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Success and Failure

Entry 1401, on 2012-06-18 at 20:49:17 (Rating 3, Comments)

Why do some companies succeed and others fail? In reality there's no simple answer, of course, but that isn't going to stop me from offering an opinion which might explain many cases of failure. Because I work in computing I am going to concentrate on that but I suspect this could apply in other areas as well.

So what's the big secret? It's caring about your product or service rather than simple profit. Yeah, it doesn't seem like such a big revelation does it, but clearly many major companies don't get it.

Compare two technology giants: Apple and Hewlett Packard. In the early days of Silicon Valley HP was truly innovative and put a lot of effort into engineering to create excellent new products. But what have they done more recently? Just push out cheap copies of what everyone else is already doing.

Looking at their products it's clear that they just don't care any more. Just recently they laid off 37,000 workers. Is their concentration on producing "me too" products and downsizing the business just a coincidence? I don't think so.

Everyone knows that Apple is an extremely profitable company but unlike so many others their prime motivation isn't making money, it's making the best products in the world. They do price these products at the high end of the market and they do make big profits for them but those are side effects of creating great technology rather than the primary driving force.

Apple could easily have gone the same way as HP. After Steve Jobs left (or was removed) John Sculley did a fair job of keeping the company innovative but after that they just produced fairly generic boxes and could easily have failed. It was only the return of Jobs and the change back to a perfectionist, product focussed culture that saved them.

There are plenty of other examples of the same phenomenon. The social network MySpace was successful until it was assimilated into a huge corporation. Then it didn't care any more and died horribly. Google have produced some great services: search and maps being the most obvious, but when they decided to take the "me too" route with their email/chat system (which I have even forgotten the name of) and their social network, Google+, they failed. In fact Google+ still exists but it has gained no real traction against Facebook.

While we are on the subject of Facebook I really need to say something else about it. I'm not as impressed by Facebook as many people are. It was just another network and a copy of existing similar services. But Zuckerberg did care about it (rather than caring about the money it would make) and it succeeded where others failed.

It will be interesting to see if Facebook continues to thrive after the IPO (which itself was a miserable failure). But IPOs are all about greed and ignorance rather than innovation and sincerity so I would expect that Facebook will begin to fail soon. It might be saved by it's overwhelming popularity because it's the type of service which is used by more people because it is already in use by many people. That can be hard to compete against whatever your motivation.

I have one final example of a company concentrating on the wrong thing. I use Vodafone as my cell phone network and they have always been fairly average (in terms of coverage, speed, service, and value) so I have taken the opportunity on several occasions to participate in surveys about their service.

But it was just a waste of time. The last two surveys have asked me which of several irrelevant and confusing plans and incentives I would prefer to have. I don't care. Cell phone plans seem to be designed to confuse the customer and produce maximum profit for the company. I just filled in "none of the above" for all their silly options and in the comments field put something like "just give us better coverage and faster data instead of messing around with different ways to confuse and extract money from your customers".

I will be looking carefully at my options when I change my phone later this year. I know that he alternatives to Vodafone aren't exactly inspiring themselves and that might be what saves them for me. But it doesn't really say much about the competitive nature of big business does it. Why did I choose Vodafone: because they are fairly useless but so are all the rest. Yeah, that's a real recommendation!

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