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The Dead Horse Theory: A Cautionary Tale for Entrepreneurs

What you can learn from Kodak, Blockbuster, and Amazon Echo.

The Dead Horse Theory — Illustrated by Oscar Berg

What is the “Dead Horse Theory”?

The “Dead Horse Theory” states that:

“When you discover that you are riding a dead horse, the best strategy is to dismount.”

In the context of business, a dead horse refers to a project or venture that is no longer viable, no matter how much effort you put into it. This could be due to changes in the market, increased competition, or simply poor execution. Whatever the cause, the result is the same: you’re putting time and resources into something that is very unlikely to succeed.

Companies that Have Tried to Ride a Dead Horse

One company that fell prey to the Dead Horse Theory is Kodak. Kodak was once the dominant player in the film photography market, but as digital photography took over, the company failed to pivot and adapt to the changing landscape. Kodak continued to pour resources into its film business, even as it became clear that the market was moving away from film. By the time Kodak finally acknowledged the shift and tried to pivot, it was too late, and the company filed for bankruptcy in 2012.

How to Avoid a Dead Horse

These examples show that even the most successful companies can fall victim to the Dead Horse Theory — in fact, it’s a common problem businesses face.

In Summary

The Dead Horse Theory is a powerful reminder that it’s important to be proactive about recognizing when a project or venture is no longer viable. By staying aware of changes in the market, monitoring your metrics, cutting your losses when necessary, and being open to changing your vision, small business owners and executives can avoid falling into the same trap that many other companies have fallen into before them.

The Dead Horse Theory — Illustrated by Oscar Berg

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