Timing will determine your future. Change now, or be forced to do it later. August 21, 2019 4 min read This story appears in the September 2019 issue
Timing will determine your future. Change now, or be forced to do it later.
August 21, 2019 4 min read
I want to see change coming to a major industry? Just watch a little kid in front of a TV.
I did it earlier this summer. My 4-year-old son and I were on a JetBlue flight, and he started flipping around the in-seat TV channels. This was a foreign experience for him; we cut the cord at home, so he’s grown up with apps like PBS Kids. Now he had dozens of live channels at his fingertips, and he landed on Nickelodeon, which was also foreign to him. SpongeBob SquarePants was on, and he was hooked. Riveted. Giggly! (Although he thought SpongeBob was made of cheese.)
Then a commercial break began.
“What is this?” he asked. I explained it was a series of ads. “I don’t want them,” he said. I said that nobody wants them, but if he waits for a few minutes, they’ll go away and his show will return. “That’s exhausting,” he said — and then asked for a phone, so he could watch streaming videos uninterrupted. His interest in SpongeBob was no match for his disinterest in ads.
Imagine it: An entire generation will grow up like him, raised on ad-free environments and with no patience for minutes-long blocks of unwanted interruption. Advertising agencies and TV networks surely know this, but what are they doing about it? Not enough, as far as I can see. Television is still running on a decades-old business model. It’s grasping onto what once worked. Know who made that same decision? Blockbuster. Kodak. Hell, so did the magazine industry — which I can assure you is now scrambling to recover.
Change will come to every business, but there’s an irony to it: The best time to embrace change is when you see it coming from far away — when you still have time to plan, and when you aren’t hurting. But that’s also the hardest time to change. Why leave something that’s still working? Why invite the pain? Most businesses simply can’t find the will to change until it’s a necessity. But at that point, it’s often too late.
This is why of all the entrepreneurs I meet, I’m most struck by the ones who make change early. It sounds easy, but it is so hard in practice. For example, I think about Andy Monfried, the founder and CEO of Lotame. His company provided an ad buying service to advertising agencies, which earned $30 million in annual revenue. But after a few years, three agencies told Andy they were moving on. “I can’t give you any more money,” he remembers them saying. “We’re building what you’re doing at our agency.”
Andy realized he was in trouble. His company was still profitable, but change was coming. He’d eventually be outmoded. In response, he planned to shut down his advertising business and pivot to a new one involving data — but one of his investors balked. Why close a profitable business? Why not use it as a cash cow, and let it die a slow death while building the next thing? But Andy disagreed. “Cash cows are the death of a business,” he told me, “because you can never starve a cash cow. Needs and resources will always gravitate toward it. So you’re better off to amputate.”
That’s what he did. He laid off half his company, used the remaining team to reinvent Lotame, and then built it back up as a data company that serves a completely different clientele. “It was an emotional experience, and I had doubts all the way through,” he admits. But he knew it was his only choice. Today, he’s been proven right: Lotame is bringing in far more than the $30 million in revenue he once sacrificed. By acting early, Andy saved his company.
This is what it means to be proactive. We can’t wait for change; we have to be the change. And yes, we’ll create some anguish along the way. We might feel crazy and risky and reckless. But we’re ultimately inviting short-term pain for long-term gain — which, frankly, is far better than the alternative. If you want to see what that looks like, just keeping watching the TV.
But my son? I suspect he won’t be watching.
This article is from Entrepreneur.com