What you can learn from Nokia and RIMM – Innovate or Die
I first started writing about Nokia and RIMM back in 2009 and wrote a series of articles that predicted the demise of Nokia and RIMM. It has been over 2 years and I felt that we need to revisit this and see how these predictions worked.
Here is a chart that shows the 5 year drop in value for Nokia from a high of $150B in 2008 to hovering around $15B :
RIMM is a similar story whose market cap dropped from about $80B in 2008 to $7B now.
The biggest lessons to learn for startups from these companies are:
1. Great Product and User Experience is everything
2. Innovation today = design + technology + great execution + people
3. Never get comfortable with your position in the market. your competitor may be a new entrant you were least expecting to be able to disrupt the market you play in – typically other startups or in this case manufacturers of Computers (Apple) or the worlds leader in Search (Google)
Related Reading:
1. Looking into the Crystal Ball – Will Nokia be able to survive?
2. The musical chairs at Nokia
4. Nokia – The story of an awesomely innovative company getting out-innovated
The era of the Customer – Part 1
When I was growing up as a kid in India, there were only 3 car manufacturers (HM ambassador, Premier Padmini, Maruti 800) selling one model each. The build quality of those cars sucked and the cars were extremely unreliable. The after sales network and service of these manufacturers was so poor that there was a secondary market for service typically called the “repair shop” that co-existed and flourished. In a world where demand exceeds supply and choice (choice can also be termed as competition) is limited the suppliers win and consumers lose. Customers have no choice but to suck it up and pay the high prices and deal with the terrible customer service experience.
What the Indian Government can learn from Chile
Chile is a very small country in South America with a population of ~17M. Chile like India was a colony of the Spanish and went through a freedom movement and became independent in early 1800s and became a democracy in 1891 after a civil war. Fast forward 200 years and Chile is a very vibrant country which has overcome a lot of issues and is now trying to make a mark in the new world order. I specifically want to draw your attention to a program launched by the Chilean government to promote startup culture called the Startup Chile program. Entrepreneurship is the single largest contributor to the progress of many nations around the world. In the 6 years that I have spent in India I have not seen one organized initiative that promotes this culture. There are attempts by NASSCOM and some private companies to attempt to promote entrepreneurship but they all amount to nothing but “fancy dress” contests for startups and do nothing to provide an organized support system and hard cash to entrepreneurs who want to go and change the world.
Here is a direct quote from the Minister of Economy of Chile J. A. Fontaine
“Instead of changing the world through revolution, we can change the world through #innovation”
This one statement sums up the attitude of the Chilean Government to promote the Startup culture and set them on a course of development and economic progress.
The right Motivation to startup
“Disgusted that a video rental store raked him over the coals for returning a movie late, Reed Hastings created Netflix. Seventeen million subscribers later, some people probably wish a clerk would have just refunded the man his 40 bucks.” -
“Hello, I am Macintosh. Never trust a computer you cannot lift… I’m glad to be out of that bag” – talking Macintosh Computer., Apple
Larry Ellison was inspired by the paper written by Edgar F. Codd on relational database systems called “A Relational Model of Data for Large Shared Data Banks”. He founded Oracle in 1977, under the name Software Development Laboratories (SDL).
“to organize the world’s information and make it universally accessible and useful” – Google Founders
Bezos named the company “Amazon” after the world’s largest river. Since 2000, Amazon’s logotype is an arrow leading from A to Z, representing customer satisfaction (as it forms a smile); a goal was to have every product in the alphabet.
How Facebook ships code
Awesome read for Tech startups in India on the importance of Engineering culture. This may not work for everyone as the author correctly puts it but a lot to learn from nonetheless…
http://framethink.wordpress.com/2011/01/17/how-facebook-ships-code/
Please also read the corrections by a Facebook Employee here http://www.reddit.com/r/programming/comments/f3u0n/how_facebook_ships_code/c1d3b37
Why Indian Internet Startups need to get off their asses and learn to program
I have been resisting writing this post for a long time as I felt that it may be too cocky or arrogant, but we at Infinitely Beta have been getting so many emails off late from startup founders and funded startups asking us to build their products for them that I felt it was appropriate to write this post now. It really shocks me and my team when we get such emails. It clearly shows that the folks that are sending us these emails obviously feel that the core DNA we have worked so hard to build over that last 12 months can easily be bought for few $$ – Not! Second, it also shows that these folks have no tech capability whatsoever and feel that technology is trivial and can be outsourced. Instead of taking the time to go and learn programming and building a deep tech culture they are just being lazy and hoping that they can find a technology team / outsourcing firm to help them with their problems. It also makes me wonder why VCs fund tech companies that lack deep tech capability.
The Quest for cheap bandwidth
Infinitely Beta moved into its office in Pune and we were delayed by a month due to the last mile issues with ISPs in Pune. The state of broadband distribution in India continues to be a nightmare (thanks to all the Telcos, the builder cartel and local authorities). When you pick your office make sure that you have talked to a few ISPs and that your premises are connected by them to avoid unnecessary delays in last mile wiring by the ISPs.
Like all Internet startups we are extremely bandwidth hungry and were looking at various options for good bandwidth. We ruled out leased lines as they are exorbitantly priced in India thanks to the greedy telcos. The best quotes we got for leased lines were pretty much around Rs. 2 Lakhs for 1 mbps (one) and Rs. 4 lakhs per year for 2 mbps. At the same time we were seeing Ads from TATA that they were offering 4 mbps DSL conections at Rs. 9000 per month and Airtel was offering similar DSL connections. The only issue with DSL is that the SLA’s are not as good as leased lines and the bandwidth may be shared on the last mile which means that effective bandwidth may drop to a 4th of the bandwidth during peak hours. To solve this issue I started to wonder how it was possible to use technology to bond multiple cheap DSL connections and create one big fat pipe for the office. A little bit of tinkering with routing tables convinced me that this was easily possible and I started to search the Internet for solutions that can do this so that we did not have to mess with IP tables etc and manage a PC. BG and I looked at this problem closely and came up with many solutions:
Entrepreneurs: Stop Innovating, Start Minnovating
This past weekend I read a very interesting article titled “Entrepreneurs: Stop Innovating, Start Minnovating” published at Harvard’s Business Blog that I felt needs to be shared widely. When I setup Infinitely Beta this is exactly what we set out to do. We are working on a core idea which we will reveal shortly. I must confess that the core idea we are delivering is not novel in itself but the way we are delivering the idea with the use of technology and mini innovations will set it apart from the competition (we hope!). Another important company DNA we setup at Infinitely Beta is “1 innovation every weekend”. The team works on the core idea the whole week and then we work on a small bite sized project every weekend that is based on some trends we see in the market. One such weekend project is a site we developed over a weekend that allows a user to link their Google Calendar with their Twitter Account called http://www.imnotspacy.com . Once subscribed to the service, all your Google Gcal reminders are sent to Twitter as a DM 15 minutes before the event. We wanted to experiment with OAUTH api’s and this project just seemed to fit in perfectly and yes we did learn about all the quirks of Google’s poor OAUTH implementation. The story of this cool little project is as follows:
“On the 6th of November, very late in the evening as we were working on our main product, @abinashtripathy our founder saw a tweet from his mentor @satishd that said
“I hate it when I space out on breakfast meetings and have to call to apologize. I want calendar reminders on my twitter client
“
Abinash jumped up out of his seat and said “I know what we are going to work on this weekend” and quickly explained what the product should do. 2 days later we had an initial prototype of I’m not spacy.”
Keep on Minnovating!
Apple iPhone Profitability Surpasses Nokia
It seems that my hunch on Nokia losing in the Mobile Handsets business is now validated based on the article published in www.telecomtv.com titled ” Nokia “not prepared” for smartphone onslaught; could sell its handset business“.
Highlights from the Article:
1. Apple’s iPhone division’s operating profits for Q3 2009 is estimated at $1.6B (based on quarterly earnings release data)
2. Nokia’s handset division’s operating profits for Q3 2009 is $1.1B based on the quarterly earnings release
Quoted from the article:
” Nokia’s director of strategy, Anssi Vanjoki, admits that the Finnish company was ill-prepared for the sustained and undeniably successful attack on its commanding position by the likes of Apple, Google and RIM and “does not rule out” the sale of its handset business at some time in the future. Martyn Warwick reports.
Nokia – The story of an Awesomely Innovative Company getting Out-innovated
Motorola is a classic American company founded in 1928 with a history of working with Radio technology. It started manufacturing car radios and slowly started manufacturing walkie-talkies (2-way radios), cellular communications infrastructure and Wireless Phones. As a pioneer of radio technologies in the US, the largest customer of Motorola was the US government who procured radio communications equipment for the military. Even NASA used Motorola’s technology in all the human space travel and the first words spoken from the moon by Neil Armstrong was through a Motorola Radio. Motorola is also credited with many industry firsts including the launch of the first Commercial Cellular phone the DynaTAC, microprocessors that powered the early Apple, Atari and Commodore computers, the invention of the Six Sigma Process, creation of the first digital cellular system and phones in 1991 and enjoyed the title of the leading manufacturer of Cellular technology in the world until 1998. When I arrived in the US in 1994, the rich lawyers, salesmen and doctors had Motorola car phones. The form factor of the cellular phone was not compact enough to be carried around in a purse or your pocket. By 1995/96 Motorola had introduced a series of cellular phones which were not quite compact but were portable enough (Pictured here). They were very sought after in those days and the very wealthy people in the US owned them (very similar to the early days of the mobile phones in the Indian market when the phones and the service were expensive).
