Blockbuster CEO John Antioco thought that online business and e-commerce was “a small marketing niche” therefore he was not impressed in purchasing a new company, called Netflix.
Reed Hastings the founder of Netflix, flew to Dallas in 2000 to explain his new business concept, and suggested that Blockbuster should take advantage of this concept. Actually, advising Antioco that Netflix should be running Blockbuster brand in the online industry, as Blockbuster should promote Netflix inside Blockbuster’s stores.
Antioco not only denied the offer but left the room laughing at Hastings idea. Ten years later, Blockbuster was declaring bankruptcy and Netflix was listed as a $28 Billion dollar asset company worldwide.
What happened with Antioco is just an example of how successful companies (including Netflix today) can have their solid grounds shaken and changed in today’s marketplace. Just think about Kodak ignoring digital cameras, Blackberry underestimating Apple, CAA ignoring Costco vehicle assisting program, as a few examples.
The interesting thing is that most of the top Executives of successful companies have good business concept. Antioco was not an exception to this rule. He brought Blockbuster to a strong brand position, having stores all over the USA and the world. Yet he laughed at Hastings proposition and probably thought that it was an insult.
Well, the opposite example was the CEO of Walt Disney, if they had stayed only with cartoon animation, they would have been bought out by another company by now, instead they invested in Theme Parks, Cruise lines, video games, movies and finally even buying Star Wars franchise.
The bottom line is that you need to pay very close attention to what is happening in the marketplace and never underestimate the competition.