I have to admit that until a few years ago I was fairly unfamiliar with the “Mount Rushmore” game. This is the game where someone throws out a topic and the group is challenged with identifying which four people, foods, cocktails, sports, cars, movies, actresses, or any other category you can think of, deserve to be represented on that genre’s Mount Rushmore a la Washington, Jefferson, Lincoln, and Roosevelt. As I mentioned in my October blog, it’s a fun, fascinating, and insanely subjective game to play. But that’s what makes it so fun. I can tell you, at LOOMIS, we’ve had a blast debating our favorite challenger brands for these last two posts.
Last month, we looked at which challenger brands made the cut from 1950 to 2000. In this blog, we’re looking at the four underdog brands that have so distinguished themselves in the past 20 years, they deserve one of the four spots on our Challenger Brand Mount Rushmore since the turn of the century. It wasn’t easy, as this has already become the prime-time century for underdogs. But after much debate, we’ve narrowed it down to our favorite four.
The Challenger Brand Fab Four, 21st Century.
If you work in any facet of advertising and marketing, you’ve most likely heard the cautionary tale about Netflix and the demise of Blockbuster. In the 80s and early 90s, Blockbuster Video stores were as ubiquitous as McDonalds. They were literally everywhere and dominated the video rental market in every hamlet, town, and city they were in. But in 1997, two software engineers named Reed Hastings and Marc Randolph envisioned an alternative to Blockbuster called Netflix where, for a monthly subscription, customers could get DVDs through the mail, that they could return any time they wanted, with no late fees. You watched when you could, mailed the DVD back in a Netflix-supplied sleeve, and waited for the next movie in your queue to arrive.
As technology and people’s digital capabilities caught up, Netflix took another step forward, shifting mainly to a streaming model. In 2000, Hastings approached Blockbuster about a merger for $50 million that would have put his team in charge of Blockbuster’s online rental program. Blockbuster declined. They reasoned there was no way the Netflix model could beat people’s love for picking up a movie at their Blockbuster down the street.
By 2004, Blockbuster’s market valuation reached $6 billion while Netflix was still climbing past $500 million. Five years later, Blockbuster had lost a third of its value while Netflix was about to crest $2 billion. A year later in 2010, Blockbuster declared bankruptcy. Call it poor management, hubris, or a lack of vision. I think it was all three.