A snapshot view: The right time to say goodbye to a business
ON HOLIDAY in India in 1995, I was very popular with the locals. Before flying from London, I had splashed out about £1,000 for one of the first digital cameras for the consumer market. Nowadays it would seem Stone Age. But back then it was a sensation whenever I used it. Locals jostled to get their shot taken and it was a marvel, seconds later, to see their picture on the little screen. Even grandparents’ faces lit up in gappy grins at seeing their own image on an electric device.
My mate Rob, travelling with me, wasn’t impressed though. “The quality is rubbish. The pictures are all grainy and the colours are terrible. I can barely see them on that little screen.” “Yes, Rob, but you can see them better if I download them onto my computer.” “Download them? Will you ever print them?” “Maybe some of them.” “Maybe? Photos are to be seen. Put in frames and admired.”
Rob spoke with authority. Photography was his passion. He’d been a photographer for years. From Vogue to violins, he’d shot the lot. It was also his livelihood. He had three photo labs in Sydney, selling film and frames, and developing prints. It was good business: he drove a Merc and lived in a million dollar house on Sydney Harbour.
“Yes Rob, you’re right. It’s crummy. But I think you’d better be careful, digital is heading in your direction. The quality is only going to get better and the price lower.” Over the following days, I urged him to sell up his business. A bit radical you might say, urging someone to completely change their life and abandon a passion, but I was convinced. Occasionally we are all right about something and sadly I was right on that one. Over the next decade, digital cameras boomed and photo film sales virtually stopped.
Rob put up a battle but blamed everyone except the new technology. Desperate for market share, other photo labs started lowering their prices on film and prints. Rob grumbled about the supermarket chain up the road, which kept undercutting his prices. “They’re cheap, they look cheap and their colours are terrible.”
Then, with customer visitors dropping slowly but steadily, Rob blamed his shop’s landlord and sued. The landlord was the Church of England. “The nearer to the Church the further from God,” Rob said, which got him in the papers as the classic Aussie battler, fighting for justice. Eventually the case was settled but his pyrrhic victory involved hefty legal bills.
Then photographic film companies stopped subsidising branded photo labs like Rob’s. “They’re abandoning us. They don’t understand the industry.”
Finally Rob went broke. He closed the last of his three labs and lost the house and car. He should have exited. But so should have big companies like Kodak. Obvious? Ask Nokia or Blackberry maker RIM.
Richard Farleigh has operated as a business angel for many years, backing more early-stage companies than anyone else in the UK. www.farleigh.com