The BlackBerry Story – 6 Areas Where the Company Went Wrong
Updated: Feb 13
BlackBerry is a perfect example of how success can lead to failure. Find out how to avoid their mistakes and make sure that this doesn’t happen to you.
In the business world, ‘complacency’ is one of the scariest words. Getting too comfortable with your success can keep you from moving forward. In time, you’ll fall behind the competition, just waiting for competitors to swallow you up.
This is exactly what happened to BlackBerry. Once a mobile phone giant, the company drove itself into the ground because of complacency. And they’re not the only one. Remember Nokia? More and more people don’t.
This is what complacency does to a business. Before we get into everything that went wrong, here’s a brief overview of BlackBerry’s tragic story.
In what seems like ancient past, BlackBerry was one of the leaders of the mobile phone industry. Everyone wanted to have that iconic keyboard in their hands. You could see their phones in the hands of the most successful businesspeople and others rich enough to afford them.
Pretty much every phone that came out during that time tried to be a BlackBerry. But none of them could come even close. People were loyal to BlackBerry to the extent that the company controlled more than 50% of the market.
They had it all: relationships with carriers, reputation in the business world, and unprecedented brand presence. At one point, it seemed that the company couldn’t get any more successful or do any wrong.
And then came 2012, the year when it all started going downhill for BlackBerry. Competitors started to kick them out of the market, which they eventually managed to do.
Not knowing where to go, BlackBerry gave up altogether in 2016 and announced that they wouldn’t be making any more new phones. They shifted their focus to software and security solutions to salvage at least what’s left of the once powerful company.
In the last quarter of 2016, BlackBerry’s market share officially hit 0.0%.
So how did this happen? Those who don’t know anything about BlackBerry might think that it had to do with some catastrophic event. But it was actually ‘success’ that proved to be BlackBerry’s downfall.
They thought that nobody could surpass them, so they stopped trying at one point. Those who know how the market works understands why this is the worst mistake that you can make.
To help you avoid it, let’s dissect BlackBerry’s failure to see exactly what went wrong.
1. Underestimating the Competition
Back when BlackBerry was ruling the world of mobile phones, companies like Apple and Google were still in the shadows. They couldn’t establish their brands on the market, as everyone wanted BlackBerry. This included carriers, partners, and consumers.
This is when complacency started to take hold. BlackBerry’s former co-CEO Jim Balsillie was very open about it. In 2007, the first iPhone showed up. A year later, Balsillie said in an interview that this was no threat to BlackBerry.
‘Because once you decide to become a BlackBerry user, you kind of stay there for life, and let’s not be too penny-wise, pound-foolish when we do get very good absolute margin,’ he commented.
Those pennies ended up turning into billions in a decade’s time. Alongside Google and Samsung, Apple swallowed up BlackBerry and made people forget about it altogether.
It’s all because BlackBerry stopped innovating. While other players were coming up with one innovation after another, BlackBerry stayed the same. Eventually, it became obsolete.
2. Complacent Leadership
From Balsillie’s comment about the iPhone, it’s safe to say BlackBerry’s leadership was complacent. Some may even consider Balsillie’s comment arrogant. Mike Lazaridis, the second largest shareholder, didn’t seem to care any more than Balsillie.
Obviously, a company’s success lies on the shoulders of its leadership. And while Balsillie and Lazaridis brought BlackBerry to the stars, they also marked the beginning of the fall.
To compound matters, the company realised this too late. It wasn’t until 2012 that Thorsten Heins replaced the former co-CEOs. His first move was to completely redesign BlackBerry’s OS to make it more competitive. This is the point when everyone realised the need for big changes.
But it was too late. Competitors took the market by storm before BlackBerry had a chance to show off their new OS. By the time it did, people had stopped caring.
This happens to a lot of companies that held onto the wrong people, no matter their rank. BlackBerry was a company poisoned by complacency, and it all started at the leadership level.
3. Failing to Expand
There’s a lifelong debate about whether companies should focus on existing customers or attract new ones. While there are arguments in favour of both, long-term customers are the lifeblood of a business.
Unfortunately, BlackBerry took this too seriously. As important as it is to keep customers, there will come a time when focusing outwards makes a lot more sense. And the time for BlackBerry was when Apple and Google first started making waves in the market.
Instead of increasing their market share and creating more loyal consumers, they got caught up in the ones they already had. This wouldn’t be that big of an issue if they could keep them, not when they had such a sizable market share. But because they failed to introduce new things to their consumers, the company ended up losing them.
4. Not Giving Up on the Things that Didn’t Work
One of the worst things that complacency does is making you believe that you have it all figured out. It creates a mindset of don’t fix what’s not broken. But BlackBerry didn’t realise that it’s not about fixing but improving.
When the Android OS first showed up, it was a massive hit. Alongside iOS, it defined what a smartphone should look like. This is why most manufacturers embraced it, which would continue to this day.
BlackBerry, on the other hand, decided to double-down on its own OS, BlackBerry 10. While it represented BlackBerry’s willingness to change, it didn’t go in the right direction.
A similar thing happened to Nokia when they picked Windows over Android. This marked one of the company’s biggest failures, as the partnership never took off. That’s when they decided to drop Microsoft and turn to Android. While the company remains a shadow of its past success, this at least kept it afloat.
BlackBerry wasn’t so lucky. Both Android and iOS would go on to become the standard bearers, while BlackBerry 10 went up in smoke.
5. Failing to Keep Up with Market Trends
It wasn’t only software that BlackBerry failed to deliver. Their hardware stagnated for far too long as well.
When everybody was rushing to touchscreens, the company chose to ignore this trend. They had too much faith in its trademark keyboard and thought that people would never want to replace it.
For this reason, they only kept releasing more of the same. There might have been some minor cosmetic changes. But none came even close to competing with a whole new technology. Touchscreens became the new norm, and BlackBerry fell further and further behind.
By the time they decided to fix this mistake, other manufacturers had secured their positions on the market. BlackBerry went from being an innovator to a distant follower.
History has a way of repeating itself, especially in the tech industry. Remember Kodak? The company invented digital photography, but it failed to keep up with all the improvements that the market demanded. Their own invention resulted in them losing to their competitors.
6. Focusing on Outdated Technologies
Back in the early days of tablets, BlackBerry wanted a piece of the action with their PlayBook. Unfortunately, the only thing that they did was making the same mistakes that they made with their phones.
Much of their focus was on developing plug-ins for Adobe’s Flash Player. But they held onto it for far too long. Even after Adobe officially killed the mobile version, they kept developing the plug-ins.
As you can imagine, this only added to their inability to focus on new technologies, which eventually doomed the PlayBook as well.
As you can see, the root cause of all of BlackBerry’s problems was complacency. Just as others were hungry for success, they were too confident in their own. This goes to show that you should never relax for long, not when your competition won’t.
Make no mistake, as this can happen to any business in any industry. If Apple or Google were to grow and stay complacent, the same fate would await them.
If you were to take away one thing from this article, it’d be to never stop growing. Regardless of your level of success, there’s always room for improvement. Failing to address it starts the countdown to the moment when you get kicked out of the market. So take some time to appreciate what you have, but never settle for it.
If you’d like to book me for a speaking event, don’t hesitate to contact my office.
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