One of the recurring themes in the month-long punditry over the partial government shutdown is how Donald Trump’s obsession with building a wall on the Southern border is unlikely to expand his electoral base. This is especially disconcerting to establishment Republicans as it flies in the face of what became known as the 2013 GOP Autopsy Report which acknowledged the need, after presidential losses in 2008 and 2012, to reach out beyond the party’s dwindling base of older white males.
Former RNC chair Michael Steele, on several occasions, has suggested Trump did just the opposite, alienating minorities, women and young voters. In an interview last January with Melissa Quinn of the Washington Examiner, Steele went so far as to call Trump a racist and misogynist. Citing specific comments and actions, Steele concluded, “I think at this point the evidence in incontrovertible. It’s right there.”
For two years, pundits speculated whether they might again be misreading Trump’s appeal to American voters and whether polls did not reflect support for the Trump agenda. Speculate no more. The 2018 mid-terms provided empirical evidence Trump has not expanded his base of support. In fact, a 2.5 percent loss in the 2016 popular vote grew into a 7.9 percent margin in the aggregate vote for Congress in 2018. Why would any rational individual think this is a path to victory in 2020? Believe it or not, there is a justification when you look at the situation from a business perspective versus a political one? Not that I would ever imply Trump is a successful businessman. I’ll get to that later.
In the documentary STARTUP.COM, aspiring entrepreneurs Kaleil Isaza Tuzman and Tom Herman schedule a meeting with Robert Higgins at Boston-based Highland Capital, seeking an investment to expand their fledgling business providing state and local governments with a digital platform to offer on-line services (e.g. license renewals, parking tickets). Assessing the company’s chances of success, Higgins shares a rule of thumb he says applies to almost every industry. There are two to four major players who achieve success with a plurality (not a majority) of the market. Then a few mom and pop niche providers. Followed by a lot of failures.
Think about it. In domestic air transportation we have United, American, Delta and Southwest. The mobile phone industry is dominated by AT&T, Verizon, T-Mobile and Sprint. And consider an industry where Trump tried to make his mark: gaming. The domestic giants are Las Vegas Sands, MGM Resorts, Wynn Resorts and Caesar’s Entertainment, all very successful yet none has more than 12.8 percent of the market.
When you approach the world from this perspective, who would not be ecstatic about a 35-40 percent market share? Just think if Trump Casinos had 35 percent of the gaming industry. It would have eclipsed the combined total for the next three competitors. Keep in mind, Trump, Roger Ailes and Steve Bannon contemplated building a media empire assuming a GOP defeat in 2018. Do not for a moment think that plan is off the table (minus Ailes, of course).
Trump believes diluting the message which accounts for his current 35-40 percent support has little likelihood of expanding his adherents and and is more prone to alienate some of his current followers. And he is probably right. In the world of commerce, think about disasters such as Coke II or the Kodak disc camera, efforts to gain market share which backfired dramatically. Or when Cadillac entered the compact market in 1982 with a rebranded version of the Chevy Cavalier called the Cimarron. In the political sphere, consider how Ann Coulter and Rush Limbaugh are quick to jump ship at the least hint of protecting the “dreamers,” even temporarily.
So give Trump credit where credit is due. He seems to understand commercial markets. Unfortunately, that lesson pales in comparison to the one that actually determines success or failure. It is not about the concept or the market. That is only the opportunity. Success depends on implementation and execution. Failing to learn that lesson explains why Trump’s model of entrepreneurship will never work for long in the private or public sector.
For what it’s worth.
Dr. ESP