My friend David Kaplan, @Adweek ‘s performance marketing editor, wrote a fascinating article on the chaotic, Reddit inspired short squeeze on GameStop. He was kind enough to include me in the conversation. I highly recommend reading the whole article (it requires free registration).
I will skip my thoughts about hedge funds and short sellers but share several of my conclusions about the impact on brands and the media landscape. This was a legitimate meteor strike for the stock market–an event that no saw coming. Perhaps they should have but they didn’t. A group of “amateurs” banded together on Reddit to move the stock market. I bet that Wall Street would have thought that was impossible. They bankrupted a hedge fund and sent big institutions scrambling.
This episode dramatically proved the power of the Reddit audience. It showed the vulnerability of RobinHood. And it shown the spotlight on GameStop and the affection that its fans have for it.
Perhaps the most important lesson that brands should take away is that they need to be constantly updating their sense of their own operating environment. They need to accept and plan for a much wider range of possibilities than they normally do. I have spent a lot of time thinking about how so many strategic plans go so terribly wrong. The fatal flaw typically lies in the starting assumptions about who the company’s competitors are and what their customers want. The plan is built on the assumption that the world next year will look much like this year and that change will be incremental and evolutionary, not revolutionary.
It’s a longer conversation for another day, but whenever an executive or consultant says “never”–as in our customers would NEVER do that–just substitute the words “definitely” or “always”. Then see if the strategic plan looks as good.