BlackBerry/Buggy Whip Union Sign Exclusive Contract

September 24, 2013

The sale of BlackBerry took no one by surprise. Here’s what your small business can learn from the company’s failures.

The dollar store sale price for the remains of BlackBerry, acquired Monday by Fairfax Financial, was a slow motion car crash that took almost nobody by surprise.  BlackBerry isn’t unique in their hubris, mismanagement and the squandering of what once seemed like a impenetrable market position, but they are a useful reminder of what happens when the marketplace moves forward and you stand still. Much like the latter day Buggy Whip operators who cast doubt on why anybody would want to ride in a “horseless carriage”,  BlackBerry dismissed the “smart phone” as a plaything for frivolous people until it was too late.  The old saying in management is that if you’re a hammer, every problem looks like a nail.  For BlackBerry, this meant there wasn’t a consumer need that couldn’t be solved by a physical keyboard.  Now, the latest BlackBerry models apparently had some of the interactive capabilities other manufacturers had integrated years earlier, but I bet the last commercial horse carriages were some pretty sweet rides, too.  Once again, the company was a day late and a couple billion dollars short.

Take a step back and remember why  the BlackBerry caught on so quickly when it launched in the 90s.  BlackBerry ‘s business strategy was to solve a specific problem – the need to communicate, especially via email, when away from the office.  There was no other provider that offered the same useful solution to this problem at the time – and BlackBerry’s reputation for being on-time and secure was just what large corporations and governmental agencies needed to sign up for this new technology.  While email still plays an important role in modern business, the Internet, and the many communications channels that it delivers, quickly became dominant.  What once seemed like a magical machine that let you stay in touch without staying in the office through breakfast, lunch and dinner was now a clunky “email machine” that struggled to provide utility when you went online.  After all, who would ever need to access the Internet on their phone? The fundamental business mistake BlackBerry made was thinking that people wanted to buy a BlackBerry in the first place. People wanted a mobile device to communicate with their colleagues and friends, and their competitors started offering better options for doing that a long time ago.

Hunter Hoffmann is Head of U.S. Communications for Hiscox.