There are some business stories that surface over and over in the many business books I read.
Here are a few great examples.
- Steve Jobs “borrows” the GUI and mouse from Xerox. Jobs famously visited Xerox and immediately saw the potential of the mouse and (Graphical User Interface) GUI, and the rest is history. Here is a great 3-minute video of Jobs explaining why Xerox could have been the greatest computer company in the world, but instead missed the boat entirely. The reason? They had “sales guys” in charge instead of product guys – much like most of the real estate and mortgage industries.
- Bill Gates acquiring the operating systems that he licensed to IBM. This might be the biggest missed opportunity in history, as Gates’ operating system looked very similar to one that was developed by another firm that had failed to license it to IBM. This is what launched Microsoft into the stratosphere, and you can read the entire story here.
- Walmart’s Supply Chain Management. Walmart started to use technology to manage its inventory in the 1970s, and it completely revolutionized retailing. They could manage suppliers much better (and demand discounts) and they no longer had to sit on excess inventory. Their computers told them exactly how much and when to order. This innovation gave them massive cost advantages and it caught every competitor completely off-guard.
But here is my favorite – Netflix vs. Blockbuster.
In the year 2000, Netflix execs met with Blockbuster execs and offered to sell Netflix for $50 million. The Blockbuster execs had to “suppress laughter” and arrogantly told Netflix to pound sand.
Today, Blockbuster is dust and Netflix is worth close to $130 billion. I love this story b/c Blockbuster was so arrogant from top to bottom, and so oblivious to the coming onslaught of changes in the industry.
Blockbuster notoriously angered customers with late fees, dirty stores, poorly trained employees, and a lack of inventory. Blockbuster also 100% missed the coming revolution in content and streaming, thinking consumers would be content to visit video stores forever.
You can read the entire story here.
The other reason I love the Blockbuster/Netflix story is b/c it is so analogous to the Real Estate and Mortgage Industries right now.
Too many of us are trying to do the equivalent of figuring out a better way to get customers to come to our offices to rent VHS tapes, when we should all instead be thinking in completely different terms.
There are technological changes looming on the horizon that will soon revolutionize both industries, and they will no doubt catch almost everyone completely off guard.
On the mortgage side, it will be AI and algorithms providing instant airtight pre-approvals and much lower rates.
And it will be similar on the real estate side, with AI, big data and virtual everything assisting with every sale, and driving down commissions.
I point out often how buyers will still want “smart advisors” to help.
But, all of us “smart advisors” will be working in a completely different landscape and probably needing to do far more volume (with the same amount of effort) to maintain our incomes.
The key for all of us will be to remain open-minded about the coming changes and to be sure to hitch our wagons to the future Netflix.
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