Seth Godin recently published a blog post about sunk costs. Read the post here.

Yes, in business school, they teach you that making the right decisions often means ignoring sunk costs and measuring what the cost/benefits are in the future.

There is some truth to that, but boy is it hard to ignore sunk costs! I would even say it is against human behavior to do so! Too often we dwell on decisions we make in the past and its inertia affects our decisions in the future.

For some professions, like venture capitalists, you never ignore sunk costs, for others, like printers, it is hard to do so. Using Seth Godin’s Analogy, the $10,000 property (Digital Press) could bring in more business for you than the $1,000,000 (Offset Press) one. Which should you invest in?

For commercial printers, this dilemma and difficulty to fight human instinct and even ‘perceived business acumen’ has never been more urgent. Very quickly the industry is moving away from print, online news compete with printed newspapers, business reports get distributed in PDF, email competes with direct mail, the ‘green movement’ means less projects (and business) for printers.

For printers, these changes mean

• replacing offset press with digital
• providing more services that complement print
• working with outside vendors to provide a more complete solution
• changing your entire business model entirelyand transforming to a ‘Marketing Service Provider’

It definitely is a tough decision to ignore previous investments, but perhaps the key here is to not stay ‘stationary‘.

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• Don’t Let The Splash Wipe You Out
• Variable Data Publishing In The Future
• Printers Diversify Out Of Trouble