Let me share with you a number of examples and analogies to make my point that. You probably celebrate a tradition with your family—whether it’s Thanksgiving, Diwali or Eid for different listeners around the world. Whatever religion you are, whatever culture you are, you prepare certain food on certain important days. It is unlikely that the food you prepare this year is completely different from the food you prepared last year. That’s because you have certain traditions and you know certain things taste very good. Certain foods are not good because they are new. If something is newer but doesn’t taste very good, why would you eat it?
The world of strategy consulting or strategy analysis
New is not always better. Think of the world of strategy consulting or strategy analysis. Every year, there are new books published on strategy. But how many of them are better than the books published the year before or 5 or 10 years ago? There are certain books we always read in strategy because they are good. There are some books we read because they are new, and we hope they will help us understand strategy better. But they don’t invariably do. So we read them, but when we think about the material we want to use, we step back and use books that have stood the test of time.
A barrier that says you have to be new to appear here
We’re taught to assume that something published this year is best. Think of the Billboard Top 100. Only a song that’s been released in the last few months can appear on the Billboard Top 100, which means that if a song is more popular than a song in the Billboard Top 100, it will still not appear on the charts.
Think of book critics for major publications. It’s very unlikely they’re going to be reviewing the best book on a subject if it’s already been reviewed because, in their mind, no one wants to read a review of an old book.
In both cases, there is a barrier that says you have to be new to appear here. Why does that rule exist? Because of how businesses have been set up and the obstacles in the way of making everything available.
New is not always better – the new world
Previously, a record store could only keep a fixed number of records, so they kept the newest records because they were most likely to sell. George Stalk from BCG often asked what would happen when the cost of bandwidth fell to zero. What happens when the effort to find something is equal irrespective of the age of the product? We know that when it comes to books, new is not always better. Same goes for many other things, like the best TV shows are not the newest TV shows.
Because for a long time, they couldn’t make everything available to you. They had to pick: if I can’t stock everything, what am I going to stock? The oldest or the newest? Due to digitization and the arrival of digitalized business economics that make sense, you don’t need to focus on the newest things. The oldest things can be easily accessed. So, what if we create a business model where we didn’t just promote the newest thing but we promoted the best thing?
It changes the economics of everything
This has profound implications because it changes the economics of everything. A record or a label or a song that was recorded in 1972 now may be worth more than a song recorded this year. No one’s looked at the recording contract for that song from 1972. No one knows what it’s worth, but now it’s worth a lot more. That means that the half-life of a song has completely changed. The half-life of a TV program has completely changed. As new audiences discover, appreciate and play songs from years ago, new songs don’t just compete with other new songs—they compete with all songs.
FIRMSconsulting training: new is not always better
I have this discussion often with FC Insiders about our huge video library on strategytraining.com. Many people tell me they want to see new content, and I ask them why because the videos that are best suited for them already exist. Then they’ll tell me they’ve watched that program already. Yes, you’ve watched it already, but I don’t think you understand all the material. If you’ve watched it, that’s fantastic, but do you understand everything? Are you getting maximum value from it? Have you implemented all of the lessons? Have you perfected it? Obviously, you should be watching the programs you need to watch. But newer is not better.
In business, you need to understand what it means in a world where things that are older may actually be more valuable than things that are newer—not because they’ve become more valuable over time but because they’ve always been more valuable. Now we have a mechanism to access them just as easily as new content.
One of the biggest strategy shifts ever in the next 10 to 20 years
That is probably going to be one of the biggest strategy shifts ever in the next 10 to 20 years. It’s almost a land rush to stake out old content, which might be more valuable than new content, but no one even knows it exists. You need to know if your business model is predicated on the assumption that new is better. How this new normal, new is not always better, going to impact your business? If your business has barriers to entry for older content or older ideas, you need to play on even footing with old ideas and old content, because those barriers will fall away. You’re going to be facing new competitors, and maybe you can even buy them off.
This is an excerpt from Monday Morning 8 a.m. newsletter, issue #10.
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