Hubris Versus Humility: The $15 billion Difference

http://steveblank.com/2010/11/08/hubris-versus-humility-the-15-billion-difference/

by joshuacc • 16 years ago

92 28 16 years ago

joshrule• 16 years ago

As always, a major key, if not the major key, to success is to be useful to other people. If they don't understand what you have to offer, you'll have a very hard time being useful.

This article is, though, a neat illustration of that basic point.

protomyth• 16 years ago

Beyond useful is building something that lets your customers say "Hey, check this out".

badmash693• 16 years ago

I respectfully disagree with Steve's assertion about Tivo's issues. Blackberry had a huge advantage : it had truly pioneering technology and competitors did not emerge for quite a while. Tivo, although very cool, did not have huge technological head start that could sustain it. TV cards for computers had existed before Tivo; you had the media center PC, Save TV, Hauppage and , my favorite, MythTV. All of these were positioned as an alternative to VCRs. Had Tivo positioned itself as better VCR that sold at $800, it would have been laughed out of the market.They could have locked in deals with cable cos and Dishnetwork -- they chose to compete/sue and failed miserably . Therefore , it was not the positioning that mattered here; it was poor go-to-market strategy.

AndrewDucker3• 16 years ago

Yeah - Tivo's advantage was that their interface was light years ahead of the competition. But you can't explain that easily. People who actually used my Tivo for a few hours thought it was amazing, but it's hard to get that word out.

mdda3• 16 years ago

Yet somehow Apple managed to translate great UX into $

mdda3• 16 years ago

It's also remarkable how little success they've had, even though : (a) the verb "to Tivo" applies to any DVR; (b) lots of discussion about "my Tivo thinks I'm gay"; and (c) great product placement on Sex in the City.

Personally, when they decided to lock up the system (predating GPL3) I put the company in the AVOID column : not a good step for a tech company to alienate potential enthusiasts.

barclay• 16 years ago

While it's an interesting post (and in general I completely agree with the notion of hubris v. humility), I think the author chose a couple of bad examples. TiVo vs. Blackberry is a complete apples to oranges comparison. Forget that one is a "productivity tool", while the other is strictly for entertainment. Or that one is in a rapidly growing market (mobile devices) while the other is fighting in a dying market entrenched with DRM, copyrights and other such bullshit.

Another big piece he's missing: through 1999-2003 blackberry had enterprise sales teams selling into companies driving corporate adoption, vs. TiVo being the redheaded stepchild that none the satellite and cable providers wanted anything to do with. Not to mention they would later ape it's features, or in the case of tivo/directTV fuck the consumer over completely.

jkuria• 16 years ago

I'm also having some difficulty with this article. The explanation seems to make sense in hindsight but "create a new market" is also a viable business strategy. Isn't that what creating "blue oceans" is about? where there are no sharks that cut each other up and bloody the water? Where you can rake in insane profits for years if you manage to pull it off? I vaguely remember reading some HBS article about this. Examples were Cirque Du Soliel et al

badmash693• 16 years ago

The key consideration with Blue Ocean is that it is based upon an existing Read Ocean; you take some features/functions/value propositions from an existing market, reduce some, enhance some and drop some etc. etc. to create your blue ocean. e.g Cirque Du Soliel = Circus - animals - multiple simultaneous acts + more acrobats + (new)musical element etc. etc.

You can't parachute in a new market from the sky ! ( however , I have argued that it was poor execution strategy that doomed Tivo and not marketing --which they blew as well.)

notahacker• 16 years ago

Counter examples are easy to find.

Apple seems to be doing rather well out of promoting the iPad as "magical" and "revolutionary" rather than a "widescreen iPod Touch" which everyone would be familiar with. I seem to recall the early iPod adverts were aimed at creating a market rather than promoting it as a "better MP3 player". Twitter wouldn't have attracted the early-adopters with "free public SMS". The web itself took off with hype about being an "information superhighway" and not simply "connect to documents on other people's computers".

mechanical_fish• 16 years ago

Apple's products don't seem like good counterexamples to me.

Apple is promoting the iPad as a different kind of iPod Touch. The thing sits right next to the Touch in stores and on web pages. It runs all the same software. It even looks like a giant iPhone. The "magical" and "revolutionary" adjectives are different, but differentiation is an essential part of the strategy: You can't just clone the product with an existing market, you have to improve upon it somehow.

On the one hand, promoting the iPod as a "better MP3 player" would have been a losing strategy because "MP3 players" were not an existing market worth entering. The number of people using MP3 players ten years ago was tiny compared to the number of music buyers. And on the other hand, iPods were aimed pretty directly at the market for existing portable music players, which was much larger. The slogan was "a thousand songs in your pocket", and the iconic image was a pair of white headphones snaking out of that pocket. I don't think people missed the fact that the iPod was a Walkman, only better. Apple could, instead, have played up the fact that the iPod was a tiny computer that played games, or a tiny portable hard drive that let you tote documents around, but in fact these aspects were very muted, because they distracted from the story that the iPod was a super-Walkman.

Apple's actually really good at playing the existing-market-only-different game. The iPod was a different kind of Walkman; the iMac was a different kind of Windows PC; the iPhone was a kind of phone and a kind of iPod; the iPod Touch was a kind of iPhone and a kind of iPod; the iPad is a kind of iPod Touch. It seems evident that Apple could have launched the iPad ten years ago as a new product, and failed. In fact, that seems evident because it actually happened: The Newton came out, it was a new kind of product at the time, and it died horribly. So instead of repeating that mistake, Apple bootstrapped the iPad market, one tweak of an existing market at a time.

The biggest "failure" (or, in Apple terms, "hobby") in the current Apple product line is the Apple TV, and a big reason it's failed so far is that nobody knows what kind of thing it is. (It isn't even "a kind of TiVo", for all the good that would do.)

InclinedPlane• 16 years ago

Indeed. Although sometimes Apple's products take a while to catch up with the hype:

What is...

http://www.youtube.com/watch?v=PpmJ16sfQyw

http://www.youtube.com/watch?v=D2BvVcSkNkA

RockyMcNuts• 16 years ago

I think there are some good points here, but

1) Tivo was different from VCRs, which were used mostly for pre-recorded content, cost far less, and had no recurring fees (except tape rentals)

2) the value chain: mobile phone networks compete, and accepted a symbiotic relationship with branded, value added devices on their network. If the other network has a better device, you better get it too. Cable companies are a local monopoly, and don't compete by having exclusives with branded boxes. They saw Tivo as a threat and integrated the functionality in their service and settop boxes.

alexro• 16 years ago

Is it actually possible to attribute the company's success or failure to any single event? I think no. Also, while a single event be the basis for many subsequent events, it doesn't directly affects the end result.

ssskai• 16 years ago

The author points out each company's profits over the last 10-years (RIM $9 Bil, TiVo -$400 Mil), yet as many have commented, this isn't really an apples-to-apples comparison. What would have been more effective would be to give some metrics on how each company did within their own industries. How did RIM do in comparison to the mobile hardware market, as % market share? How did TiVo do within their market industry?

RIM's success can be in part attributed to the explosive growth of the mobile technology industry. Maybe TiVo did great in the DVR/ VCR industry, but that industry just isn't nearly as lucrative.

A better question to answer would have been how did each company do in their industry. Or even better, give an example of a characteristically "hubris" approach of a product in the mobile hardware space, and compare it to RIM's "humility" approach.

Oxryly• 16 years ago

I believe this sort of analysis can only be written in retrospect. And I'm not sure it's very accurate.

TiVo faced a wide array of business challenges and I doubt they would have avoided any of them if they had release their device as some sort of "tape-less VCR". It would have seemed silly and probably wouldn't have fooled anyone. The cable and media companies would still have smelled blood in the water and the early adopters would have been put off by the silly positioning.

alexwestholm• 16 years ago

To me, the title is misleading. This post seems to be more about positioning a product in a way that users understand versus the general usefulness of hubris or humility in relation to products. While poor positioning might be evidence of hubris (in a bad way), I think it's a different issue.

mattmaroon• 16 years ago

This is pretty poorly written, even if his point is valid. TiVo to RIM is an apples to oranges comparison. You can't surmise that because RIM had $15b in revenues and TiVo had $240m that the difference is humility. It might just be that there is a lot more money in Blackberries than DVRs. It might be that RIM faced no real challenge in the early years, whereas TiVo faced challenges from every cable company and electronics maker who partnered together to make their own DVRs.

Everyone knew what a TiVo was regardless of the description. It was such a hot topic that blogs about it made fortunes from AdSense in the early years. Perhaps calling themselves a better VCR would have worked out, but I can't imagine it would have been an extra $14.75 billion.

tieTYT• 16 years ago

"This is pretty poorly written, even if his point is valid" Totally agree. I got bored 25% of the way through and stopped reading. I didn't see any point in sight. Can someone give us a TL;DR?

timdellinger• 16 years ago

There's also another variable that the article doesn't explicitly take into account, although it's discussed a little: RIM sells primarily to businesspeople for whom money is no object when you consider the competitive advantage that the product offers. TiVo, on the other hand, sells an entertainment device to consumers who have to squeeze it into their entertainment budget.

Hubris Versus Humility: The $15 billion Difference

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