This chapter is from the book
This chapter is from the book
This chapter is from the book
Strip Maps
A third type of mistaken map is what we call a strip map. A strip map has a restricted or narrow view of the terrain and a fixed sequence for getting from one place to another. Like the other mistaken maps, this one has been with us for a very long time. The strip map in Exhibit 2-7 shows how to get from London to Rome. As you can see, there is a fixed sequence of going from one monastery to the next and a rather narrow view of the path.
)
EXHIBIT 2-7
The road from London to Rome.
Strip maps get established because particular sequences and a narrow path have been shown to work in the past. When we show this old strip map to people, they often laugh. "How could anyone follow such a narrow map?" they ask. When drawn out on paper, strip maps do look rather narrow. How can people fall into the strip-mapping mistake? It is actually quite easy. Although the narrowness of a strip map is obvious when it is drawn out on paper, that narrowness is often missed when the map is seen in our mind's eye. Why? The answer lies in the success of the map. If we follow the strip map sequence, stay within the narrow parameters, and succeed in reaching our desired destination, why would we necessarily think about alternative sequences or other paths off the beaten track to the left or the right? The answer is that we don't. Who has time to argue with success? The sequence worked, so let's not think too much about other alternatives and, instead, simply use the map again.
Consider Barnes & Noble for example. CEO, Lennie Riggio, got his start in selling books when he dropped out of New York Uni
versity in 1965 and opened SBX (Student Book Exchange). By 1971, he owned five SBX college bookstores. That year, he bought a struggling book shop in Manhattan called Barnes & Noble. In 1979, he bought Marboro Books, which had six stores. At this point, the strip map was being established and reinforced. The mental strip map looked something like this: To sell more books, own more brick-and-mortar book shops.
The strip map was further reinforced as more brick-and-mortar bookstores were built. As Riggio built more stores, he also made them bigger. Whereas many of his early bookstores carried 20,000 titles, the newly constructed bookstores carried twice that number. The strip map was further established and reinforced: To get to the destination of more sales, buy or build more brick-and-mortar stores and make them bigger.
The entrenchment of this map solidified when, in 1986, Riggio, using junk bonds and his company, Barnes & Noble (37 total bookstores), bought B. Dalton (over 800 total bookstores). The combination gave Barnes & Noble nearly 850 bookstores, most of them twice the size of the original Barnes & Noble store in Manhattan. In fact, with the acquisition of B. Dalton came not only many larger bookstores, but a few "mega" bookstores, as well. These mega stores carried over 100,000 titles.
Unlike nearly all of its regular big bookstores, which were in shopping malls, the mega bookstores were so big that they were built as separate, stand-alone businesses. Inside these brick-and-mortar shops, Riggio added couches, coffee bars, music CDs, and free copies of the New York Times Book Review. Barnes & Noble built scores and scores of these mega bookstores throughout the 1990s. In fact, Barnes & Noble built 95 mega stores in 1995 alone.
By 1995, the strip map was firmly entrenched and reinforced by millions of dollars of success: To sell more books, you need to have (build or buy) more and bigger brick-and-mortar bookstores. In fact, the map was so successful that even though the U.S. book market grew by less than 1% per year during the 1990s, Barnes & Noble's market share increased from 7% to over 15% during the same time period. This increased share came largely from small, independent bookstores. By July 1998, Barnes & Noble's stock price hit an all-time high of $48, which represented a 220% increase over its price just two years earlier. Barnes & Noble's strip map (Exhibit 2-8) looked brilliant.
)
EXHIBIT 2-8
Barnes & Noble's strip map of market success.
What happened? In July 1995, Jeff Bezos, CEO of Amazon.com, decided to follow a different map to selling books. Rather than restrict customers to only 100,000 titles, he would make over a million titles available to them. And rather than have bricks and mortar, customers could click in their orders. For three years, Barnes & Noble totally dismissed Amazon.com. However, when after three years' time, Amazon.com had 8.4 million registered customers and Barnes & Noble had just 1.7 million, shareholders of Barnes & Noble took notice. Many sold their Barnes & Noble stock, and the price tumbled by nearly 50%.
But you may be thinking, "Wait a minute. Look at what has happened to Amazon.com. Its stock price has crashed, and dot-coms are now dot-bombs." This is true. However, just as we were irrationally exuberant about the future of Amazon.com, we run the risk of being irrationally pessimistic about the future of online book sales. We should not confuse Amazon.com's big spending to add everything from CDs to garden tools and the resulting losses as evidence that online book sales will disappear along with Amazon.com's stock price. Online book sales continue to grow and cannibalize book sales from other brick-and-mortar sources. If e-books take off, and we then are able both to order and receive books via the Internet, many predict that online book sales will rival brick-and-mortar-based book sales.
But let's not get sidetracked. The main point is that the strip map of obtaining more sales through more and bigger stores was so entrenched in Barnes & Noble that it took a massive loss in market value before the grip of the mental map and its inherent restriction were changed. In fairness, once recognized in 1998, Lennie Riggio did create Barnesandnoble.com. Unfortunately, at that point, he was playing a serious game of catch-up. By that point, Amazon.com had a 75% percent market share of all online book purchases.
In summary, several key insights grow out of our strip map discussion. First, like all mental maps, strip maps get retained only if they work. A certain sequence of steps and narrowness of territory gets incorporated into a strip map only if it works. Second, as long as you don't venture outside the narrow map, a strip map will likely continue to work. Third, only after a new sequence is proven to work or after a different route to the desired destination is shown to be successful is the old sequence challenged. Unfortunately, by that point, a successful strip map (even if mistaken), like all mental maps, is extremely difficult to change and breaking through this brain barrier is as likely as hitting Mach 1 in a Cessna.