Comment by frognumber | Hacker News Reader

Comment by frognumber | Hacker News Reader

Parent Full thread

> At my store and every single store I was aware of, if they had not pivoted to cellphones they would have gone out of business in 2000.

Let's shorten this: "if they had not pivoted, they would have gone out of business in 2000." A pivot was needed, and a long time earlier. They key question is which pivot.

Identifying a big market, with a lot of competition and no competitive advantage, was better than nothing, but worse than identifying a market with some competitive advantage.

> You literally lost Radio Shack money and hastened the transformation every time you walked past the CD players and plasma spheres towards the back of the store where the components lived.

True.

To make money, they would have needed to monetize me for a lot more than the price of a component. Have a quick look to see what Russian School of Math charges for afterschool math classes, what summer STEM camps cost, or tuition at a university. More critically, look at the derivative -- which prices are going up and which are going down.

If you earn 50 cents selling me a resistor, I'm losing them money.

If you earn $1000 teaching my kid something about electronics. All of a sudden you need far fewer of me, and you broaden the appeal to anyone educated with money and a child.

They had everything in place to do that, right down to wonderful educators like Forrest Mims.

And if they had done that well, there would have been many more of me around now too.

>Have a quick look to see what Russian School of Math charges for afterschool math classes, what summer STEM camps cost, or tuition at a university.

None of those are geographically distributed physical locations that need to be staffed and operated constantly. They're monolithic institutions, pop-up restaurants of learning, or virtual.

I would have used Kumon as an example except the comparison breaks down when you realize parents pay Kumon a lot of money to increase their children's test scores, and very few schools test for hobby electronics.

Pivoting to your plan would have achieved the same result: the death of Radio Shack.

Preserving a brand for the sake of preserving a brand doesn't make sense.

Customers don't exist for after-school hobby electronics classes for teens at over 8,000 locations across the US. So you pivot anyways (to a sector you have no practical or institutional knowledge in, which doesn't exist already), close down 7,000 stores (to roughly match the number of Kumon locations), get rid of all of your inventory because you don't have the scale at 1,000 small locations to make competing with big-box or online make any sense and then-- bam!

Radio Shack's dead anyways.

> Customers don't exist for after-school hobby electronics classes for teens at over 8,000 locations across the US.

I'm not sure that's obvious, at least if you don't completely restrict yourself only to specific kinds of electronics, eg. have computer assembly, troubleshooting, phone and other device repair classes/workshops, etc. The most successful pivots create a market where there previously was none.

> None of those are geographically distributed physical locations that need to be staffed and operated constantly. They're monolithic institutions, pop-up restaurants of learning, or virtual.

I think you're misunderstanding how these operate. Almost all of these are staffed and operated for at least the same number of hours as a typical Radio Shack location.

> to a sector you have no practical or institutional knowledge in, which doesn't exist already

No, Radio Shack had more institutional knowledge here than just about anyone else. They made electronics kits, wonderful books, etc. A better example is AoPS opening up physical tutoring center (which they did, and which has been very successful).

> close down 7,000 stores (to roughly match the number of Kumon locations), get rid of all of your inventory

If you do this, you're managing the pivot like an idiot. Here is how you pivot:

1) Start a summer camp at one location. Iterate on the program until it's efficient and turnkey.

2) Start a small number of afterschool programs in a similar fashion

3) See what it takes to be successful. Perhaps grant some kind of certificate for those, and ideally, frame it so it can go on a college application, or if you're really ambitious, so amount of college credit. I can name a dozen other places this could go, but critically, it takes a bit of financial elbowroom to have time to explore and pivot like this.

Once this is going, expand reach to more and more stores. And do this in 1990, so you have time and elbowroom, rather than in 2000.

For big institutions, pivots almost never work wholesale.

> close down 7,000 stores

Scaling down was probably necessary at some point, but bankruptcy was not.

Scaling down can be followed by scaling back up.

Reply on news.ycombinator.com