The Lesson of “Don’t forget all the parts move”
Today’s WSJ has a book excerpt about the demise of RIM/Blackberry. It is a fascinating story but also has a core lesson for product managers (including myself) which is the lesson of “don’t forget all the parts move”.
While hindsight is always 20/20, when you are faced with a potentially disruptive situation you have to take a step back and revisit nearly all of your assumptions, foundational or peripheral, because whether you see it or not, they are all going to face intense reinvention.
In disruptive theory we always talk about the core concept that disruptive products are better in some things but worse in many of the things (tasks, use cases, features) that are currently in use by the incumbent product. This is the basis of the disruption itself. In reading the excerpt it is clear that out of the gate this reality was how the RIM executives chose to view the iPhone as introduced as targeting a different market segment or different use cases:
If the iPhone gained traction, RIM’s senior executives believed, it would be with consumers who cared more about YouTube and other Internet escapes than efficiency and security. RIM’s core business customers valued BlackBerry’s secure and efficient communication systems. Offering mobile access to broader Internet content, says Mr. Conlee, “was not a space where we parked our business.”
There’s a natural business reaction to want to see a new entrant through the lens of a subset of your existing market. Once you can do that you get more comfortable doing battle in a small way rather than head-on. You feel your market size will trump a “niche” player.
The problem is that such perspective assumes a static view of the market. You’re assuming that all the other attributes of your implementation will remain advantaged and the new competitor will fail to translate that single advantage into a broader attack.
What happens, almost all the time, in technology is that disruptive entrants gain ecosystem momentum. There’s a finite bandwidth in the best people (engineers, partners, channel) to improve, integrate, promote products. Once the new product appears compelling in some way then there’s a race to gain a perceived first mover advantage. Or said another way, the leaders of the old world were already established and so a new platform yields a new chance to a leader. There’s a mad dash to execute whether you’re building leather cases, integrating line of business systems, or selling the product.
When I read that first quote, I thought how crazy to think that the rest of the internet, which includes email and messaging, would not race to try to establish new leadership in the space. The assumption that everyone is sitting still is flawed. Or just as likely, many of those incumbents will choose to assume their small part of the blackberry world will move ahead unscathed.
In a platform transition, everything is up for grabs. If you’re the platform you have to change everything and not just a few little things. First, no matter what you do the change is still going to happen. It means that you don’t have the option of doing nothing. Once a new platform gains momentum and you start losing your partners (of all kinds) or can no longer attract the top talent to the platform you have seen the warning sign and so has everyone else.
As Blackberry learned, you can’t take the path of trying to just change a few things and hope that taking what you perceive as the one missing piece and adding it to your platform will make the competitor go away. You can see how this worked in the example of the Storm device introduction, which aimed to add a bigger screen while maintaining the Blackberry keyboard feel. In other words, the perception was that it was the screen that was the thing that differentiated the device.
The browser was painfully slow, the clickable screen didn’t respond well in the corners and the device often froze and reset. Like most tech companies launching a glitchy product, RIM played for time. Verizon stoked sales with heavy subsidies, while RIM’s engineers raced to introduce software upgrades to eliminate Storm’s many bugs. “It was the best-selling initial product we ever had,” says Mr. Lazaridis, with 1 million devices sold in the first two months. “We couldn’t meet demand.”
Storm’s success was fleeting. By the time Mr. Balsillie was summoned to Verizon’s Basking Ridge, N.J., headquarters in the spring of 2009 to review the carrier’s sales data, RIM’s senior executives knew Storm was a wipeout. Virtually every one of the 1 million Storm phones shipped in 2008 needed replacing, Verizon’s chief marketing officer, John Stratton, told Mr. Balsillie. Many of the replacements were being returned as well. Storm was a complete failure, and Mr. Stratton wanted RIM to pay.
Of course we know now that there were many more elements of the iPhone that changed and it was no single feature or attribute. Every platform shift involves two steps:
- Introduction of a new platform that does some new things but does many existing things in a suboptimal way.
- Evolution of the new platform to achieve all those old scenarios but in new ways that often look like “hey we had that back then”. For example, consider the rise of secure messaging, mobile device management, and new implementations of email. All of these could be viewed as “Blackberry features” just done in a totally different way.
That’s why all the parts are moving, because everything you ever did will get revisited in a new context with a new implementation even if it (a) means the use case goes unanswered for a while and (b) the execution ends up being slightly different.
On a personal note, I was a Blackberry user from the earliest days (because our team made Outlook and the initial Blackberry was a client-side integration). When I saw the iPhone I was one of those people fixated on the keyboard. I was certain it would fail because I couldn’t peck out emails as fast as I could on Blackberry. In fact, I even remember talking about how Windows phones at the time had touchscreens so if that became popular we would have that as well. That summer, I waited on line to pick up my iPhone and was convinced of the future in just a few minutes.
You would have thought I would have been prepared. Previously, I had experienced a similar lesson. I had yet to be convinced of the utility of the internet on a phone, which the iPhone too solved. Of course my lens was clouded by the execution of the phones I used most (Blackberry and Windows) and the fact that the internet didn’t want to work on small screens and without Flash. I would visit Japan several times a year and see the DoCoMo i-mode phones and was a big skeptic—my friends from Japan still make fun of me for not seeing the future (by the way, at that time SMS had yet to even gain traction in the US and friends from Europe found that mysterious). What I failed to recognize was that in the i-mode implementation a full ecosystem solved the problem by moving all the parts around. Of course i-mode got disrupted when the whole of the internet moved to mobile. So perhaps it wasn’t just me. No matter what happens, someone always said it would. But saying it would happen and acting are very different things. Though I do recall many exchanges with Blackberry execs trying to convince them to have a great browser once I used the iPhone.
The lesson always comes back to underestimating the power of ecosystem momentum and the desire and ability of new players to do new things on a new platform.
A while back I made a list of all the moving parts of the Blackberry collapse. You can read it here, Disruption and woulda, coulda, shoulda.