Lessons From The Fall Of BlackBerry

The implosion at BlackBerry (BBRY) has been stunning. Back in 2008, the company had a market value of over $80 billion. As of now, it’s only $4.3 billion. In fact, over the past three years, the company’s market share in North America plunged from about 70% to a meager 5% (according to IDC).

OK, then what are the lessons? Well, to answer this question, I reached out to some tech pros. Here’s what they had to say:

– Marcus Nelson, CEO & Founder, Advocate

“The news from BlackBerry offers the best evidence yet that denial ain’t just a river in Egypt. BlackBerry’s leadership has sailed that denial river since Apple introduced the iPhone in 2007, right up until CEO Thorsten Heins’s comment last year that there was ‘nothing wrong’ with the company. BlackBerry proves that Andrew Grove really did have it right when he said ‘only the paranoid survive.’ That’s probably the best lesson CEOs can take away from BlackBerry’s fall.”

– Craig Hanson, General Partner, Next World Capital

“Blackberry’s decline is worth studying. Here’s a company whose name was synonymous with ‘smartphone’ early on. It had a commanding share and owned the corporate market. Corporations led device buying. But that corporate hegemony was also its demise. It relied on selling to corporate IT buyers and locking them up with long-term contracts and server-based solutions. It fell behind on innovation, kept its app ecosystem closed and proprietary, and failed to recognize the rise of consumer-driven IT buying. Now it finds itself struggling to hang on to some respectable share in a corporate market it largely created.

“Any other big, traditional IT sectors relying on a similar strategy of expensive long-term contracts, and longstanding corporate IT relationships should beware. Think license model on-premise application software. Think expensive, proprietary storage systems. In each case, individuals and departments have figured out that they can get solutions that are easy, flexible and subscription-based. And they can buy, install and uninstall it themselves. Even at the margins of corporate IT buying, that kind of awakening ripples throughout an organization’s IT strategy.”

Mark Lee, CEO and founder, Splashtop

“Blackberry’s strength has been in enterprise and government with its recognized security and manageability features. However, instead of focusing on addressing and enhancing its offerings for businesses and becoming the enterprise mobility platform, Blackberry chased after consumers who were flooding to iOS and Android. Not helping was that fact that in the consumer space Blackberry’s features were inferior– from touch screen, size, browser and the weak app ecosystem. Steve Job’s buzz didn’t help either.

“It was not long after that iOS and Android devices developed more sophisticated security and manageability (through mobile device management (MDM) and mobile app management (MAM)) with companies such as Good Technology, MobileIron, and Airwatch, and quickly became enterprise ready. In reaction, Blackberry now wants to help companies manage iOS and Android, but it’s too late.

“It is a painful lesson, but many companies facing similar challenges can learn from Blackberry. The takeaway is in order to be a successful company, it must have the ability to change, be flexible and re-strategize to align with the market’s needs. Survival is spotting customer pain points and trends, and effectively shift gears to steer towards new opportunities that can still leverage the company’s core competencies and expertise.”

– Matt Allison, CEO & Co-Founder, TrendKite

“Lesson learned? Ensure there is real market demand – and real value – for your product before investing in mass production. If there is one thing that is certainly becoming clear, it is that ‘too big to fail’ doesn’t apply in the world of technology.”