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In a famous 1960 article called “Marketing Myopia,” Theodore Levitt held up the railroads as a quintessential example of companies’ inability to adapt to changing circumstances. Levitt argued that a focus on products rather than on customers led the companies to misunderstand their core business. Had the bosses realized that they were in the transportation business, rather than the railroad business, they could have moved into trucking and air transport, rather than letting other companies dominate. By extension, many argue that if newspapers had understood they were in the information business, rather than the print business, they would have adapted more quickly and more successfully to the Net.
—

James Surowiecki, “News You Can Lose” (via seantice)

Yes.

(via mikehudack)

I don’t buy this. What expertise did the rail companies have in trucking? It’s like the idea that the oil companies are actually “energy” companies, who should be investing heavily in solar and wind. Maybe. But what expertise or competencies do they have in this type of thing? None.  If there were any examples of companies having had the ability to do something like this, that’d be one thing. But Surowiecki’s hindsight reasoning doesn’t strike me as good business advice.

Now here’s some actual business advice that might work for companies in dying industries: Recognize that the end is in sight and stop reinvesting in the core business. Trim costs and distribute the cash to shareholders until it runs out.

This isn’t sexy or anything worthy of Surowiecki, but companies actually do it. Like Earthlink, the ISP, which is making money hand over fist by not reinvesting in a dying business. Or the beeper companies, which actually still make a lot of money (doctors still use beepers) etc. etc.

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    —- This is an excellent point. My mom and I were discussing this idea the other day. If newspapers had gotten that they...
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