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December 11, 2014



There are many similar examples in electronics industry as well. Keep learning and maintain business acumen.


It is amazing how often these type business cases occur… big one day, gone the next….

Thanks for sharing!

“For over a thousand years Roman conquerors returning from the wars enjoyed the honor of triumph, a tumultuous parade. In the procession came trumpeteers, musicians and strange animals from conquered territories, together with carts laden with treasure and captured armaments. The conquerors rode in a triumphal chariot, the dazed prisoners walking in chains before him. Sometimes his children robed in white stood with him in the chariot or rode the trace horses. A slave stood behind the conqueror holding a golden crown and whispering in his ear a warning: that all glory is fleeting.”

― George S. Patton Jr.


We often use current situation and technology capabity to assess future business feasibility.


This story, to me, simply confirms John Hussman’s quote on risk, “People vastly overestimate their ability to recognize risk and underestimate what it takes to avoid it….). To often, people think in two dimensions (the current market and the current competitors); not considering those risks from above which can descend upon them and remove them from the face of the earth.

When I worked at Union Carbide, they had a process for making ethylene glycol (used in the production of anti-freeze and polyester fiber) and their annual production was around 3 billion pounds. In a commodity business, margins are thin, so if you don’t have the lowest cost process, you will lose your shirt. Now all companies would license their process (for the immediate income and also a royalty if the buyer adopted the process. Union Carbide would typically buy other processes and evaluate them just to make sure their current process was competitive . Yes, it was expensive, but it was information they could not afford to be without. It’s like insurance and you insure what you cannot afford to lose. When someone has an idea which threatens your very existence, you evaluate it, even if their probability of success is low (because you can’t afford the downside).

micro CEO

Yes, there are so many examples like this. Of course it is easy to speak in hindsight, and the real trick is to identify the shifting trends of change and to act upon them. Few challenges are more difficult than giving up a known, good thing with a proven history, in exchange for an unknown new thing with large risks and (by definition) no track record of success. So it happens again and again in the history of business and industry. And well that it should be this way. For who wants an eternal monopoly?
Another classic story of paradigm shift in technology is that of the swiss movement watch vs. the quartz movement. A patent for the quartz mechanism was actually filed by Swiss engineer Max Hetzel. This became the Accutron from Bulova. But as the story goes, no one believed consumers would be interested in such a gimmick, compared to the real watches made with real Swiss engineering. Or at least they did not focus enough attention on it, until 90% of the watch market was already taken by Japanese manufacturers like Citizen and Seiko. Seiko Quartz Astron was first to market in around 1970.

But the mystery remains... how to identify emerging disruptive trends and then convince an incumbent corporate leadership to throw their weight behind it. It is inherently difficult (innovator's dilemma), and perhaps society at large is better off for this disadvantage.

Singapore Sling

This also applies to employees… one must continue to upgrade one’s skill sets or one can easily become a dead wood in a changing organization.

Am I Ignorant?

my take on this matter is somewhat different. Here ignorance is not the issue. Blockbuster failed to do their homework with changing needs of the customers and market. Like Kodak film, Polaroid, Nokia, Blueberry.. they underestimated (or ignored) the fast and powerful effects of new technologies and how to take advantage of them. Also, it takes about 20 years or so for a generation shift. With new generations come new views, ideas, likes and dislikes... Blockbuster management probably had old dogs still at guard who were content with their glorious past!! We must credit Blockbuster for catering to the customers for two decades or more... Being a giant for a long time. Like any thing else, they had to make room for the new comers on the block. We can see in the history - The Roman empire, the British empire, The Pyramid kings, etc... once mighty and sounding immortal.... are all things of past... Can we say that they all were ignorant?

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