One third of all American households swiped a credit card with Redbox. In 4 years, they have grown from $100 million to $1.5 billion in revenue last year. How did they do that? Redbox has a business philosophy that discovery is an opportunity to offer trial and ultimately a path to purchase. Redbox is the company that delivers DVD movies and games via a kiosk vending machine outside retail establishments.
Last week, I attended the Business Network Chicago StartUp meeting held at Perkins & Coie a law firm downtown Chicago. The speaker that night was Mark Achler. Mark shared his path as an entrepreneur in an interview with David Carman, the master of ceremony for the BNC StartUp group. The discussion, interview and questions were great to learn from.
Mark started out as a channel VAR participating in the original launch of the IBM PC, worked at Apple, a few doors down from Steve Jobs, was a VC at one point, and ultimately built several successful businesses as an entrepreneur. Redbox, he pointed out was a significant departure from the startup world – but holds his attention through intrepreneural energy inside a billion-dollar company.
Mark shared with the audience how constant innovation at Redbox has kept them relevant, vending movies, then adding games, and now offering streaming digital. That is the “path to purchase” that investing in DVD technology, a potentially declining distribution medium, has given Redbox to gain customers and market share.
Mark shared that “it’s a science to be good at spotting trends, but it’s an art to identify the right timing,” which is what he feels Redbox is doing. I think he’s right.
Mark shared that “there are more Redbox vending locations for DVDs than there are Starbucks and McDonalds restaurant locations [in the United States] combined.” That clearly is extensive reach, and an inordinate number of touch points that act as a path to purchase.
He shared some advice with the people in the room. He pointed out that to be an agent of change, or innovation, or entrepreneurism, you must “Lead the vision with a passion of a pit bull.” You can see that passion in him, his words, and his eyes.
Another point of advice, Mark responded to a question of ambiguity at a decision point, that “you can never go wrong by doing right by your customer,” and further shared that this is a point where many companies make their biggest mistakes, sometimes, unrecoverable.
Mark was asked for his take on the future, based on the trends he’s seeing today. He gave everyone in the room the insight that there are two critical elements for success in the future. The future will be about content and customer. He pointed out that the acquisition cost for both quality content to offer, and acquiring new, and retaining existing, customers will continue to increase. Oh, and in the month of marathon awards shows, Mark shared that there will be continued consolidation in entertainment.”
Great words of wisdom, and interesting experiences took Mark from Illinois to California and back again. He lived the PC revolution, became an investor, then entered today’s content industry. I truly enjoyed listening, and learned a few things. If you get a chance to hear Mark speak, it’s worth it. BNC is a great group to get exchange and network with successful people.
See you at the next BNC event. http://www.bnchicago.org/
Image owned by: Redbox, McDonalds and Starbucks. Sourced from their website.
Reasons being that Redbox has an increasingly large number of DVD/Games vending machines than there are McDonald’s and Starbucks combined is because they have joint venture with Walgreens as a contributing factor that have allowed them to place vending inside or outside of each of Walgreens 8,000+ retail locations. With Walgreens securing all major corners in the U.S. it places Redbox at the forefront of front-end customer service. It’s all about location, location, location.
Excellent point – the number of Walgreens sites makes all the difference. Relating it to Starbuck and McDonalds puts it into perspective.