Every so often, violent storms of creative destruction occur within markets that appeared stable.
Like earthquakes and volcanoes, these massive events are the result of hidden pressures.
Tectonic plates shifting beneath the Earth gradually build up enough resistance and slip past each other, causing the earth to shake. Magma builds up beneath the Earth, breaking through weak spots in the Earth's crust, spewing forth a volcanic blast of ash and lava.
Bubbles within markets are pressure points with similar dynamics as those in volcanoes and earthquakes. Pressures build, and hidden bubbles burst, as any adult who is living through today's financial crises knows.
Take the hammock market, for instance.
The HammockSource, the former worlds largest hammock company, was the bellwether.
At the core of this company, a bubble of non-innovation, was hiding. They attended every major trade show, advertised in all the trade magazines, and occupied an enviable spot on the shelves of key Big Box retailers.
But their complacency, and the flurry of re-hashed products from year to year left a void. They had nothing proprietary other than their brands.
When they shifted most of their manufacturing to China, their largest accounts realized they could go factory direct without The HammockSource. POP!
Fifteen years ago, two sister companies (now The HammockSource), dominated the entire world market for hammocks. The Hatteras Hammock Company and Pawleys Island Hammock Company supplied hammocks to just about every familiar retailer in the world.
We bought one of their hammocks in 1996. We were utterly disappointed that we paid over $150 for a couple of wood sticks, a tangle of rope, and a fancy metal name plate. The "hammock" wasn't comfortable in the least (Shammock is a better classification).
We took aim and, during the last 12 years, developed a line of comfortable hammocks and innovative hammock stands that would knock this old company off it's undeserved perch.
When we zigged, they zagged.
We met them at trade shows where both Green Eggs & Hammocks and The Hammock Source were exhibiting their wares. When we unveiled our SUPERWEAVE™ line of ultra-comfortable Caribbean Hammocks, they soon released their Megaweave™ imitation to counter our punch (nearly an identical product by the way).
Whereas The Hammock Source offered mainly earth tones and low key colors in their line of rope and fabric hammocks, they suddenly realized that color was a good idea when we exhibited our line of brightly colored Mayan hammocks and hammock chairs. They countered at the next trade show with a line of brightly colored prints on Sunbrella fabric.
It was amazing to see this old established company following our lead and jumping out of their comfort zone to compete in ours.
But they could not follow us into the arena of innovation.
What they couldn't do, and what they haven't done for over 100 years, is innovate.
Essentially, all they did for the last few decades was change their floral patterns, and fiber configurations, and roll out a line of rugs and rockers. As for innovation and development of intellectual property within the hammock or hammock stand arena, they remained completely stagnant.
The HammockSource is now obsolete.
As I predicted back in the year 2000, they are now as relevant to the hammock business as The Yugo is to the car manufacturing business.
I saw the flaw in The Hammock Source from the beginning of my company in 1997. It's precisely why I decided to start a new manufacturing company, Global Hammocks Incorporated.
In 2001, The HammockSource still appeared to be leading the charge.
What I could not see was that their bubble had already burst.
Every design they offered lacked thoughtful engineering, and aesthetic appeal, not to mention comfort. It appeared to me that engineers had never been part of their design process.
Furthermore, there was nothing proprietary about their core product line. No patents, no intellectual property. Nothing that can't be copied.
And these are the sub-standard, comfortless models that have been copied and re-copied, flooding world markets until today. Today, thousands of Chinese factories commissioned by Mass Retailers who don't see anything but the bottom line (profit), are selling the same thoughtless junk.
The HammockSource outlasted their relevance. Failure to innovate cost them the market they once dominated.
What I couldn't predict, was the scale of the eruption and the emergence of a new force, even more difficult to contain. The market was blown wide open and the retailers once served by The HammockSource, backed the Chinese industrial complex, are the new nemeses of comfort, on a scale a thousand times larger.