I want to talk about taking a long term perspective, unforeseen consequences, not learning from history and maybe confirmation bias. A couple of things have serendipitously come across my desk as the same time that made me renew by thinking on these issues. I seem to find my best business lessons everywhere but in business books.
As you may have read, the European Community has just spent 7 years negotiating a trade pact with Canada. But it collapsed because the Wallons voted against it. The Wallons represent the French speaking part of Belgium. The other part speaks Dutch and each part has its own parliament.
For the EU to approve this (or any other) trade agreement, all 28 members have to vote for it. 27 and a half did but the Wallon parliament said no, so the deal was dead. I’ll get back to that.
Meanwhile, I’ve been reading the October issue of Boardsport Source, which I always enjoy. Dirk Vogel wrote a trend report on skate longboards. He starts off by acknowledging that the “…market has gone from boom to bust over the last two seasons.” He’s right, of course. I think most of us are surprised it didn’t happen sooner.
Then he goes on to quote Richard Auden at Mervin (makers of Lush Longboards) as saying, “The biggest problem in longboarding right now? The industry thinking longboard is dead when it isn’t!”
Dirk goes on, “Folks pronouncing the category “dead” tend to overlook that, beyond the trend, longboarding has grown into a deeply rooted culture…” Then he quotes Pablo Castro at Loaded Longboards in Los Angeles. “Things have slowed for us but there’s still a lot of life in the market. While the industry has slowed, there’s still a ton of events and stoked people riding skateboards all over Europe.”
Dirk finishes off his introduction by saying, “Looking ahead, it’s exactly those “stoked people” – the ones keeping the faith – that will keep longboarding alive in the long run.”
I’ll get back to those comments after I’ve talked some more about the Wallons. Right now, let’s just say that over many years, I’ve never found it a good business practice to put lipstick on a pig (confirmation bias). I do agree with them that longboarding is going to be fine, but I’d draw some different business lessons than they draw. I hope that will be useful.
George Friedman founded Stratfor, the geopolitical consulting firm. A couple of years ago he left to start GPF- Geopolitical Futures. Writing on October 25th, he explained the historical background of how the Wallons came to be in position to block the trade treaty. I could paraphrase George and look smart, but I think I’ll just quote him.
“Wallonia is a region of Belgium. Belgium was once a part of the United Kingdom of the Netherlands, invented after the Napoleonic Wars of the 19th century. It was created at the insistence of Britain, for whom the port of Antwerp and other lesser ports were a dagger pointed at the heart of the United Kingdom. A Continental fleet based there would have a short trip to southeastern Britain and invasion, as well as opportunities to close the English Channel.”
“Britain feared French control. One solution was the creation of a separate state, but where its borders were drawn would determine French influence over it and the ports it controlled. A predominantly French nation could reunite with France. An excessively powerful country could become a threat in itself. When Belgium rebelled for its independence in 1830, Britain pushed for a solution that made sure that the population was divided between Dutch speakers, called the Flemish, and French speakers, called Walloons.”
“The two groups, one from Latin Europe and one from Germanic Europe, disliked each other from the beginning – going back centuries.”
I won’t fault politicians in 1830 for not looking ahead to 2016. But that there WOULD BE PROBLEMS was obvious and inevitable. I suppose it worked in that France never invaded England. Too bad they couldn’t have constructed a country to keep Germany from trying it, but in 1830 there was no Germany.
George let his sense of humor show through when he closed his article this way.
“The geopolitics of the Napoleonic Wars rose from its grave to govern Europe. And the Europeans laugh at American elections. The U.S. election will end on Nov. 8. There is no terminal date for European humor.”
Unfortunately, the Wallons have ruined all this fun by finally agreeing to the deal. Europe bought them off I assume. I don’t know exactly how. They pretty much had to so they could avoid looking like the 28 Stooges.
Having provided a short and, hopefully, interesting lesson in long term and unforeseen consequences as well as the difficulty of building consensus in a large group with different interests and the dangers of forgetting the past, let’s return to the comments from Boardsport Source.
I have watched, over many years, snowboarding, popsicle skateboards, surf, and right now SUP, go through what skate longboarding is going through. In meetings, trade shows, conferences, panels and presentations too numerous to count it has been proclaimed that the industry as a group should “Do something!” to resolve whatever the industry crisis du jour is. Often this revolved around “fixing” distribution, but it’s also been issues like helping specialty retailers, selling on the internet and the evils of Amazon, the need for MAP, the buy/sell cycle and others.
The industry, through various trade associations, has done some good industry supporting things as have individual companies. Fundamentally, however, each company has done and will do what it perceives to be in its own (short term?) best interest. I don’t see that ever changing. It shouldn’t.
These calls for industry action usually come well after the inevitable maturation of the industry has begun because that’s when companies start to feel pain.
But the issue is never what the industry thinks or can do- it’s always and everywhere what the consumer thinks and is doing. And many longboard consumers- like the popsicle skateboard, surf, and snowboard consumer before them- are feeling confident in the quality of all brand’s product, finding them easy to buy everywhere, noticing less product improvement and differentiation, thinking of the product as a bit of a commodity and the use of the product as a sport or mode of transportation rather than a lifestyle.
Is anybody surprised at that? What’s remarkable is not that this is happening- we’ve all watched it happen time after time- but the implicit industry assumption that rapid growth was a normal condition and that there is somehow a “problem” with the industry when that inevitably slows or ends.
I also want to respectively disagree with the idea that the “deeply rooted culture” and “stoked people” are what will keep long boarding going. Well, maybe I don’t want to disagree with it, but I’d like to suggest that saying that doesn’t help us run our businesses. That core market will always exist. It will shrink as it has with other action sports. It’s not that it won’t be important, and maybe even trend setting.
But it won’t be as important to as large a percentage of the market (unless that market shrinks beyond what I expect) and the trends set in the “core” will be important to fewer customers. In fact, if those trends involve doing things most users of longboards never expect to do and don’t identify with, it might even be damaging to the broader market’s health and growth prospects.
You have a decision to make about who your customers are and why they buy your product. That’s the fundamental business question- not what the industry is doing and what it thinks. Want to focus on the “core?” Fine. Nothing wrong with that decision. Recognize it may limit your growth.
If you decide you want to focus on a broader market (I think most brands see themselves as “active outdoor” rather than action sports now because that’s where the growth is) think about what your relationship with the core market is and how you keep it as your distribution changes and maybe expands.
Look at the history of the related sports and ask yourself why you think skate longboards will be different. Go read about the Wallons, or whatever you can read to get yourself out from under talking with people in the industry who share your biases and experiences and who take comfort (as we all do) in the idea that this time will be different.
Recognize (so you can ignore) all the platitudes and generalities that have swept across all the industry segments as they have matured. They may make you feel good, but they won’t facilitate making good business decisions because they don’t help you ask the right questions.