Adaptability is the key to growth, not just in business, but in every area of life. Let’s use business as an example. The popular American candy, Ayds, went out of business when the Aids epidemic hit. The logical thing to do was to adapt, but the company refused to change its name and undergo rebranding. So Ayds went the way of the dinosaurs.
In 1973, Kodak hired someone who invented the digital camera. They refused to market the digital camera because they feared they would lose too much money in the lucrative photographic film business. They made billions of dollars from digital photography companies since they owned the patent to digital photography, but in 2007 the patent ran out. Kodak filed for bankruptcy just five years later.
Blockbuster could have bought Netflix for only $50m in 2000, but they turned the offer down. By 2010, Blockbuster filed for bankruptcy. Netflix’s worth was $13 billion.
Schlitz beer was facing huge competition from Budweiser, so they responded by cheapening their product. They changed their brewing process and that changed the taste of the beer, and not for the better. They used corn syrup to replace some of the malted barley, added a silica gel to prevent the product from forming a haze, started using high-temperature fermentation instead of the traditional method, and started to use less-expensive extracts. Of course, drinkers of Schlitz noticed the difference, and the changes not only changed the flavor of the beer, but it also spoiled more quickly.
FDA labeling guidelines caused problems with the beer, which caused a recall in 1976. Schlitz is still made today by Pabst, but it’s a less expensive niche brand and it’s nowhere near the heights it had in the 20th century.
The Romans cheapened their currency by decreasing the purity of their coinage, and the United States got rid of the gold standard and is running the dollar printing presses 24/7 and decreasing the value of their currency. The US is following the pattern of the fall of Rome in lockstep through compromise, just like Schlitz beer.
When Quaker Oats bought Snapple, they suffered massive losses because they refused to stick with a business they understood. Your success in one kind of business does not make you an automatic success in any kind of business. Flexibility is important, but stick to what you’re good at.
In 1999, Excite.com was offered the opportunity to buy Google for only $250,000. Yahoo turned down an offer to buy Google for $1m in 1998 and $5 billion in 2002. Google is now worth half a trillion dollars. My Space and Facebook, I could go on and on. So what’s the bottom line?
Remain flexible, adaptable, and open to new ideas, avoid greed and arrogance, and stick to what you’re good at. And remember, if you don’t look after good people, you will lose them and they will possibly become your competition. Learn from spiders and crows.