Finding and Using Innovations for the Events Industry, with Long-Term Benefits (Part 2)
2. Buffett sticks with stable businesses.
Buffett seems “traditional” and “low tech”, but he once was CEO for a technology firm. It sold punch cards after regulators broke IBM’s monopoly in that niche. He left that business, however, when he realized IBM still owned the hearts of industry decision-makers. Buffett remembers his prospects saying, “No one gets fired for choosing IBM.”
Since 2005, after many trials, IBM reclaimed a significant market share, especially in providing services to large institutional firms. Buffett saw how IBM is now “‘a company that helps IT departments do their job better. It is a big deal for a big company to change auditors, change law firms’ or to switch to a new technology vendor”. IBM clients need consistency, so upstarts don’t usually win in battles with “Big Blue”.
That’s why IBM’s strength fits into Buffett’s investment style. He buys billions of dollars of a solid business. Then, Berkshire Hathaway sticks with it. IBM, after struggling, met 2005-2010 projections. Now that its executives saved it from bankruptcy, Buffett thinks IBM will meet 2010-2015 projections, too.
TAKE AWAYS FOR THE EVENTS INDUSTRY –
● Pick technology providers who are experts with a strong track record. Get references and work examples.
● Tech providers don’t need to equal IBM in size! You aren’t as rich as Buffett. Sometimes one small and trusted provider meets your need expertly tailored solutions.
● IBM’s new service model helps them flourish. Similarly, when they meet stakeholders’ needs, associations and exhibitors succeed. Make sure your technology does the same!
● Focus on implementation, not hardware. IBM now helps their customers utilize “Cloud-based solutions”, which are secure software applications available through the Internet. Make sure to focus on “usability” — for members, sponsors, and your staff.