Every industry has its giants. Sometimes those giants are rooted in tradition, sometimes they imitate their competitors, and sometimes they’re innovative. And, every once in a while, sometimes they change everything.
That’s what these three big brands did with their influence. They didn’t just try something new — they changed the way their industry functioned. Whether they were pioneers, accidental geniuses, or exceptions to hard-and-fast rules, these three companies changed their industries forever.
#3. RCA: A new kind of broadcast
How RCA changed broadcast
Arguably, Philo T. Farnsworth invented the television. He first showed it off in 1926, but ran into a lot of legal troubles since his design infringed on patents held by another American scientist, Vladimir Zworykin.
Zworykin worked for RCA, which owned all of Zworykin’s patents related to television. Fortunately for them, they won their legal battles with Farnsworth. Unfortunately, that didn’t entitle them to his inventions.
So it wasn’t until 1939 — more than a decade after RCA first contacted him — that Farnsworth finally accepted a deal for $1 million ($16.8 million today) to let RCA manufacture and sell televisions with his inventions. And that’s exactly what they did. RCA started small with 5” x 12” picture tubes, and they gradually merged their popular radio network, the National Broadcasting Company, to broadcast television.
Over the coming decades, television (and broadcasting stations) exploded in popularity. Departures from radio broadcast formatting made shows like The Tonight Show and The Mickey Mouse Club huge hits, not to mention the introduction of big-money game shows in the 1950s. Unfortunately, RCA’s days were numbered, and they didn’t last much longer in the 20th Century when they sold to General Electric.
Still, the popularization of television — plus the reformatting of NBC — played an undeniable role in the broadcast industry. And, really, life in general. The lesson: Persistence and innovation can change the world.
#2. G.D. Searle: A new kind of pill
That’s because a pharmaceutical company named G.D. Searle accidentally developed one of the most common “pills” in the world: Birth control.
How G.D. Searle changed the concept of pills
No company actually wanted to create oral contraceptives in the 1950s. In fact, the Catholic Church and 30 states had strict rules against it.
Plus, pills were something that sick people took to get better, and research showed that oral contraceptives would have to be taken every day. Would there actually be a market for that? So instead of contraceptives, Searle focused on developing steroids, like cortisone, that made them a lot of money in the past.
Under instructions to develop those steroids, chemist Frank Colton created a synthetic progesterone compound. But after research and testing, Colton discovered the compound had a few interesting side effects. It was a contraceptive — that much was clear.
But it also treated a lot of gynecological disorders that were previously difficult or painful to treat. All at once, Searle had its next steroid, plus a marketable oral contraceptive. The final drug — Enovid — passed federal government regulations in 1957 as the first daily pill, birth control pill, and synthetic progesterone.
And to Searle’s delight, the company had a monopoly on the drug for years, even in the 1960s when other pharma giants started producing their own. Today, once-a-day pills are common throughout the country. Whether they’re herbal remedies, vitamins, sleep aids, or oral contraceptives, they’re some of the most profitable drugs in the world.
The lesson: Embrace your accidents.
#1. Walmart: A new kind of distributor
Depending on your point of view, Walmart is either the greatest or worst thing to happen to America. Walmart is the biggest company in the world, and it’s by far the most profitable retailer. In fact, the stores generate so much cash that the Walton family has as much money as the bottom 42% of Americans combined.
But the family wasn’t always that wealthy — obviously, they had to start somewhere. But even with explosive growth and incredible revenue, how did they make so much profit from selling products with razor-thin margins? The answer is in the supplier-distributor relationship.
How Walmart changed the supplier-distributor paradigm
In retail, most business relationships fit into a category called “supplier-distributor.” The supplier is the company that makes the goods, and the distributor is the company that sells them. And, in most industries, suppliers are the ones with the power. That makes sense — after all, without stuff to sell on their shelves, distributors would go broke in a heartbeat.
Fitting this template, Walmart is a distributor. But unlike other distributors, Walmart has all the power in its relationships with suppliers. That’s because, as the world’s largest company and retailer, it has a massive distribution network that reaches millions of people and earns billions of dollars.
In other words, if you want to grow, you need Walmart. As the chain expanded, its purchasing department gained enough leverage to turn the tables on their suppliers. Now, Walmart sets the terms for everything — including price.
Walmart and their suppliers rarely speak to media about the supplier-distributor relationships, so it’s hard to know the specific details about their relationships. Still, the details of their relationships are irrelevant — the key takeaway is that retail is fundamentally different now. Walmart’s surge to power and their use of that power has made them the most successful retailer in history.
Granted, they’re not quite at the valuation level of oil companies or Apple, but they’re gaining. With such high profits and consistent forward momentum, it’s a wonder they don’t just buy their suppliers. The lesson: Nothing is ever set in stone.
Do you innovate?
These companies all left their mark on history by innovating. Does your company do the same?
Do you see an upcoming change that’ll redefine your industry — and maybe the world? Let me know in the comments!