Blackberry seems to be going the way of Kodak, other epic business fails

Blackberry is abandoning efforts to sell itself, and the CEO is stepping down. As noted in the embedded video with that piece, Blackberry had half the U.S. smartphone market just five years ago; now it has roughly one percent. You can call this ‘escalation commitment,’ or call it The Innovator’s Dilemma.  Basically, you’re spending too much time worrying about your consumers in the present, and not enough time thinking about what they might want in the future. Although you can argue Apple has done this less under Tim Cook (perhaps an easy scapegoat), Apple under Steve Jobs was ostensibly the reverse of the current Blackberry situation: it was always looking to what could be the ‘next thing’ for its consumers.

Here’s all you need to know about stock price, and here’s the inevitable “You can continue to count on us” letter. As this post notes, Blackberry was once utterly associated with the 24-7 business culture and its demands; that led us to this. The Blackberry’s ultimate demise wasn’t even really slow — it happened fairly drastically over about six years, including a “public strategy review” about a year or so ago. The base story here is that Blackberry wasn’t ready for the iPhone explosion; their CEO at the time of initial release said something about the iPhone “not representing a sea change.” Other tech leaders had similar reactions.

We know what happened there.

Blackberry 10 was supposed to be a saving grace, and that didn’t work out. Consumers were/are worried. For those that believe the decline of the Blackberry is just begging to be a HBS case study, well, it kinda was. (Also see here and here.) If you’re wondering what to do now if you’re on the Blackberry network, start by reading this, but remember: don’t panic. The Blackberry is, in fact, still used by a good portion of government and most of the executive branch of the United States. No matter how you cut the deck, it’s going to be an interesting week. As it aims to raise $1 billion, Blackberry is going for a “business model transformation.” If that doesn’t work, this could become the reality.

There are essentially four options that BBerry has. People have been talking about this Amazon Phone (potentially free, or for $99, or something along those lines) for over a year; what if Amazon just up and bought Blackberry? After all, the company does need new innovations. I’ve always thought the notion of innovation in business is interesting: although market research is a huge chunk of (at least) the American market, sometimes what becomes popular seems completely random. Aside from having a “visionary leader,” how can a company determine what people want from phones/e-mail communication devices? I do think one important aspect is relatively stable leadership, at least at the top: when it’s ‘musical chairs’ on strategy, or there aren’t core people who have been through several iterations of the company’s pros and cons, that can hurt. Some have also argued that for less-stellar companies in terms of innovation, the 1998 extension to copyright terms (basically increasing it to 120 years) has hindered the development of certain products.

I personally only had a Blackberry for about a 12-month stretch around 2009. I never liked it that much, but that could be because I have generally fat fingers, and it’s more conducive to those with littler fingers; I also think it helped create a culture where even people at corporate low-middle slots felt they were really important because they could jump in on discussions at 11pm local time, before their boss (who potentially had kids or something) had the opportunity to do so. I always got that sense — Blackberries (just as iPhones do) tend to clutter a conversation because of how people read and respond to the threads. The blinking red light is too easy of a thing; you see it and you want to jump in the ring, so to speak. All the communications technology revolutions of the past 15-20 years have done this to an extent — that is, increased the clutter of the communications process, while also making it insanely easy. I’d like to see Blackberry stick around, just because I know the brand loyalty it has engendered in some, but it could be on the way to being another Kodak, yes: great for a time, and ultimately a story of failure for the next generation of b-schoolers. It’s a shame too, since their latest ad featured Tame Impala’s “Elephant.” Pretty hip. Innovate on the phone next time!

Ted Bauer