History Repeats – In A Business Model

I want you to think about the company that pioneered a new way to listen to music. Think about the way that they used or purchased technology that was coming of age. Imagine the news stories that you have read about the way that this company competed with other massive catalogues of music to create their own repository that people would use on the devices that they were producing. Think about the fantastic way that they used design, branding, their own music catalogue and the advantage in technology to win the race for listeners.

From what I describe, you most likely were thinking about Apple releasing the iPod in 2001. If you had been thinking about RCA in the 1950s, all of the same criteria would have been true. Let’s take a look.

Apple (2001)

  • MP3 technology was initially invented in the 1990s. (Not by Apple)
  • The delivery system for iPods was technology made by different companies including hard drives by Toshiba, and components manufactured elsewhere.
  • Music competition came from catalogues of pirated music and the current CD catalogues that people owned.
  • Revenue is generated by sales of music and sales of devices.

RCA (1950)

  • Purchased a company that was the world’s largest producer of phonograph players (in 1929)
  • Was threatened by disruption from both radio and other large recording companies
  • Created a catalogue of materials to help sell their record players.
  • Revenue is generated by sales of music and sales of devices.

Business Model Similarities

The key is that the business model is almost the same. There are just small differences in the business model that adjust to different eras.

The significant difference is the delivery method of music. With Apple, the music was delivered electronically, and could only be played on their devices. RCA provided physical records in the same way other music was distributed – through record stores. Apple’s approach was also ‘stickier’ because people who wanted to purchase music for iTunes could initially only play the music on their iPods (or Apple computers.)

The outcome for the customer is the same in each case. The person will get enjoyment from listening to music in their individual context and timing. Each music collection is personalized and can be played on demand.

Below you can see a comparison of a simplified RCA Business Model Canvas from 1950, and the Apple iPod Canvas from 2001. The changes are highlighted on Apple’s canvas.

Note the source of the canvas template is listed. The information on the canvas is my own.
Note the source of the canvas template is listed. The information on the canvas is my own.

Key Take Away

When you consider a project or business plan, ask yourself “what model or structure has already worked for someone else?” Map out what this business model as it has worked in the past. Then define the small changes that you can make to update the model to meet the needs of your customers.

If it succeeded in the past, it is likely that it can succeed in the future. Not with the same delivery method, but focused on the same outcome.

The car succeeded because it solved the same problem as the horse and buggy, only better. The problem was getting transportation from one place to another. The outcome was the most comfortable way to travel long distances. The car won.

The record player, iTunes, and Youtube have all solved the same problem – music that I want, when I want it, personalized to me. Each delivery method achieves this differently, but the outcome is that people enjoy music.

The model change slightly, but the outcome remains the same. How can you apply that to the work or industry that you are in?