July 23rd, 2012
When I first moved to New York in the mid-70s, I was working downtown for New York State’s Emergency Financial Control Board. Yes, Virginia, we’ve had financial crises before, and that was a pretty bad one. My job was conducting ‘financial intelligence’ about the city subway system.
A guy I worked with shared my interest in music, and told me about this great new record store just down the street — J&R. It was for years my first stop when I wanted to find something unusual. As many of you know, in the interim they expanded from that one store to now occupy many of the storefronts opposite City Hall. They now carry cameras, computers, TV and other electronics, small appliances, and on and on.
‘This could be the last time’
These days, whenever I’m downtown, I’ve taken to stopping in — because I’m always afraid it will be the last time. Tower Records, Virgin, Sam Goody’s, and HMV, formerly the other biggies in town, have long since left the market for vinyl records and CDs — because obviously the markets for these products are increasingly niche-based, and the major (legal) markets for recorded music are for MP3 downloads and streaming à la Pandora and Spotify. I still buy CDs to get the best quality sound, but do it almost exclusively now from Amazon.
Even while they were around, records changed a lot. My first memories of buying music are of going to the record store with my dad and having the clerk take out the record you were interested in so you could listen to it in a listening booth before committing to it.
Business models come and go
I’ve taken to playing a mind game in which about a decade into the future I’m talking to my (yet-unborn) grandchild, and mention record stores — to which her reply is, “What’s a record store, Grandpa?” Now the game has evolved to, “What’s a _____, Grandpa?”, with the blank filled by some technology or business model that is dying off.
Becoming ‘seasoned’ gives you a perspective, in seeing whole technologies and business models being born, thriving, and then dying off, or becoming marginalized. I remember when the milkman and the breadman came to our house in suburban Philadelphia. “What’s a milkman, grandpa?” A man who brought milk to your house every morning, of course.
What’s a token clerk? That used to be the person who stood in a booth all day and sold you a token to ride the NYC subways. For that matter, what’s a token? A metal coin used to buy a ride.
The office of the ’60s
The first office I worked in used carbon paper to make copies of documents, which were being produced on a typewriter. If they needed to be copied at a later time, they were retyped — until mag card machines came into use. All of these were obviously obsoleted by computers — which before everyone had his own were operated exclusively by the typing pool.
Some office technologies have taken longer to die off than I would have predicted or preferred — fax, for example. Does anyone use it, when you can scan and email from a $50 scanner? I guess so, that’s why every office needs it — but it really is a dinosaur-in-training. Why can’t it just go away quietly?
I remember radio and TV repair shops, now obsoleted by a combination of high manufacturing quality with the essentially disposable nature of these products.
When I speak of value dynamics, this is what it means – that new ways of doing things invariably overtake old ways. It’s what Schumpeter called ‘creative destruction’ and Christensen calls ‘disruptive technology’. That’s not to say the new ways are always better in human terms, but they are almost always more attractive economically — which is why they catch on.
Where to, from here?
The real fun comes when you try to extrapolate these past trends to see where the future is trending, and how fast. For me it’s so much fun that I do it for a living.
I went to a lunch meeting the other day in which the topic of discussion was making plastics from organic materials like corn — the results being just as usable as those from the traditional petroleum feedstocks, with the additional benefit that, unlike petroleum-based products, they’re bio-degradable. We discussed the various drivers that could turn this from a cutting-edge proposition with limited commercial adoption (since it’s currently also more expensive), to a mainstream technology that’s widely used and commercially viable.
So maybe “What’s a petroleum-based feedstock, Grandpa?” will be part of the game one day for the economically precocious.
What’s your favorite “Whatever happen to…”? And what are things that we take for granted now that may — or should — someday go the way of the record store?
And if you’re a business person, what aspects of your product and/or business model are headed for the ‘dustbins of history’?