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You should read The Innovators Dilemma. This is a fairly common pattern - a company optimises for an existing customer base, what they value the most, and ends

You should read The Innovators Dilemma. This is a fairly common pattern - a company optimises for an existing customer base, what they value the most, and ends up with happy customers and good revenues/profits. http://en.wikipedia.org/wiki/The_Innovator's_Dilemma http://en.wikipedia.org/wiki/The_Innovator's_Dilemma Some disruptors come in, and they are worse by the same things those existing customers value. They are often more expensive by the same measures. The existing company doesn't really do anything about it because the disruptors aren't of interest to the customers, nor is there sufficient profit to be made. But what those disruptors do different does end up being valued by some and eventually it becomes the mainstream market, and it is too late for the original company to catch up. The book uses hard drives as an example, and repeatedly the disruptors are smaller form factors with lower electrical consumption, with less storage space and higher $/mb costs. Blackberry was good at email, battery life and minimising mobile data traffic. The iPhone was none of those, and more expensive. But what it did better (especially web browsing) turned out to be more valuable. I highly recommend reading http://asymco.com http://asymco.com which follows the mobile industry and related spaces. It is strongly data driven with lots of graphs (ie a constrast to "opinion" sites). His research is that mobile companies suffering their first loss tend to die or get bought out in about two years http://www.asymco.com/2013/10/04/estimating-htcs-post-traumatic-life-expectancy/ http://www.asymco.com/2013/10/04/estimating-htcs-post-trauma...

hga 13y ago
Everyone should read The Innovators Dilemma (link to cheapest used Amazon merchant copies, the printing I read: http://www.amazon.com/gp/offer-listing/0066620694/ref=tmm_pap_used_olp_sr?ie=UTF8&condition=used&sr=&qid= http://www.amazon.com/gp/offer-listing/0066620694/ref=tmm_pa...) And as a matter of fact, his strongest example of disk drives, for which he had the best data, is a field I followed for most of the period he discusses, and he nails it as far as I can tell. But he also has other examples, e.g. hydraulic excavators defeating steam shovels---and at the denouncement you'll viscerally understand why--- or how Honda came over here trying to compete with e.g. Harley-Davidson and ended up taking a very different path. One thing to emphasize, and it's true for all these examples, is that the disruptors got their start serving new markets that the established companies couldn't, wouldn't or didn't even see a need to. But I'm not sure that's entirely to blame here: hasn't Blackberry suffered some terrible technical execution failures lately? Multiple well publicized crashes of their backend email systems? A tablet that couldn't do email without a nearby Blackberry cell phone, an amazing lapse who's cause is strongly rumored to be from being unable to write the necessary working software in time? See also some handset screwups elsewhere in this discussion: https://news.ycombinator.com/item?id=6669481 https://news.ycombinator.com/item?id=6669481
- rogerbinns 13y ago
  The things Blackberry thought mattered most about their product were battery life, "security", email (keyboards, data backend for that) and minimising data usage (makes the carriers happy). The iPhone is a terrible product along those lines. Heck it runs a full blown Unix, compositing graphics, and is positively profligate with data consumption. Asymco covers this in detail, but what happened on the carrier side was they found that iPhone users were prepared to pay more for large data plans (by Blackberry standards) and hence the carrier could subsidise the iPhone price because of that. (Many carriers moved over to the handset subsidy model for the iPhone.) RIM thought carriers were trying to make maximum usage of their network, when in fact they were trying to maximize revenues. Consumers valued full blown Internet access highly and then apps. That led to the iPhone taking off. Blackberry had a platform that was all about economy (use minimal memory, cpu, network etc). They did react hence the QNX acquisition. But Apple and Android both had a head start on them. RIM had to bootstrap a new platform, redevelop most apps, and try to catch up, all in a shorter amount of time than Apple and Android had, also while changing core values (minimalism/efficiency). It would be a rare organization indeed that could pull that off. Globe and Mail have a good long article with the insider details http://www.theglobeandmail.com/report-on-business/the-inside-story-of-why-blackberry-is-failing/article14563602/?page=all http://www.theglobeandmail.com/report-on-business/the-inside...
  - hga 13y ago
    Thanks for the link, although I can't justify spending more time reading it than getting to the introduction of the Storm, which per my last link, supports my point about technical execution. It's one thing to find it difficult to figure out how to fight a disruptive innovator or a paradigm shift---and the iPhone was mostly the latter, I think, only partly a disruptive innovation since it only did a few things worse than the Blackberry, and the lack of a keyboard was deliberate. It's quite another to make your first product to answer that challenge, that addresses the company's "most important strategic opportunity since the launch of its two-way e-mail pager" and have it fail to work (well). Probably damaging the brand while they were at it, certainly displeasing Verizon Wireless. Companies fail for many reasons, and often for multiple reasons. I'm just pointing out that RIM started to fail in technical delivery, in new products such as the Storm and that silly "can't do email by itself" tablet, and in its core existing business (e.g. email system outages ... and poorly handled ones at that, and probably more as well).

hga 13y ago

Everyone should read The Innovators Dilemma (link to cheapest used Amazon merchant copies, the printing I read: http://www.amazon.com/gp/offer-listing/0066620694/ref=tmm_pap_used_olp_sr?ie=UTF8&condition=used&sr=&qid= http://www.amazon.com/gp/offer-listing/0066620694/ref=tmm_pa...) And as a matter of fact, his strongest example of disk drives, for which he had the best data, is a field I followed for most of the period he discusses, and he nails it as far as I can tell. But he also has other examples, e.g. hydraulic excavators defeating steam shovels---and at the denouncement you'll viscerally understand why--- or how Honda came over here trying to compete with e.g. Harley-Davidson and ended up taking a very different path. One thing to emphasize, and it's true for all these examples, is that the disruptors got their start serving new markets that the established companies couldn't, wouldn't or didn't even see a need to. But I'm not sure that's entirely to blame here: hasn't Blackberry suffered some terrible technical execution failures lately? Multiple well publicized crashes of their backend email systems? A tablet that couldn't do email without a nearby Blackberry cell phone, an amazing lapse who's cause is strongly rumored to be from being unable to write the necessary working software in time? See also some handset screwups elsewhere in this discussion: https://news.ycombinator.com/item?id=6669481 https://news.ycombinator.com/item?id=6669481

rogerbinns 13y ago
The things Blackberry thought mattered most about their product were battery life, "security", email (keyboards, data backend for that) and minimising data usage (makes the carriers happy). The iPhone is a terrible product along those lines. Heck it runs a full blown Unix, compositing graphics, and is positively profligate with data consumption. Asymco covers this in detail, but what happened on the carrier side was they found that iPhone users were prepared to pay more for large data plans (by Blackberry standards) and hence the carrier could subsidise the iPhone price because of that. (Many carriers moved over to the handset subsidy model for the iPhone.) RIM thought carriers were trying to make maximum usage of their network, when in fact they were trying to maximize revenues. Consumers valued full blown Internet access highly and then apps. That led to the iPhone taking off. Blackberry had a platform that was all about economy (use minimal memory, cpu, network etc). They did react hence the QNX acquisition. But Apple and Android both had a head start on them. RIM had to bootstrap a new platform, redevelop most apps, and try to catch up, all in a shorter amount of time than Apple and Android had, also while changing core values (minimalism/efficiency). It would be a rare organization indeed that could pull that off. Globe and Mail have a good long article with the insider details http://www.theglobeandmail.com/report-on-business/the-inside-story-of-why-blackberry-is-failing/article14563602/?page=all http://www.theglobeandmail.com/report-on-business/the-inside...
- hga 13y ago
  Thanks for the link, although I can't justify spending more time reading it than getting to the introduction of the Storm, which per my last link, supports my point about technical execution. It's one thing to find it difficult to figure out how to fight a disruptive innovator or a paradigm shift---and the iPhone was mostly the latter, I think, only partly a disruptive innovation since it only did a few things worse than the Blackberry, and the lack of a keyboard was deliberate. It's quite another to make your first product to answer that challenge, that addresses the company's "most important strategic opportunity since the launch of its two-way e-mail pager" and have it fail to work (well). Probably damaging the brand while they were at it, certainly displeasing Verizon Wireless. Companies fail for many reasons, and often for multiple reasons. I'm just pointing out that RIM started to fail in technical delivery, in new products such as the Storm and that silly "can't do email by itself" tablet, and in its core existing business (e.g. email system outages ... and poorly handled ones at that, and probably more as well).