Almost two years ago to the day, I wrote a poste entitled, The Death of Flip.
In this post I predicted that the imminent launch of the new iPhone (complete with video capture functionality) would make the single-purpose Flip obsolete (working from the premise that the best camera is the camera you have with you):
This is bad news for Flip.
Just as the still camera in the iPhone eliminated the need for people to carry a second camera for casual pictures, the video function will do the same.
We own several Flip cameras currently, and I can pretty much guarantee that once the new iPhone with the video function is released, our Flips will be relegated to the same junk box where our other still cameras and video cameras have gone to die (it’s perched in the basement upon — not kidding — a VHS player).
As an aside, Flip could have at least forestalled their demise by not having such an utter crap UI for their video management tool. Of course, Apple has that covered pretty well.
Well, two years (and a massive acquisition by Cisco) later, and it was reported today that Flip is indeed by killed off by Cisco:
[Cisco] said it will close down its Flip business and support FlipShare customers and partners with a transition plan. Cisco will take up to $300 million in one-time charges in its third and fourth quarters as part of the plan.
The message here — as I try to tattoo in my students’ minds at this point every semester — is that businesses have two choices: innovate or die.
Entrepreneurship is creative destruction, and the world is littered with the near-forgotten corpses of once-innovative firms (e.g. Flip) that, due to a lack of innovation/poor management, have been relegated to a footnote as other companies pass them by.
This is not limited to products; entire industries/institutions can be and are destroyed (I read recently that the firm that supplies most of the gumball machines to stores is suffering mightily).
Some areas I believe are perilously close to going the way of Flip if they don’t innovate soon:
The traditional music business
The traditional film business
The traditional book business
The Banking business
All of the above institutions have enjoyed a robust moat around them that kept competition away. However, tech, lack of innovation, complacency, etc. are, slowly, but surely, allowing competitive innovators to encroach. Once the gap is breeched, the change will be violent and sudden.
The tie that binds those in the above list is that nimbler and more customer-centric firms are creating value propositions — via innovative approaches — that will offer substitutes to customers who are all too eager for a better alternative.
Just think, it wasn’t even ten years ago when a typical Saturday might involve: a drive to the local Tower records to pick up a CD, prior to making a stop at the Borders to grab a hardback book, and, on the way home, a stop off at Blockbuster to rent a movie for the evening.
The music business is indeed a canary in a coal mine; what is your firm learning from its mistakes?