“Success” does not mean “big”


Most of us have a bias toward increasing market share as a measure of success.

When it comes to charting your course through a murky future, that can be a poor signpost to follow.

That’s because markets go through phases.

Let’s say (to stay with the smartphone theme of the last few posts) you are trying to figure out which ship to jump on in the years ahead. We’ll imagine a solid performer capable of landing with any of the players, but at Motorola in, say, early 2009.

Looking around the Motorola of that day, it’s clear that the success of the RAZR is over, because the market has switched from flip phones to smart phones. How would that person assess the competitive landscape?

Well, if they were focused on share potential, they might have said “I need to get into a solid Android player”. It’s true that more phones that connect to the Internet run the Android operating system than any other.

But which player? Google choose to go with the hardware supplier-software supplier ecosystem model pioneered by Microsoft and Intel with the PC. As a result, our performer on the move would have had to anticipate which Android player would triumph (who, in other words, would be the Dell of the ecosystem?). She may have guessed Samsung (today’s leader) or not.

So raw numbers alone aren’t everything. You can get the right segment figured out (if you’re using size as a metric) but pick the wrong horse within it. Worse, from a security point of view (after all, each change might require uprooting the family, exposing you to real estate risk, spousal job risk, etc.), for in a global market like smartphone manufacturing the players are scattered.

Android may have more overall, but Apple has more in one lump. That’s because if you enter the iOS world there’s only one player to choose.

Of course, working for Apple may not be the easiest thing for our top performer to tolerate. It is a very different company from most of the others. Even if a job was found, Apple’s focused approach to product development means there aren’t as many opportunities to career-build — far fewer competing prototypes to play with.

Would our performer consider RIM, or Nokia?

Looking at their products from 2009, they’d see the same story as they see at Motorola: the market is moving past them. Still, both are not so far gone that they can’t come back, although both have (by 2009) already locked in a “time of troubles” that would have to be lived through.

Today, of course, both companies would be seen as places to flee from, yet both are quite capable of creating their own secure market space. Will it ever be the dominant one again? No.

But it doesn’t have to be. It only needs to be big enough to support the necessary product R&D.

Steve Jobs’ return to Apple in 1997 — the salvation of a company about to close its doors — started with focusing the company on a very simple product matrix. Every step since has kept that simplicity, while adding music players, phones and tablets to the computer mix.

Smaller players with unique value propositions (thus forming a market) need the same discipline. If they have that, success is well within their grasp; if they don’t, and they just flood the market with product after product, they will fail.

That’s the kind of thinking our top performer in 2009 might have done. Where would you choose to go, had this decision been yours?

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