Grouping is Hard

Nokia was a phone company, blackberry was a smartphone company. They were both destroyed by a computer company called Apple, making phones. Each company’s products performed a similar service for consumers but production at these companies wasn’t at all similar. These companies got good at systematizing the multitude of tradeoffs that go into scale production. In the vernacular of Steve Blank, they were optimized to execute a very narrow business model. If a different mix of tradeoffs comes along, they were dead. And they are dead.

Yet we are surprised. We are surprised because we have grouped these companies together (PHONES) when they aren’t actually very much alike. Grouping is hard when it really matters.

A better grouping might have been (?): Nokia made voice transmission devices over wireless networks. Blackberry made data transmission devices optimized for efficiency. They were beat by a company that was still happy to (again channeling Steve Blank) continue searching for new business models. Here’s a neat quote from Steve:

The large companies that survive rapid technology and/or platform shifts are often run by founders, (Jeff Bezos at Amazon, Steve Jobs at Apple, Larry Page at Google, Larry Ellison at Oracle) or faced with an existential crisis and forced to change (Satya Nadella at Microsoft) or somehow have miraculously retained an innovation culture through multiple generations of leadership like W.L. Gore.

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