Autopsy of an Industry

, , Comments Off on Autopsy of an Industry

Well, after my last post, I thought it best to shift back to business and focus on a subject with some operational take-aways for us all.

I had read an article about a year ago. It was actually about myself and the seminar business I had built.

It talked about the fact that I had blamed the demise of my seminar business on the Great Recession.

I had certainly made that statement, but I had not implied, directly or by inference, that the Great Recession was the only reason the seminar business died. There were several other reasons that had nothing at all to do with the circumstances of the Great Recession or the circumstances surrounding the capital structure of the company, which also contributed.

In fact, if I were to rate them all, I would say that the capital structure of the company was third (the subject of prior blogs); the Great Recession was second, and, if the truth be told, the primary fundamental reason for its demise was the disruptive nature of technology.

Yes, the disruptive nature of technology. 

I know that many of you have heard that technology is disruptive.  However, I suspect very few of us have probably sustained or absorbed the direct and immediate impact that a disruptive technology had on our individual businesses. It is akin to the disruptive result of automobiles on the sale of buggy whips ninety (90) years ago, or of cell phones on pay phones, or of DVD’s on VHS’s, or of streaming video on DVD’s, and so forth and so on.

Good grief.  The pages of the Wall Street Journal are blood stained reporting on businesses and industries that have and are perishing in the midst of the technology rapture.

I just didn’t realize mine would be one of them.

I remember attending a convention of the Factoring industry some fifteen (15) years ago and commenting from the podium that the internet would fundamentally change their businesses. Truthfully, I really didn’t know how that would occur. I just knew that it was a powerful instrument and that it had to result in some influence on the way they operated their businesses. Of course, in fact, it did, even though I was met with skepticism at the time, and didn’t honestly know what I was talking about anyway.

All of us know how price comparisons are occurring. We know that the internet is incredibly efficient at delivering information, whether it’s on branded goods in our favorite grocery store, or on mortgage rates or insurance, or on footwear delivered overnight, and so forth and so on.

Similarly, I knew that the internet, over the next fifteen (15) years, would have an effect on our seminar business.

But what I didn’t know is in what ways. In the beginning, we saw some effect, but not terribly substantial and certainly not producing any significant result. As a matter of fact, the best years we ever had were from 2003 to 2007, when everyone in America was printing money in their businesses and the internet was a distant disrupter.

But, with each passing year, I saw more and more significance in the influence the internet was having in lots of different ways. However, it wasn’t so much the internet as it was the development of a derivative product that I hadn’t honestly thought about in the early 2000′s:  the evolution of search.

Let me explain.

Our seminars sold information. We did not sell tangible products; we sold information.

Information is very valuable if it is proprietary. Indeed, it continued to remain valuable even after the development of the internet because the information, although available, was buried in the gigabytes of information which may or may not have been accessible and certainly not in any recognizable or communicable format.  And, unfortunately, our information did not have the imprimatur of earning participants a diploma or a university degree.

Therefore, while the internet might have been somewhat disruptive to our business, it was not substantially harmful since it just simply proved that, in a sea of information, the most efficient way to obtain relevant information was to attend a proprietary seminar where it would be created, packaged and delivered cogently.

On the other hand, what happened in the later years of the seminar business was the development of search engine technology. Each of the search engines became more and more powerful and acute in identifying information that was relevant to the subject at hand. Therefore, by 2007, if you wanted to search for information on conducting a short sale, or an options straddle, or a triple net lease transaction, you could do it with a few strokes of your fingers and you would have more information than you could digest in a month.

It had the following attributes:

• Everything was free.
• It was comprehensive.
• Some information had agendas, but much information did not.
• At the end of the day, while some information was worthless, a great deal of the information was valuable.
• You could do it from the privacy of your own home without anybody being involved. 

And, by the way, did I say that it was free?

The Internet was disruptive, for sure.

But search technology was even more disruptive because it enabled a consumer to pinpoint information which was relevant to them, pay nothing, and digest the information in a useful way.

Fast forward one year.

My wife, Janet and I were getting ready for a Halloween Party. She wanted to do a spider cake. She went online, stroked the appropriate terms, and ended up with a recipe, not only in print, but also with a video narrator. She had her recipe in less than ten (10) minutes and, guess what . . . it was absolutely free. . .and tasted great!

Welcome to an era in which information is valuable, searchable . . . and free!

At the end of the day, the internet, with its culture of free exchange, free information, free communication, combined with a communality and culture of free sharing, made the business of selling information virtually impossible.

The seminars that made us the 800 lb. guerilla were “How to” seminars. They were legitimate and real. They were valuable, constructive and useful. However, they required a business model to make them work. The internet, combined with search and consolidated with the joint culture, ultimately killed that business model, at least in any format I was prepared to accept.

That does not mean that there are not other information-driven business models that work or may work.  It does mean, however, that mine no longer did. 

Seminars were not dead on arrival. But they ultimately became dead on delivery.

Consider my seminar business another case study in the annals of Darwinian economics relevant to each of us as we play out future scenarios for the businesses each of us runs!