Technology shift of the 90s and early 2000s inconvenienced many business that refused to adapt.
One of the biggest missed opportunities of our time is Blockbuster‘s failed acquisition of Netflix in 2000.
A brief history:
Blockbuster was the biggest movie rental service in the US. At its peak in 2004, it consisted of nearly 60,000 employees and 9,000 stores across the United States. Physical video rental (VHS) was a very big thing and even here in Kenya we had such services until a few years ago.
In 2000, Netflix was just a small struggling company hoping to revolutionize video rentals by sending DVD via mail instead of having physical branches. Clients would browse through a catalogue on Netflix website, pay and have it delivered to their doorstep.
Blockbuster was offered Netflix at a meagre $50 million, but the board laughed at the idea. They saw Netflix as a small niche business that would soon die out.
10 years later, Blockbuster filed for bankruptcy, and its valuation was only $24 million. Netflix is meanwhile valued at almost $40 billion, meaning if blockbuster is still alive and going with its last valuation, Netflix can buy it about 1500 times over.
Failure to predict the future also hurt our own Posta.
The former giant corporation is a shell of its former self, and nobody wants a box. I passed by their Tom Mboya street branch recently, and there are posters all over announcing that they have vacant boxes. This is the case in all their branches, and has been that way for several years now. The only customers they seem to be keeping are institutions, businesses and companies.
I applied for a box and got it in a record 20 minutes. Some years ago, you would be kept on hold for nearly 2 years before a box became ‘available’.
It costs less than Sh3000 to have your own box, a figure affordable to many, but people just don’t see the need. Many box holders have died over the years or simply stopped paying.
If Posta had predicted the future well, I’m sure they would be a major ISP for example, in a field dominated by newer companies Safaricom, Zuku and Jamii Telecom.
But reports of Posta’s demise are greatly exaggerated.
Apparently, it pulled Sh3.6 billion in revenue last year.
Now, in order to survive the onslaught of the internet, Posta will be launching its own bus service, dubbed ‘Postaline’. They will serve both passenger and parcel delivery services.
By having the 62-seater buses, transportation of parcels and goods will be much easier and cheaper. The bus will have 42 seats for passenger occupants and the rest for deliverables,” Postmaster-general Enock Kinara told Nation.
They hope their revenue will quadruple within three years to reach Sh14 billion.
I wouldn’t call this a bad move, but it’s definitely a late move. But I have to say, in a country where our daily news is corruption and thievery, this is some good news.