When business leaders start looking at ways to grow their company, someone generally suggests a plan that would appeal to an under-served segment of the audience. The company has out-grown certain customers, or there’s a new demographic that is not responding to the current model and the idea is floated that these could represent new markets. Think about discussions they must have had at Kodak when digital cameras started to gain momentum and people were buying less film.
The typical response in these meetings to any such idea is that launching a separate business model to serve these segments would open the door to cannibalizing the current model*.
- Retailers were hesitant to launch online versions of their stores for fear that too many of their current shoppers would desert brick & mortar stores.
- Newspapers were slow to go digital — opting instead to use gimmickry as a way of maintaining print subscribers.
- American car companies responded to the early Japanese imports by going bigger, leaving Toyota, Subaru and Datsun to gobble up what was a very lucrative piece of business.
In this 17-minute podcast cast interview, James Allworth describes why companies should cannibalize themselves. “If you don’t cannibalize your own company, someone else will.”
Gather your executive team and listen to this as a group, then talk about how you can devour your own customers.
* Note: My friend Howard Potratz says the best feeling in the world is the one you experience during the 10-seconds that exist between the time you suggest a great idea and someone tells you how stupid it is.