Too many years ago, I worked for a company that sold education software. It was a start up and was growing rapidly. The business owners decided to change the way we went to market. The rational was that the market was moving away from 3.5 inch floppy disc drives to smaller bite size educational modules. (That’s how long ago this was)
The new product was sold by the chapter and not by the subject. But the key was that each user was sold a licence. We became educational license sales teams.
Many of us, myself included that this was commercial suicide. Our fear of change made us believe that our ability to sustain success would be severely restricted. And so it came to pass.
Whilst our nimble software company slowly changed, revenues dipped. But after a while we all started to see the benefits of the change in our ‘go to market proposition’ and our individual bank balances increased accordingly.
This company went on to become the EBay of its day in the on-line software market. It acquired its competitors and morphed again to take advantage of the growth in internet. The company floated and the founding fathers became extremely wealthy, even making the Times 100 rich list several years running.
But like most successful companies it is now on the sleepy backwaters of the NASDAQ as it time has gone. It has been caught up by its competitors and caught out by market conditions.
Can the same be said of EBay? Today it announced disappointing results with sales up and profits down. Could this be due in part to the global recession or the change in proposition EBay went through 3 years ago. It began to charge its buyers and sellers more for less just at the time when the market was moving into depression.
Only time will tell if this was an inspired change in direction, or a chance for its competitors and the market to push EBay into another sleepy hollow on the NASDAQ. We hope the former but at the moment fear the latter.
