Analyzing BlackBerry’s Rise to Failure.
With the recent news of BlackBerry shutting down its text, data and voice functionality on its legacy devices, it begs the question of how could this happen to a brand that at one point controlled 50% of the smartphone market in the U.S. and 20% globally? What’s clear is that the company overlooked the importance of evolving and constantly iterating its design and platform. For instance, in 2010, BlackBerry severely underestimated the growing mobile phone consumer market of 5.2B subscribers and how the iPhone 4 would signal its demise.
I’ve always been fascinated by companies like Blockbuster, Motorola, or even Kodak, which were once industry leaders and innovators, and how they ignored industry shifts initiated by consumer preferences and competitors, and how, due to their failure to innovate or their inability to look outside of the box, this inevitably resulted in a slow death for their business. This 2016 write-up in The Verge said, “Success, as BlackBerry had a decade ago, breeds two interrelated negatives: conservatism and complacency.”
Before starting ScheinerInc. several years ago, my previous experience included being a part of three start-ups, two of which were in the tech space—one where I was part of the team building from the ground up an on-demand application platform for brands to cost effectively reduce marketing costs; the other where I led the brand and digital marketing for a SaaS insurance technology company.
I frequently recall the lessons for vertical SaaS success and how some of these rules are applicable to other platforms or innovation. Below are a few of these rules and how BlackBerry could’ve benefited from by instituting them as business success guardrails.
The Product Must Have Natural Upsell Triggers
“By focusing on the tens of millions of customers it already had, BlackBerry missed out on the billions that were to come.”
Due to its high level of email encryption and security features and its simplistic design, BlackBerry was highly coveted by business professionals and generated many government contracts. Instead of looking for ways to expand the brand with the global consumer market, it chose to stay dormant with this limited customer base. “By focusing on the tens of millions of customers it already had, BlackBerry missed out on the billions that were to come.” Unlike the iPhone or Android, there weren’t any new upsell triggers or excitement caused by creating market demand for the next-generation version and features of their phone. Despite having a lot of first-mover advantages, BlackBerry refused to embrace change through its phone design or its desire to capture the consumer market.
Tools Are Frictionless as Consumer Products
On January 9, 2007, “Steve Jobs announced that Apple had reinvented the smartphone, developing a product that combined a cellphone, mobile internet and its best-selling iPod music player—all in one device,” which gave its users a full-screen multitouch interface and software that was easily controlled by tapping, swiping, or pinching. This immediately magnified BlackBerry’s design and functionality shortcomings as a consumer-minded brand.
Authentic Evangelism Drives Adoption and Sales
“By 2016, “out of more than 432 million smartphones sold worldwide, only 207,900 were BlackBerry devices, which officially made RIM’s smartphone market share 0%.”
BlackBerry’s strong selling feature that helped with driving early adoption was BBM. “BBM was the first instant messenger exclusively for mobile devices and became hugely popular and a driver of device sales in the late 2000s.” However, BBM was only available on BlackBerry devices. In 2013, in order to break free of its Walled Garden, BlackBerry introduced BBM as a standalone app for iOS and Android; however, this was too little and way too late. By 2016, “out of more than 432 million smartphones sold worldwide, only 207,900 were BlackBerry devices, which officially made RIM’s smartphone market share 0%.”
Authentic Evangelism Drives Adoption and Sales
“No matter how good you may already be, there’s always the potential to do better, and if you’re not willing to change and do the scary new thing, someone else will. Adapt or die.”
While BlackBerry’s keyboard and trackball at the time were symbolic of its design, this was offset by its tiny screen and by the fact that it offered no apps to enhance the user experience, not to mention that it lacked a built-in camera. The iPhone 4 had a full-screen display and a front and back camera. Both in its design and functionality, the iPhone was able to deliver an impenetrable value proposition and had a clear competitive advantage for spurring growth.
Whether you’re creating a new platform, a new website user experience, or simply trying to improve processes within your own organization, some of these rules can help in evaluating your solution and the value that it will generate.
When positing why BlackBerry’s success led to its failure, the Verge story ended with this quote: “No matter how good you may already be, there’s always the potential to do better, and if you’re not willing to change and do the scary new thing, someone else will. Adapt or die.”