April 19, 2024 • 46 mins
Discover how a chance encounter with gum revolutionized an entire industry as Caitlin and I recount the serendipitous story of William Wrigley Jr.'s pivot from soap to chewing gum. We'll also crack open the history books to reveal how Coca-Cola danced away from its medicinal roots to become a global soft drink powerhouse. Our conversation is a vibrant tapestry woven with tales of observation, adaptation, and the bold moves that define successful businesses.
Strap in for a rollercoaster ride through branding triumphs and errors that have left indelible marks on consumer culture. We reminisce about the New Coke saga and dissect what it teaches us about tampering with consumer affections. Then, shifting gears, we applaud Pepsi's sparkling transition with Bubbly, while pondering the fate of movie theaters in a digital-dominated era. Caitlin and I dissect these industry shifts with the precision of a scalpel, extracting valuable lessons on the need for timely innovation.
Join us as we explore the rise and fall of beloved businesses and the innovative sparks that keep industries thriving. From the Blockbuster phenomenon to the surprising adaptability of Flated's truck bed covers, we'll leave no stone unturned in our quest to understand the dance of evolution in the corporate world. Expect to be dazzled by our foray into the future of travel with high-speed hydrofoil and a homage to the unchanging deliciousness of chicken and waffles, as we wrap up another thought-provoking episode of the Innovate Everything podcast.
Strap in for a rollercoaster ride through branding triumphs and errors that have left indelible marks on consumer culture. We reminisce about the New Coke saga and dissect what it teaches us about tampering with consumer affections. Then, shifting gears, we applaud Pepsi's sparkling transition with Bubbly, while pondering the fate of movie theaters in a digital-dominated era. Caitlin and I dissect these industry shifts with the precision of a scalpel, extracting valuable lessons on the need for timely innovation.
Join us as we explore the rise and fall of beloved businesses and the innovative sparks that keep industries thriving. From the Blockbuster phenomenon to the surprising adaptability of Flated's truck bed covers, we'll leave no stone unturned in our quest to understand the dance of evolution in the corporate world. Expect to be dazzled by our foray into the future of travel with high-speed hydrofoil and a homage to the unchanging deliciousness of chicken and waffles, as we wrap up another thought-provoking episode of the Innovate Everything podcast.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
And I'm joined as always by my co-host Caitlin.
Speaker 2 (00:02):
Mode.
Speaker 1 (00:03):
And today we're going to talk about the pivot.
Now, when you think of the pivotright, you might think of a
movement which would be goingfrom facing one way or pointing
one way if you're an objectinstead of a person to pointing
the opposite way, or probably 90degrees, one way or another,
similar to basketball, whereyour pivot foot stays down and
(00:24):
you rotate around that foot.
One point of contact has tostay put for it to be a pivot
and not just a turn.
And if you're in a moment inyour life where you are in need
of a pivot, it's all you canthink about.
It's like driving down thehighway and you really have to
pee.
There's nothing else thatmatters.
(00:45):
I don't care if there's peopletelling you a story or your
favorite songs on the radio.
You're sweating, you've got togo and that's all you can think
about.
And oftentimes in that instanceyou find yourself pulling off
rather abruptly on the side ofthe highway.
I can't wait anymore, got topivot.
Here we are, side of the road,let's like find our way into
(01:06):
some bushes.
And I also think of a pivot inthe military terms, where you
have this large group of peoplethat are marching and they pivot
on that heel and they rotate180 degrees and march the other
direction and stay in unison.
So two different pivots.
One is rumble strips on theside of the highway, little
(01:26):
bumps on the edge as the grassis interacting with your tires.
The other is a precise militarymovement and oftentimes the
pivot is thought of in terms ofbusiness.
And today we're going to take ajourney into the world of the
pivot and we're going to talkabout some instances where the
(01:47):
pivot has gone really, reallywell and some instances where
maybe it didn't.
And the first one that comes tomy mind is a business pivot.
But it speaks to me becausethis person is sales and his
name was William Wrigley Jr.
William Wrigley is a soap andbaking soda salesman in the
1890s.
He just moved to Chicago andhe's peddling his products Now,
(02:12):
like most business people, mostsalesmen, william's trying to
think of a way to get people totake this meeting and so he, as
a marketing move, decides tostart offering free chewing gum
with his purchases.
And as observant as he is, henotices that you know what?
This chewing gum that I'moffering for free is more
popular to the customers.
(02:33):
People are buying my productsto get the chewing gum.
Speaker 2 (02:35):
He's getting meetings just to get just.
People are booking meetingswith him just to get his gum.
Speaker 1 (02:39):
He's getting sales.
This is a reward for selling I.
He's getting sales because he's.
He's given this chewing gum,and so he does one of the most
famous pivots in history whatyear is this?
Speaker 2 (02:51):
because this is 18.
Speaker 1 (02:52):
This is 1890s.
I don't know.
I don't know specifically wherein the 1890s.
Speaker 2 (02:55):
Like I wouldn't do anything for a piece of chewing
gum in 2024.
So I'm just curious like wherethis fell in the landscape of
availability of chewing gum.
Speaker 1 (03:05):
Yeah, but chewing gum at this point is probably still
a bit of a novelty Pretty poortoo as far as options go.
Yeah, there's not a lot offlavorful gums.
It's not like today wherethere's gums all the show.
Think of it like somebody'soffering you a really bougie hot
(03:26):
chocolate or something andyou're like that's kind of cool,
I'll do a bougie hot chocolatefor a you know $50 sale.
Why not, right?
So he pivots himself into achewing gum brand which is now
worth billions of dollars and hebecomes Juicy Front, juicy
Fruit, juicy Front, juicy Front,and Wintergreen and Double Mint
and all these things that youthink of when you think of of
wrigley became his legacy, allfrom a pivot well, I would say
(03:49):
his.
Speaker 2 (03:50):
It wasn't from a pivot.
He pivoted because he saw thathe had something better to offer
than what he was originallytrying to sell.
So he, he pivoted intosomething that was already there
yeah, and so I didn't need tonecessarily.
Maybe maybe his sales for theother product he was pushing
were for fine, but he'drecognize that if he just leaned
into the chewing gum he woulddo better yeah, and, and a big
(04:13):
chunk of pivoting is isobservation right and some of
it's situational?
I'm sure you're familiar withcoca-cola and their whole story.
Coca-cola, obviously that youknow who they are, but being
someone who studied business.
But for our listeners, I thinksomething that's interesting
about Coca-Cola is that theydidn't originate as a soft drink
(04:34):
company.
They actually originated in1886 as a.
They patented their drink, orthe inventor patented his drink,
as a pharmaceutical drink thatwas supposed to help with
headaches and fatigue, and so itwas over the counter.
It was very much likehomeopathic wellness type drink
(04:56):
and it took off.
People loved it.
They loved that it tastes goodand they thought, oh, it's good
for my health.
They thought, oh, it's good formy health.
So the inventor, whose name wasJohn Pemberton he did really
well, he was in Atlanta hepatented this drink.
It was taking off and then in1903, what happened, I'll tell
you Cocaine was all of a sudden,no go, bad for your health.
(05:21):
People Don't do cocaine.
What a shame, what a shame.
And the original Coca-Colabeverage had cocaine in the
formula.
So Coca-Cola was like, hey,let's take it out, because the
public view of cocaine is goingdown, we don't want to get sued.
So they did the start thingthey took it out of their recipe
.
But then that changed theflavor profile completely.
(05:44):
And so then they had a choiceto make.
And this is where they hit thatfirst big pivot, I would say,
because I'm sure Coca-Cola hashad a lot, They've had a lot of
pivots.
They're an old company, they'vebeen around for a while,
they've done very well.
But this is like their firstmajor pivot into the world of
soft drinks because instead ofcontinuing down the road of this
wellness drink which no longerhad cocaine in it, boo, they
(06:08):
decided to pivot into the softdrink arena.
They changed their ingredientsand they changed their marketing
and their advertising, fromthis drink is good for your
health to this drink tastes goodand it's a lifestyle brand,
it's the drink you want, it'sgoing to make you cool, which
they still run.
They still rely on thatmarketing strategy today.
(06:29):
Right, like Coca-Cola is cool,it's the drink to have.
Everyone drinks it, etc.
So I just think it's reallyinteresting that the pivot there
was was in their product right.
It was in the ingredients, butit was also in how they talked
about their product right andhow they went to market.
Speaker 1 (06:47):
Yeah, well, and they very cleverly, in my opinion at
least, they kept the counter,they kept the soda jerk.
They kept the soda jerk kind ofdressed a little bit like a
medical person, with like littlewhite outfit, and they kind of
they pivoted by marketing itvery similarly, in a different
way.
Speaker 2 (07:05):
Right, right.
So for context, if you had goneinto a pharmaceutical store
prior to this pivot and youwanted a Coca-Cola beverage, a
pharmacist would basically getit off tap right and then give
it to you that way and kind oflike, when you go into like a
kombucha bar, you can get itlike kombucha on tap in some
wellness stores.
It was the same type of formulaor go-to-market strategy.
(07:29):
So just for context for ourlisteners, that's how you would
normally buy Coca-Cola.
You wouldn't walk in and takeit off of a shelf or out of a
cooler.
It had to be administered by apharmacist, even though it was
totally over the counter.
There was no prescription drugsin it.
Well, there was cocaine in it,but there wasn't, it wasn't,
you'd not have a prescription.
(07:50):
It was just kind of gimmicky tohave someone serve it to you
like that, and so they kept thatgoing for a little while until
they really went hard into thesoft drink market and started
buying up all their competitors.
Speaker 1 (07:58):
Yeah, and when they kept it, the original, the syrup
.
So it was still kind of a sodajerk who's making the syrup and
then mixing it with thecarbonated water, kind of on
site, and dialing it a littlebit to your preferences, which
again I think is a nod to thatkind of pharmaceutical.
The pharmacist would give youthe right dosage if you will,
and I think I still think it iskind of interesting just
speaking of Coca-Cola.
So there's two things that Iwant to bring up.
(08:19):
One is, to this day, I stillthink the most popular tweet in
history, the most viewed andliked and shared tweet, was Elon
Musk saying, after he boughtTwitter, that he would buy.
If he had enough likes, he wouldbuy Coca-Cola and put the
cocaine back in it, which Ithink is still the most popular
tweet in history, andillustrating that a great pivot
(08:43):
defined an entire brand andindustry.
And I mean we're talkingbillions and billions of dollars
and that same exact company.
Right, no one's immune to justkind of mediocre pivot ideas.
Right, coke is very open-mindedand I think there's a huge
value in kind of thatpsychological safety of being
(09:03):
willing to pivot and lose money.
But going back to Cokemid-1980s we're talking about
well-established into this softdrink brand.
Speaker 2 (09:11):
Yeah, about 100 years later almost yeah.
Speaker 1 (09:14):
Coca-Cola, the soft drink brand, is now starting to
get a lot of competition fromPepsi.
Speaker 2 (09:19):
Yeah they're feeling the pressure.
Speaker 1 (09:21):
And Pepsi is different and liked by a lot of
people and taking a lot ofmarket share because, yeah,
they're feeling the pressure.
Weeder Coca-Cola products.
Reformulate it a little bit,give it more of that Pepsi
sweetness.
We'll call it New Coke andwe'll kind of push them out of
(09:49):
the market.
We'll beat them at their owngame and anyone who's ever been
to business school has heardthis story.
It is a classic marketingblunder.
The Coca-Cola fanatics yourhardcore fan base absolutely
revolted at this idea.
Speaker 2 (10:03):
Yeah, why would you make my beloved soft drink taste
like pepsi?
Speaker 1 (10:07):
yeah, and well, and, and the idea was, well, a lot of
people like pepsi, so we'llcome up with new coke.
And they still carried theoriginal coke, but the the fan
base, and again going back tothat clever pivot of keeping the
soda jerk, kind of keeping itfeeling like your your
pharmaceutical experience theywent the other direction.
They just launched this newCoke and everyone's like is old
Coke going away.
(10:28):
What does that mean?
And there was just kind ofhysteria about the whole thing.
Right, and you think about 100years later, you're just the
descendants of a cocaineaddicted person who, like, grew
up.
Speaker 2 (10:40):
We apologize to any of our hardcore Coca-Cola
listeners.
We are not implying that youare a cocaine addict.
No, no, no.
Speaker 1 (10:46):
I'm saying that culturally they're very
ingrained in it, right, so thatthese people who've lived and
breathed Coca-Cola products forthe longest time I've been to
people's homes that have likelittle museums to Coca-Cola in
their homes right, it's a verydominant brand.
And you put out this new Cokemessage and I mean it was the
(11:07):
biggest flop that I can think ofin business.
And Brian Dyson steps down.
They come out with Coca-Colaclassic.
Hey, everybody, everything'sokay, new Coke is dead.
Coca-cola classic Everyone'saware that this is old school
Coca-Cola and we move forwardfrom there.
And even talking about moremodern pivots, you're talking
(11:27):
about Pepsi.
One of the number one sellingSKUs at Pepsi is bubbly.
One of their number oneproducts is sparkling water.
Pepsi's pivot into sparklingwater when they saw kind of
LaCroix's business going up wasa great move on their end as
well.
So let's go back to someone whopivoted late, right.
(11:47):
So we've got Coca-Cola pivotedwell.
You've got Wrigley that pivotedwell, let's talk about pivoting
late.
Speaker 2 (11:53):
The not so great pivot.
Speaker 1 (11:55):
The not so pivot.
Speaker 2 (11:55):
Like we tried, but maybe not enough.
Speaker 1 (11:58):
Called the half pivot the half pivot.
Speaker 2 (12:00):
I like poor pivot, so I have a great example.
Speaker 1 (12:03):
Okay.
Speaker 2 (12:03):
And I think millennial listeners will be
able to totally relate to thisone the movie theater oh, the
nostalgia like what a greatplace for us as kids, what a
treat as to go to the movietheater with your friends, maybe
your first girlfriend orboyfriend, with your family.
(12:25):
It was the place to be and liketheater sold out.
Do you remember when you werelike 10?
You had to get there early andthere were like no seats
available lines.
Speaker 1 (12:36):
I mean, that was the from 1990s to the early 2000s
and mid 2000s.
Speaker 2 (12:41):
That was the date dinner and a movie well, and
then and then we thank you forputting the timeline in, because
in the mid-2000s what happened?
We had digital transformationof content consumption right.
We've got netflix coming on thescene, we've got blockbuster
and blue box and red box andjust choice right for people to
(13:03):
bring entertainment into theirhomes instead of having to wait
for films to come out in theaterand then to go to Blockbuster
and rent a DVD or VHS.
So you had that first change.
Speaker 1 (13:15):
And the beginning of TVs becoming cheaper, right.
Speaker 2 (13:17):
Exactly the technology coming home and now
you can see 4K or HD just betterpicture quality in the home, so
you don't have to go out.
So they're hit by digitaltransformation.
Then they're hit by consumerbehavior changes, right.
So people realizing oh, I canbring the movie home, it looks
(13:40):
great here, I can be comfortable, I can be in my own environment
, I have control.
If I get up to go to thebathroom, I can go comfortable,
I can be in my own environment,I have control.
If I get up to the bathroom, Ican go do that.
And then the third thing thathit them and I do feel bad for
movie theaters because theyreally got slammed was the
financial downturn, right Likethe crash 2008.
Now no one's spending money onfrivolous things like movies.
(14:02):
So a lot of things happened,but in my humble opinion, they
pivoted way late and they didn'tcommit to their pivot right.
So let's fast forward throughthe late 2000s.
Now we're in 2024.
What is the movie theater today?
It is confusing.
It is an overpriced place tosee new releases and you're
(14:25):
either going to get a standardviewing experience, like we had
as kids, with sticky floors,maybe bigger seats, but they
don't do much, maybe theyrecline a little bit.
Or you're getting this fullimmersive experience where the
seat is shaking and you'regetting wind blown in your face,
and so it's like this dichotomyof experience, and yet you're
(14:47):
still paying top dollar, even ifyou're going to a matinee.
I mean, I took the girls to amatinee a few months ago to see
that new migration movie withthe ducks.
I mean, it cost me like $100.
And it was a matinee.
I remember a week ago seeingmatinees as a kid for like $5.
Now it's still $13.50 to see amovie in the middle of the day
(15:08):
and on a weekday, which isinsane.
So you know they, they got hitby all these things.
And then, what was the pivot?
Enhanced their viewingexperience.
So imax imax was is still hugeand I don't really think it
really people really bought intoit like okay, it's a big screen
, that's cool.
3d experiences which I feellike are hit or miss.
People either hate them or lovethem.
Luxury and comfort right.
(15:29):
You got the dine-in experiencewhere you can like you're in
this lazy boy and they bringfood to you and you can get
sushi and wine, whatever youlike.
And then the 4DX, which is likethat environmental enhanced
experience right, those are thethings they tried to pivot into.
Speaker 1 (15:48):
In my personal opinion, do not get the sushi at
the movie theater.
I agree, I've had a badexperience.
Speaker 2 (15:53):
Same.
Speaker 1 (15:54):
But the I think we're probably together.
But the interesting piece ofthis pivot and the way that it
sounds is, I think, back to justrolling back the reel in my own
head.
And there are a lot of smallerpivots and there's even things
like I remember at the heyday ofthe movie theater you used to
(16:15):
get almost shaken down to makesure you weren't bringing a
snack in because there was somuch revenue in the snacks that
you had to hide your snacks andthere was a little bit of a game
to figure out how you couldhide your outside snacks to
bring them in Oversized hoodieswith things shoved into your
waistband.
Yeah, and when you look at itnow, they don't even try.
They had to give up lots andlots of margin there because
(16:39):
there just weren't enough peoplecoming, and turning away people
didn't make any sense.
I need the revenue.
Just let them in Whatever theywant to bring.
I mean, the last time I went tothe movie theater I carried I
carried an outside snack in myhand on the way in the door.
No one even cares.
Speaker 2 (16:52):
You're just walking in with a little scissors pizza
like hot, hot off the out of theoven.
You're like, hi, I'm here formy movie.
They're like it's you solvethis problem or fix the movie
theater, sinking ship that it is.
However, I think that there'stwo things they could have done
better.
I think the first is when therecession hits and people
(17:13):
weren't going out, they shouldhave made movies so cheap.
When you go to the drive-in,you can see three movies for $10
.
You all get in Whoever's inyour car.
It's a flat rate.
It's usually a double header.
It's just an affordable way toget out and do something.
And I think if they had again Idon't know the numbers and
(17:33):
maybe it just wasn't doable butmake movies super cheap, make
everything a matinee price, justget people out.
They're still going to spendmoney, they're going to buy the
sack so you can keep therigorous checks and make sure
they're not bringing inconcessions.
But make it really affordablefor that time period where
people are really strapped forcash.
And then, when we come out ofit and we start pivoting in the
(17:56):
experience, commit to that pivot.
It drives me nuts.
When I go online to buy a movieticket, I don't know what I'm
getting.
The ticket price price is high,so I'm assuming I'm getting
something.
But it's like I should knowthat theater it's all dying in
theaters.
That theater is all 40x, thatyou know what I mean.
Like and it should just be.
That's the movie theater now,like we're not doing just
(18:17):
standard movie theaters.
Like overhaul it.
So I want to go and see thatpicture in that setting because
I'll wait for any movie to comeout on Apple TV and stream it at
home where I can be in mypajamas and watch it at my own
pace.
But I'll go out and see what dowe see?
40x Maverick, that was awesome.
(18:40):
What a great movie to have thatfull, immersive environmental
experience.
But make them all like that,like just go all the way.
This, like double-mindedness,tries to become bananas.
Speaker 1 (18:51):
I do think what's interesting as you talk about it
is the, the movie theater wherethey did do well.
I'll give them this what theydid do well is they listened to
their, their base, because themovie experience now is so
tailored towards your likehardcore movie person.
They gave them what the ravingfan wanted, which I think is
interesting Because it's alittle bit like baseball.
(19:13):
If you don't grow up inbaseball or you're not an avid
fan of baseball, all the littlesubtle rules like why did the
pitcher hit that guy with a ball, all those little things that
you don't really understand, youcan't really appreciate the
game unless you know a lot ofthose subtleties.
And I feel like the movieexperience, they, they they're
so tailored towards the, theavid movie buff that someone
(19:34):
like you who goes the moviesometimes doesn't really know
what's happening.
I don't.
I like I'm sure they havelittle identifiers and tags.
I'm sure if you have their appit's really easy and all that
kind of stuff, but it's.
They did a great job oflistening to their fan base and
adjusting to their fan base.
But that's an interestingthought is is it's almost like
they didn't know.
They didn't know where to go,so they just listened to their
fans, which is that's not a badbusiness move, right, and the
(19:57):
movie theaters are still there,right, so they're not doing
horrible, and I feel like moviesare making a little bit of a
comeback, to some degree,because of the 40x and the the
fact that they've made it but,like, make all your theaters
that right.
Speaker 2 (20:10):
if you say meet me at the you know regal cinema and
route 8, I should know what thatexperience is going to be,
regardless of the movie I'mseeing.
I know what the seats are goingto be like, I know if it's
going to be immersive or notimmersive.
I just wish they could committo a show experience because the
(20:30):
ticket price isn't lower.
If the ticket price wasdramatically reduced for just
your standard picture in astandard seat with no frills,
and the consumer knows that,like wow, this picture in this
theater is six bucks and thatone's 22.
Okay, yeah, I'm going to get adifferent experience.
But why are we price gougingfor also pet peeve old movies
(20:55):
coming back to the theater?
Why are we doing this?
Is this like it feels like amoney grab?
Like I went to go take the kidsto see a movie a couple of
weeks ago and the only thingshowing was Luca.
The movie's three years old.
They've seen it a billion times.
Speaker 1 (21:08):
I'm not taking the theater to watch luca insane
seen it a million times on ouron our 120 inch projection
screen.
The well and so, speaking ofcommitting kind of a great segue
blockbuster right.
So we're in the movie industry.
Blockbuster yeah, we're goingfrom committing to non-committal
.
Speaker 2 (21:24):
No, actually I think we're in the movie industry
Blockbuster.
Yeah, we're going fromcommitting to noncommittal.
Speaker 1 (21:26):
No, actually I think we're going to over committing
to our like, sticking to ourguns too hard.
Right, the refusal to pivot.
Now, if you're under the age of30, you probably don't even
know what I'm talking about.
Speaker 2 (21:37):
Should we level set on what Blockbuster is?
I would love to hear youexplain it, you old millennial.
Speaker 1 (21:44):
Sure, Okay, so Blockbuster.
So long before the digital age,when I could just go on the
interwebs and figure out who'sstreaming something.
Long before the digital age,you had to get in your vehicle
and do a lot of things right.
There were still payphoneseverywhere.
People had stopped using them.
We're talking.
Let's travel back to the late90s.
(22:05):
People are out and about.
There are no cell phones.
If I want to call somebody, Igotta call their parents, house
and hope time to be alive, yeahhope their mom's not on the
phone while we talk aboutwhatever devious plans we have
their brothers on the internetyeah, or their brothers on the
internet, you know, playing likeminesweeper or something yes,
but mines mind sweeper was notso good it was not an internet
(22:27):
game organ trail.
No, actually that wasn't aninternet game either, but
regardless, we're going down adeep rabbit.
Well, yeah, we're going thewrong direction.
Okay, so back in these days ifyou wanted a movie, what you had
to do drive to a blockbuster.
Now this was a think of a shoestore, laid out very similar to
a shoe store, where there'swalls that are full of movies
(22:48):
and vhs's and and the newsparkling dvds, right and, and
the blu-ray section.
When that came around it wasvery shoe store-esque, with
walls lined with items and thenmid like racks on four standing
racks with those and it was kindof the it's like a game stop
like a game, very actuallysimilar to a game stop, but it
(23:10):
was.
It was a a movie experience.
What they did was they laid thethe buildings out very similar
to the lobby of a movie theater,and there were snacks at the
checkout ring and the whole ideawas like you're going to the
movies but you're going home,right.
So it was kind of the like thecheaper alternative to going to
the movies, but you're goinghome, right.
So it was kind of like thecheaper alternative to going to
the movies.
So for $5 or whatever it was,you could rent the newest, most
(23:32):
you know intense release thathad just gotten out of the movie
theater and you could take ithome for cheaper than going to
the movies.
Speaker 2 (23:38):
For two days, ladies and gentlemen, you had that
movie, and if it was an oldmovie, you got it for a week.
Speaker 1 (23:44):
Yeah.
Speaker 2 (23:45):
Which was an eternity .
Speaker 1 (23:47):
Yeah, and so what you would do is you'd go with a
family and you would go to thisblockbuster and you'd pick a
movie as a family, which tookforever.
Speaker 2 (23:53):
Or two or two or three or four or four, as many
as well.
I think the did, the member did, I don't know, I, I, we were
poor, so we got one like oh we,we each got to pick one, and
there was three of us.
So we, we grew up, we weresplurging.
Speaker 1 (24:10):
We were a little different.
We got one.
Speaker 2 (24:12):
We probably didn't have a membership I think your
mom, who might be listening soshe can tell us, might have told
you you can only get one moviethat's possible.
We'll find out, we'll we'llwe'll debrief with her later
make us negotiate yeah in termsof our deal.
Speaker 1 (24:25):
So you go to Blockbuster, you pick this movie
, and then there are snacks Allthe movie-style snacks were
there and you take them home.
So Blockbuster was the king ofthis industry.
I mean, there were some smallmovie stores here and there, but
Blockbuster was a giant.
Speaker 2 (24:40):
Age of video.
Speaker 1 (24:41):
Yeah, that was the other one.
Speaker 2 (24:43):
That was the only competitor I can think of.
Speaker 1 (24:50):
I don't think we even had, and they were garbage.
So.
So blockbuster was the giant.
They were the, the, the big boybusiness, and they were.
They were a very large business, publicly traded company the
whole night, and in the early2000s, this little startup
called netflix.
That in the early days.
Now here we'll go back to theearly days of Netflix for our
younger listeners.
It wasn't digital, yet theywould mail you.
So instead of having to driveto Blockbuster, they would mail
(25:13):
you on a monthly subscription.
You'd go online, you'd pick themovies that you want and they
would mail the DVDs to you andthen, when you were done, you'd
mail them back.
Speaker 2 (25:22):
And you'd get your next one.
Speaker 1 (25:24):
And Netflix waited until the DVD revolution had
kind of come up enough that theycould flat ship these items.
So they'd mail you the DVD, youwould watch it, you'd mail it
back.
Speaker 2 (25:34):
Yeah, they wouldn't even come in a case, they'd come
in an envelope.
Speaker 1 (25:37):
Thin paper envelope In a sleeve.
Yeah, yeah yeah, yeah.
And Netflix would mail youthese movies and they started
chewing into some of box versusmarket share and in the early
two thousands.
I want to say.
It was like 2002 or something.
Netflix was in was in a littlebit of financial trouble and so
they approached blockbuster andsaid, hey, we would like to sell
(25:58):
our company to you for $50million.
And blockbuster laughed themout of the building, like why
would we waste our time buyingthis little?
Speaker 2 (26:07):
male People come to us.
We're not going to ship moviesto people.
Speaker 1 (26:11):
They were very sure of their business model and, to
their defense, they were makinglots of money.
A couple years later I thinksix years later Blockbuster
Netflix had become big enoughthat Blockbuster started a
copycat service.
This was in like a 2007interview with the former CEO of
Netflix that brought this up.
Blockbuster started a copycatservice and it was losing like
(26:31):
$50 million a year but it wascompeting with Netflix.
And the Netflix CEO said hegoes, we were nearly out of
business.
We had like a month to live.
Blockbuster had us on the ropesand Blockbuster did a board
meeting and they and they saidhey, this is costing us money.
We're not this.
This, this competitor is notthat big of a deal.
We're going to cancel thisprogram and and get rid of the
(26:53):
ceo.
And so they got rid of the ceoand with, and kind of with him
left this mail ordersubscription service kind of
digital age intro to toblockbuster.
And netflix calls it theluckiest break in business
history Because the secondcompetition just dissolved
dissolved and Netflix shortlythereafter went digital and
(27:15):
Blockbuster almost immediatelywent out of business.
They brought in a new CEO whohad went back to the retail
model.
We don't need this mail thing.
We don't need to compete withblock with Netflix.
Speaker 2 (27:24):
Just be better at what we do and within a few
years blockbuster was toast it'scrazy to me that blockbuster
didn't launch a netflix similarlike okay, quick question where
does red box and blue box fitinto this history?
Because I think it'sinteresting that red box popped
up and then Bluebox popped up,which was the Blockbuster
(27:46):
version of Redbox.
So I'm very surprised that onceNetflix went digital, like
fully streaming, thatBlockbuster didn't try, as a
last-ditch effort, to go fullydigital as well.
They already have all thesetitles.
I don't know what that wouldlook like for them.
How difficult.
But to launch a blockbusteronline where you just stream.
Speaker 1 (28:09):
Well, so I think there's two pieces to that.
One is when you're publiclytraded, especially everything's
revenue, it's all about moneyand you've got so much overhead
in all these stores and nowthey're losing money.
Trying to convince the board tospend $40 million to start a
digital service, if I had toguess, that's probably where we
went wrong.
But the, and also real quickfor our younger listeners,
(28:32):
redbox and Bluebox.
Oh, yes, thank you Were theselittle kiosks that were at the
grocery store where you could dokind of a Netflix type
situation where you could get aDVD in the store, but but yeah,
so so Blockbuster's.
Their unwillingness to pivot, Ibelieve, is they're so hard and
(28:52):
fast to their guns that itabsolutely just killed the
company.
Speaker 2 (28:57):
If you want to visit a Blockbuster, there is one
remaining store like a physicalbrick and mortar in Bend, oregon
.
So if you are in Oregon, headover to Bend because there is
one last store.
I'm assuming it's privatelyowned.
I mean, if I lived near thisstore I would go there all the
(29:18):
time.
It's pure nostalgia, yeah it'sa nostalgic type situation, but
if you are interested, you canvisit.
Speaker 1 (29:24):
Be kind, please rewind.
Speaker 2 (29:26):
Yes, oh, my goodness.
Speaker 1 (29:27):
So okay.
So so, blockbuster pivots anddies.
Speaker 2 (29:31):
Well, Blockbuster doesn't pivot.
Speaker 1 (29:33):
Well, I'm sorry, Blockbuster doesn't pivot and
dies.
Speaker 2 (29:36):
Blockbuster thinks about pivoting and then realizes
it's going to be hard.
Speaker 1 (29:39):
It's like Waterboy they pivot.
No, they don't pivot, theythink about pivoting.
Speaker 2 (29:45):
They pretend to pivot .
That's exactly right.
Speaker 1 (29:47):
So can we think of any that didn't pivot and died?
Right?
So can we think of any thatdidn't pivot and died?
Yeah, toys r us toys us.
Speaker 2 (29:56):
I always are us, toys are us.
Let's just stay in nostalgialand.
So the brick and mortar giantwarehouse store that was
everything we wanted to do on aweekend when we were sub seven
years old totally went out ofbusiness.
I mean, I can't remember.
I can't think of anywhere elsethat we would have gotten toys
(30:16):
as a kid.
It was Toys R Us.
Like, you didn't get them atTarget or Walmart Online didn't
exist.
That's where you went If youneeded a birthday present, if
you were getting rewarded.
That's where you went.
And this company is gone, Ithink I mean I haven't seen a
physical toys r us in probablyfive years.
(30:39):
They're gone, gone like theywent bankrupt, right, and in the
, what killed them wase-commerce essentially right,
like the rise of amazon.
But then there was other thingstoo.
They had really invested inglobal expansion and so they're
losing consumers because nowconsumers can get toys online
(31:02):
and also they started popping upin other department stores like
Target and Walmart et cetera,even like Kohl's.
There's choice all of a suddenwhere you can get toys.
And instead of focusing on ane-commerce model, toys R Us just
kept trying to expand, liketheir brick and mortar presence
internationally.
(31:24):
So a ton of money they'rehemorrhaging just trying to open
up all these new stores whereno one wants to go to the store
anymore, which is, you know,they just weren't listening to
how their consumers werebehaving, and that was a big
thing was.
Consumers want choice.
Consumers want?
You know there was no.
Not only was there no way tobuy toys from Toys R Us online,
there was nothingdifferentiating them from like
(31:46):
Amazon or Target.
Like there were, they didn'thave any line of toys that was
specific to them which couldhave bumped them up or helped
their survival rate.
Speaker 1 (31:56):
Well, and I feel like what made Toys R Us so popular
is that you could go physically,touch and play with the toys.
You could see them in person,one-stop shop.
The number of times we were onthe way to a birthday party and
just stop at Toys R Us realquick.
Speaker 2 (32:09):
Because there's something there.
You'll find something.
Speaker 1 (32:11):
Yeah, they have everything.
Speaker 2 (32:12):
Yeah.
Speaker 1 (32:12):
But I also wonder how much the kind of the revolution
of the cheap Chinese toy had animpact on that.
Because when growing up, whenToys R Us is the big deal, right
, a water gun was $28, 30 bucks,right, but it was quality, it
(32:38):
lasted your entire childhood.
They also had like 11 differenttypes of super soaker.
Like you had choice, yeah.
And then come you know the theadvent of of cheap chinese toys.
The water gun goes from 30 downto like five bucks and you just
buy 12 of them, right, theybreak.
And you, you know kind of thedisposable toy, right, the
microplastic machine, right,like you, you get this advent of
really cheap, kind of crappytoys that allow you to to not
feel as bad about spending fivebucks, 10 bucks, whatever it is.
(33:01):
Toys were an investment.
You kept your toys, you triedto maintain your toys because
they were relatively expensive.
Your parents got them for youon your birthday and Christmas.
That was pretty much it.
Cheap, tiny chinese toys madeit like a seasonal thing, right.
Speaker 2 (33:15):
That's when you start getting like the goodie bag,
right, like little crappy,disposable toy that used to be
goodies, right, like like ediblegoodies, like pop or lollipops
and chocolates and candy.
Now it's like, like you said it, disposable, cheap plastic
knickknacks.
Speaker 1 (33:32):
Yeah, so I'm interested.
I'm just wondering how much ofthat was part of it as well.
Speaker 2 (33:36):
Yeah, I mean they had a focus on overexpansion,
pouring into their brick andmortars when consumers wanted
choice, flexibility and also thebirth rate declined.
So think about when we werekids, or just before we were
growing up, households had lotsof kids.
(33:59):
So going to Toys R Us, whereit's a warehouse of toys, where
there's something for everyone,was great.
But then you have this swing inculture where people have less
kids.
You don't need to go to Toys RUs.
There's less kids to buy toysfor.
So again, they're focusing onexpansion, a brick and mortar
(34:22):
and they poured no resourcesinto their online shop.
And that's what consumerswanted from them was like go
online, I will still buy fromyou, but you need to invest in
your e-commerce platform.
And they just flat out did it.
Speaker 1 (34:34):
And then here's the thing right, let's go the other
direction.
You don't always have to pivot.
There are plenty of examplesBaking Soda is one of them,
right when they never evenreally had to pivot, just
slightly changed the marketing,and I'd like to bring a yummy
one in, if that's okay.
Yummy, yummy, one of myfavorite things in the world.
Speaker 2 (34:51):
It's too depressing.
Talking about Toys R Us, yeah,let's move on.
I do wish that it existed todaybecause it would be super fun,
just like swing in, grab a toy.
I feel like Five Below is thenew Toys R Us.
Speaker 1 (35:04):
It kind of is, kind of yeah.
Speaker 2 (35:16):
Like, just like something.
Like there's like a littlesomething for everyone.
But perfect example right fivebelow is is a is a toy store
full of cheap, disposableplastic toys.
Right right, it's the chinese.
Well, it's not for mom, andstuff for dad and stuff for
auntie.
Like there's something foreveryone's candy, yeah, but but
it's.
Speaker 1 (35:22):
It's low cost leader, right, let's leave nostalgia
land.
Let's go to one of my favoritefood groups waffles the waffle
iron food groups, not food foodgroups.
Speaker 2 (35:29):
Food groups waffles the waffle iron.
Food groups, Not food foodgroups.
Speaker 1 (35:32):
Food groups waffles.
You can do a lot of things withwaffles, but the waffle iron is
a great example of somethingthat was.
It was cast iron before made inFrance in like the early 1800s
or something.
And it's almost impossible toundercook a waffle if you just
wait several seconds becauseit's so evenly cooked and it has
these little squares that areinlaid in the way.
(35:53):
It's a very easy way to cook abreakfast food.
And Thomas Jefferson brings thewaffle to America when he was
off during the early parts ofour country.
He's always living in Francefor a while.
When he comes back he bringsthe waffle with him because he
loved it.
He was a Francophile, he wasall about that waffle.
So he brings the waffle withhim because, like he loved it,
he was all about that waffle.
So he brings the waffle backand the waffle becomes one of
(36:15):
the most popular breakfast foodsin america and with little to
no pivot.
I mean the waffle iron now isjust a slightly it's a.
It's an electronic version ofthe same cast iron waffle
original waffle iron.
You just hold over a fire,right.
There's nothing different aboutthe waffle iron overall.
But where the pivot comes in,which I think is interesting, is
(36:36):
Joe Wells.
He was the proprietor of WellsSupper Club and Joe Wells in the
early 1930s has this jazz clubin Harlem and jazz clubs close
wee hours in the morning and theperformers come off the stage
and they're starving and JoeWells has a kitchen and he goes.
(36:59):
Well, it's too late for dinner,it's too early for breakfast
let's make kind of the idea of abrunch right and he comes up
with the idea of one of myfavorite foods chicken and
waffles.
Speaker 2 (37:10):
Get out of town.
That's where it originated from.
Speaker 1 (37:15):
A club in Harlem.
Speaker 2 (37:15):
What a great story, yeah.
Speaker 1 (37:18):
And.
Speaker 2 (37:18):
I did not know that.
Speaker 1 (37:19):
Wells.
It was called Wells Supper Cluband it was open until 1999,
from the 1930s to 1999.
But apparently there's stillone on 7th Avenue.
There's a little family-ownedsupper club that the Wells
family owns.
That's still one like on 7thAvenue.
There's like a little familyowned like supper club that the
Welles family owns.
That's still in New York.
I don't know if it made itthrough COVID, but last I
checked it was still there.
I haven't been there yet but Ido plan on it, but that is the
(37:41):
birthplace of the chicken andwaffles and chicken and waffles
has also never needed to pivot.
So the goal and the target hereis just be in and around
waffles and you'll be safe.
Speaker 2 (37:54):
And Coca-Cola.
Speaker 1 (37:55):
And Coke and waffles baby.
Speaker 2 (37:57):
I think the lesson is know your consumer, know your
audience.
Right, if your audience issaying this is perfect, the
Coca-Cola recipe is exactly whatwe want, waffles are delicious.
There's no reason to pivot.
Sure, you can make it better,you can go to market better, you
can change your marketing, makeit more sexy, whatever.
(38:19):
That's fine.
But there's no reason toconsider a pivot for the sake of
pivoting.
And then, on the flip side, ifyou have a business model that
you see being widely affected byconsumer behavior the movie
theater, toys R Us you've got tobe willing to just flip your
(38:41):
whole business model upside downfor the sake of your consumer.
Who is your consumer?
What are they looking for?
Why are they being drawn awayfrom you?
How can you lean into that?
Speaker 1 (38:50):
Yeah, well, and that's exactly it.
Right, that's the whole idea ofa pivot is completely changing
direction, and I think there area lot of companies that stay
lean and they are willing toembrace change and willing to
embrace innovation and arewilling to lose money.
There are companies that aren't, that have been very successful
for very long periods of time,lose money.
(39:12):
There are companies that aren'tthat have been very successful
for very long periods of time,and there are companies that
pivot over and over Nintendo andNintendo Go.
Look at the history of NintendoNintendo's on everything they
they've made, like circuitboards and like linen products,
and then they just kind ofhappened to land on video games
and became popular.
Nintendo pivoted like a milliontimes in in like 20 years, just
trying to figure out what it is.
(39:32):
They were so indecisive aboutwhat they should do, they just
tried everything.
Speaking of trying everything,let's get into John's fun finds
of the week, things that I sawthis week that I think were
really innovative and I likedthem a lot, and the first one is
a company called Flated, soit's getflatedcom and what it is
, and I think this is brilliant.
(39:53):
For those of you who own trucks, it is so think of an
inflatable paddleboard.
That's very rigid structurethat it makes an inflatable
paddleboard.
They took that and they made atruck bed tonneau cover.
It's a little roof that goes ontop of the truck.
So if you want to camp in yourtruck bed, instead of buying
that big fiberglass top, youjust inflate this thing and put
(40:15):
it on top.
It gives you protection fromthe elements, gives you some
privacy, but you can inflate atruck bed cover to then put your
truck bed tent into or just puta mattress in the back of the
truck.
Inflate this thing.
I think it's brilliant.
I think it's a great use of anexisting technology that drop
(40:39):
forge inflatable technology.
That's super stiff and verystrong.
It's a simple and creative useof that technology.
So get inflated.
I'll be sharing it on socialmedia and I shared this one last
week, but I plan on talkingabout this week and I'll share
it again, just to make sure youknow we're.
You know anybody listening tothis show is aware of it, but
there's a company called regentand what they're doing and this
is I think you'll love thisthey've created a hydrofoil.
(40:59):
I'm not going to call it anairplane because it doesn't
technically fly.
Speaker 2 (41:03):
It's a flying.
Is it falling with style?
Speaker 1 (41:05):
no, it's built like an airplane and it's attached to
this hydrofoil and they turn onprops and they the airplane
just gets a couple of feet, yeahit hydrofoils up but but it
technically it is flying and thehydrofoil is more just kind of
keeping it level where it'ssupposed to be.
but it can go several hundredmiles an hour and it's going to
(41:27):
go between the of Hawaii like ataxi service.
So instead of renting, you know,getting a ticket on one of the
small little airline planes,they're giving you kind of a new
and interesting way of kind ofgoing between the islands and
getting some of that old schoollike Voyager type vibe across
the ocean and seeing the islandstaller than you.
One of the most.
(41:48):
In my opinion, one of the mostmagical things you can do when
you're in Hawaii is get thelittle six-seater plane, buy a
ticket to go between islandsbecause they'll kind of loop
around the islands.
You get to see some reallypretty stuff as they fly, as
they pass the island.
They'll kind of give you alittle flyby and loop around,
turn it a little sideways foryou so you can see the island,
and it's just a really intimateexperience to get between
islands in Hawaii.
This is an even to me isn'teven more intimate, right?
(42:11):
It's a connection to the ocean.
I think it's a really, reallyneat way of getting back and
forth, and I really really lovethe idea.
Speaker 2 (42:18):
How many people can fit?
I think it's six, okay, so it'sthe same as getting on like one
of those little sets of planes.
Speaker 1 (42:23):
Yeah, it's a smaller, it's designed to be a smaller
experience.
It's not.
None of the traveling betweenHawaii is really like big
there's no, I mean there's nopoint at a commercial airliner,
no.
So it's all.
You know five to.
You know three to five peopleusually, but it's a really neat
way of getting between, kind oftaxi servicing.
I imagine it's incrediblyefficient because you're very
(42:45):
low friction, you're, you know,kind of keeping it low to the
ground so you're not combatingany kind of winds that might be
higher.
The the pacific in that areatends to be relatively flat, not
all the time, obviously it'sthe ocean, but but consistently
flat.
So I think it's just kind of acool little magical way and a
magical idea it's.
It's one of those ideas that,like is it's built around an
(43:06):
experience, not around some kindof technology or something else
.
It's just someone said, hey,you know what, what, a, what a
way to to get between islands.
Let's keep our connection tothe ocean, let's keep this kind
of intimacy of travel, ofboating, but doing a.
You either have to boat in ayou know a large, you know ship
(43:28):
that goes back and forth andcarries hundreds of passengers,
or it's like a small boat that'snot that fast.
Speaker 2 (43:33):
Do they run ferry services between islands?
Speaker 1 (43:35):
Yeah, they do ferry services but they're kind of
long right, it's a couple hours,Five hours.
Yeah, it's several hours to getbetween, but they have ferry
services.
Speaker 2 (43:43):
And how fast would one of these get you?
Speaker 1 (43:46):
This thing goes like 200 miles an hour, so it's
probably it's the same as anairplane I I think it can go 200
.
I don't think they travel at200 imagine hitting like a
dolphin I mean, well, thehydrofoil stays pretty close to
the surface and I don't thinkyou'd really they jump these
animals jump out of the water?
Speaker 2 (44:02):
yeah, you could.
I would love to see whathappened about like a flying
fish just whack this thing I'dprobably just make a little
smear mark and I mean, would itget wobbly?
It's interesting.
Speaker 1 (44:13):
Yeah, I mean I love the idea.
I think it's one of thosereally neat concepts.
I'll post it on my social mediaon Innovate the Ordinary or
Innovate Everything podcastsocial media by all means I
don't know how I feel abouttraveling that fast inches over
the water.
Speaker 2 (44:27):
There's just a lot of variables.
Yeah 200 miles an hour, like acouple thousand feet up where,
like there's nothing is onething but a little turbulence.
Speaker 1 (44:44):
I think they travel at at like closer to a hundred.
I think what it can do and whatthey do do is a little bit
different, but yeah, of courseit's it's way faster, it's it's
it's like being on a really,really high speed boat and I
think that's really cool, rightRight.
But with wings, very cool.
But having said that, thank youso much for joining us.
Speaker 2 (44:59):
You're awesome Chicken and waffles.
Speaker 1 (45:01):
What do you think?
I love chicken and waffles.
And I'm joined as always by my co-host Caitlin.
Speaker 2 (00:02):
Mode.
Speaker 1 (00:03):
And today we're going to talk about the pivot.
Now, when you think of the pivotright, you might think of a
movement which would be goingfrom facing one way or pointing
one way if you're an objectinstead of a person to pointing
the opposite way, or probably 90degrees, one way or another,
similar to basketball, whereyour pivot foot stays down and
(00:24):
you rotate around that foot.
One point of contact has tostay put for it to be a pivot
and not just a turn.
And if you're in a moment inyour life where you are in need
of a pivot, it's all you canthink about.
It's like driving down thehighway and you really have to
pee.
There's nothing else thatmatters.
(00:45):
I don't care if there's peopletelling you a story or your
favorite songs on the radio.
You're sweating, you've got togo and that's all you can think
about.
And oftentimes in that instanceyou find yourself pulling off
rather abruptly on the side ofthe highway.
I can't wait anymore, got topivot.
Here we are, side of the road,let's like find our way into
(01:06):
some bushes.
And I also think of a pivot inthe military terms, where you
have this large group of peoplethat are marching and they pivot
on that heel and they rotate180 degrees and march the other
direction and stay in unison.
So two different pivots.
One is rumble strips on theside of the highway, little
(01:26):
bumps on the edge as the grassis interacting with your tires.
The other is a precise militarymovement and oftentimes the
pivot is thought of in terms ofbusiness.
And today we're going to take ajourney into the world of the
pivot and we're going to talkabout some instances where the
(01:47):
pivot has gone really, reallywell and some instances where
maybe it didn't.
And the first one that comes tomy mind is a business pivot.
But it speaks to me becausethis person is sales and his
name was William Wrigley Jr.
William Wrigley is a soap andbaking soda salesman in the
1890s.
He just moved to Chicago andhe's peddling his products Now,
(02:12):
like most business people, mostsalesmen, william's trying to
think of a way to get people totake this meeting and so he, as
a marketing move, decides tostart offering free chewing gum
with his purchases.
And as observant as he is, henotices that you know what?
This chewing gum that I'moffering for free is more
popular to the customers.
(02:33):
People are buying my productsto get the chewing gum.
Speaker 2 (02:35):
He's getting meetings just to get just.
People are booking meetingswith him just to get his gum.
Speaker 1 (02:39):
He's getting sales.
This is a reward for selling I.
He's getting sales because he's.
He's given this chewing gum,and so he does one of the most
famous pivots in history whatyear is this?
Speaker 2 (02:51):
because this is 18.
Speaker 1 (02:52):
This is 1890s.
I don't know.
I don't know specifically wherein the 1890s.
Speaker 2 (02:55):
Like I wouldn't do anything for a piece of chewing
gum in 2024.
So I'm just curious like wherethis fell in the landscape of
availability of chewing gum.
Speaker 1 (03:05):
Yeah, but chewing gum at this point is probably still
a bit of a novelty Pretty poortoo as far as options go.
Yeah, there's not a lot offlavorful gums.
It's not like today wherethere's gums all the show.
Think of it like somebody'soffering you a really bougie hot
(03:26):
chocolate or something andyou're like that's kind of cool,
I'll do a bougie hot chocolatefor a you know $50 sale.
Why not, right?
So he pivots himself into achewing gum brand which is now
worth billions of dollars and hebecomes Juicy Front, juicy
Fruit, juicy Front, juicy Front,and Wintergreen and Double Mint
and all these things that youthink of when you think of of
wrigley became his legacy, allfrom a pivot well, I would say
(03:49):
his.
Speaker 2 (03:50):
It wasn't from a pivot.
He pivoted because he saw thathe had something better to offer
than what he was originallytrying to sell.
So he, he pivoted intosomething that was already there
yeah, and so I didn't need tonecessarily.
Maybe maybe his sales for theother product he was pushing
were for fine, but he'drecognize that if he just leaned
into the chewing gum he woulddo better yeah, and, and a big
(04:13):
chunk of pivoting is isobservation right and some of
it's situational?
I'm sure you're familiar withcoca-cola and their whole story.
Coca-cola, obviously that youknow who they are, but being
someone who studied business.
But for our listeners, I thinksomething that's interesting
about Coca-Cola is that theydidn't originate as a soft drink
(04:34):
company.
They actually originated in1886 as a.
They patented their drink, orthe inventor patented his drink,
as a pharmaceutical drink thatwas supposed to help with
headaches and fatigue, and so itwas over the counter.
It was very much likehomeopathic wellness type drink
(04:56):
and it took off.
People loved it.
They loved that it tastes goodand they thought, oh, it's good
for my health.
They thought, oh, it's good formy health.
So the inventor, whose name wasJohn Pemberton he did really
well, he was in Atlanta hepatented this drink.
It was taking off and then in1903, what happened, I'll tell
you Cocaine was all of a sudden,no go, bad for your health.
(05:21):
People Don't do cocaine.
What a shame, what a shame.
And the original Coca-Colabeverage had cocaine in the
formula.
So Coca-Cola was like, hey,let's take it out, because the
public view of cocaine is goingdown, we don't want to get sued.
So they did the start thingthey took it out of their recipe
.
But then that changed theflavor profile completely.
(05:44):
And so then they had a choiceto make.
And this is where they hit thatfirst big pivot, I would say,
because I'm sure Coca-Cola hashad a lot, They've had a lot of
pivots.
They're an old company, they'vebeen around for a while,
they've done very well.
But this is like their firstmajor pivot into the world of
soft drinks because instead ofcontinuing down the road of this
wellness drink which no longerhad cocaine in it, boo, they
(06:08):
decided to pivot into the softdrink arena.
They changed their ingredientsand they changed their marketing
and their advertising, fromthis drink is good for your
health to this drink tastes goodand it's a lifestyle brand,
it's the drink you want, it'sgoing to make you cool, which
they still run.
They still rely on thatmarketing strategy today.
(06:29):
Right, like Coca-Cola is cool,it's the drink to have.
Everyone drinks it, etc.
So I just think it's reallyinteresting that the pivot there
was was in their product right.
It was in the ingredients, butit was also in how they talked
about their product right andhow they went to market.
Speaker 1 (06:47):
Yeah, well, and they very cleverly, in my opinion at
least, they kept the counter,they kept the soda jerk.
They kept the soda jerk kind ofdressed a little bit like a
medical person, with like littlewhite outfit, and they kind of
they pivoted by marketing itvery similarly, in a different
way.
Speaker 2 (07:05):
Right, right.
So for context, if you had goneinto a pharmaceutical store
prior to this pivot and youwanted a Coca-Cola beverage, a
pharmacist would basically getit off tap right and then give
it to you that way and kind oflike, when you go into like a
kombucha bar, you can get itlike kombucha on tap in some
wellness stores.
It was the same type of formulaor go-to-market strategy.
(07:29):
So just for context for ourlisteners, that's how you would
normally buy Coca-Cola.
You wouldn't walk in and takeit off of a shelf or out of a
cooler.
It had to be administered by apharmacist, even though it was
totally over the counter.
There was no prescription drugsin it.
Well, there was cocaine in it,but there wasn't, it wasn't,
you'd not have a prescription.
(07:50):
It was just kind of gimmicky tohave someone serve it to you
like that, and so they kept thatgoing for a little while until
they really went hard into thesoft drink market and started
buying up all their competitors.
Speaker 1 (07:58):
Yeah, and when they kept it, the original, the syrup
.
So it was still kind of a sodajerk who's making the syrup and
then mixing it with thecarbonated water, kind of on
site, and dialing it a littlebit to your preferences, which
again I think is a nod to thatkind of pharmaceutical.
The pharmacist would give youthe right dosage if you will,
and I think I still think it iskind of interesting just
speaking of Coca-Cola.
So there's two things that Iwant to bring up.
(08:19):
One is, to this day, I stillthink the most popular tweet in
history, the most viewed andliked and shared tweet, was Elon
Musk saying, after he boughtTwitter, that he would buy.
If he had enough likes, he wouldbuy Coca-Cola and put the
cocaine back in it, which Ithink is still the most popular
tweet in history, andillustrating that a great pivot
(08:43):
defined an entire brand andindustry.
And I mean we're talkingbillions and billions of dollars
and that same exact company.
Right, no one's immune to justkind of mediocre pivot ideas.
Right, coke is very open-mindedand I think there's a huge
value in kind of thatpsychological safety of being
(09:03):
willing to pivot and lose money.
But going back to Cokemid-1980s we're talking about
well-established into this softdrink brand.
Speaker 2 (09:11):
Yeah, about 100 years later almost yeah.
Speaker 1 (09:14):
Coca-Cola, the soft drink brand, is now starting to
get a lot of competition fromPepsi.
Speaker 2 (09:19):
Yeah they're feeling the pressure.
Speaker 1 (09:21):
And Pepsi is different and liked by a lot of
people and taking a lot ofmarket share because, yeah,
they're feeling the pressure.
Weeder Coca-Cola products.
Reformulate it a little bit,give it more of that Pepsi
sweetness.
We'll call it New Coke andwe'll kind of push them out of
(09:49):
the market.
We'll beat them at their owngame and anyone who's ever been
to business school has heardthis story.
It is a classic marketingblunder.
The Coca-Cola fanatics yourhardcore fan base absolutely
revolted at this idea.
Speaker 2 (10:03):
Yeah, why would you make my beloved soft drink taste
like pepsi?
Speaker 1 (10:07):
yeah, and well, and, and the idea was, well, a lot of
people like pepsi, so we'llcome up with new coke.
And they still carried theoriginal coke, but the the fan
base, and again going back tothat clever pivot of keeping the
soda jerk, kind of keeping itfeeling like your your
pharmaceutical experience theywent the other direction.
They just launched this newCoke and everyone's like is old
Coke going away.
(10:28):
What does that mean?
And there was just kind ofhysteria about the whole thing.
Right, and you think about 100years later, you're just the
descendants of a cocaineaddicted person who, like, grew
up.
Speaker 2 (10:40):
We apologize to any of our hardcore Coca-Cola
listeners.
We are not implying that youare a cocaine addict.
No, no, no.
Speaker 1 (10:46):
I'm saying that culturally they're very
ingrained in it, right, so thatthese people who've lived and
breathed Coca-Cola products forthe longest time I've been to
people's homes that have likelittle museums to Coca-Cola in
their homes right, it's a verydominant brand.
And you put out this new Cokemessage and I mean it was the
(11:07):
biggest flop that I can think ofin business.
And Brian Dyson steps down.
They come out with Coca-Colaclassic.
Hey, everybody, everything'sokay, new Coke is dead.
Coca-cola classic Everyone'saware that this is old school
Coca-Cola and we move forwardfrom there.
And even talking about moremodern pivots, you're talking
(11:27):
about Pepsi.
One of the number one sellingSKUs at Pepsi is bubbly.
One of their number oneproducts is sparkling water.
Pepsi's pivot into sparklingwater when they saw kind of
LaCroix's business going up wasa great move on their end as
well.
So let's go back to someone whopivoted late, right.
(11:47):
So we've got Coca-Cola pivotedwell.
You've got Wrigley that pivotedwell, let's talk about pivoting
late.
Speaker 2 (11:53):
The not so great pivot.
Speaker 1 (11:55):
The not so pivot.
Speaker 2 (11:55):
Like we tried, but maybe not enough.
Speaker 1 (11:58):
Called the half pivot the half pivot.
Speaker 2 (12:00):
I like poor pivot, so I have a great example.
Speaker 1 (12:03):
Okay.
Speaker 2 (12:03):
And I think millennial listeners will be
able to totally relate to thisone the movie theater oh, the
nostalgia like what a greatplace for us as kids, what a
treat as to go to the movietheater with your friends, maybe
your first girlfriend orboyfriend, with your family.
(12:25):
It was the place to be and liketheater sold out.
Do you remember when you werelike 10?
You had to get there early andthere were like no seats
available lines.
Speaker 1 (12:36):
I mean, that was the from 1990s to the early 2000s
and mid 2000s.
Speaker 2 (12:41):
That was the date dinner and a movie well, and
then and then we thank you forputting the timeline in, because
in the mid-2000s what happened?
We had digital transformationof content consumption right.
We've got netflix coming on thescene, we've got blockbuster
and blue box and red box andjust choice right for people to
(13:03):
bring entertainment into theirhomes instead of having to wait
for films to come out in theaterand then to go to Blockbuster
and rent a DVD or VHS.
So you had that first change.
Speaker 1 (13:15):
And the beginning of TVs becoming cheaper, right.
Speaker 2 (13:17):
Exactly the technology coming home and now
you can see 4K or HD just betterpicture quality in the home, so
you don't have to go out.
So they're hit by digitaltransformation.
Then they're hit by consumerbehavior changes, right.
So people realizing oh, I canbring the movie home, it looks
(13:40):
great here, I can be comfortable, I can be in my own environment
, I have control.
If I get up to go to thebathroom, I can go comfortable,
I can be in my own environment,I have control.
If I get up to the bathroom, Ican go do that.
And then the third thing thathit them and I do feel bad for
movie theaters because theyreally got slammed was the
financial downturn, right Likethe crash 2008.
Now no one's spending money onfrivolous things like movies.
(14:02):
So a lot of things happened,but in my humble opinion, they
pivoted way late and they didn'tcommit to their pivot right.
So let's fast forward throughthe late 2000s.
Now we're in 2024.
What is the movie theater today?
It is confusing.
It is an overpriced place tosee new releases and you're
(14:25):
either going to get a standardviewing experience, like we had
as kids, with sticky floors,maybe bigger seats, but they
don't do much, maybe theyrecline a little bit.
Or you're getting this fullimmersive experience where the
seat is shaking and you'regetting wind blown in your face,
and so it's like this dichotomyof experience, and yet you're
(14:47):
still paying top dollar, even ifyou're going to a matinee.
I mean, I took the girls to amatinee a few months ago to see
that new migration movie withthe ducks.
I mean, it cost me like $100.
And it was a matinee.
I remember a week ago seeingmatinees as a kid for like $5.
Now it's still $13.50 to see amovie in the middle of the day
(15:08):
and on a weekday, which isinsane.
So you know they, they got hitby all these things.
And then, what was the pivot?
Enhanced their viewingexperience.
So imax imax was is still hugeand I don't really think it
really people really bought intoit like okay, it's a big screen
, that's cool.
3d experiences which I feellike are hit or miss.
People either hate them or lovethem.
Luxury and comfort right.
(15:29):
You got the dine-in experiencewhere you can like you're in
this lazy boy and they bringfood to you and you can get
sushi and wine, whatever youlike.
And then the 4DX, which is likethat environmental enhanced
experience right, those are thethings they tried to pivot into.
Speaker 1 (15:48):
In my personal opinion, do not get the sushi at
the movie theater.
I agree, I've had a badexperience.
Speaker 2 (15:53):
Same.
Speaker 1 (15:54):
But the I think we're probably together.
But the interesting piece ofthis pivot and the way that it
sounds is, I think, back to justrolling back the reel in my own
head.
And there are a lot of smallerpivots and there's even things
like I remember at the heyday ofthe movie theater you used to
(16:15):
get almost shaken down to makesure you weren't bringing a
snack in because there was somuch revenue in the snacks that
you had to hide your snacks andthere was a little bit of a game
to figure out how you couldhide your outside snacks to
bring them in Oversized hoodieswith things shoved into your
waistband.
Yeah, and when you look at itnow, they don't even try.
They had to give up lots andlots of margin there because
(16:39):
there just weren't enough peoplecoming, and turning away people
didn't make any sense.
I need the revenue.
Just let them in Whatever theywant to bring.
I mean, the last time I went tothe movie theater I carried I
carried an outside snack in myhand on the way in the door.
No one even cares.
Speaker 2 (16:52):
You're just walking in with a little scissors pizza
like hot, hot off the out of theoven.
You're like, hi, I'm here formy movie.
They're like it's you solvethis problem or fix the movie
theater, sinking ship that it is.
However, I think that there'stwo things they could have done
better.
I think the first is when therecession hits and people
(17:13):
weren't going out, they shouldhave made movies so cheap.
When you go to the drive-in,you can see three movies for $10
.
You all get in Whoever's inyour car.
It's a flat rate.
It's usually a double header.
It's just an affordable way toget out and do something.
And I think if they had again Idon't know the numbers and
(17:33):
maybe it just wasn't doable butmake movies super cheap, make
everything a matinee price, justget people out.
They're still going to spendmoney, they're going to buy the
sack so you can keep therigorous checks and make sure
they're not bringing inconcessions.
But make it really affordablefor that time period where
people are really strapped forcash.
And then, when we come out ofit and we start pivoting in the
(17:56):
experience, commit to that pivot.
It drives me nuts.
When I go online to buy a movieticket, I don't know what I'm
getting.
The ticket price price is high,so I'm assuming I'm getting
something.
But it's like I should knowthat theater it's all dying in
theaters.
That theater is all 40x, thatyou know what I mean.
Like and it should just be.
That's the movie theater now,like we're not doing just
(18:17):
standard movie theaters.
Like overhaul it.
So I want to go and see thatpicture in that setting because
I'll wait for any movie to comeout on Apple TV and stream it at
home where I can be in mypajamas and watch it at my own
pace.
But I'll go out and see what dowe see?
40x Maverick, that was awesome.
(18:40):
What a great movie to have thatfull, immersive environmental
experience.
But make them all like that,like just go all the way.
This, like double-mindedness,tries to become bananas.
Speaker 1 (18:51):
I do think what's interesting as you talk about it
is the, the movie theater wherethey did do well.
I'll give them this what theydid do well is they listened to
their, their base, because themovie experience now is so
tailored towards your likehardcore movie person.
They gave them what the ravingfan wanted, which I think is
interesting Because it's alittle bit like baseball.
(19:13):
If you don't grow up inbaseball or you're not an avid
fan of baseball, all the littlesubtle rules like why did the
pitcher hit that guy with a ball, all those little things that
you don't really understand, youcan't really appreciate the
game unless you know a lot ofthose subtleties.
And I feel like the movieexperience, they, they they're
so tailored towards the, theavid movie buff that someone
(19:34):
like you who goes the moviesometimes doesn't really know
what's happening.
I don't.
I like I'm sure they havelittle identifiers and tags.
I'm sure if you have their appit's really easy and all that
kind of stuff, but it's.
They did a great job oflistening to their fan base and
adjusting to their fan base.
But that's an interestingthought is is it's almost like
they didn't know.
They didn't know where to go,so they just listened to their
fans, which is that's not a badbusiness move, right, and the
(19:57):
movie theaters are still there,right, so they're not doing
horrible, and I feel like moviesare making a little bit of a
comeback, to some degree,because of the 40x and the the
fact that they've made it but,like, make all your theaters
that right.
Speaker 2 (20:10):
if you say meet me at the you know regal cinema and
route 8, I should know what thatexperience is going to be,
regardless of the movie I'mseeing.
I know what the seats are goingto be like, I know if it's
going to be immersive or notimmersive.
I just wish they could committo a show experience because the
(20:30):
ticket price isn't lower.
If the ticket price wasdramatically reduced for just
your standard picture in astandard seat with no frills,
and the consumer knows that,like wow, this picture in this
theater is six bucks and thatone's 22.
Okay, yeah, I'm going to get adifferent experience.
But why are we price gougingfor also pet peeve old movies
(20:55):
coming back to the theater?
Why are we doing this?
Is this like it feels like amoney grab?
Like I went to go take the kidsto see a movie a couple of
weeks ago and the only thingshowing was Luca.
The movie's three years old.
They've seen it a billion times.
Speaker 1 (21:08):
I'm not taking the theater to watch luca insane
seen it a million times on ouron our 120 inch projection
screen.
The well and so, speaking ofcommitting kind of a great segue
blockbuster right.
So we're in the movie industry.
Blockbuster yeah, we're goingfrom committing to non-committal
.
Speaker 2 (21:24):
No, actually I think we're in the movie industry
Blockbuster.
Yeah, we're going fromcommitting to noncommittal.
Speaker 1 (21:26):
No, actually I think we're going to over committing
to our like, sticking to ourguns too hard.
Right, the refusal to pivot.
Now, if you're under the age of30, you probably don't even
know what I'm talking about.
Speaker 2 (21:37):
Should we level set on what Blockbuster is?
I would love to hear youexplain it, you old millennial.
Speaker 1 (21:44):
Sure, Okay, so Blockbuster.
So long before the digital age,when I could just go on the
interwebs and figure out who'sstreaming something.
Long before the digital age,you had to get in your vehicle
and do a lot of things right.
There were still payphoneseverywhere.
People had stopped using them.
We're talking.
Let's travel back to the late90s.
(22:05):
People are out and about.
There are no cell phones.
If I want to call somebody, Igotta call their parents, house
and hope time to be alive, yeahhope their mom's not on the
phone while we talk aboutwhatever devious plans we have
their brothers on the internetyeah, or their brothers on the
internet, you know, playing likeminesweeper or something yes,
but mines mind sweeper was notso good it was not an internet
(22:27):
game organ trail.
No, actually that wasn't aninternet game either, but
regardless, we're going down adeep rabbit.
Well, yeah, we're going thewrong direction.
Okay, so back in these days ifyou wanted a movie, what you had
to do drive to a blockbuster.
Now this was a think of a shoestore, laid out very similar to
a shoe store, where there'swalls that are full of movies
(22:48):
and vhs's and and the newsparkling dvds, right and, and
the blu-ray section.
When that came around it wasvery shoe store-esque, with
walls lined with items and thenmid like racks on four standing
racks with those and it was kindof the it's like a game stop
like a game, very actuallysimilar to a game stop, but it
(23:10):
was.
It was a a movie experience.
What they did was they laid thethe buildings out very similar
to the lobby of a movie theater,and there were snacks at the
checkout ring and the whole ideawas like you're going to the
movies but you're going home,right.
So it was kind of the like thecheaper alternative to going to
the movies, but you're goinghome, right.
So it was kind of like thecheaper alternative to going to
the movies.
So for $5 or whatever it was,you could rent the newest, most
(23:32):
you know intense release thathad just gotten out of the movie
theater and you could take ithome for cheaper than going to
the movies.
Speaker 2 (23:38):
For two days, ladies and gentlemen, you had that
movie, and if it was an oldmovie, you got it for a week.
Speaker 1 (23:44):
Yeah.
Speaker 2 (23:45):
Which was an eternity .
Speaker 1 (23:47):
Yeah, and so what you would do is you'd go with a
family and you would go to thisblockbuster and you'd pick a
movie as a family, which tookforever.
Speaker 2 (23:53):
Or two or two or three or four or four, as many
as well.
I think the did, the member did, I don't know, I, I, we were
poor, so we got one like oh we,we each got to pick one, and
there was three of us.
So we, we grew up, we weresplurging.
Speaker 1 (24:10):
We were a little different.
We got one.
Speaker 2 (24:12):
We probably didn't have a membership I think your
mom, who might be listening soshe can tell us, might have told
you you can only get one moviethat's possible.
We'll find out, we'll we'llwe'll debrief with her later
make us negotiate yeah in termsof our deal.
Speaker 1 (24:25):
So you go to Blockbuster, you pick this movie
, and then there are snacks Allthe movie-style snacks were
there and you take them home.
So Blockbuster was the king ofthis industry.
I mean, there were some smallmovie stores here and there, but
Blockbuster was a giant.
Speaker 2 (24:40):
Age of video.
Speaker 1 (24:41):
Yeah, that was the other one.
Speaker 2 (24:43):
That was the only competitor I can think of.
Speaker 1 (24:50):
I don't think we even had, and they were garbage.
So.
So blockbuster was the giant.
They were the, the, the big boybusiness, and they were.
They were a very large business, publicly traded company the
whole night, and in the early2000s, this little startup
called netflix.
That in the early days.
Now here we'll go back to theearly days of Netflix for our
younger listeners.
It wasn't digital, yet theywould mail you.
So instead of having to driveto Blockbuster, they would mail
(25:13):
you on a monthly subscription.
You'd go online, you'd pick themovies that you want and they
would mail the DVDs to you andthen, when you were done, you'd
mail them back.
Speaker 2 (25:22):
And you'd get your next one.
Speaker 1 (25:24):
And Netflix waited until the DVD revolution had
kind of come up enough that theycould flat ship these items.
So they'd mail you the DVD, youwould watch it, you'd mail it
back.
Speaker 2 (25:34):
Yeah, they wouldn't even come in a case, they'd come
in an envelope.
Speaker 1 (25:37):
Thin paper envelope In a sleeve.
Yeah, yeah yeah, yeah.
And Netflix would mail youthese movies and they started
chewing into some of box versusmarket share and in the early
two thousands.
I want to say.
It was like 2002 or something.
Netflix was in was in a littlebit of financial trouble and so
they approached blockbuster andsaid, hey, we would like to sell
(25:58):
our company to you for $50million.
And blockbuster laughed themout of the building, like why
would we waste our time buyingthis little?
Speaker 2 (26:07):
male People come to us.
We're not going to ship moviesto people.
Speaker 1 (26:11):
They were very sure of their business model and, to
their defense, they were makinglots of money.
A couple years later I thinksix years later Blockbuster
Netflix had become big enoughthat Blockbuster started a
copycat service.
This was in like a 2007interview with the former CEO of
Netflix that brought this up.
Blockbuster started a copycatservice and it was losing like
(26:31):
$50 million a year but it wascompeting with Netflix.
And the Netflix CEO said hegoes, we were nearly out of
business.
We had like a month to live.
Blockbuster had us on the ropesand Blockbuster did a board
meeting and they and they saidhey, this is costing us money.
We're not this.
This, this competitor is notthat big of a deal.
We're going to cancel thisprogram and and get rid of the
(26:53):
ceo.
And so they got rid of the ceoand with, and kind of with him
left this mail ordersubscription service kind of
digital age intro to toblockbuster.
And netflix calls it theluckiest break in business
history Because the secondcompetition just dissolved
dissolved and Netflix shortlythereafter went digital and
(27:15):
Blockbuster almost immediatelywent out of business.
They brought in a new CEO whohad went back to the retail
model.
We don't need this mail thing.
We don't need to compete withblock with Netflix.
Speaker 2 (27:24):
Just be better at what we do and within a few
years blockbuster was toast it'scrazy to me that blockbuster
didn't launch a netflix similarlike okay, quick question where
does red box and blue box fitinto this history?
Because I think it'sinteresting that red box popped
up and then Bluebox popped up,which was the Blockbuster
(27:46):
version of Redbox.
So I'm very surprised that onceNetflix went digital, like
fully streaming, thatBlockbuster didn't try, as a
last-ditch effort, to go fullydigital as well.
They already have all thesetitles.
I don't know what that wouldlook like for them.
How difficult.
But to launch a blockbusteronline where you just stream.
Speaker 1 (28:09):
Well, so I think there's two pieces to that.
One is when you're publiclytraded, especially everything's
revenue, it's all about moneyand you've got so much overhead
in all these stores and nowthey're losing money.
Trying to convince the board tospend $40 million to start a
digital service, if I had toguess, that's probably where we
went wrong.
But the, and also real quickfor our younger listeners,
(28:32):
redbox and Bluebox.
Oh, yes, thank you Were theselittle kiosks that were at the
grocery store where you could dokind of a Netflix type
situation where you could get aDVD in the store, but but yeah,
so so Blockbuster's.
Their unwillingness to pivot, Ibelieve, is they're so hard and
(28:52):
fast to their guns that itabsolutely just killed the
company.
Speaker 2 (28:57):
If you want to visit a Blockbuster, there is one
remaining store like a physicalbrick and mortar in Bend, oregon
.
So if you are in Oregon, headover to Bend because there is
one last store.
I'm assuming it's privatelyowned.
I mean, if I lived near thisstore I would go there all the
(29:18):
time.
It's pure nostalgia, yeah it'sa nostalgic type situation, but
if you are interested, you canvisit.
Speaker 1 (29:24):
Be kind, please rewind.
Speaker 2 (29:26):
Yes, oh, my goodness.
Speaker 1 (29:27):
So okay.
So so, blockbuster pivots anddies.
Speaker 2 (29:31):
Well, Blockbuster doesn't pivot.
Speaker 1 (29:33):
Well, I'm sorry, Blockbuster doesn't pivot and
dies.
Speaker 2 (29:36):
Blockbuster thinks about pivoting and then realizes
it's going to be hard.
Speaker 1 (29:39):
It's like Waterboy they pivot.
No, they don't pivot, theythink about pivoting.
Speaker 2 (29:45):
They pretend to pivot .
That's exactly right.
Speaker 1 (29:47):
So can we think of any that didn't pivot and died?
Right?
So can we think of any thatdidn't pivot and died?
Yeah, toys r us toys us.
Speaker 2 (29:56):
I always are us, toys are us.
Let's just stay in nostalgialand.
So the brick and mortar giantwarehouse store that was
everything we wanted to do on aweekend when we were sub seven
years old totally went out ofbusiness.
I mean, I can't remember.
I can't think of anywhere elsethat we would have gotten toys
(30:16):
as a kid.
It was Toys R Us.
Like, you didn't get them atTarget or Walmart Online didn't
exist.
That's where you went If youneeded a birthday present, if
you were getting rewarded.
That's where you went.
And this company is gone, Ithink I mean I haven't seen a
physical toys r us in probablyfive years.
(30:39):
They're gone, gone like theywent bankrupt, right, and in the
, what killed them wase-commerce essentially right,
like the rise of amazon.
But then there was other thingstoo.
They had really invested inglobal expansion and so they're
losing consumers because nowconsumers can get toys online
(31:02):
and also they started popping upin other department stores like
Target and Walmart et cetera,even like Kohl's.
There's choice all of a suddenwhere you can get toys.
And instead of focusing on ane-commerce model, toys R Us just
kept trying to expand, liketheir brick and mortar presence
internationally.
(31:24):
So a ton of money they'rehemorrhaging just trying to open
up all these new stores whereno one wants to go to the store
anymore, which is, you know,they just weren't listening to
how their consumers werebehaving, and that was a big
thing was.
Consumers want choice.
Consumers want?
You know there was no.
Not only was there no way tobuy toys from Toys R Us online,
there was nothingdifferentiating them from like
(31:46):
Amazon or Target.
Like there were, they didn'thave any line of toys that was
specific to them which couldhave bumped them up or helped
their survival rate.
Speaker 1 (31:56):
Well, and I feel like what made Toys R Us so popular
is that you could go physically,touch and play with the toys.
You could see them in person,one-stop shop.
The number of times we were onthe way to a birthday party and
just stop at Toys R Us realquick.
Speaker 2 (32:09):
Because there's something there.
You'll find something.
Speaker 1 (32:11):
Yeah, they have everything.
Speaker 2 (32:12):
Yeah.
Speaker 1 (32:12):
But I also wonder how much the kind of the revolution
of the cheap Chinese toy had animpact on that.
Because when growing up, whenToys R Us is the big deal, right
, a water gun was $28, 30 bucks,right, but it was quality, it
(32:38):
lasted your entire childhood.
They also had like 11 differenttypes of super soaker.
Like you had choice, yeah.
And then come you know the theadvent of of cheap chinese toys.
The water gun goes from 30 downto like five bucks and you just
buy 12 of them, right, theybreak.
And you, you know kind of thedisposable toy, right, the
microplastic machine, right,like you, you get this advent of
really cheap, kind of crappytoys that allow you to to not
feel as bad about spending fivebucks, 10 bucks, whatever it is.
(33:01):
Toys were an investment.
You kept your toys, you triedto maintain your toys because
they were relatively expensive.
Your parents got them for youon your birthday and Christmas.
That was pretty much it.
Cheap, tiny chinese toys madeit like a seasonal thing, right.
Speaker 2 (33:15):
That's when you start getting like the goodie bag,
right, like little crappy,disposable toy that used to be
goodies, right, like like ediblegoodies, like pop or lollipops
and chocolates and candy.
Now it's like, like you said it, disposable, cheap plastic
knickknacks.
Speaker 1 (33:32):
Yeah, so I'm interested.
I'm just wondering how much ofthat was part of it as well.
Speaker 2 (33:36):
Yeah, I mean they had a focus on overexpansion,
pouring into their brick andmortars when consumers wanted
choice, flexibility and also thebirth rate declined.
So think about when we werekids, or just before we were
growing up, households had lotsof kids.
(33:59):
So going to Toys R Us, whereit's a warehouse of toys, where
there's something for everyone,was great.
But then you have this swing inculture where people have less
kids.
You don't need to go to Toys RUs.
There's less kids to buy toysfor.
So again, they're focusing onexpansion, a brick and mortar
(34:22):
and they poured no resourcesinto their online shop.
And that's what consumerswanted from them was like go
online, I will still buy fromyou, but you need to invest in
your e-commerce platform.
And they just flat out did it.
Speaker 1 (34:34):
And then here's the thing right, let's go the other
direction.
You don't always have to pivot.
There are plenty of examplesBaking Soda is one of them,
right when they never evenreally had to pivot, just
slightly changed the marketing,and I'd like to bring a yummy
one in, if that's okay.
Yummy, yummy, one of myfavorite things in the world.
Speaker 2 (34:51):
It's too depressing.
Talking about Toys R Us, yeah,let's move on.
I do wish that it existed todaybecause it would be super fun,
just like swing in, grab a toy.
I feel like Five Below is thenew Toys R Us.
Speaker 1 (35:04):
It kind of is, kind of yeah.
Speaker 2 (35:16):
Like, just like something.
Like there's like a littlesomething for everyone.
But perfect example right fivebelow is is a is a toy store
full of cheap, disposableplastic toys.
Right right, it's the chinese.
Well, it's not for mom, andstuff for dad and stuff for
auntie.
Like there's something foreveryone's candy, yeah, but but
it's.
Speaker 1 (35:22):
It's low cost leader, right, let's leave nostalgia
land.
Let's go to one of my favoritefood groups waffles the waffle
iron food groups, not food foodgroups.
Speaker 2 (35:29):
Food groups waffles the waffle iron.
Food groups, Not food foodgroups.
Speaker 1 (35:32):
Food groups waffles.
You can do a lot of things withwaffles, but the waffle iron is
a great example of somethingthat was.
It was cast iron before made inFrance in like the early 1800s
or something.
And it's almost impossible toundercook a waffle if you just
wait several seconds becauseit's so evenly cooked and it has
these little squares that areinlaid in the way.
(35:53):
It's a very easy way to cook abreakfast food.
And Thomas Jefferson brings thewaffle to America when he was
off during the early parts ofour country.
He's always living in Francefor a while.
When he comes back he bringsthe waffle with him because he
loved it.
He was a Francophile, he wasall about that waffle.
So he brings the waffle withhim because, like he loved it,
he was all about that waffle.
So he brings the waffle backand the waffle becomes one of
(36:15):
the most popular breakfast foodsin america and with little to
no pivot.
I mean the waffle iron now isjust a slightly it's a.
It's an electronic version ofthe same cast iron waffle
original waffle iron.
You just hold over a fire,right.
There's nothing different aboutthe waffle iron overall.
But where the pivot comes in,which I think is interesting, is
(36:36):
Joe Wells.
He was the proprietor of WellsSupper Club and Joe Wells in the
early 1930s has this jazz clubin Harlem and jazz clubs close
wee hours in the morning and theperformers come off the stage
and they're starving and JoeWells has a kitchen and he goes.
(36:59):
Well, it's too late for dinner,it's too early for breakfast
let's make kind of the idea of abrunch right and he comes up
with the idea of one of myfavorite foods chicken and
waffles.
Speaker 2 (37:10):
Get out of town.
That's where it originated from.
Speaker 1 (37:15):
A club in Harlem.
Speaker 2 (37:15):
What a great story, yeah.
Speaker 1 (37:18):
And.
Speaker 2 (37:18):
I did not know that.
Speaker 1 (37:19):
Wells.
It was called Wells Supper Cluband it was open until 1999,
from the 1930s to 1999.
But apparently there's stillone on 7th Avenue.
There's a little family-ownedsupper club that the Wells
family owns.
That's still one like on 7thAvenue.
There's like a little familyowned like supper club that the
Welles family owns.
That's still in New York.
I don't know if it made itthrough COVID, but last I
checked it was still there.
I haven't been there yet but Ido plan on it, but that is the
(37:41):
birthplace of the chicken andwaffles and chicken and waffles
has also never needed to pivot.
So the goal and the target hereis just be in and around
waffles and you'll be safe.
Speaker 2 (37:54):
And Coca-Cola.
Speaker 1 (37:55):
And Coke and waffles baby.
Speaker 2 (37:57):
I think the lesson is know your consumer, know your
audience.
Right, if your audience issaying this is perfect, the
Coca-Cola recipe is exactly whatwe want, waffles are delicious.
There's no reason to pivot.
Sure, you can make it better,you can go to market better, you
can change your marketing, makeit more sexy, whatever.
(38:19):
That's fine.
But there's no reason toconsider a pivot for the sake of
pivoting.
And then, on the flip side, ifyou have a business model that
you see being widely affected byconsumer behavior the movie
theater, toys R Us you've got tobe willing to just flip your
(38:41):
whole business model upside downfor the sake of your consumer.
Who is your consumer?
What are they looking for?
Why are they being drawn awayfrom you?
How can you lean into that?
Speaker 1 (38:50):
Yeah, well, and that's exactly it.
Right, that's the whole idea ofa pivot is completely changing
direction, and I think there area lot of companies that stay
lean and they are willing toembrace change and willing to
embrace innovation and arewilling to lose money.
There are companies that aren't, that have been very successful
for very long periods of time,lose money.
(39:12):
There are companies that aren'tthat have been very successful
for very long periods of time,and there are companies that
pivot over and over Nintendo andNintendo Go.
Look at the history of NintendoNintendo's on everything they
they've made, like circuitboards and like linen products,
and then they just kind ofhappened to land on video games
and became popular.
Nintendo pivoted like a milliontimes in in like 20 years, just
trying to figure out what it is.
(39:32):
They were so indecisive aboutwhat they should do, they just
tried everything.
Speaking of trying everything,let's get into John's fun finds
of the week, things that I sawthis week that I think were
really innovative and I likedthem a lot, and the first one is
a company called Flated, soit's getflatedcom and what it is
, and I think this is brilliant.
(39:53):
For those of you who own trucks, it is so think of an
inflatable paddleboard.
That's very rigid structurethat it makes an inflatable
paddleboard.
They took that and they made atruck bed tonneau cover.
It's a little roof that goes ontop of the truck.
So if you want to camp in yourtruck bed, instead of buying
that big fiberglass top, youjust inflate this thing and put
(40:15):
it on top.
It gives you protection fromthe elements, gives you some
privacy, but you can inflate atruck bed cover to then put your
truck bed tent into or just puta mattress in the back of the
truck.
Inflate this thing.
I think it's brilliant.
I think it's a great use of anexisting technology that drop
(40:39):
forge inflatable technology.
That's super stiff and verystrong.
It's a simple and creative useof that technology.
So get inflated.
I'll be sharing it on socialmedia and I shared this one last
week, but I plan on talkingabout this week and I'll share
it again, just to make sure youknow we're.
You know anybody listening tothis show is aware of it, but
there's a company called regentand what they're doing and this
is I think you'll love thisthey've created a hydrofoil.
(40:59):
I'm not going to call it anairplane because it doesn't
technically fly.
Speaker 2 (41:03):
It's a flying.
Is it falling with style?
Speaker 1 (41:05):
no, it's built like an airplane and it's attached to
this hydrofoil and they turn onprops and they the airplane
just gets a couple of feet, yeahit hydrofoils up but but it
technically it is flying and thehydrofoil is more just kind of
keeping it level where it'ssupposed to be.
but it can go several hundredmiles an hour and it's going to
(41:27):
go between the of Hawaii like ataxi service.
So instead of renting, you know,getting a ticket on one of the
small little airline planes,they're giving you kind of a new
and interesting way of kind ofgoing between the islands and
getting some of that old schoollike Voyager type vibe across
the ocean and seeing the islandstaller than you.
One of the most.
(41:48):
In my opinion, one of the mostmagical things you can do when
you're in Hawaii is get thelittle six-seater plane, buy a
ticket to go between islandsbecause they'll kind of loop
around the islands.
You get to see some reallypretty stuff as they fly, as
they pass the island.
They'll kind of give you alittle flyby and loop around,
turn it a little sideways foryou so you can see the island,
and it's just a really intimateexperience to get between
islands in Hawaii.
This is an even to me isn'teven more intimate, right?
(42:11):
It's a connection to the ocean.
I think it's a really, reallyneat way of getting back and
forth, and I really really lovethe idea.
Speaker 2 (42:18):
How many people can fit?
I think it's six, okay, so it'sthe same as getting on like one
of those little sets of planes.
Speaker 1 (42:23):
Yeah, it's a smaller, it's designed to be a smaller
experience.
It's not.
None of the traveling betweenHawaii is really like big
there's no, I mean there's nopoint at a commercial airliner,
no.
So it's all.
You know five to.
You know three to five peopleusually, but it's a really neat
way of getting between, kind oftaxi servicing.
I imagine it's incrediblyefficient because you're very
(42:45):
low friction, you're, you know,kind of keeping it low to the
ground so you're not combatingany kind of winds that might be
higher.
The the pacific in that areatends to be relatively flat, not
all the time, obviously it'sthe ocean, but but consistently
flat.
So I think it's just kind of acool little magical way and a
magical idea it's.
It's one of those ideas that,like is it's built around an
(43:06):
experience, not around some kindof technology or something else
.
It's just someone said, hey,you know what, what, a, what a
way to to get between islands.
Let's keep our connection tothe ocean, let's keep this kind
of intimacy of travel, ofboating, but doing a.
You either have to boat in ayou know a large, you know ship
(43:28):
that goes back and forth andcarries hundreds of passengers,
or it's like a small boat that'snot that fast.
Speaker 2 (43:33):
Do they run ferry services between islands?
Speaker 1 (43:35):
Yeah, they do ferry services but they're kind of
long right, it's a couple hours,Five hours.
Yeah, it's several hours to getbetween, but they have ferry
services.
Speaker 2 (43:43):
And how fast would one of these get you?
Speaker 1 (43:46):
This thing goes like 200 miles an hour, so it's
probably it's the same as anairplane I I think it can go 200
.
I don't think they travel at200 imagine hitting like a
dolphin I mean, well, thehydrofoil stays pretty close to
the surface and I don't thinkyou'd really they jump these
animals jump out of the water?
Speaker 2 (44:02):
yeah, you could.
I would love to see whathappened about like a flying
fish just whack this thing I'dprobably just make a little
smear mark and I mean, would itget wobbly?
It's interesting.
Speaker 1 (44:13):
Yeah, I mean I love the idea.
I think it's one of thosereally neat concepts.
I'll post it on my social mediaon Innovate the Ordinary or
Innovate Everything podcastsocial media by all means I
don't know how I feel abouttraveling that fast inches over
the water.
Speaker 2 (44:27):
There's just a lot of variables.
Yeah 200 miles an hour, like acouple thousand feet up where,
like there's nothing is onething but a little turbulence.
Speaker 1 (44:44):
I think they travel at at like closer to a hundred.
I think what it can do and whatthey do do is a little bit
different, but yeah, of courseit's it's way faster, it's it's
it's like being on a really,really high speed boat and I
think that's really cool, rightRight.
But with wings, very cool.
But having said that, thank youso much for joining us.
Speaker 2 (44:59):
You're awesome Chicken and waffles.
Speaker 1 (45:01):
What do you think?
I love chicken and waffles.
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