For those of us old enough to remember, the mention of Blockbuster will bring nostalgic childhood memories flooding back.
Whether it’s the painstaking task of wandering down the aisles, trying to choose a DVD or bringing a VHS back home only to find it hasn’t been rewound, it’s safe to say the video rental store was a solid fixture of the 90s and 00s.
However, the three billion dollar company, which had over 84,000 employees, closed its doors in 2014 after going bankrupt.
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And apparently it was all down to one key 'mistake'.
In an interview with Management Today, former CEO James Keyes shared his insight into what went wrong with the company.
He said: “If I’d known that in 2008 the entire financial world would collapse, I’d have taken it private, refinanced the debt at a reasonable interest rate and we would have made it through the financial crisis and never looked back.”
What went wrong for Blockbuster?
Keyes explained how he had initially thought the company could get through the financial crisis until a deal with Google fell through.
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He continued: “I had a high degree of confidence in Blockbuster and our ability to make this transformation. People on the outside didn't know about the Google discussions. We had strategic partners that could have been game changers. I had a very strong board. I had Carl Icahn, who was very supportive early on.
“I had reason to have confidence at the time. But when spin gets out there, it can create a run on the bank.”
And he has some advice for other companies out there, adding: “Unless you’re a brand new company with something like AI, the requirements for short-term improvements in a public company counter the need to reinvest in the business and completely reinvent it.”
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Keyes went on to say: “The lesson for entrepreneurs is cash flow, cash flow, cash flow. I didn’t see the financial crisis coming as quickly as it did, but it was pretty clear that there were warning signs out there.”
If Blockbuster had survived the financial crash, there’s no telling how the company would have fared against the streaming platforms on offer today.
Keyes said: “When I google my name today, I'm still plagued with being the guy that failed to keep up with technology. That hurts given the fact that my great purpose of being there was to embrace technology and take it to the next level.”
He added: “It’s important for me to keep reminding myself as I read my TikTok comments that I was in the arena. There’s some kid on the couch, eating popcorn, saying ‘this is the guy that screwed up Blockbuster.’ I just think you have no idea what it took at the time to be able to withstand that storm.”
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There is now just one sole franchise store left in the world and it can be found in Bend, Oregon.