Back from the Grave: The Marvel Universe
Marvel's resurrection story can be made into a movie! No kidding.
When trapped inside a cave of darkness, all we need is a ray of light.
When chips are down and hope is bleak, all we need is someone to hold us tight.
That’s how the golden era of superhero comics dawned upon us. People could ward off the dark clouds of World War II with the hope that someone somewhere will save the day just like how their superheroes do.
Also, hidden between the pages, the comics often had some theories related to war, that made people all the more curious.
Marvel was one of these comic companies that seized this opportunity. It was merely creating spin-offs of DC superheroes, but, in the high tide of the comics craze, Marvel managed to do just fine.
(Marvel fans, please don’t drop off. We don’t mean to hurt your sentiments :P)
And, well. The high tides of this Comic craze came down as quickly as they went up.
But, what reduced comic sales was not the end of the war, but something that no one could predict. Comics started being related to increased cases of teen pregnancy and homosexuality! (I know: What the f***!)
Comics sales plummeted like anything. And as the dust settled, two superheroes emerged, DC and Marvel. Now, DC could not tolerate the fact that they did all the hard work and Marvel got to take a big portion of their cake. Marvel had clearly overplayed the second mover advantage for far too long. So what did DC do?
Comic companies appoint some middlemen who are in charge of distributing the comics. DC, slyly purchased Marvel’s distribution arm and limited the number of books that Marvel could distribute each month. Now, Marvel was in an ocean and DC was already ready to spill the blood. And it was in this period when Marvel was pushed against the wall, that the most iconic Marvel characters emerged.
Marvel’s comics were not for children anymore. They were for college-going students. The new class of superheroes was just ordinary people, entrusted with extraordinary responsibility.
With the reins in the hands of Stan Lee, Marvel created Fantastic Four, The Incredible Hulk, Thor, Ant-Man, Spider-Man, Iron Man, and many more all-time favourite superheroes.
Those instantly struck a chord with the audience and Marvel successfully swam out from the red ocean, into the fresh virgin blue ocean. It was now selling six million comic books per month against seven million sold by DC. Even if DC owned the distribution channel, they could do little to curb quality comics produced by a rival. (Yeah! Good content has always ruled).
But this successful run soon came to a halt. Sharks came predating in the blue ocean and Marvel was acquired and re-acquired by multiple business houses. Each tried to excessively milk the cow, without providing it any nourishment. The predators did not care a bit about the comics, all they cared about was profits.
If you don’t understand your product, how do you expect the world to? If you don’t feel the love and the angst of your customers and your employees, can the business even thrive?
Employees were humiliated, new and costly businesses were entered into, prices of comics were increased (in the hope that comics will become collectibles), distributors were cut out so that Marvel could pocket all the profits themselves.
Greed was no good. Quality suffered, costs soared, revenue, demand, and profits came down. One bad decision after another led to Marvel’s downfall. It had to fire 1/3rd of its workforce and file for bankruptcy!
We all know that Marvel came back from the dead- stronger than ever. But, how did the story unfold?
In the slew of businesses that Marvel had acquired, it had also purchased a 46% stake in toymaker, Toy Biz. Now, in a reversal of fate, Toy Biz had the most promising bid to take over Marvel. Not in terms of money, but in terms of the business plan.
They had a huge task in hand. Comic book sales were slipping 20% year on year. The company used to give its characters for movies on license. But now, even those deal opportunities had dried out because no one wanted to make deals with a shaky business.
The new owners could feel the cash flow crunch and so, they started scaling down operations. They focused on the main business. They signed deals to license out movies of Spider-Man, X-Men, Fantastic Four, Hulk at unfavorable terms. But, it gave them the much-needed cash to run the business. It also laid out the groundwork for Marvel and gave them the experience for when they would enter the movie business in the future.
The company was also manufacturing toys, end to end. But this was a problem. Because it required a lot of working capital (capital that is blocked in day-to-day operations). To reduce the cash-flow problems of the company, they decided to do away with the headache of manufacturing and sold the exclusive rights to their vendors. The working capital risk was successfully transferred and cash flows improved further.
Finally, they restored Marvel to the good-old culture that fostered creativity and respect. Having seen the day of struggle, they were also more mindful of the expenses that they made and lived a very humble corporate life.
This is how the groundwork was laid for Marvel’s next stop that would propel it to greatness. Marvel Studios. And, the rest, as they say, is history.
Our takeaways from this story?
A lot of distractions come in the way of businesses in the name of opportunities. The difference between failure and success sometimes is not the opportunities that you grab, but the opportunities that you pass.
It’s important for businesses to listen to their customers and focus on their needs and wants.
Cashflow. Is. King.
What are your takeaways?
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Wow extremely motivational and well framed, had a good feel after reading this looking forward to similar articles in future and thank you.