Our industry can benefit from the lessons taught in market disruption

Market disruption has pushed many household bands into extinction and created new multi-billion dollar corporate giants. Consider these example. As the internet became increasingly fast Netflix quickly crushed the brick and mortar business model of Blockbuster Video allowing consumers to avoid long lines, late fees, and limited selections. When Betamax, and VHS tapes first entered the market many in Hollywood openly lamented that this was the beginning of the end of box office movie sales. Then came online music. Napster disrupted the tightly regulated sale of music controlled by a handful of record labels allowing anyone with an internet connection to download and play nearly any song. The music industry balked, filed suit and then eventually embraced the digital revolution foisted upon them leading to the debut of Apple’s iTunes, Pandora, Spotify, and others.

Each of these market disruptions is instructive, providing us a keen insight into how industry’s resist change and fade into extinction or adapt and increase market share. While on a much smaller scale, the reverse mortgage industry is facing a similar conundrum- albeit much of it born from regulation rather than innovation.

There are typically two approaches industry’s have taken to increase their appeal to consumers: offering a plethora of products or simplified selections. Consider the…