One Trick Ponies

When was the last time you used a standalone camera? I don't mean your phone or PC or tablet - I mean a camera that only takes pictures. With film. A still image camera.

In 1976, Kodak owned 90% of the film market. It's name was so much a part of our culture that the phrase "Kodak moment" became synonymous with photography. Everyone knew what a "Kodak moment" was. The company was founded in 1889, so they understood how to successfully manage a profitable business. In fact, for decades, Kodak was considered a must-have blue chip stock that no portfolio was complete without. Yet 2007 was the last year that Kodak turned a profit. On 1/19/12, Kodak finally filed for bankruptcy, and no longer makes cameras, digital photo frames, or pocket video cameras.

Lest you think that Kodak didn't try to change with the times, the company actually invented the first digital camera in 1975, and sued to protect its patents. And, even if they had dived into digital cameras full throttle and right from the start, bear in mind that, as I write these words, you can't give digital cameras away.

The real problem wasn't that Kodak changed too slowly. The problem was and is that Kodak is a one-trick pony in a world that demands that gasoline - as "old economy" a product as you can get - serves more than one function (cleaning your engine while powering your vehicle). We live in a time when even toilet paper manufacturers better come up with a few more ideas if they don't want to go down the drain.

The days of the single purpose product are over. Do you really believe that books will still be printed on paper 20 years from now? (Maybe 10.) Cars are another product ripe for a paradigm shift; even the manufacturers ran out of anything new to say decades ago. If it doesn't fly or teleport, a car is essentially a car, and sliding brand loyalties show that Customers know that. (Tupperware, I'm talking to you, too.) Even multipurpose products like Blackberries are falling by the wayside because they aren't multipurpose or intuitive enough.

It's no longer enough to simply buy a smaller, sexier company on the edge of technology to drive your share value. Shareholders understand that it's a ploy, and that you're only going to ignore the acquisition to death while you conduct business in the same old legacy organization way. Even the old mantra "Adopt, adapt, improve," will only keep your doors open for so long.

Spread out to reduce risk caused by downturns in one segment of the economy. That includes spreading out so that you cover more Customer demographics. Don't underfund or overfocus on particular segments, divisions, or departments. And, perhaps most important, don't share revenue.

To be successful, every segment must support itself from day one.

Give each segment the autonomy to make its own decisions and build its own infrastructure. All you should care about is whether or not the segment is profitable. Once you have one or two that are, listen and watch how they do things to see if their way of doing business can be applied to less successful segments. And do your best to make sure that the people who run each segment are new people, not your cronies, and that they come from outside your core industry. (Why in the world would you want to create a line of unsuccessful clones?)

Sooner or later, every market and every product goes away.

Making your products perform multiple functions that increase Customer convenience and that don't require an owners manual because they are instinctive to use as a hammer will increase your company's lifespan, but they won't make you immortal. To do that, you have to keep creating, finding, and funding wildly creative answers to problems that consumers don't even know they have.

And just so you don't think that this concept only applies to the GM's of the world, even if you build funky wooden shelves that you sell at art fairs, how many other out-of-work guys do you think go into that business every year, or women who think they can make jewelry for a living, or couples who think they can make a go of a restaurant? Almost all of these businesses fail. They have no POD's. They are all one trick ponies. But how about some earrings with built-in wireless ear buds or a bluetooth headset, a shelf with a built-in iPad charger/stand you can watch a movie while cooking, or a restaurant that has treadmills instead of chairs?

Take a look at Kickstarter.com to see what John Doe thinks is worth funding. There's a lot of noise, but there are some gems there (not least the whole idea of crowdsourcing venture capitalism). Many of the ideas are already out there.

The secret is not to be first. The secret is to be best.

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