It was not long ago we lived with the stressful reality of the video rental late fee.
While we suffered, one company, that I will not mention, received most of their profits from these late fees.
Most of us can relate to Reed Hastings’ anguish. He had to pay a $40 late fee for the rental of the Apollo 13 video he misplaced. “It was all my fault. I didn’t want to tell my wife about it. And I said to myself, I’m going to compromise the integrity of my marriage over a late fee?” We had to accept video late fees as a reality, luckily for us, Reed Hasting did not.
Like Reed, Don Wetzel did not accept the existing reality of waiting in long lines at banks to withdraw cash. Bill Gates and Steve Jobs did not accept the existing realities that only big companies can afford computers and IBM and Digital Equipment (now defunct) will make them. Jeffrey Bezo’s did not accept the existing reality that you have to go to the store to buy things. Hasting, Wetzel, Gates, Jobs & Bezos each leveraged their Realities Aptitude to bring us Netflix (no late fees), the ATM, personal computers and Amazon.
In researching successful self-made billionaire dropouts, the Realities Aptitude is clearly the secret sauce. It is often overshadowed by creativity, talent, taking risks and hard work that are interwoven throughout success stories. Realities Aptitude is recognizing, understanding and leveraging the existing, new and emerging realities. Having a clear picture of the dynamics of what is real is one of the five competencies that can help make almost anything happen:
- Knowledge – “understand it”
- Enablement People Skills – “secure support & commitment”
- Realities Aptitude – “see it coming”
- Creativity – “new idea acceptance”
- Enduring Grit – “thousands of small choices to make one big thing happen”
Realities can be clearly obvious or may require deep domain knowledge and wisdom to recognize them. Realities are how things really work, rather than how they are designed to work. Realities are a snapshot in time during the transition through dynamic states, being constantly altered by innovation, socioeconomics and human behavior:
Realities Aptitude is the ability and wisdom to recognize, understand and leverage realities as well as their associated dynamics. That is why experience is so important. To do this in your field, career or life in general, it can take many years to develop this aptitude.
Reed Hasting was able to leverage industry, technology and personal realities into start Netflix in 1998.
- Existing – People hate late fees. Movie titles were limited to store inventory. You had to drive to the store and remember to return the videos. Reed was an engineer who invented a debugging software program. He was a founder and a former CEO of a software company.
- New – People were going online (it was the year Google was founded). People began to accept sharing their credit cards online as Amazon and eBay were each 3 years old. The DVD was introduced 3 years earlier. People liked DVD quality and began purchasing DVD players. Reed sold his company the previous year.
- Emerging – With the DVD, movies were now in a digital format and forecasters were predicting Video on Demand in the near future. Cable Modems were introduced the previous year and cable companies were developing broadband internet rollout strategies.
Reed Hasting had to leverage many more new and emerging realities for Netflix to succeed. The Netflix model may seem obvious now, yet sometimes the emerging realities do not emerge. If they don’t, you go bankrupt like Solyndra and A123 did this year. Solar panel manufacture Solyndra and lithium-ion battery maker A123 built manufacturing capacity to service high demand from several sources that didn’t emerge as expected.
It doesn’t do us a lot of good recognizing and understanding the new and emerging realities if we don’t accept them. The new realities in 2007 came from Amazon introducing the Kindle eReader, Apple launching the first iPhone, Netflix starting to stream online videos and Zynga beginning online games. The reality today is Amazon sells more ebooks than traditional books, most music is purchased online, 20 percent of the all internet traffic is streaming Netflix videos and Zynga has over 300 million active online users.
In 2007, Borders Book’s sold books, Music CDs, movies and video games. They went bankrupt just 4 years later in 2011. You wonder if Borders really had a chance or were they not far enough along Elisabeth Kübler-Ross’ five stages(1) of acceptance of realities:
Denial — “I feel fine.”; “This can’t be happening, not to me.”
Anger — “Why me? It’s not fair!”; “How can this happen to me?”; ‘”Who is to blame?”
Bargaining — “I’ll do anything for a few more years.”; “I will give my life savings if…”
Depression — “I’m so sad, why bother with anything?”; “I miss my loved one, why go on?”
Acceptance — “It’s going to be okay.”; “I can’t fight it, I may as well prepare for it.”
As you can see with the Kübler-Ross model above, a realities aptitude is just as important to our personal lives as our careers, dreams and big ideas. The ability to recognize, understand and adapt to the new and emerging realities is key to our prosperity and in making almost anything happen.
(1) Santrock, J.W. (2007). A Topical Approach to Life-Span Development. New York: McGraw-Hill.