It's the end of an era for the Blockbuster store, once the king of video. Earlier this week, the chain's parent, Dish Network Corp., announced that it would close the roughly 300 remaining stores it owns by January.
A trip to the video store was practically de rigueur in the 1980s and '90s, back when renting movies to watch at home was a relatively new concept. Millions of consumers flocked to Blockbuster, where they'd look for the latest blockbuster releases or indie flicks and present their membership cards for khaki-pant-clad staff to ring out.
In fact, Blockbuster was once so engrained in the popular culture that it's almost hard to believe the one-time phenomenon has limped to such a dismal conclusion. What went wrong?
For starters, technology happened. First DVDs, then digital streaming. Blockbuster, which held onto its video cassettes, was late to the game. Next came innovative competitors like Netflix, which rented DVDs through the mail and quickly took away market share. Eventually, Blockbuster tried to compete -- but by then it was too late. As Warren Lieberfarb, a former president of Warner Bros' home-video business, told The Wall Street Journal:
"There is a history of Blockbuster being eclipsed regularly by technology and it holding on inordinately to the preservation of its brick-and-mortar business while the world was moving exponentially toward new models of digital distribution."
All of this reminds us of the importance of pivoting -- the fundamental shift in direction that smart entrepreneurs take when market conditions or changing times or industry adjustments require it. In recent history, we've seen a number of big companies do this successfully, perhaps saving themselves in the process. Amazon, for instance, started out as a book seller; now it offers everything from groceries to garden tools. IBM took its eye off hardware to focus on software. Nintendo, long loved by teenage boys, introduced the Wii and added everyone from soccer moms to seniors to its customer base.
At The Story Exchange, we've seen first-hand how savvy entrepreneurs will adjust their core strategy in the face of changing business realities.
One of the best examples is Xiaoning Wang, who came here from Beijing and started a company, ChinaSprout, in 1999 when she realized that American families with adopted Chinese children wanted to connect with Chinese culture. For almost a decade, she sold Chinese products over the Internet, expanding from 100 items like clothing and crafts to more than 8,000 within a few years. She opened a warehouse and hired a staff.
All that changed in 2008, when the Chinese government put restrictions on foreign adoptions. ChinaSprout took a big hit.
But rather than call it a day, Wang changed her company's original direction. Seeing the growth of Mandarin language education, she pivoted. Her company now supplies textbooks for Chinese language classes to schools.
To survive, the best businesses realize they need to be nimble. Blockbuster, to its detriment, stayed still as the world around it moved. It's a mistake that other entrepreneurs are wise to avoid.
Watch Xiaoning Wang's story below.