In 2007, Research-In-Motion had finally come to accept that its poor app ecosystem was destroying its handset business & with that limiting the adoption of their messaging service, Blackberry Messenger.
Most people falsely assume that the demise of the blackberry was the Qwerty keyboard.
This is an analysis fallacy.
Customers rarely abandon a dominant technology over a feature. They shift their buying behaviour over a missing user or business benefit.
Benefits > Features
In 1997, Finnish giant Nokia launched what is considered the worlds first mobile app – the now infamous Snake game.
For my generation this was the mobile portability of the Tamagotchi. The idea of fusing a phone & a game: collapsing the friction of gaming across devices.
This little innovation was only possible 130 years after the founding of Nokia due to a simple game plan: compress telephony and internet technologies.
And to this end, Nokia led the charge.
And their device of choice: the Nokia 6100.
The world’s first true: SMARTPHONE.
By 1998 – and partly due to the launch for the Nokia 6100 – the company had surpassed Motorola as the world’s largest cellular phone manufacturer.
Nokia then purchased Ipsilon Networks & used their internet routing technology to launch apps such as the calendar, email, fax and of course – that massive iconic Nokia display.
By today’s standards – simply par. By the 1990s, that display was HUGE.
You would remember my choir boy crush self @KELLYROWLAND sending a message to Nelly using an excel spreadsheet to type her message.
Oh, how the world has changed.
During this era, device to device & user-to-user communications was one to one.
User A send message to User B.
The “huddle effect” hadn’t yet embedded itself in mobile telephony. This idea of huddling into a conversation where many have the same conversation at same time.
The Invention Of The BlackBerry Pin
The BlackBerry Pin, which was the technical tagging system & technical backbone of BBM, was the main innovation.
Each unique device & user has a unique pin. This means each user exists as an autonomous entity, they can own their Pin (think of it as a digital ID).
Quite simply: I can change the device, upgrade the operating system, change telco service providers or even switch numbers but retain my BBM identity.
This single shift in user design theory changed the game.
So, why then did BBM lose the war to WhatsApp Messenger?
The answer to this is not as simple as you’d think.
Did the Blackberry management team miss an opportunity?
Did WhatsApp have the late-comer advantage?
Was there some bad luck?
But perhaps the silver bullet, the proverbial arrow in the Achilles of BlackBerry, was the poor app ecosystem.
This is the rise of WhatsApp pre-the Facebook acquisition.
The Introduction Of The SSO
Enter Mark Zuckerberg and an unrivaled user access platform – the SSO.
A single-sign on for the user of technology.
When you have a universe of over 2 billion users, every new app has the potential to leverage those users.
Since the Facebook acquisition, WhatsApp has grown by 365%.
Imagine building a technology that goes from 0 to 2Bn (over 30% of the earth’s population) in less than a decade.
Hungry VCs anyone?
Side note: The carried interest potential as a PE investor is mouthwatering.
So, look at the ratio of growth since the FB acquisition of WhatsApp.
Side-note: Facebook acquired WhatsApp in 2014.
Phew. Let’s take a break.
We’ve covered Nokia, the snake game, blackberry and BBM and now Facebook and WhatsApp.
The truism from this thread is this:
Ecosystems trump product features or technical capability. When building a hyper scale platform, technology or business, you have to pivot on the ecosystem. More is better.
Being the number one standalone player is very dangerous.
Being number 1 means simply this: your playbook is the most studied template by every challenger. When you’re at the peak, you’re most vulnerable.
It’s how Kim Coates took out Paul Sorvino on Bad Blood.
So the lesson is this: you can only attack what you can locate.
So, the lesson from Research-In-Motion, Nokia & almost every other incumbent is this:
When you’re number 1 at something, descend that mountain of dominance … and scale a new one.
- Constantly push toward new boundaries.
- Don’t celebrate being number one.
- Celebrate chasing number ones in new markets or new opportunity sets.
Hope you enjoyed the thread.