs to look at its product offerings periodically to insure that it is making the needed changes in those products, product delivery, and product cost to provide needed and relevant services that will help in the mission of building client base. It is very difficult to do this when unprecedented growth has blinded the industry to changes in its clients’ service needs, requirements, or conditions of business.
Well, it is not quite as busy now as it was six months ago, and that gives the recruiting industry an opportunity to review our business, services, practices, and client costs to determine if we are truly relevant — or a buggy whip seeking a market
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Rufor
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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.