In business, as in card games, it’s hard to quit when you’re ahead.
Blockbuster founder David Cook, a computer programmer, started the movie rental outfit in 1985 after designing software that could track what was most popular.
Two years later he got out by selling Wayne Huizenga a controlling stake for $18 million. Huizenga proceeded to turn the 19-store chain into a blockbuster worth billions.
Sensing technology shifts ahead, he hired a team to help him come up with a new model. “We discussed it a lot and thought about buying a cable company,” he says. “But there were so many ways it could go, and none of us wanted to get into an area where we had no expertise.”
Stumped, Huizenga threw in his hand and turned Blockbuster, now with 3,000 locations, into somebody else’s problem. He sold it to Viacom for nearly $8 billion in 1994, three years before Netflix was born.
Blockbuster’s first two owners played their end games early. Today, of course, the market is resetting again.
— Adapted from “How Blockbuster Failed at Failing,” Stephen Gandel, Time.