Monday, October 18, 2010

Blockbusters

People who open nightclubs are often those with a need to feed their own egos.
But their ego is what will eventually lead to their failure.

On one block in the small town in which I currently live, there is one strip club, one hole in the wall and one large nightclub/concert hall.
This area is on the outskirts of town and few people have any occasion to go to this area.
But everyone knows where this area is.
Since it lies between the two major towns of the area, this block receives a high rate of traffic.

The strip club is doing great.
The hole in the wall is suffering.
The huge club is barely making it.
But now a group of gay dudes is opening up a very nice gay bar on the same block.
Another partnership is looking at opening a more upscale night club right across the street from the tiddy bar.
Many see this as a problem - but it is not.
This area will similar to a mall concept - if you can't find it here, try next door.

But many of these club owners don't see it this way.
Many of these owners think that their business is the most important spot on the block.
Many cannot see that when they all benefit, they all benefit.
These owners think in much the same way as movie studios in years past.
Movie execs used to think that only one blockbuster at a time could be in theaters.
But this limited the choices given to paying customers.
When many movies are in theaters and one sells out, people go to the next best option and wait to see their first choice at a later date.

This concept also works in the nightclub business.
After a week filled with lunches trying to explain this concept to jealous club owners, I need a better example.
Maybe I should use the concept of Burger King being across from Mac Donald's which is next door to Wendy's and all are doing well.
Simple concept - but these egos are the primary hindrance.

3 comments:

Liam said...

Good luck with that, for some reason its hard for people particularly business owners and investors to realize that conventional wisdom in business is not always best for business. I spent years fighting to get those types to approach my research and presentation with reason but instead i was met with rejection.

brohammas said...

DOes your club do bigger business than Walmart? How bout Home Depot or Lowe's? Is the owner smarter than the owners of these businesses?

Lowe's and Depot moniter each other constantly to see who is moving or building where. Any time one goes up, the other does the same... right across the street.
They NEED to be there to capture the business. If one becomes a location, people will travel there, if they are the only one there, they get all the business. You need to be there as well to even have a chance.

It may look crazy, but they are the ones making the big money.

uglyblackjohn said...

@ Liam - Three of these clubs are paying me consulting/training fees.
But each thinks that I should only look out for them.
It's crazy - this is not a zero-sum game.

@ brohammas - Those guys are big time because they see the big picture.
These guys are still thinking small time.