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www .businessabundance .online. Hello and welcome
back to the Business Abundance Podcast. I am
here with Rowan. Hello. And today we're going
to be chatting about opportunities for you as
a small business owner, specifically, and I think
we've mentioned it before, Blockbuster. and what
we can learn from this case study. I think it's
pretty relevant considering it's kind of obvious,
isn't it? That if you don't take hold of the
opportunities, you're going to fall behind. You're
not going to grow. You're going to be a bit stuck.
Possibly. Yeah. Likely. Yeah. I think change
is good personally. I think it's good for yourself
to learn and you're going to learn a lot about
yourself, but Yeah, I think with Blockbuster,
yes, it's a really big business, but the theory
stands the same for small business owners. Yeah.
Do you know anything about what happened? I do.
I was just trying to think of the movie name
that came out a couple of years ago and it's
about the last Blockbuster store and like what
they're trying to do to survive and the whole
town comes through and the landlord's trying
to kick them out. But on the larger scheme, yeah,
definitely. It was quite a success story turned
into a catastrophe. I remember Blockbuster. Very
fond memories. And I'm glad I was of the age
that got to experience Blockbuster. But like
on a Friday night, we would drive into the little
town I lived in and we'd go pick up our legs
and breasts, which isn't here where we live anymore,
which is so sad. But we'd pick it up. I'd have
a little Hawaiian pack and we'd go sit in Blockbuster
and there'd be like the new releases on the wall.
go and you'd look through there and that'd be
the coolest movies that you could possibly watch.
But then they were too expensive because it was
like $15 to rent that. For one night. One night.
But then you'd have to like go through the aisles
of all the different parts. It'd be horror or
it'd be like action. Yeah. That was so cool.
Oh, and then they had the popcorn by the stand
and it was like the microwavable popcorn, but
we couldn't get that because we didn't have a
microwave. So. Yeah. Fond experience. Microwave.
You can heat it up on the stove. That was kind
of the idea. But yeah. And then you'd take it
home and you'd eat your little takeaway and then
you'd watch the movie and then you'd have to
give it back. And there was like that slot. Yes.
That you had to like drop the movie into. Yeah.
So fun. Yeah. That was good times. I think I
spent three times the amount of late fees. I
do actual rentals. The one day ones, I had to
just change to the weekly rentals. It was missed
out on the new releases. Oh, the new releases
were always so good though. Yeah, but the late
fees was just bonkers. I feel like the movies
back then just, there was just something special
about them when you saw them on the wall and
you're like, gosh, I want to watch all of them
because they're all so cool. Yeah. And then you'd
wait so long for them to come out of the cinema
before you could get them on movie. As you're
thinking about it now, just the enjoyment, enjoyment
might not be the. right with a satisfaction of
all the process of going, okay, it's movie night
tonight. Now we've got to go to the video shop.
I'll walk around and it will, and that takes
you half an hour. And then you got to get your
snacks and then you settle in. So off you go.
It's movie night. Like it's a, it makes the experience.
And I was just comparing that to, I'd forgotten
about, I haven't thought about this ever, but
now what is it? So it's movie night. We can get
our snacks, which doesn't take very long. Yeah.
We turn on Netflix and look through the. the
save for later movies, Amazon, and still takes
15, 20 minutes to try to choose a movie. And
they're generally not that good. They don't look
nearly as good as what they look like on the
wall. Now you've explained it with the romantic
tinge. So fun. I have two siblings and we would
all come with like five movies that we want to
watch. So you'd have to like sit there negotiating
which movie you're going to watch. But now you
like look through movies and you're like, it's
okay, I guess. I don't even know. how long ago
that was, but it makes me feel old now. Yeah.
It's pretty funny. Just, you know, having spent
a few years with you that I can hear you telling
stories of when you were a girl. Very hard for
me not to just make old jokes. Well, we were
just talking about my style and how much I want
to be stuck in my style. I want Blockbuster back.
Bring it back. But today we're going to be chatting
about the fall of Blockbuster essentially. It
was so good. It was so good. So now we're thinking
like that was kind of cool. Well, why was it
then so bad? Because life changes. Yeah. New
technology comes out. Yeah. You didn't really
want it. You say you want it, but you didn't
really. Well, I didn't actually have it. It's
been a very recent thing for me, Netflix, and
I refuse to buy a subscription. I just did ads.
I just, yeah, I refuse to buy a subscription,
which means that maybe I'm just not that invested
in it. I find value in other things like I love
reading. Yeah. We watch shows for the sake of
watching shows. And then if you've got other
hobbies, there's been reading, there's my wife.
And then we're just not watching as many shows,
but the shows we want to watch, it's like an
event each week. But then all the other ones
we normally watch, we just don't watch them.
We don't care. I'm watching some trashy shows
just for the laughs. And I will not repeat what
I just did. I've put my trashy shows on the podcast.
Yeah, but this is not appropriate for podcasts.
It's like Love Island equivalent, just for the
fun of it. Yeah, no, it's nice to see some trash
every now and then. We're all human. Yeah. Yeah.
No disrespect to those shows, but you watch it.
It's entertaining. Yeah. Yeah. Yeah. You're not
watching it to increase your knowledge. I know.
Anyway, completely off topic. Yeah. So Blockbuster,
there's no Blockbuster anymore. As much as we...
We're so fond of it and as much as we see the
value in it now, it doesn't exist. Go on. And
I guess for a little bit, we'll just unpack what
happened. And I think everyone who is listening
probably knows what Blockbuster is. And we probably
explained it, the video rental store. Now it
has been replaced by platforms. Streaming platforms.
Yeah, by Netflix, Binge, Amazon Prime. Stan.
Take a pic, Disney. So many different things.
Video on demand. Yeah, essentially. Now Blockbuster
actually had the opportunity to purchase Netflix
from my understanding, and they didn't. They
did launch their own digital streaming a lot
later, but that obviously didn't work because
Netflix had a much larger subscription base than
they did, which is interesting considering Stan
and Prime and all of those came up. Netflix was
kind of the big, that was the forefront, but
then I feel like Stan and Binge and all those
sort of things have come up behind Netflix and
almost overtaken it. Definitely the one leading
the way. Yeah, I think from my experience we're
seeing. I'm watching a lot of Binge at the moment,
but they did launch their digital streaming much
later, but it wasn't successful. Lockbuster .com.
Is that what it was called? Was that an online
platform where they sent out the movies to the
homes? I'm not sure what it actually did. I was
just looking at the facts. I'm doing a little
bit of a fact check, but, um, the Netflix offered
to sell 49 % of Netflix to Blockbuster for 50
million. I haven't seriously fact -checked this,
but, um, in exchange for running their brand
online. Yeah. Okay. The Blockbuster one. That
would have been unfortunate in hindsight, but,
um, Blockbuster .com. Not sure what it did. But
trying to transition. Yeah. Yeah. But then they
also had frequent changes in leadership as I
guess they, this is all speculation, scrambled
to improve themselves. Then the physical stores
obviously had their maintenance costs, which
was not feasible considering the income wasn't
coming on. And they had a significant reliance
on late fees from people like you. Which I didn't
know she was going to say that. And yeah, then
there was the convenience of Netflix. And so
Blockbuster just dwindled away. I remember watching
the Blockbuster stores close. It was kind of
like chicken feed. And if you didn't have Blockbuster
near you, because I, you know, you can pretty
much insert the name of your local video store
and we all would have experienced that. It's
reasonably recent. Yeah. And then you just don't
see them anymore. They're just closed down. transition
to video streaming platforms and that was it.
Yeah. I don't even have a DVD or a Blu -ray player
or a video player or anything like that. Now,
when the internet goes down, it's pretty boring
place. Well, I was actually at my grandparents
house two weeks ago and they have a cupboard
full of really good quality DVDs. So good. And
that was, that was fun. Yeah. I'm glad the DVDs
still exist. I remember when we had videotapes,
they were. Oh, you are old. I know. Yep. I watched
a lot of the rings on those, but they don't exist
anymore. That went in on videotapes. Yep. So
we, we watched them and then obviously, yeah,
DVDs, but DVDs sort of don't really, they're
not used anymore. So we started an accommodation
place a few months back and they just had like
a library and half of it was library and half
of it was DVDs. Oh yeah. And watched DVD that
night. That's pretty cool. It's quite sad. Yeah.
Well, it was interesting. Cause I suppose you
get a bit of that environment back. going through
the shelves and physically selecting stuff rather
than on a screen. And then, you know, you've
got to go put it in the play and then it makes
worrying and buzzing and clunky. And when the
CD was scratched, devastating because you're
emotionally invested in watching this. It's got
the little menu that pops up. Yep. And it's got
the bloopers. Got the bloopers. Oh, gosh. Kind
of fun to read. It's maybe just like a classic
car, you know, you get the appreciation for it
as a memory rather than the appreciation at the
time, which is a bit of annoyance. So fun. Anyway,
I think the vibe that we're getting here is that
It was a very appreciated model. Yeah, the model
of the business, regardless of whether it's blockbusters
or someone else. You know, you had your video
store, you bought your stock. You could have
the big, huge posters from the industry of what
was, you know, new release and what wasn't. People
came in, it was a destination. They had a look
around, they could grab everything and it was
part of people's lives. Massive part of everyone's
really. Yeah. And they owned, say owned real
estate, owned some buildings or they might have
leased them, but they had. They owned a spot,
is what I'm talking about, in the city and in
people's lives. And then they have had those
costs around that as well. But then at some point
they had some market disruption and were they
willing to let go of what they've profited from
for so long that's worked. They would be confident
that that would still work, I guess, because
they were like, oh, well, nothing will change
what we've got. We've got these values to our
clients and this is a place we are in society.
But obviously like even though fond memories
of it, we stopped using that service along with
everyone else. So they didn't for whatever reason
change. Yeah. And I guess I want to bring that
down to smaller scale for our small business
owners. You might think that your model in the
past has worked, but it might not work for future
because things will evolve. Things will get easier,
more convenient. You've got to listen to your
customers essentially. Yeah. I heard a good quote
and it was, uh, I think it's very obvious, but
the past will not predict your future. Yeah,
that's good. Yeah, that one. Yeah. So I think
that's probably the theme of today. Sometimes
it's like a judgment call because it could have
been that that new technology and disruption
didn't take off. Yeah. Maybe the production companies
didn't allow that, that subscription licensing.
Cause that was a huge thing with Spotify. I think
we talked about it before too, but they had a
huge issue of how are the musicians and how are
the record companies that, well record companies
fundamentally were profiting the most. Yep. How
are they still getting paid? And then, so if
that couldn't be solved, there was no product.
So they had a bit of a judgment call, I guess.
They could have, doing nothing could have been
the right answer. Could have tested. Yeah, could
have tested. Well, just thinking about what you
said there and tested, but like, what could you,
could a few have done if you were focusing on
your customers? We talk about thinking about
what customers want and they go, okay, well,
We are this and this and this, and these are
all great values. That's why we're successful.
That's cool. But would our customers prefer,
could we be doing more for them? Yeah. Instead
of just staying stagnant. Yeah. And that might
be improving things, but if we're doing more,
okay, we've got internet. Wouldn't that be great?
Rather than here's our competitive advantage
over everyone. They might've been trying to pioneer
like what Netflix were doing. Whereas they probably
weren't focusing on that. Regardless of how can
we do this the best? How can we do this the best
and protect what we've got at the same time?
Yeah. Which comes back to like the monkey bar
theory of you've got to let go to move forward.
Translate that for yourself. You know, when you're
going across the monkey bars, you can't go across
them unless you actually let go with one of your
hands to go to the next rung. So they've got
their physical assets and a whole money making
machine. They're not prepared to let go of some
of that to get to a better spot. Then they're
never going to get across the monkey bars. Yeah.
I think even easier than just assuming what customers
need is to actually ask them, hear from them.
I mean, they had enough capital to probably do,
what's the word, like groups. Would have been
doing them. Yeah. Well, should listen. Well,
who knows what the group said as well, and we'll
ask them the question. That's true. Yeah. Get
feedback from your customers. You want honest
feedback. So I think it's easy to ask a customer.
I guess a good test that we have is if they're
willing to write a review, then they're happy
with the services we're providing. Yep. And then
they're, they're people that we can go to for
trusted feedback. Yeah. You don't necessarily
want feedback. So about your future from clients
that don't like what you do, because it might
be that, you know, good at it, but it might just
be they don't get it or they want something that
you don't, you know, do yourself. Yeah. So yeah,
feedbacks and listings very important. Yep. But
like with Blockbuster, Netflix, they were physical
DVDs as well. That was a postal service. And
I remember thinking about that at the time, my
boss, he got them. Never had late fees. I was
sitting on his desk. Makes sense. Like he would
browse it on the computer and figure out what
he wanted. It was a bit of a process because
you had to wait for it to come. And you had a
lot of that excitement you had from going to
the store, but just in a different way. And the
big thing was the late fees. It's a pain point
for customers though. Just to get there in your
car. Yeah, literally. But that would frustrate
customers. Blockbuster relies on it. So you're
doing something that annoys customers. To make
money. Yeah. Not, not ideal. So if we're talking
about that and you said that they relied on that
income, that's true. Then that's not in their
customer's best interest to charge them late
fees. Nope. So that's probably the model of they're
a part of the society. They're part of the institution.
They're part of the framework of the town, but
then they're profiteering from their position,
not from their value. Which definitely would
mean customers, if they're given a choice where
they have more control and less punishment, then
you know, which way are you going to go? So I
guess the self -reflection question at this time
would be, are you relying on something that annoys
your customers in order to run your business?
Yep. Take some time to have a think about that
one everyone. Yeah. So you definitely, if that's
something in your business, then that could be
taken away from you at any point. So then. I
guess embracing change and innovation being probably
one of the other prominent learnings from this
is that you need to be willing to adapt your
business model. So let's just say that they are
relying on late fees, they get the feedback,
that's annoying, and then they need to change
that because they realise that that's a pain
point, they're relying on it. What does that
change look like? They know that the internet's
coming up. Well, on Netflix, it's. Yeah, there's
a big jump though. If you think about it. Okay.
Well, if we get rid of late fees and that's a
huge amount of income, does that mean we need
more income from our rental fees? Become a real
estate market, a real estate pioneer. But then
if our rental fees are higher, then are they
going to the video shop down the road? Which
means then we're losing customers and we're not
getting late fees. So we've got a double loss
there. But then if we've got to go to online
streaming, like we just don't even understand
that. How do you build the online stream? How
does that work? How do you get the, there's a
huge path to go down there. But you can invest
in the new technology and invest, which is what
I was saying just before investing in research
and a bit of development, just apply a little
bit of your budget for a bit of future. Yeah.
Spot on. So that's, you know, that's something
they might've been doing, might not have, but
it didn't work out for them, obviously. But if
you've had this model that's been successful
so long, making money, giving it to the shareholders,
should have you been taking a big chunk of that
and investing in stuff that might never work
just to see what happens? And the answer probably
is yes. Yeah. Some of my favourite clients that
we work with aren't really afraid to experiment
with what they do. And then if it doesn't work,
they're happy to call a loss a loss. But if it
does work, you see them move forward in great
strides, which is really cool. And I love working
with those people because it just makes things
a bit, well, you see them achieve what they want
to achieve and you're just, you're just helping
them along the way. Yeah. Everyone likes kicking
goals too. It gets a bit boring when you're just
doing the same old same old. Yeah. I mean, a
lot of people want to grow and in growing, you
need to try new things. Some things won't work,
but you're willing, you need to be willing to
take that risk and do it in the smartest way
possible. Don't apply your whole budget to it.
Just apply a little bit and see how it goes.
Yeah, so then when it comes to keeping an eye
out for new opportunities, we want to look at
being prepared enough to act quickly. Now, what
would you say that looks like? I just think about
what I would do. If you've always got priorities,
I guess it's just a matter of you've always got
things to do. There's something that's urgent,
but if there's something more urgent coming in,
you've just got to be flexible and be able to
change. Um, sounds pretty simple, but you know,
if something is important today and then something
else comes in, that's more important than, you
know, just rejig it and work on it. Um, and then
I think just there's too much planning and there's
too much change. Yep. But at the end of the day,
doesn't hurt to go through haze is what we're
doing. Does that make sense? Yeah. And should
we maybe doing something else? Like, is there
something better is it doesn't matter if we don't
do this or it's a failure or whatever. And we,
we change. I think it's just being able to, when
you see something, prioritise it. Cause there
are a lot of people that there's a new shiny
object and they go down that hole. And you would
say the clients we've got, it's not that important
from a big picture. It's not really going to
make them any money, but they still get out cause
it's shiny. So it's been able to identify what
the, you know, being pretty clear about measuring
what the impact of things are or the potential.
Yeah. And then even before that, making sure
that you're like financially prepared should
an opportunity come up. Yeah, correct. These
like, you can have ways to keep decisions a bit
clearer as well. You've got a risk and reward,
I guess. So what's the worst thing that can happen
and what the best thing that can happen. And
then, you know, probably you're going to sit
in there somewhere in the middle. But if you
look at that, there's a very high chance that
this will be successful, but success isn't worth
that much. Yeah, that's fair. Okay. And then
you've got a project. There's a low to medium
chance of this being successful. but the rewards
will be fantastic. So like which of those decisions
or there's a high chance of this being successful
and it's going to be great if it's successful,
but if we're not successful, there's a massive
effect on us. Yeah. It's like going to ruin us.
Yeah. Don't do that. Oh, maybe do that if you're
really willing. Yeah. And then you can just look
down. Okay. Well, where do I sit? What do I want?
What can I do to mitigate the risk or ensure
success? Yep. Um, and should I do that or should
I not? So you don't have to be up to date after
church, but I think the point is, it's always
looking at your options and opportunities and
being aware that, yeah, this is for us, this
is not. And when something should change, then
we'll make that. I feel like the people in small
business already have an appetite for risk. I
mean, they wouldn't have gone into small business
without it. Um, there's always a risk with opening
up your own business. And so I'd probably encourage
them to carry on that idea. throughout the business.
It might be making money, but if you're wanting
to look long term, things might change and you
need to be prepared for that. Yeah. With small
businesses. Yeah. They're, they're a bit more
on the risk side than most people because I've
started their own business. But then if you think
about it from businesses point of view, they're
very much risk of this because most small businesses
are doing something that a lot of other small
businesses are doing. Yeah, that's true. And
can you really define what makes you unique?
That actually means something. who can answer
the question, how am I going to be the next blockbuster?
Not only the failure, but the success. And if
you were fully keen to take on a risk, that would
be your plan. But yeah, most small business owners
probably just say, oh, this is what we do. This
is the market. And that's probably where we're
talking about blockbusters failure has been important
for small businesses because they're going, we're
here. We're happy in our spot. They wouldn't
change, but it could change overnight. And you
need to always be progressing. Yeah. If you're
doing that, you've done pretty well. Yeah. It
makes me think of like people's unique. value
proposition, I'm curious to know what Blockbusters
was. Because if it was to provide an in -person
experience, then that was sort of the end of
their road, naturally, which I mean, you can't
be too disappointed by. But if it was to provide
a communal experience for families to enjoy,
or like a bonding experience for families to
enjoy, for example, then yeah, absolutely, they
could have adapted, but still held to what they
wanted to achieve as a business. Yeah. So, yeah,
I guess it all depends on what it was and what
that looked like, which is also very important
for small business owners in understanding that
because that will be the foundation for everything
that they do. Sort of the mission vision sort
of argument. If you know what you want to achieve
in the grand scheme of things, it'll be easier
to adapt around that because you're not known
for a product or service. You're known for an
experience. Yeah. I think like when you're talking
about that. You know, what, what should Blockbuster
have thought about forgetting and not knowing
what their proposition was, what they did. And
that probably changed as they went through, they
would have the new research and they would change
it up a little bit. But fundamentally, if I'm
thinking about it, I'm going, well, they're basically
bringing entertainment into people's homes. Yeah.
Yeah. So, okay. Well, that, that allows family
experiences or dates or whatever. It's an escape
for them, but it's an event in your house. That's
what they're doing. So yeah, if they stuck to
that. And I'll talk about higher purpose. You
can't really hit it and not it's pie in the sky.
We can't achieve it because it's ridiculous,
but you can be doing it, but it doesn't mean
you could change what you're doing and still
be doing it. So, um, high purpose for them could
have been, you know, if a movie's an escape,
it's a different, like said, fantasy or horror.
So it's not really bringing entertainment to
the home. It's bring the world to your home or
I don't know. Like you'd be putting, you'd be
framing it like that. It's like they're bringing
another world into your home. And if they stuck
to that, there's so many things they could have
done. And they had so many customers and such
a huge customer database that even if it didn't
look like what Blockbuster was, they should have
at some point been able to change with that huge
asset and still been able to, you've got fond
memories of the name, a Blockbuster. If you bring
a Blockbuster into someone's home, that still
sounds super cool. And they could have done that,
but it's just a shame. Obviously they're making
the decisions. learning for a small business
is not just we're a video rental store. We're
bringing the entertainment into your home and
we do this in these ways and blah, blah, blah.
We're a part of your life and it all sounds nice.
But what's that bigger purpose, even if the market
completely changed, you can still do for your
customers. That's good because if you're okay
with that purpose, then it doesn't matter if
you're doing video rentals or you're doing something
else. Just still enjoy the business. You'll still
be happy with what it does and the customers
will still deal with it. Yeah. I'd love them
to come back. Honestly, I feel like there is
still a space. Like I know bookstores and everything
are making a bit of a return. People are trying
to bring people back into stores. So they're
trying all those things. That's so sad. Didn't
even know there was still one. I feel like I'd
love for them to come back and I hope they do
eventually if the business isn't completely...
I feel like it would be like the hipster. Hips,
that's the term we're looking for. Ah, yes. You
know, you got the hipster cafe fad. Yeah. Um,
you know, that's going to be the book thing in
the future. I think so too. It'd be an experience,
a place for people to meet. Like I know movie
clubs and those sorts of things still exist.
Like I don't see why not. I reckon they can come
back. They'll learn something and bring it back.
I think we were talking about something else
the other day. Um, the connection, people still
want to deal with people. Yeah. I was like, Oh,
I all went remote and now people are sort of
going back into the offices because Customers
just want to see, but they were talking about
how this service became different because people
used to remote or phone calls and just not seeing
people. But now he was finding he's had a lot
more success just being able to see people. Like
that was a massive competitive difference. That's
never changing. People like dealing with people,
they like that atmosphere, the environment. That's
what you're fondly remembering. So some of those
other things, the movie club. Well, that sounds
fantastic. Is there a market for that? Is there
a market for? putting together an event every
week turned into something special that people
were keen to come looking forward to during the
week and can make a part of their lives. Might
be poo, might be something else. But it's those
feelings that people still have that you're trying
to appeal to. Yeah. Which just is simply learned
from listening to customers. Yeah. Which is straightforward
and where they stop buying it. Change. Yeah.
That's good learning from Blockbuster. Such a
fond memory. Maybe next time we'll do chicken
feed. I love chicken feed too. But yeah, if you're
a small business owner listening, I would just
encourage you to consider what your risk appetite
is. And if you've heard from your customer base
that they would not prefer something else, but
they're leaning toward, they say, yeah, this
product or service is good, but it would be better
if you did this. I would really encourage you
to listen in. Could build your business more
than you would have ever hoped. So with that,
we will sign off and we'll see you in another
episode. Until next time. Bye.