Rita McGrath
speaker
126 appearances
2 recordings
2 series
first heard Mar 2025
last heard 8 Jun
Rita McGrath’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 1 in all, peaking in Jun 2026 with 1.
Appearances
So if you think about sort of intellectual deniability, why would you believe that could be true? But what had happened in the interval was some big changes in tech. So Dollar Shave Club could start up without servers, and they didn't have to hire programmers to build custom websites, and they didn't have to manufacture.
You know, manufacturing razors is really hard, and they already had a supply because of Mark's efforts. So I think it was very difficult for the Gillette executives to realize this was real.
And, you know, don't get me wrong, 50% share in a high-margin business like that is nothing to sneeze at. That's a really good business. It's just not as good as it was, right? And I have a lot of credit for the people at Procter & Gamble and Gillette. They really know their game, but the game changed.
Well, I define an inflection point as something that changes what is true about the rules around your business, typically by a factor of 10 or more. So 10 times faster, 10 times cheaper. In the case of Dollar Shave Club, 10 times more convenient or even more than that. And it can take incumbents by surprise, as we saw with Gillette. People forget that, right?
So these things seep into this whole world of reality. And then something comes along like internet, digital advertising, e-commerce, changes all those rules, and your system is still operating on the old ones.
Well, okay, back in 1995, the internet was very new. Computers at the time operated on, you know, things called floppy disks. And things were very primitive. Most of us got our access to the internet, if we were on at all, which most people weren't, by dial-up. You remember? You know, the modem dial-up. And...
The visionaries among us were saying, oh, you know, the web is going to completely replace newspapers and novels and magazines. And Stoll was looking at the reality of 1995 and he was saying, let me get this straight. You're going to drag a computer to the beach to read your racy romance novel? I don't think so.
idea behind a lot of this is it's a bit like the line from the old Hemingway novel, you know, the sun also rises or one character asks another, well, how did you go bankrupt? And the answer was, well, two ways, gradually and then suddenly. And in the gradual part of that curve, everything looks the same. Nothing looks as though it's changing.
And it's very hard for human beings to think about these exponential changes that can come out and really shift what's possible in the world.
Yeah, they do. They do. And I think what's interesting is you kind of go from this will never happen to, hey, what's happening to, well, of course that happened. We're kind of like that when we think about change. I also think that there is a human tendency, if something's going to be very destabilizing to your business or your life, there's kind of a human tendency not to want to see it.
Yeah. So Antonio Perez grew Hewlett Packard's printer business from kind of nothing to, I think it was seven billion something business. And he lost out in his bid to become CEO at HP and Carly Fiorina was named instead. Now she's got a problem and he's got a problem. She's got to figure out what to do with him because he was very clearly a qualified heir apparent at that company.
And there were kind of two warring camps there. So she kind of let him carve out his own space around printing. So they forged a joint venture with Kodak, which went on for a few years. Perez wanted to buy Kodak. I don't think he got the board to buy into that. And eventually when the CEO rolled up and opened up a Kodak, he took that role.
And what he did in that role was he made the, what turned out to be pretty fatal decision to aim the whole company at printing just at that period when screens were getting so good that we didn't need to print. And I don't know this, but my belief and others observing the situation would agree that it was kind of ego-fueled.
He was going to show the HP board and all the others how wrong they were to not have given him that role and was using Kodak as his vehicle to do that.
And we see that a lot, you know, that there is a time and a place for a particular strategy to be successful. And when the conditions change, you can't just rinse repeat.
Yes. So Blockbuster is another one of those fascinating stories, because I think we get it wrong. You know, Blockbuster always gets told as, oh, you know, dumb old company, never saw the power of streaming. And that's not actually true. There was a very well-known turnaround, retail turnaround guy called John Antioco, who was put in the CEO role there. And the company was in trouble.
There was a lot of competition. Their margins were getting squeezed. And they had two things that drove customers absolutely crazy. One was the late fees. And the other was that if you had a movie that came out that was really super popular, Blockbuster would only buy, you know, four or five to keep in the store at the time. So the hot new movies you often had to wait for.
And those were things that were irritating. So Antioco took a look at this and he said, well, what I think we need to do, I think we need to get rid of late fees. I think streaming is a thing. And he actually partnered with Enron, yes, that Enron, to build out a digital infrastructure that would make it possible to do that. But again, we're talking kind of before high-speed broadband.
This was several years before even Netflix adopted streaming in a widespread way. So that was a little early technologically. But what happened in the back half of this was Antioco's moves were going to cost about $200 million apiece. So the streaming part and the late fees, which was a big part of their profit margin,
And the parent company at the time was a company called Viacom, which just didn't have the appetite for that. So Viacom ended up floating an initial public offering with Blockbuster, who went to market kind of weakened. The turnaround had not yet taken place. And so a lot of investors were very skeptical.
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