Back in the 1980’s I can remember people buying music by the bucket load on vinyl. Cassette were still around but vinyl had that ‘jena se qua’ elegance that cassette couldn’t rub off. This industry lasted for almost 70 years.

In fact, at around 1985, it was estimated that the vinyl industry was at $25 Billion annually. However by the time we reached 1990, the vinyl manufacturing companies had completely evaporated.

Don’t get me wrong, the loss of this kind is not easy to be sniffed at. To the vinyl industry, this was loss of epic proportions.

So where did all the money go?

It’s not like the music industry had stopped selling records. On the contrary, music was very much booming with a whole load new genres being introduced into the market.

The answer is on newer technology, all the money changed hands to the CD industry. This also had a sell by date of about 15 years with the introduction of MP3.
Nokia understood this in the beginning but somehow along the way they lost this. People often think of Nokia as a mobile company when in fact when it started off it had nothing to do with mobile phones. It is a Finnish company which was founded in 1865. Yes that date is correct it is not a typo. This is long before the telephone. It actually started off as manufacturing company making paper from vegetable fibers. Since then in its 151 year history it would totally change to many different industries to keep up with the times.

I can remember in the 1990s they were the market leaders on mobile hand held devices.

Until at some point after the millennium they lost that mantel and with the introduction of apple devices this almost completely destroyed them. They had no choice but to sell all their assets to Microsoft.

These kind of issues are also not just related to the manufacturing industry. This has also reached its ugly hand out to the service sector. Yahoo is a classic example of this. The company was created by a couple of PHD students rose to fame like wildfire in the 90s and quickly reached to new heights. They even had the opportunity to buy Google for $1 Million in the late 1990s, but refused because the firm wanted computer users to spend more time on Yahoo!

Yahoo made the same devastating mistake as Nokia, they both decided not innovate by listening to the market. Instead they both believed they will move with technology at their own pace would create their own market.

But for some reason Yahoo still did not learn from their mistake. Probably their biggest blunder was to occur in 2008 whencollins_yahoo Microsoft offered to buy them out for $45 Billion. Yes that is the correct number it is also not a typo. What’s amazing is that they refused. Giving the reason they wanted to stay independent.

Today after eight years of beating the dead donkey and expecting different result while still maintaining the same stance in their technology. They’ve had to resort to selling their company to Verizon for $4.8 Billion.

You don’t have to be a number crunching genius to realize just how much of a disaster this company has made. For those of you who is calculating the loss, let me tell you the answer.

This comes to a whopping loss of $40.2 Billion dollars. This is a colossal failure on their part. And now finally to top it all off, Yahoo’s recent security breach might even cost them further by Verizon pulling out on the deal all together.

In conclusion if there is anything we could learn from this – Market is King!!!

No matter how big or small a company, as soon as it stops listening to the market, it will lose. The market is a wave that should not be confronted. Instead we should use the market to our advantage and ride the wave.

This is what we believe in Khan Direct. We ride the wave!


Ali Khan