Pivoting Inward

By Douglas Rushkoff. Published in Hemispheres Magazine on 1 April 2015

Back when I was growing up in the 1970’s, Radio Shack was always one of my favorite stores. I was an electronics geek, fascinated by crystal radio kits, diodes and capacitors. A blank circuit board and pile of transistors was an invitation to make pretty much anything one could imagine: a walkie-talkie, a battery tester, a lie detector. If there were plans, I could follow them. If there were no plans, well, there was Larry at the New Rochelle Radio Shack who could point me in the right direction. 

The electronics age was the original tech “maker” era, after all - when crafts transitioned from wood and glue to wires and solder. And like many technology geeks of my generation, I found myself saddened yet unsurprised by Radio Shack’s recent bankruptcy. Not too saddened to miss out on the clearance sales as a couple of thousand retail outlets are closed, and not too cynical to miss the fact that the only things people were buying were the little parts and tools in the back of the store - the small area still dedicated to Radio Shack’s original technology hackers. 

And as I rummaged the bins with everyone else, I couldn’t help but feel as if Radio Shack had missed out on the greatest retail pivot opportunity of the 21st Century. Here was the world’s most established outlet for electronics parts and expertise, entering the era of computer hacking, Arduino electronics kits, Makerfaire, Wired, programming, wearable computing, and the  Internet of things - and utterly missing out on the whole thing. 

Radio Shack started out okay. They made the first computer most of us ever owned - the TRS-80 line of desktops and laptops of the late 1970s. But as more consumer-oriented computer manufacturers like IBM and Apple came up, Radio Shack slowly abandoned silicon. True enough, the computer had become less of a programming tool for hobbyists, and more of a slick, plug-and-play appliance. It seemed as if the number of real power users and computer hobbyists would only decline as places like Google and Apple took over technology development. 

That’s where Radio Shack may have made it’s tragic error. It pivoted away from the hobbyist, and toward the consumer. They started selling PDAs and cell phones - the same boxed electronics as everyone else - with the same carrier plans available at the phone stores. Why buy an AT&T phone at a Radio Shack instead of the AT&T store? How does the electronics expertise of the salesperson being leveraged? It wasn’t - which is why the store became less about deep knowledge of parts and amps than cell phone contracts. 

There’s a big lesson in this for anyone in business. Most companies still think of a pivot as a way to steer away from failure.  A startup’s business plan fails deliver rapid returns, so the founders pivot to something else - doesn’t matter what, exactly, as long as it maintains the investors’ faith in the possibility of a home run. Or an established business finds itself “disrupted” by a new technology, and then pivots ahead into the unknown future - usually a good faith effort to get online, create an app, or otherwise imitate the disruptive upstarts. 

Instead of competing with the cell phone shops, Radio Shack should have doubled down on its own expertise and reputation. The geeks may have been temporarily disrupted by the computer age, but they are back. Radio Shack could have been the local hub for hi-tech knowledge and creativity - the place to build a 3D printer, take an Aduino class, program a Raspberry Pi, get the parts for a robot, or develop new drones. Radio Shack should have been earning headlines about whether they are going too far by arming hobbyists with too much technological power - not about whether they can move enough smart phones to please short-term shareholder interests.

Ironically, perhaps, Radio Shack’s demise isn’t the story of how the Web destroyed another retail business. We could always buy parts from catalogues, but went to Radio Shack for the culture, the convenience, and the expertise. No, the real story here is that a great company pivoted away from both its expertise and the market opportunity of a lifetime. Looks like someone else will have to pivot into its place.