Article published in the Philadelphia Business Journal on April 21, 2024.
What can be learned from products and services that were once industry standards, but were made obsolete? This is an update of columns I have previously written to help companies stay abreast of market disruptors.
Taxi services
Uber saw an opportunity to disrupt the traditional taxicab market with an on-demand car service that leveraged a device nearly all of us carry—a smartphone. Founded in 2009, Uber developed a mobile app for requesting and paying for car service through the convenience of a smartphone.
To state that Uber has been widely successful is an understatement. Lyft operates on a business model similar to Uber’s.
The price of taxi medallions crashed as a result of the huge impact that Uber and Lyft had on the taxi industry. The industry was much too fragmented to adopt the information technology implemented by Uber. It could not launch a competitive response.
Blackberry
Research in Motion Limited is the company that pioneered the Blackberry smartphone in 1999, and forever changed how people communicate with each other. They owned the market with Blackberry smartphones, which had email, text and phone capabilities, aimed at the business and federal government markets. Blackberry smartphones were so popular with business people that they were dubbed “crackberries.”
In 2007, Apple introduced the iPhone, followed by Google’s Android smartphone. Both the iPhone and the Android smartphones were aimed at the underdeveloped consumer market. These devices not only had an improved user interface and a much higher resolution screen and camera, but also had the ability to surf the Internet and for users to add apps, increasing the functionality of smartphones many fold. They also had an embedded keyboard in the phone’s larger screen, important when viewing photos, videos and surfing the web. When Blackberry finally introduced a keypad embedded in a larger screen, it was inferior to the iPhone’s embedded keypad.
I became a heavy Blackberry smartphone user in 2001, but converted to an iPhone in 2010. I switched to an iPhone when it became apparent that Blackberry’s touch screen keypad and camera were significantly inferior to that of the iPhone, and because there were many more apps developed for the iPhone.
Blackberry rested on their laurels and failed to see the competitive tsunami coming their way. The company didn’t effectively respond to the introduction of the iPhone and Android, thinking they would be viewed only as recreational devices and would not interest the business community. Blackberry watched as third party developers introduced apps that significantly expanded how iPhones and Androids could be used. Research in Motion was led by co-CEOs which certainly didn’t help the company’s decision making process.
What we all used before Microsoft Office Suite
Word Perfect, Lotus 1-2-3 and Harvard Graphics, developed by different companies, were respectively the word processing, spreadsheet and graphical presentation applications of choice in the 1990s. They were industry standards before Microsoft introduced Word, Excel and PowerPoint, which were integrated applications and became part of Microsoft Office Suite.
Within a short period of time, Word Perfect, Lotus 1-2-3 and Harvard Graphics were relegated to the dustbin of history, surpassed by these superior Microsoft products. Not being fully integrated, it would have been nearly impossible for these three applications to remain competitive with the Microsoft offerings over the long term.
Kodak
Kodak was once the world’s leader in film photography. Upon the introduction of digital photography for the consumer in the mid-1990s, Kodak faced a technology that would eventually obsolete its film business, which occurred with the ability of iPhones and Android phones to take photos and videos. Unless Kodak entered the smartphone business, it could not have competed.
How do you avoid being overtaken by a competitor introducing a new product or service? Constantly monitor changes in technology and in customer and market preferences, as well as the strategies of current and future competitors. Develop products and services that customers and clients don’t yet know they need, even if it means making obsolete your current product or service offering. Better you do it than a competitor. Stay ahead of the market.
You may face similar or different competitive situations in your business as outlined above. As I wrote in a September 2016 column, the way to protect your business is to follow the advice of Andy Grove, the former chairman and CEO of Intel: “Only the paranoid survive.” In business, there is no truer statement.
Stan Silverman is founder of Silverman Leadership and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read columnist on leadership. He can be reached at stan@silvermanleadership.com.
