Episode 12: Bad Brands
Ever heard of Brian Poole and the Tremeloes? Shock! Not many people have. Lessons can be learned from the mis-signing of this never-heard band by a record label on a travel budget. Join Doug and Glenn as they riff on this, play the latest Blockbuster DVD, and try to figure out which companies were hit with the Blade Runner curse.
Transcript
Glenn Suart 0:00
But if you were to ask people now what the best vacuum is I’m sure Hoover is nowhere near there. The word itself has become a dated term for cleaning up. And they could have maybe prevented that if they’d done something, but now it’s really hard to, you know, reinvent themselves when you have a Dyson out there who’s taking that sort of innovation kind of place in the market.
Doug Ross 0:37
Welcome to Conversations on Startups, a podcast brought to you by Douglas Ross, author of the book, Spark Click Go: How to Bring Your Creative Business Idea to Life, and Glenn Suart, of Today’s Great Idea, a radio series featuring over 300 origin stories of businesses, brands and inventions that have changed the culture. Welcome to today’s conversation.
Doug Ross 0:59
Hello, and welcome to another Conversation[s] on Startups with Doug and Glenn. I’m Doug Ross, author of Spark Click Go. I’m here with my friend and colleague, Glenn Suart, of Today’s Great Idea. How ya doing, Glenn?
Glenn Suart 1:15
I’m doing great, Doug, how are you doing?
Doug Ross 1:17
I’m doing terrific… excited to talk about another topic today. Last time we were together, we talked about things that entrepreneurs could learn from successful brands or business ideas, and today we thought we would take the flip side of that coin and talk about things we can learn from bad brands or not so good business ideas
Glenn Suart 1:41
Like anything, there is (sic) learnings to be had everywhere and that’s the way it should be at the end of the day. And hopefully these kinds of things we talk about today don’t happen to you, but they do happen to other people and you… by… just by seeing them and, like, thinking about them, you might be able to learn something from them, that you could apply, of course, to your own business or own startup. Very true. You learn a lot from bad ideas.
Doug Ross 2:09
You do. And the best way or the most impactful learning happens if you experience it yourself but we’re trying to help you avoid that, as Glenn just said, by sharing some of these stories. So, you know, when I was thinking about… just thinking of some examples, and then going through them, I definitely see a pattern. There are some similar reasons. So perhaps, as we go through this discussion, or wrap up at the end, we might be able to pull out some of these common sort of missteps that people take. But, as far as that goes, what comes to mind for you when you think of a bad business, or brand?
Glenn Suart 2:55
Let me tell you a little story about this one, and, you know, it won’t be too hard to guess I’m sure. Sixty years ago essentially in London, England, Decca Records invited two bands to show up on New Year’s Day to come and record some songs because they wanted a Beats group for their… their record label. The first group was from London called Brian Poole and the Tremeloes, and they recorded a couple of songs. The other band was from another part of England. Decca decided to go with Brian Poole and the Tremeloes, in part, because they didn’t want to really pay for travel expenses for a band coming from another part of England, they just wanted Brian because he was from… locally in London. Any idea who the other band was, there Doug?
Doug Ross 3:44
Well, when you say a Beats band, not so sure I really know what a Beats band is. Can you just give me a little bit of color on the definition?
Glenn Suart 3:53
Ya know, it was just a little bit more Rock and Roll I think than anything else. And ah…
Doug Ross 3:59
And this was 1960?
Glenn Suart 4:00
1962 actually. New Year’s Day, 1962.
Doug Ross 4:06
Okay, well, I’m gonna have to go with the Beatles because they started to produce albums the following year.
Glenn Suart 4:13
Well, you’re very correct. Decca records [ah, nice] which was a big (?) label at that point had a choice. And they made their choice kind of on the wrong factors, if you will. And I’m sure it was… it all had a whole bunch of other factors, and you know, the Beatles weren’t quite recording all their sounds quite yet, but the thing was… they sent the Beatles a note saying thanks very much, but you know, we think guitar groups are on their way out. What I took from that is… you know, yeah, it’s easy hindsight [is] 2020…to choose a different, you know… laugh at these people. But in reality, it was probably a hard decision at that time. They had no idea what was coming. The 60s were kind of new, but to think about travel expenses is not so good. What it tells me is that – and Brian Epstein was the manager of the Beatles at the time – and he thanked them very much for the time and DECA said, “look, we’ll press your records for you if you want to pay us to do it,” and he said, “no.” It comes down to knowing your value. They (the Beatles) didn’t necessarily bend over to… to work for somebody else, they were comfortable doing their own thing, and even if all these other record labels like HMV, and Philips, and Columbia had also turned down the Beatles at that point, so it wasn’t a surprise to some degree. But the Beatles sort of held together and knew their value, and obviously came out and did a very good thing after that, so just because you get rejection, that doesn’t mean to give up at the end of the day. And the other people aren’t necessarily smart, so that’s one of the things I get out of it.
Ali 5:46
You’re listening to Conversations on Startups with Doug and Glenn, merci pour nous avoir joindre.
Doug Ross 5:55
Yeah, I love that we’ve moved – not in every industry – but there are less and less of these gatekeepers that you’re talking about. So in that example the gatekeeper is the record exec trying to predict or, in fact, choose what they need, and manufacture hits. There are fewer of those now. I think they still play a role [yup] and influencers do too, but there’s nothing like getting your idea out more broadly and creating demand that way, and then going forward and scaling up from there. Because these guys are just not that smart. How could you possibly miss the Beatles? Come on.
Glenn Suart 6:36
I know that sounds crazy. But you know, people did. Interestingly, of course, that lineup on New Years Day, 1962 was Paul McCartney, John Lennon, George Harrison, and Pete Best, who got replaced by Ringo Starr, you know, shortly after that. So I don’t remember all the history of The Beatles, but they could be… I know, they were trying to tweak the sound a little bit, so having Ringo, they looked at themselves and said, you know, we could be a little bit better, we’ve got to change this and that… the result was a change, a fine tuning of their ‘business model’, as it were.
Doug Ross 7:12
Yeah, that business model is an interesting one. It’s fine tuning, I can see that. Doing something completely different is tough for businesses and one of the examples that I would like to share is Blockbuster, because they had the classic struggle. It was like Fight Club kind of thing, for a period of time between Blockbuster and Netflix, and Blockbuster… just… they couldn’t change their business model. They had the stores with all the videos we used to go to get – and they did bring out a mail service to try and compete with Netflix at one point- but they really couldn’t completely change that business model for some reason and switch to or see- talk about missing trends… see that things were going to be digitized in a big way, and really invest whatever you needed to do in your business to be ready for that. And so they were crushed by the newer competitor who came in fully seeing the new technology and moving that direction and also proving a certain amount of nimbleness over time to continue to evolve that and create a studio. This is pretty phenomenal on the flip side, but we’re focused on the… on the businesses that were not able to keep up with the times, like Blockbuster. How can a brand like that go out of business?
Glenn Suart 8:41
Yep. It’s interesting. I love that story. Because it’s so true. It’s like they had blinders on, and then the issue that comes up is… another one that’s very similar, existing similar story, have you ever heard of the Blade Runner curse?
Doug Ross 8:56
I’ve not, no.
Glenn Suart 8:57
Okay, 1982 I believe this… the original Blade Runner came out with Harrison Ford, and there’s a big scene near the beginning where he’s… they’re flying around within the city, and there are a lot of logos for companies that existed at that time. What happened is a lot of those companies (now) no longer exist and therefore became cursed by that movie. [That’s Hillarious] It is. I gotta look it up. I gotta remember how many were no longer in business. [Yeah] The point being that.. to your point of a Blockbuster… sometimes they think they’re too big to fail, but [and] in fact, they are too big. They don’t understand the market’s changing, and they’re not ready for something. You know, years ago, Timex used to be the biggest thing in watches and then Swatch came along and took them out, per se, as it were. You have that happen in a whole bunch of other areas where people think that they’re immune. And one we talked about in a previous episode was Kodak… inventing the digital camera, and not as you said – just the same thing with Blockbuster – they didn’t want to cannibalize their existing lucrative business, and essentially, let somebody else do it for them when they could have done it themselves.
Doug Ross 10:16
Hey podcast listeners, we’re gonna take a short break now. If you’re enjoying the show, feel free to invite your friends, remember to subscribe, and if you want to help spread the word leave us a review on Apple Podcasts or your favorite podcast app. Each episode of Conversations on Startups focuses on a single topic. If you want to comment on something you’ve heard on the podcast, or suggest a topic for us to cover in a future episode, send an email to:go@todaysgreatidea.com or douglas@sparkclickgo.com. Glenn and I appreciate you and hope you find our uncut and unrehearsed stories, perspectives, and tips helpful. Speaking of helpful stuff-let’s pick up where we left off.
Doug 11:02
That’s right. And it’s so difficult to do it themselves. So the flip side, you can go after some of these long-standing businesses and if you’re the small guy, you can do things more nimbly and.. create a success that way. Another one that I think of is Blackberry – huge Canadian success… international story – and to me what I think they missed there was… they really missed the mobile web, and they didn’t have this multitouch screen – I think we talked about them briefly too. But they thought that security would be more important than convenience. And, if you think about it, it’s a little bit of hubris when you’re kind of saying no, no, my customer is going to value this the most. Well, you don’t really know and you don’t decide what your customer is going to value. And what has been shown was the customers valued convenience, much more than security. I mean, look how much data we give out every day. There’s a term for it, I think it’s called a data trail… like a vapor trail of a jet plane, and we leave a ton of that and we’re happy to do that if we get our conveniences. Any other examples you think we can can learn from? I mean, there are whole industries here Glenn. There’s the news industry… we talked about music from the point of view of, I guess, from the producers point of view, or from the band’s point of view, but that’s another industry that’s been totally shaken up. I think of the beer industry as well as an example. At one point in North America there were 50 breweries, for all 400 Million people – I’m actually talking about the US and Canada, so not including Mexico. All those people and only 50 breweries. And mainstream was what you had to do. You had to have massive commercial budgets, Super Bowl Ads, all of these ridiculous things. And really what people wanted was, they wanted a story, they wanted a craft beer, they wanted taste, they wanted different flavors… things like that. And it’s again, another story of the customer, really, you know the importance of listening to the customer and not telling them what it is that they should like.
Glenn Suart 13:20
It’s interesting, you brought up Superbowl commercials, because how many of those Superbowl commercials in the last 20 years, not the the Budweiser ones, and the Coke ones, etc, etc., but the ones for sort of new brands – . they’re trying to introduce themselve- they go out, spend a ton of money on creating some really potentially interesting content, sometimes successfully. But often they’re trying to make a splash, but it’s really a drop in the bucket and they spent a lot of their marketing money thinking that this is going to make everyone aware of them, and it’s helpful, but it’s certainly not the be all and end all. And a lot of these companies have gone out of business simply because they didn’t know… the lesson learned is… don’t buy a Superbowl ad for vanity if it doesn’t fit your… what your marketing model really should be. But you know, people think they’ve got a lot of money, especially if they got a lot of money from investors, and they go spend it poorly. And that’s one way of embarrassing yourself at the end of the day.
Doug Ross 14:22
Yeah, absolutely. You want the high impact, low cost sorts of things. You know, I think there are a lot of businesses as well that are… that are hanging on, trying to just manage for profit and… and not innovating. I think this is another… this is really… it’s it’s not just Blockbuster but it’s a lot of companies that have done that, and they can’t stay up with the times and there’s something to be learned from that. You know, we said we would talk about bad brands as well. I have to mention Goop. [Ha Ha} I just can’t get over the name. It’s somewhat successful. There are people that… that are buying those products. But oh my god what a name? It’s… why would you do it? You don’t have to do it… why do you pick a name like that, you know, it’s unique, but horrible and it doesn’t say “beautiful” or “affirming…” some of these things we might think that some of the customers would like from a brand like that.
Glenn Suart 15:19
And, you know, maybe it does appeal to a certain audience that does want it, and I don’t know, I haven’t followed Goop, I know who they are, of course. But, it’s the same thing is that retail store FC UK playing on that, you know, the profanity… you know, element? And, you know, it works the first time. Oh, yeah, isn’t that clever? And it’s like, well, okay, it’s a limited value, per se. [Yeah]. And then the other example that I’m thinking about, we talked again, about this before is… bad promotions, but as a brand, you know, Hoover, the vacuum cleaner company, was the company of our parents generation. You had to have a Hoover, it was the best thing going and they had innovation, and Hoover meant something. But if you were to ask people now what the best vacuum is I’m sure Hoover is nowhere near there. The word itself has become a dated term for cleaning up. And they could have maybe prevented that if they’d done something, but now it’s really hard to, you know, reinvent themselves when you have a Dyson out there who’s taking that sort of innovation kind of place in the market… and Shark, doing things about value, and commercial… So the lesson there is, when you get big as an entrepreneur, try to stay small, and try to be nimble and do all these things even if you’re a huge, huge business. You have to structure yourself to do that, because inevitably you’re gonna find that, oh, I got a big marketing budget, I can buy Superbowl ads, or I can go and do this, or I’ve got five layers of staff now to do things. That’s what kills you. So if you learn those from these businesses, or brands, if they haven’t done anything, or… failing, that’s the takeaway. A really good successful long term brand innovates, not just the business, but the culture to make sure it stays nimble and goes the right way. Does that make sense to you, Doug?
Ben 17:18
You’re listening to Conversations on Startups with Doug and Glenn, thanks for joining us.
Doug Ross 17:26
Yeah, the culture… as we’ve talked about the business, the business model, all of those things, the culture is such a huge one. And a lot of people are afraid to change things, and they are trapped in this, well, it worked last year, or always worked in the past, that’s going to work in the future, and you just see repetition of it as revenues decline, profits decline, all of those sorts of things – and when that’s declining, it’s maybe even harder to innovate, because now I’m putting money into R&D… development, it might take a while before that business is going to be big enough, and it becomes tougher, you’re in a negative spiral at that time. One last thing that we haven’t talked about too much would be lack of scalability. You know, I can think of certain service businesses in particular. If you can’t scale it, it’s going to be tough to really grow that business so think about that, when you’re creating your… your business. How labor intensive is my business? Or, how much does it depend on a really skilled or experienced person or persons? And if it does, am I going to be able to, first of all, retain those people… attract… retain those people, and what am I going to do when I need to grow? This can be a key brick on the brake from growth. If you can’t scale it… I’ve seen this many times and it becomes a constraint on a business. So think about that. I guess I’m on the flip side here a little bit Glenn… we haven’t wrapped up the lessons to be learned, but I just can’t help thinking about the entrepreneurs out there that we’re trying to help.
Glenn Suart 19:06
No, 100%. It’s like that’s a lesson big brands… where they make bad decisions… they become too focused, as I think Goop as an example, you know, you associate that with Gwyneth Paltrow, of course… it depends on how you feel about her. If she makes a bad movie coming up – and she, of course, is careful not to damage the Goop brand – but if something was bad to happen, well, Goop is all… you know, screwed. So you have to make decisions carefully. Yes, is the answer. There’s lots of great lessons out there from great businesses or I should say not so great businesses, and not so great brands, doing things poorly, but think[ing] about how you can make their business better will help you do your business better.
Doug Ross 19:51
Absolutely. And what we’ve tried to do is point to some of the pitfalls that are out there so that you’re aware of them. We hope that you don’t fall into similar pitfalls. In fact, we hope that you would do the opposite… is really the ultimate objective here when you’re creating your own business. But from an opportunity point of view, there are lots of opportunities to be had when you think of some of the inertia built into big businesses. I think sometimes the entrepreneur thinks, oh, what can I do? These guys are so huge. But it’s, I guess the analogy that comes to mind for me is the Death Star, in Star Wars. I love that because it was… it was huge. It was all powerful. What could you possibly do… all knowing, you know, these sorts of images. But they’ve got vulnerabilities and some of the vulnerabilities of these big death stars that are out there… big companies, is… they have blind spots, and they have people afraid of doing new things. And you as the entrepreneur really have a lot of ability to do things that they don’t. Cater to smaller markets that maybe become bigger markets over time because the big guy, the Death Star is not going to do that. And you’re the nimble Jedi in the X Wing fighter and you know just what to do to blow these guys up, if I may.
Glenn Suart 21:18
It’s a great analogy, Doug. All right, next week we’ll have another exciting topic for you. If you enjoy these, please let us know because we like feedback as regularly as possible.
Doug Ross 21:39
Conversations on Startups is a production of Glenn Suart and Douglas Ross. We hope you’re having fun listening but mostly that you take action on your business idea. For more inspiration visit our websites: todaysgreatidea.com and sparkclickgo.com. Another episode of Conversations on Startups will drop soon, or is already available to binge. Thanks for joining us, and remember to subscribe and invite your friends. See ya next time!
Transcribed by https://otter.ai