Wednesday, July 13, 2011

RIM-Shot: Lessons From BlackBerry Hill

RIM, Research-In-Motion, was once THE smartphone company. Anyone who was important, or wanted to look like they were, had a BlackBerry phone. I personally never succumbed, but my brother-in-law, who truly is important, by the way, had one of the early black-and-white models, which he used extensively. Many of my partners dabbled with the various RIM offerings, as I bemoaned in this post.

But today, RIM is on the road to extinction, a victim of the usual ignorance, arrogance, and hubris I often cite on these pages. The lessons to be learned are simple enough...know who your customers are, and give them what they want and/or need. It really is that simple.

Jonathan Geller wrote what may prove to be RIM's obituary on, dateline today. In his "exclusive look" Geller tells ". . . a story filled with attitude, cockiness, heated arguments among the executive team and Co-CEOs, and paranoia." Sounds familiar.

Geller interviewed a number of former RIM execs for his piece, and the revelations are multitude:
Jim Balsillie and Mike Lazaridis are two irreplaceable leaders who were largely responsible for RIM’s success, our source continued. But as time progressed, Mike did not listen to the marketplace. This is obvious from the outside view, though the details surrounding why RIM is no longer a market leader — and why RIM will most likely not be able to regain its leadership position in the near future — are most interesting.

Let’s rewind a few years. Picture yourself sitting in an executive briefing at Research In Motion. You’d hear Mike Lazaridis unequivocally state time and time again that BlackBerry smartphones would never have MP3 players or cameras in them because it just does not make sense when the company’s primary customers were the government and enterprise. “BlackBerry smartphones will never have cameras because the No. 1 customer of ours is the U.S. government,” Mike Lazaridis would say in meetings. “There will never be a BlackBerry with an MP3 player or camera.”

The fact is, that RIM didn’t only miss the boat in terms of product features and device trends as we now know, but the underpinnings of the company’s consumer failure began all the way back in 2005 with bold statements like these, combined with a lack of research and development in numerous key areas. . .

The three-year roadmap for RIM products focused on refining the technology in phones had already been released, rather than looking at where to add major new componentry or trying to identify or even shape future trends.

“When you hear Mike talk about the latest and greatest, it’s been the same thing for ten years: security, battery performance, and network performance. RIM has positioned battery life and network performance for years. People are not concerned with iPhone battery life,” one source told me. Network performance, to Mike, trumps any innovation a device like the iPhone offers. “Mike is convinced people won’t buy an iPhone because battery life isn’t as good as a BlackBerry,” a different source said. Mike apparently is in disbelief that people can use over 15GB of data on their iPhone and Android devices, and he feels that people will buy smartphones based on network efficiency, even though carriers with tiered data plans in developed markets love customers who use monstrous amounts of data.
Yup. The surest way to alienate your customers is to tell them what they want, rather than listen. The next-surest mistake is to compound the first mistake by doubling down on a product that no one liked in the first place.

Of course, you need to identify just whom your customers really are:
While RIM has always viewed carriers as customers rather than end users, carriers have long been trying to find a different partner that doesn’t charge network fees. 
RIM saw the gravy-train as hooked to the carriers, and not to the folks like me that would actually have to use their devices and services. Bad move, at least in the end.

Speaking of mistakes, it is generally bad form to promise a feature and then renege or require some additional part or fee to make said feature function:
. . .Jim Balsillie told the carriers at the 11th hour that the PlayBook wouldn’t have native email and would require the Bridge app in order to receive emails and provide calendar functions. “RIM is notorious for dropping these bombshells at the 11th hour on the carriers, and the PlayBook not having native email was a shock to the carriers.” They were all expecting a BlackBerry with a bigger screen. RIM was hoping to blow through the 500,000 units and have carriers take orders for millions of additional PlayBooks, but that has not happened yet. Mike Lazaridis looks at it as, why aren’t people buying this tablet when it has the most powerful engine with respect to multitasking, and supports Flash? But consumers have spoken pretty loudly a number of times, and Mike unfortunately leads the product side and continues to miss the mark with the masses, a former RIM executive told me. “I don’t even see anyone in Waterloo walking around with a PlayBook that doesn’t work for RIM,” another former RIM employee said.
I think my point is pretty clear. What is happening to RIM is not unexpected, at least by those on the outside. Here was a company that had "lightning in a bottle"; they should have been the premier smart-phone maker on the planet. BUT THEY DIDN'T LISTEN TO THEIR CUSTOMERS. RIM's masters had no clue or care about what the great unwashed masses wanted in a smart-phone. They wanted to dictate what was important and what wasn't. They wanted to tell us...because they thought they knew better than their customers what was needed. Throw in the disconnect between the perceived customer and the actual customer, and you have the recipe for the slow-research-in-motion train-wreck we are now witnessing.

The lesson is complete when one substitutes the name of a PACS vendor and their product for RIM and BlackBerry, respectively.

Did someone say Waterloo?


Anonymous said...

Any coincidence that RIM owns the PACS building? Or that a number of ex-PACS employees went down the road for a RIM job?

Anonymous said...

Great post, Dalai. And unfortunately, so true.