|Satellite & TV Information|
Learning from Voom
Voom was thought to be the company that would be able to compete with DirecTV and Echostar in satellite service. However, after a $650 million loss it became clear that the company needed more than technology. By looking inside the Voom Company, you can learn from their business mistakes to avoid the same problems in your own business.
You Need More Than a Good Product
The Voom channels definitely had something to offer to their customers. Never before was such a wide selection of HD channels available for television viewers. However, it takes more than just a good product to make a profit. Market research needs to be done to see if anyone will buy the product. The money you put into research will definitely pay off to find out whether or not you can sell your product or not. You need to find out if you can make a valuable return on your investment or not. In the Voom case, their investment obviously did not provide the company with a profit.
Do Not do Business with Your Family
The Voom battle became a family feud. Charles Dolan, founder of Cablevision, felt that Voom was worth saving while his son the CEO, Jimmy Dolan, wanted to pull the plug. Eventually, Charles Dolan tried to buy Voom with the help of his other son. This caused major conflicts within the Dolan Family. You should avoid mixing family and business. This may seem like a harsh rule but it is something that can save a lot of heartache in the long run.
Know Your Competitors and Your Industry
One of the problems with Voom is that they did not expect the technological advances that their competitors had after they launched Voom. Know your competitors and know what type of industry you are in. Be aware of the outside forces that can affect your business. Is your industry known to change rapidly? Voom did not take into account what their competitors had up their sleeve and this became very detrimental to the business.
The Pain of Sunk Costs
It is hard to walk away from a large investment that does not give any returns. One must remember that a sunk cost is exactly what it sounds like; it is sunk, gone, vanished, kiss it goodbye. So many times businesses fall into the mistake of trying to save fallen projects because they have already put so much time and money into it. This was definitely the case with Voom. With the lost of $650 million Charles Dolan was bound to want to save part of the investment. This is an important lesson to learn in business. You must say goodbye to sunk costs.
Charles Dolan dreamed about creating a satellite company that could compete with DirecTV and Dish Network. However, almost no one was supporting to Charles Dolan in his cause at the end seeing that Voom was bound to fail. However, Charles Dolan would not listen to the other board of directors and continued in his efforts to save the dying business. It is important to sometimes swallow your pride and listen to the arguments of those around you to see if they possibly have some validity. Be open to what others are saying because they just might be right.
While it seemed that Voom had the capabilities to change the way viewers watch TV and to be very profitable, instead it failed shortly after its creation. This is because of a few business principles that were neglected. When working with your own new business, make sure that your business plan makes sense and that you pay particular attention to your team, the external factors that could affect your business, and know how to walk away when your great idea turns out to be a flop. If you are willing to do these things, you will avoid running into the same problems that Voom did.
Kaitlin Carruth is a client account specialist with 10x Marketing- More Visitors. More Buyers. More Revenue. To learn more about Voom, please visit I-Satellite.
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