The Sinking Ship

Thanks to Hollywood, hundreds of millions of people had the chance to experience what life might have been like on the Titanic – grand, opulent, classist, and doomed. It was also full of notions that are both chivalrous and antiquated with how people might react today. The notion that a captain might go down with the ship or that storybook ideal that the band must play on until the very end, their very end, is certainly at odds with the current me me me culture. Of course, those aboard did not know their fate until the very end, and while not too protracted, it did not happen swiftly taking almost three hours before first impact to full submersion. The Titanic, as the movie proved, makes for a timeless tale, one full of irony and allegory. It is in this tale of invincibility and unexpected demise that we find ourselves pondering digital re-enactments of the Titanic.

Last week when writing about the potential bubble and mega-billion dollar digital media exits, a story came out that tells not all the unlike the Titanic, for now at least and luckily minus the actual loss of life. This is the story of the one that used to rule them all, MySpace. As a business, it has languished, becoming a diminishing asset not unlike AOL’s dial-up business. It hasn’t gone away but despite the best efforts thus far, including numerous management and direction changes, the business has not pulled out of decline.

Unlike the Titanic, the event which signaled MySpace’s eventual rode to demise does not have as concrete an event as hitting an iceberg. Many many point to Facebook as that which lead to the once king of social’s doom, but hardly anyone, Mark Zuckerberg included, would have guessed his company would surpass MySpace. Like any great entrepreneur and overly driven, competitive individual, visions of grandeur absolutely ran through his head but the rational brain would not have agreed until much later. Today, FBOK has 15x the users that MySpace had at its peak, a number that shows little sign of slowing down; it also carries an estimated value 79.5 billion dollars higher than MySpace’s purchase price.

That MySpace didn’t have a specific event that signaled their end has certainly not made the ride down any smoother or any more palatable. In the digital world, their story is anything but unique. As others have noted before, it is as though the category killers and originators all end up surpassed at best and obscurity at the worst. Who would have guessed that Yahoo would not retain the number one spot in search? Who would have thought that Netscape would disappear? It’s one thing to lose your spot, but it is another to work there. What must it be like to work at MySpace? How does a company like Yahoo turn itself around when they see so much bad press? These are big ships on a trajectory, much like Titanic. In today’s world, Apple alone stands as the rare example of a company that rose from the ashes to regain an achieve an even bigger place of prominence. Theirs is the ultimate Catch-22 though – a strong business almost too closely associated with its strong leader. Everything a strong business is not supposed to do. Can you for example name the CEO of Coke?

Whether MySpace’s story thanks to new owners Specific Media in conjunction with Justin Timberlake can ultimately resemble an Apple versus that fabled ship remains to be seen. What we don’t envy though is that challenge of both still working there as well as that of one who takes over the helm. Here is what so easily happens. Employees remember the good times. They look to management to help create that and to fix the culture decline with substance. Management doesn’t really care about fixing the business. They don’t feel they have the support of the people into their new vision. They endanger that support further by making a few mid-course corrections and a stream of layoffs. They might care, but it’s hard to really care as even upon taking the job they started to plan their next venture. In their mind, they are simply optimizing for being able to say look how many lives we did save (using the Titanic metaphor) as opposed to actually trying to have the ship avoid the iceberg once the warning bell has sounded.

This battle is playing itself out in companies not nearly as large as Yahoo or public as MySpace. The foreboding, dread, and continuous drain on moral almost ensures that those still there do so because no better alternative exists. The ship may go down but why jump off the boat if it looks like some form of life raft will still exist. It is really is too bad that businesses like these don’t necessarily have an iceberg to point to. At least Napster could fight until the very end happily even though the knockout blow would come at any moment. For the rest where they find themselves already sinking but not knowing why, theirs is that depressing but all too common story – not admitting the issues until all they can do is tread water.