When A Fresh Start Is The Best Start

How to reinvent your business model without losing your identity.

 
 

Many cultures bestow special significance to the idea of crossroads, those places of transition where travelers can continue on their route or take a new direction.

For companies as well as people, deviating from the status quo can be daunting. It brings with it the risk of losing sight of your past as well as your future. Yet, in cases where the original trajectory is leading to demise, a new business model, a fresh product, or a major deviation in approach could be the best bet for survival and success.

Here are the stories of several companies and one entire industry whose crossroads gamble paid off, with their ultimate successes far outshining anything the travelers could have initially imagined.

Video Killed The Radio Stars, But Podcasts Brought Them Back To Life

It wasn’t so long ago when no car trip was complete without a radio and the raucous company of a favorite disc jockey.

In New York, Howard Stern and Opie & Anthony were popular. In Washington, DC, listeners frequently tuned in to the likes of Don Geronimo and Mike O’Meara. And in Los Angeles, radio fans typically favored Adam Corolla or Rick Dees.

Together, these and other audio entertainers brought new crowds and growing credibility to an otherwise aging medium.

You might not always get to choose when and how you reinvent yourself; in fact, wait too long and other forces are likely to dictate your future for you. 

But no industry is bulletproof. Howard Stern’s departure from Viacom’s Infinity Broadcasting network for SiriusXM in 2006 (1), along with several other departures by notable entertainment figureheads, marked the beginning of the end for talk radio. 

With no obvious heirs apparent to fill rating gaps, the top brass at many major networks concluded that Americans had grown tired of radio, and DJs nationwide received their pink slips. Many radio stations from Atlanta to San Diego replaced localized personalities with the same centrally produced, canned programming.

Fortunately, Apple’s introduction of the iPod coincided closely with this upheaval and soon after, the concept of podcasting was born. Suddenly, displaced DJs had a new, unfiltered medium to reach millions.

Podcast production requires little more than a PC and a microphone, and because listeners can download content from anywhere in the world to enjoy at their own convenience, podcasters have an increased potential sphere of influence.

Today, the podcast phenomenon extends beyond former radio personalities. For example, filmmaker Kevin Smith, actor and comedian Kevin Pollock, Freakanomics authors Steven D. Levitt and Stephen J. Dubner, and even former professional wrestler Stone Cold Steve Austin all have shows with a significant public following.

THE CREDIT UNION LESSON

You might not always get to choose when and how you reinvent yourself; in fact, wait too long and other forces are likely to dictate your future for you.

Many former radio personalities were left behind by their industry and, as a result, were forced to find new ways to engage with their audience.

For credit unions faced with the loss of a major SEG, dwindling numbers in a key area of the balance sheet, an aging technology suite, or other factors that put their business model at a crossroads, proactive responses are often required to maintain a place at the financial services table.

Let The Games Begin

For many kids and kids at heart, the holidays mean one thing — getting some serious face time with the next generation of video games and video game consoles.

Yet few would guess that the charismatic criminals of Grand Theft Auto V, the post-apocalyptic space warriors of Destiny, and the cartoon combatants of Super Smash Bros. all owe their entertainment legacy to the queen of hearts?

In 1889, a Japanese manufacturer named Fusajiro Yamauchi started producing “Honafuda” playing cards, and by 1933, Yamauchi Nintendo & Company was born (2).

Nintendo could not have remained relevant for more than 125 years without adapting to trends and pursuing new technology. 

Fate was on the side of this burgeoning company. It obtained a license to use Disney characters on new Western-style playing cards and thus expanded its appeal to a younger audience. In addition, the company began a series of technological experiments to create new types of games for children. It even secured exclusive rights to distribute the Magnavox Odyssey — one of the world’s first home-based video game consoles.

Nintendo soon found itself diverting resources from its real-world toy development to focus on creating its own proprietary video game offerings.

Donkey Kong, one of the company’s first cross-market triumphs, hit American arcades in 1985. Next came the home-based Nintendo Entertainment System (NES) with Duck Hunt and Mario Brothers, followed by the handheld Nintendo GameBoy and its addictive flagship title Tetris. Many generations of gaming technology followed over the next two decades, each more cutting edge than the last.

One of the company’s most recent consoles — the Nintendo Wii —brought family members together to bowl, fence, and occasionally shatter a television screen thanks to the system’s revolutionary motion-based controller. Its offspring, the Wii U, introduced Americans to another cutting-edge play style through the use of dual-screens.

Nintendo is also reportedly working on yet another next-generation system, suggesting this entertainment dynasty won’t be seeing a Game Over screen any time soon.

THE CREDIT UNION LESSON

Reinvention doesn’t always require a complete 180-degree turn, especially where deeply held values and core tenets of the business are concerned. In fact, many times a major change-up to a company’s business model can enhance, rather than replace, its original identity.

For example, Nintendo could not have remained relevant for more than 125 years without adapting to trends and pursuing new technology. Despite that, it has remained true to its original purpose established in 1889 — to create tools of entertainment and distraction.

From deploying remote teller systems as a middle ground between efficiency and personal interaction to making the best rates contingent upon relationships levels or other behaviors that benefit the institution, credit unions don’t need to kill sacred cows to move ahead, they just might need to move them to greener pastures.

 

Next: Let 3M's Failure Be Your Guide »


Let Failure Be Your Guide

Say “3M” in a game of word association and odds are people will blurt out “Scotch Tape” or “Post-its.”

Odds are slim to none someone will say “grinding wheel adhesives,” although that was the main focus of this company’s business model for a time.

3M was founded in 1902 as the Minnesota Mining & Manufacturing Company in Two Harbors, MN, where its owners had hoped to mine corundum for use as the aforementioned adhesive (3).

Unfortunately, the mineral was too soft for this purpose, and 3M moved to the lakefront shipping town of Duluth, MN, to focus on manufacturing sandpaper.

In what would prove to be an often-repeated trend for 3M, this major shift in its product line would lead to another opportunity for innovation … which would lead to another … and another.

The first of these occurred when a paint shop customer complained that there were no tapes available on the market that were useful for masking. A few years of trial and error later, 3M released a new form of residue-free masking tape designed to solve that issue. And 3M developers created the company’s first cellophane tape when an insulation manufacturer noted that the company’s masking tape did not have a waterproof seal.

Decades upon decades of gradual innovation and improvement have led to a product arsenal that includes everything from Scotchgard fabric protector to the ubiquitous Post-it note. The company has products in homes across the nation as well as around the world. Not too bad for a brand whose first big idea didn’t stick.

THE CREDIT UNION LESSON

Listen to what consumers are really asking for.

User surveys are a great starting point, but there might also be pain points members are not yet aware of that the credit union could address. Is there a service fee members seem to always pay because they don’t understand a policy? Do members endure the hassle of signing in multiple times on different accounts to use online and mobile services?

At the same time, remember that the court of public opinion is more fickle than most, so be wary of changing too much too fast purely at the behest of outside pressures. 

TRY AND TRY AGAIN

Just because a new product fails at first doesn’t mean it’s a dud. Follow the example of these companies who took their doomed ideas to the drawing board instead of the garbage bin.


A Happy Accident?

British scientists developed sildenafil citrate in the late 1980s as a possible treatment for high blood pressure and heart pain. In clinical trials, the test subjects did not show a marked change for either of those symptoms. However, several volunteers did advise researchers that an unintended side effect was occurring. Ten years later, Newsweek labeled the little blue pill — now commonly known as Viagra — the “hottest new drug in history almost everywhere in the world.” (4)

 

The Dough That No One Wanted

In the mid-1930s, Kutol Wall Cleaner was a housewife’s best friend whenever she had to clean coal soot off of delicate wallpaper. But by the 1950s, many homes had switched to natural gas and electricity and the market for this cleaning putty dried up. After hearing that some children had used the product to create holiday ornaments, company owners dyed the off-white putty red, yellow, and blue, added a pleasant almond scent, and introduced the world to Play-Doh. (5)

 

Bubble Wrap Blues

For a time, the Sealed Air Corporation thought its new invention — with its transparent film and tiny, individual bubbles — would be the perfect wallpaper for 1960s home decor. It wasn’t. The company then marketed it as a greenhouse insulation. No dice. It wasn’t until IBM started using the product as a buffer to keep its new computer models safe during shipping that bubble wrap finally found its true calling (6).

 

Sources:

  1. Wall Street Journal
  2. Nintendo.co.uk
  3. Money.CNN.com
  4. CNN.com
  5. Cincinnati.com
  6. Cracked.com
 

 

 

Jan. 22, 2015


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