"Napoleon in Rags" (Like a Rolling Stone)

Kara Holm
Oct 15, 2016
5 min read

The genesis of today’s blog is a short article that appeared in The Sunday Telegraph on October 2, 2016 by Ben Marlow (brought to my attention by my personal media curator). The headline,“BlackBerry should be remembered as having changed the world,” caught my attention.

As an Apple user (slave, addict or brand aficionado depending on your perspective), I had missed the news that BlackBerry would stop manufacturing handsets. A recent Facebook post by my brother Alex, a noted contrarian and non-conformist, should have tipped me off that something was up at Research in Motion (RIM), the maker of BlackBerry. Alex shared that he was moving on to a new device (not Apple) after years of loyalty to the BlackBerry. His abandonment of BlackBerry was part of a downward spiral by which RIM fell from its peak of 85 million subscribers in 2013 to just 23 million in 2016.

In a company press release dated September 28, 2016, RIM Executive Chairman and CEO John Chen is quoted as saying:

BlackBerry is no longer just about the smartphone, but the smart in the phone. Working with trusted partners to extend the reach and availability of our secure mobility software remains a key focus for the Mobility Solutions….

It will be interesting to see if BlackBerry can successfully pivot its business, as Apple did when it launched the iPod, heralding a new era for the company. Blackberry will outsource production of hardware, in an effort to reduce expenses and focus on its core strengths. BlackBerry’s value proposition was tied to its behind-the-scenes security features and its strength in the B2B[1] space. Can RIM leverage both its foundational expertise in enterprise security and the higher margins software offers (compared with hardware) to mount a comeback? Time will tell.

The question I would like to explore today is how did RIM fall so far, when back in the early 2000s they had a virtual monopoly on smartphones? You may recall that smartphones were not a mass consumer product back in the early part of the century. They were the exclusive domain of business people. The devices were expensive, data was expensive – and if you didn’t get a lot of “urgent” email as well as phone calls – it was hard to rationalize the investment.

RIM underestimated the impact competitors, who were improving on Blackberry’s insight that consumers wanted the internet in their hand everywhere they went, could have on their business. Essentially, RIM did not understand the strong desire early adopter BlackBerry smartphone users would have for a more engaging experience on their handsets, once they experienced the alternative presented by Apple.

Email and web surfing are great but what other issues could the technology be used to solve for consumers? Apple needs to be celebrated for identifying the smartphone mass market product benefits and creating a demand for them. In my opinion, it took Apple’s imagination to understand that not only would individual consumers be willing to pay high prices for these devices, they would also be open to increased monthly costs for data utilization, in exchange for increased functionality. Apple also had to be patient while the market and supporting industries (telephone companies in particular) caught up to requirements of these new products.

While RIM’s corporate and government clients appreciated the security offered by BlackBerry, its clients’ employees (i.e. RIM’s end users) wanted something more. The novelty of only checking your email and surfing the web had been superseded by the colourful interface, touch screen, music, and other “apps.” In hindsight RIM showed a serious lapse of judgement by failing to see or address the disconnect between the technology and procurement teams at its corporate clients and the ultimate end-users. In the moment I am sure BlackBerry felt secure: they were the first to offer handheld emails and browsing to the public, their enterprise security platform was superior to its competition, they were an elite status product, and people seemed to love their “CrackBerries.”

The ability to browse the web and check emails from anywhere was something consumers wanted; but Apple’s fresh presentation and enhancement of the concept – copied and evolved by Samsung and others – had more “sex” appeal than BlackBerry’s rather flat delivery. Because RIM was not prepared for the expansion of smartphones to the mass market, it could not extend its reach beyond its corporate and government clients. Nor could it hold on to these clients because their employees wanted the Apple experience. By the time RIM understood the issue, it was too late. They were following, not leading. The BlackBerry fell out favour and iPhones became the fetish object for the tech savvy, and those who aspired to be.

I had been a BlackBerry user for years and made the transition to the iPhone sometime in 2010 (late to the party really). I liked the interface on the iPhone, missed the BlackBerry keyboard a little, and learned to love the integration on all my Apple devices.

So here we are…. Today practically all those over the age of 11 have a smart phone in their pocket or purse. The next time you pick up your phone to send a text, or order Uber, or use ApplePay when purchasing groceries, or turn up the heat before returning home, recognize the part BlackBerry played in the revolution that enabled you to engage in these activities. A (then) small Canadian company had an insight which created an entirely new market and took us there first, opening the door for other companies and innovations.

We are waiting for the next disruption. The new iPhone 7 is an evolution, not a revolution. Apple revenues fell in Q1 of 2016, the first time the company posted a decline since 2003. Samsung is facing a potentially existential crisis with the Note7 global recall. Anyone who has travelled by plane in Canada or the US recently will have heard the instructions to shut off their Note 7 completely for the duration of the flight, due to the risk of fire. Wearables like Google Glass and Apple Watch are just new interpretations of existing technology. This is the moment where an innovator can initiate another societal transformation. Something new will come along that – like BlackBerry and the iPod and the iPhone – will change everything again.

Your advice for today:

Don’t be complacent. Think about your competition and don’t rest on your laurels. As Ferris Bueller (the lead character in John Hughes’ 1986 classic film Ferris Bueller’s Day Off) says:

Life moves pretty fast. If you don’t stop and look around for a while, you could miss it.

It is great to be first, but being first is not enough for long. There is always someone behind you, waiting to usurp your place. (Think about the frequent regime change in Game of Thrones.) The usurpers don’t even need their own idea: they just have to “do you” better.

I have recently started a new business with Helen and Shawn Green – it is a game called Play the Field. We launched Play the Field during the Global Gaming Expo last month in Las Vegas. We are clear: being first matters, but being first is only our starting point, not our destination. I think BlackBerry’s mistake was they that were comfortable being first and gave the confident impression that they would remain first. They miscalculated and became the “Napoleon in rags” described in Bob Dylan’s song Like a Rolling Stone.

If you want to succeed and stay relevant, it is critical to stay hungry and watchful. Commit to innovation, based on your core strengths, so as to ensure your survival and sustainability.

As the 2016 Nobel Laureate for Literature says:

And the first one now

Will later be last

For the times they are a-changin'.