When it comes to business, there are attitudes that win, and then there are those that lose.
This series of posts is dedicated at looking into those that don’t work in a business.
(Check out the next post in the series about being “Penny wise and Pound Foolish“)
The first post is about the fossilized mentality. These people still use Windows XP, and the Nokia 3310 (no offense, 3310). They are not meant to be in business.
- “It worked in Egypt, so it’ll also get me to the promised land”
Dan Sullivan said, “The skills that got you out of Egypt aren’t the same skills that will get you to the promised land.”
Here’s a story to help explain Sullivan’s words.
Arthur started off with a CD shop in his neighborhood. It was 1999. CDs were a novelty back then, when Sri Lankans were still using VHS ad cassette tapes. But he felt if he played his cards right, he could make it big.
By 2000, CDs were a big hit. Everyone had a mp3 player and cd players. And PC parts were becoming cheaper. He had invested in some cd burners, and a SLT ADSL connection. This was also the time cheap blank CDs were beginning to hit the market.
Arthur put stuff to download by day, burned the CDs by night, and sold the CDs the next day.
Money came flowing like water.
Then, he moved his store to Nugegoda. And renamed it GoMedia.
It was a big hit.
All the tuition classes were in the area. and kids were coming in after school and classes to buy music, games, and movies, all burned on the cheap CDs. When established Places in Unity Plaza were selling CDs for Rs 250+, Arthur’s GoMedia sold them for Rs 99.
Money came flowing in like a flood.
It was 2002. He had approached a friend of his, Charitha, to invest in his venture, and used the money to invest more in his infrastructure and open a new branch, near Town Hall.
They bought more CD burners, upgraded the ADSL connection, hired people to do the downloading and burning.
So, Arthur and Charitha, now partners, had 2 store locations, and had a movie rental business on top of the CD sales.
Things couldn’t have been better.
But somewhere around 2004, the market began to change. ADSL was becoming more common in homes. And USB pen drives were becoming popular.
Charitha was concerned. The whole business model rested on the fact that it was cheaper to buy GoMedia CDs, than try to download stuff over a dialup connection.
But, Arthur was having none of it. So what if people had ADSL connections? The business is solid, Arthur tried to assure Charitha.
Also around this time 3G was being introduced, and internet speeds were the fastest ever, at the same price. Cheap blank DVDs were also being made. More and more competitors were entering the market, especially in Unity Plaza.
By 2006, GoMedia was but a shell of its former self, and by 2010, it was no more.
In the 90s and early 00s, their business model was a success, but Arthur and Charitha didn’t change their tactics after they got to the ‘next level.’ Their competitors who made the same mistake of not adapting, as they progressed, also fell into the same trap.
If something worked for you yesterday, don’t expect it to work tomorrow, too. Growth demands change. Sometimes, it requires a complete overhaul of existing methods/strategies. Anything less, and expect failure to come knock on the door.
The Point…
Anyone going into business must not be fossilized in their thinking.
Kodak used to be a big name in photography. Where are they today?