No sitting still, you grow or die - Yahoo, AOL, Blockbuster v Google, Facebook, Netflix

In a tough year like 2009, many business leaders want to jump in a foxhole and focus on survival.  The goal becomes maintain, and then try to grow again sometime in the future - when the economy gets better.  They cut marketing and sales costs, stop new product development/introduction, and literally plan to do nothing new until "the business" improves.  Unfortunately, that sets a business up for failure.

In today's fast moving competitive world, it's impossible to stand still.  Your business either grows, or it falls behind.  Think about Yahoo!.  The company hoped to maintain it's search business at it entered a "turnaround."  Unfortunately, the competition isn't willing to give Yahoo! any time at all.  Microsoft grabs off 10% of the market with its Bing introduction, and Google just keeps taking share.  Take a look at Yahoo's performance:

source: Silicon Alley Insider

Or consider AOL. AOL was the undoubted leader in bringing people to the internet.  But over the last decade AOL has tried to maintain its customers without offering any new products.  It has saved investment dollars, but lost its relevancy. Now Facebook has more unique visitors than AOL - a clear sign AOL (which recently went public) is well on the way to disappearing:

source: Silicon Alley Insider

Blockbuster was the clear market leader for video/movie rentals.  The company even had a college football bowl game named after it!  The CEO bought a baseball team, and made it into a World Series winner!  Blockbuster was THE store for obtaining entertainment for many years.  But the company saved its dimes, tried to defend its market position, and didn't develop new solutions.  Now it is being overwhelmed by competitor Netflix:

source:  Silicon Alley Insider

Too many business leaders believe in "The Myth of the Flats" (from Create Marketplace Disruption.)  They think that you can build a business, and then ride a market position.  When business is bad they depend upon living on past brand position.  They think they can wait for a better market to come along before they use White Space to introduce new solutions that meet emerging needs.  And the competitors, who don't slow down, use market downturns to introduce new solutions and overtake the former market leader.

Smart companies don't rest on their laurels.  They don't wait for a better market.  They keep using White Space to develop new solutions.  And even in a bad overall economy, like 2009, they sell more and make more profits.  Just look at Amazon, achieving record market valuation in 2009:

source:  Silicon Alley Insider

If you want 2010 to be a great year, it starts with recognizing that you can't stand still.  You can't wait for "a better market."  You have to create that better market by pushing forward with White Space to introduce new solutions that meet emerging market needs.

Comments

[Joseph Joel Sherman]

Adam,
Thank you for this analysis. You are right, in this economy no company can stant still and expect to keep their ground. Even the giants like Google and Facebook cannot live on past glory, if they stand still, new platforms will come from behind quickly to attack.

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Hello
Its very easy to understand from those graphs.I completely agree with you that Facebook has more unique visitors than AOL.This is really a good analysis.Thank you very much for such informative post.You have done a good job.

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[Jordan Flipsyde]

A very well written article I must say.
Personally I am rather new cause I have only been listening to electronic music for only the past 1.5 years.

[jordan 11]

oh.it's impossible to stand still.I found that to be more helpful well let me know how it turns out! I love what you guys are always up too.