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I'm an almost 25-year veteran of the cable industry and I can tell you that Comcast and Time-Warner didn't grow huge via word-of-mouth. The benefits of cable s
by smoyer 13y ago
I'm an almost 25-year veteran of the cable industry and I can tell you that Comcast and Time-Warner didn't grow huge via word-of-mouth. The benefits of cable service grew community systems by word-of-mouth, then Comcast and Time-Warner grew by acquiring and consolidating systems.
For example, Time Warner Cable Oceania now provides cable service to the entire Hawai'ian island chain, but they had just bought out the last two systems (by island) in 2002 when I visited. Where I live, Comcast acquired Adelphia, who had acquired AT&T, who had acquired TCI, who had acquired Telemedia.
The Robber-Barons of the 1920s consolidated steel, railroads and banking. Edison and Westinghouse (with Tesla's AC) consolidated small utility companies AND supplied most of the equipment.
I think acquisitions played a huge part in the growth of airplane companies too (McDonnell-Douglas was originally two companies) ... there are very few car companies now compared to the early part of the 1900s and most recently we've watched banks become huge through acquisitions.
Unfortunately, I think the premise of the article is completely wrong, but I wasted my time reading until the end and wondered how so little content could consume so many words. You grow big by knowing a market could be huge and then having the confidence to buy when the price is right (even if the indicators aren't in your favor at the moment).
- pg 13y agoMost of the companies you mention are not counterexamples, because they were already big when they started acquiring and merging with other companies.
- larrys 13y agoAt Wharton I interviewed the founder of Jerrold electronics. Iirc (this was a long long time ago) his Philadelphia connection to Ralph Roberts (comcast) was how he built Jerrold (they made cable boxes). Comcast of course grew large by starting and getting it's first cable franchise in a small town in Mississippi. Nobody chooses their cable company the cable company chooses you. (I actually have an audio tape of that interview that I made.)
- smoyer 13y agoBig but I wouldn't say "huge" ... and they did tend to be bigger than the companies they were acquiring (Time-Warner was huge in other businesses before the acquisition spree really started). I mentioned "aggression" in your market as a requirement for becoming huge, but was it also something that led to them being big in the first place? I think there are people who act convincingly larger than they are, and the world grows to fit them. There are a whole host of business requirements that can sink the process of becoming big. Adelphia failed because the Rigas family aggressively expanded the company, took it public but continued to treat it as though it was still family owned (I shouldn't say more). So the business acumen to run an enterprise at different sizes is important - I've seen leaders fail to hire appropriately, then delegate kill promising companies too. I think we could make a long list of reasons for failure. larrys: I'd love to hear your audio ... Jerrold was purchased by General Instruments who was in turn purchased by Motorola. Motorola added Jerrold's set-top boxes, to GI's trunk amplifier and line extenders (and other head-end equipment), then Motorola added both to their cable modem business and that conglomerate was ultimately bought by Google. Cisco purchased Scientific Atlanta who was the main competitor.
- larrys 13y agoI will try to dig it up. Another person I interviewed was Ed Moldt who ended up years later being the head of the Wharton Entrepreneurial Center. At the time he was working on telemedicine a way that doctors could remotely diagnose patients by video.
- pbreit 13y agoTime Warner is Time magazine, Warner Bros, HBO and TBS. All having massive word of mouth spread.
- smoyer 13y agoI should have specified Time-Warner Cable (which is now a separate company - http://www.nasdaq.com/symbol/twc http://www.nasdaq.com/symbol/twc).