Monday, May 5, 2014

going downstream with an upstream business - the value of being ourselves part II


It wasn't that long ago, of course I think in evolutions and age myself in dog years now, that I sold things from mall carts because there was no place of commerce called the internet.

(there was an internet of course, but people didn't trust it so much for shopping in those days)

I had to build my business to appeal to the local customer. This is what business makers had been doing for generations.

If I wanted to focus my business on what I wanted to do I had to plant my business in a place the thing I wanted to do was needed.

Or I could try to figure out what was needed in the place I wanted to plant my business (ie the local mall) and focus my business on that.

I couldn't just decide what I wanted to do and do it wherever I wanted to do it - I had to work upstream with an upstream business.

We live in a very different world now.

(although it looks like the internet created this change, what really happened is we changed and the internet was created by us to support our new way of being - this is why we really need to defend what we have created here - if you haven't educated yourself on net neutrality, please do so and take some action to support it)

The stuff I sold from my mall carts had a very broad appeal. It had to. I had to appeal to as many people who came into that mall as possible or I wouldn't stay in business.

This mindset is the reason so many people in business before the internet have so much trouble translating their success to an online business. With 60% of U.S. sales anticipated to involve the internet by 2017 we all need to figure this thing out.

I have a friend who owns a local music store selling musical instruments and supplies. He has been in business for decades and was smart enough to see the internet as a great opportunity. He got in early and set up a website.

It pretty much looked like a one dimensional version of his music store.

This seemed like a good idea at the time (the aisles in his store became sections in his website - he even had pictures of his retail store on his front page) because we really couldn't see how this was all going to work yet.

Of course what happened is his website never took off. Yes, millions of people were buying online, but they weren't buying from him (most of the money made from local stores going online without a doubt went to web designers).

His physical store sales plummeted. Yes, customers still came in to pick the brains of his seasoned staff, but then they went online (and to the big box stores), with its price comparison and Amazon free shipping.

The very internet that was supposed to open up his little business to the world destroyed his retail sales platform because he was selling the same thing everyone else was.

Now he is a very savvy and smart business man and switched his retail sales business model to a service model - he now makes most of his money on music lessons and has become the go-to local place for this. He was able to go downstream and do what we loves in an upstream business.

This works for him because he is a musician and loves music - if he had been just a guy who opened a music store because he saw his town needed a music store he would have been in a whole lot of trouble. Those guys are dead in the water now.

There is not a Happily Ever After ending to this tale however

(and if he really thought it through he wouldn't really want there to be, we came to this planet for contrast and growth after all - the end is never really the end).

His service business model is exhausting. His sales staff do not easily transition to teachers. Some are excellent, some not so much. He is now trading hours for dollars. Even in his little upscale community parents will only pay so much per hour for lessons. Other music stores are making similar transitions. There is more competition all the time. He still has a store filled with musical merchandise and a website that looks like his store. He is swimming in brand new waters.

(and so are we)

Next part III - loosening our grip

3 comments:

DancingMooney ♥ said...

I am forever grateful that I came into the world during a time that the internet and computers were being developed. My mom started taking computer classes at night and was once a network engineer in San Francisco, back when this was all new. So much has changed and grown since then, but I was 5 learning to type on my Commodore 64... playing some sort of letter drop game. I am no computer wiz, I just know how to use one... but I love having the opportunity to use this resource we have, and the ability to make my own living from the comfort of my home. What a blessing, and such a great fit for me. This is a great series, ready for the next post! :)

Catherine Ivins said...

My first computer was a Toshiba T1000 - it was before Windows and I had to type in DOS commands. I still remember them and now that I think about it- this is exactly the kind of junk cluttering up my brain when I need the space to remember more important things - like what i had for dinner last night, since I have no memory of that ...

we are absolutely blessed and absolutely exactly where we should be Janelle xo

DancingMooney ♥ said...

Oh yes, DOS! I hate to say this, but a couple of my neighbors work for the state, and claim they still run on DOS, is that not insane?! It's no wonder Cover Oregon failed so miserably. They need to hire some programmers that are living in today's world. Omg.