Most businesses get it wrong. They always look for a threat from a competitor who’s offering similar products or services. Then they focus all their time and energy dealing with this direct competitor while completely ignoring the threat from indirect competitors.
In the old days, movie theaters saw other movie theaters as rivals. However, they failed to notice that the real threat to their business wasn’t other movie theaters but the exploding popularity of movie rental services first from Blockbuster Video, then from streaming video offered by Netflix. While movie theaters could plan for the competition from other movie theaters, they had no answer for dealing with indirect threats from DVD rental services and streaming video competitors.
Only lately have you seen movie theaters fight back by offering gourmet food, comfortable seats, 3D glasses, and special nights for parents bringing crying babies to a theater. By offering something that indirect competitors can’t offer, movie theaters are trying to attract people who want an experience beyond just watching a movie, which is all their indirect competitors can offer.
The future is clear for anyone willing to look. Your biggest threat will come from where you least expect it. The problem is that most people aren’t willing to look. Instead people seem to go through three stages of Denial, Delusion, and finally Desperation.
At one time, the computer book business was extremely lucrative. That’s because people needed information since most programs were fairly complicated to use such as Microsoft Office or Windows. Since programs only changed versions every few years, a computer book could sell for several years. Because computer books rarely needed updating, publishers could print books in large numbers to reduce the overall cost of each book, thereby increasing the profit per book.
The computer book business seemed so rosy that few authors heeded every warning that trouble was lurking ahead. First, the cost of printing, storing, and distributing heavy computer books kept increasing. That by itself wasn’t so bad but then the Internet became readily available to almost everyone. Now instead of buying a bulky computer book, people could easily find the answers to their questions using a search engine.
Then book stores started dying because fewer people were buying printed books. Then major programs started going through rapid updates. Instead of three or more years, major programs started going through updates every two years, and then every year. Apple releases a new version of iOS and OS X every year, which means by the time a computer book on OS X gets written, printed, and shipped to a bookstore, that book has less than a year to sell before it’s completely out of date.
That means publishers can’t print as many copies, which increases their overall cost per book to print. That also means book stores buy fewer computer books so they don’t get stuck with obsolete books. Just visit any remaining book store in your neighborhood and notice how the computer book section has shrunk from several shelves to one or two with far fewer copies of any individual title.
At one time, I earned my living entirely from computer book sales, mostly from Microsoft Office for Dummies. Today the amount of royalties Microsoft Office for Dummies earns in one year is equal to the amount of money it used to earn in one month. Imagine if you suddenly had to stretch your monthly income to last a year and that’s the fate most computer book authors are in right now.
In the old days, computer book authors fought to write books on anything related to Microsoft because that’s where the money was whether it was Windows, Microsoft Office, or C#. Then something changed. Microsoft completely missed the mobile computer revolution (thanks to Steve Ballmer, who earned a multimillion dollar bonus for his “leadership”).
Suddenly, not only were computer books no longer as lucrative as before, but Microsoft knowledge was no longer as lucrative as before. Here’s where most computer book authors went through an initial stage of Denial.
“PCs will be around forever,” one computer book author calmly told me. “Everyone will always use Windows,” another computer book author said. “Microsoft isn’t going anywhere,” yet another computer book author assured me.
In a way they were right, but they assumed that also meant that the world would continue paying top dollar for knowledge of Microsoft products. However as the world slowly shifted to iOS and Android, the Windows experts simply denied that Microsoft computer books could possibly be in trouble. Rather than look at the growing trends and the threats from all sides (increasing printing costs, decreasing book sales, Internet access to information that computer books used to provide, the shift to mobile computing, etc.), so many Windows experts found it easier to deny that life could ever possibly change for the worse.
As Apple took over the mobile computing market first with the iPhone and then with the iPad, many Windows computer book authors grudgingly admitted that their world was changing. However, rather than follow the money by learning about the iPhone, iPad, and Macintosh, many Windows computer book authors placed their faith on Windows Phone to compete against the iPhone and Surface tablets to compete against the iPad.
Their theory was that Microsoft was such a cash cow in the past that it would still be lucrative to stick with Microsoft today. Such a delusion meant that they continued to ignore the most profitable part of the mobile computer market, which was the iPhone and iPad.
Many Windows computer book authors also leaped on the Android bandwagon, assuming that Android would become the new Windows. Unfortunately for them, Android device manufacturers often customize Android to differentiate their Android devices from rival Android manufacturers. That means using Android on a Samsung phone will not always be identical to using Android on an HTC phone. The PC world never had to worry about this because a Dell PC ran Windows XP exactly the same as a Hewlett-Packard PC.
Even worse, people often bought PCs just to use Windows. Hardly anyone buys a mobile phone just to use Android. Instead, people buy a mobile phone because they want a mobile phone, and the cheapest phones just happen to run Android.
The typical Android user spends far less money buying digital products than iOS users, and Android users also spend less time browsing the Internet than iOS users. Since using Android is basically simple and few Android users care to learn much about Android, books about Android failed to sell like previous books about Windows.
Even writing books about OS X or iOS was futile because Apple rapidly updated both operating systems and made the iPhone and iPad relatively easy to use without making people read a manual or take a class. In the old days, most people couldn’t use an Windows PC without reading a book or taking a class. Today, most people can use an iPhone or an iPad without relying on a book, so the whole mobile computer market also helped make computer books irrelevant.
Strangely, many Windows computer book authors went from the stage of Denial (“Everyone will always use Windows.”) to Delusional where they believed Windows will make a massive come back with Windows 7/8/RT/10 and life will return back to the prosperous early days when everyone used a Windows PC and needed a book to teach them how to use it.
In the desktop market, Windows still dominates with a 90 percent share. However if you include mobile computers like smartphones and tablets, Windows now only has a 15 percent share. People didn’t abandon Windows so much as they embraced iOS and Android. While Microsoft was focused on beating back direct competitors to Windows like OS X and Linux, they missed the mobile computer revolution that represented their worst indirect competitor.
With so many people using iOS and Android, there’s less of a market for Windows experts. That means most Windows computer book authors are seeing plummeting book sales with no hope in sight. After first denying that Windows could possibly be in trouble, then getting delusional that Windows could make a comeback and return to its glory days, most Windows computer book authors are facing the Desperation stage where their Windows computer book income is rapidly shrinking and their knowledge of Windows is no longer as profitable.
What can they do? They can write more computer books, but the entire computer book market is dying, so that’s not an answer. They can stick with Windows and hope Windows 10 will take over the market again, but if that doesn’t happen, they’re already behind learning iOS, OS X, and Linux because other experts have filled their places long ago.
Their only hope is that Windows 10 will magically take over the mobile computer and wearable computer market while still dominating the desktop market. Maybe that will happen, but the odds are that people won’t suddenly throw away their iPhones and iPads (and Apple Watches along with their Android devices) just to use Windows 10.
Basically, those computer book authors who clung to Windows for too long are now in the same situation that reality TV stars face after their shows go off the air. At one time, Jon Gosselin of “Jon & Kate Plus 8” fame was making $10,000 a night just to appear in a nightclub. Now he’s working as a waiter and making far less each night.
Yet this current crisis of many computer book authors could easily have been avoided if they had simply looked ahead. The time to look for alternatives isn’t when you’re desperate, but when life is going well so you have plenty of time and money to develop alternatives.
Imagine riding in a car that’s heading towards a cliff. Only if you look straight ahead can you see the cliff, but if you look anywhere else, life looks rosy and comfortable. That’s the initial stage of Denial by refusing to admit that there could be trouble ahead.
Now as the car reaches the edge of the cliff, you can still look behind you and see a peaceful scene, but if you look straight ahead, you can’t avoid the danger. So rather than deal with impending trouble, most people prefer to indulge in wishful thinking, which is the Delusional stage.
That’s when people hope that life will magically return back to the past in much the same way that you could wish that a car rolling towards the edge of a cliff will magically stop on its own and roll back up the hill where it’s safer.
During this Delusional stage, there’s still time to change, but most people prefer to substitute hope for action and wish for the past instead of changing in the present. Just read these excuses Blackberry fans use to insist why Blackberry phones still have a chance to see an example of delusional thinking.
Finally as the car hurtles off the cliff, you can look everywhere and see the danger. That’s when Desperation sets in and that’s when it’s too late to save your current situation. Just ask Radio Shack how long they stayed in the Delusional stage before finally declaring bankruptcy when they hit the Desperation stage.
It’s easy to avoid desperation by always planning for the worst especially when times look their best. Unfortunately when times are good, most people close their eyes and assume that times will never change, and then they wake up one day and act surprised when it has changed.
At one time, McDonald’s was the fast food leader. Now with declining sales, they’re gradually facing tougher competition from other hamburger rivals. At one time, K-Mart and Sears were the leading retailers. Now Walmart has taken over and K-Mart and Sears will likely fade away. At one time, Windows was the dominant computer operating system. Now iOS and Android have taken over with little chance that Windows 10 will magically push them aside.
The lesson is simple. If life is going well, stay vigilant and start developing alternatives just in case. If life isn’t going as well, hurry up and make drastic changes now. If your life is already falling apart, look to the past for how you might have ignored warning signs and resolve not to miss them the next time around.
It’s never too late to change but it’s always possible to get blind-sided at any time, so be ready. Just ask all those Windows or Blackberry experts who stubbornly avoided learning anything else if they would have made different choices earlier if they could do it all over again.