Nokia - Case Study
Hello everybody,
Today's topic is nokia and we're going to learn two things today:
the first is to know the difference between confidence and hubris when you're being successful and you're growing and moving along and the second point is to understand and have it in your heart that what got you here won't get you there and we're going to apply those two points and i'm going to show you how you can use them learning what happened to know yet so let's go nokia is one of my favorites because it's a it's a handset maker and I came from the wireless industry early in my career so I know a lot about this industry and it's one of my favorite case studies even though it really kind of had a sad ending for a lot of people and employees but it is what it is and it's made something that we can all learn from so nokia started believe it or not as a paper mill back in the eighteen hundreds and somehow between then and no and 1992 got into wireless phones and they started making phones really high-quality little phones 4u and me basic bones no innovation their innovation was that they can make millions and millions of phones every month make them very inexpensively and ship them anywhere that's what they did style function innovation in the future that wasn't their set of cards make them really good making simple make them small and get them at a low price to you and me and quite often we got them for free remember those days you a two-year contract and get your nokia phone way you want along the way though some things happen that's what we're going to learn about in the great confidence of being able to dominate an industry by 1998 they had 52-percent global market share cranking out millions and millions of phones every month they were very confident they were very bold in that and I knew people at wireless carriers used to say they used to negotiate really tough with them and they were a force to be reckoned with and so they had a lot of confidence and what we would soon find out is that confidence was hubris the difference between confidence and hubris you can be confident going out to play a game or do something humorous thinks you've already won before you got there and you're cocky and that means you can get caught by surprise and that's exactly what happens in nokia when life started moving toward content you know I know a little bit about content because in 2001 i was working at sprint and I was running a wireless incubator for sprint with help from Qualcomm and actually call comments right here in my shirt they make chips for phones lots and lots of chips and they were for seeing a future where our phones would be doing so much sprint knew about that in this incubator we were helping build little companies that would build stuff that the consumer would use tomorrow one of those Wireless games and a little company name jammed at mobile was funded in that wireless incubator i was fortunate enough to actually leave sprint and join jammed at mobile and join those founders and go on a run and while we were building content for the future it was very interesting companies like Samsung Motorola we're starting to build bigger phones and taking advantage of Qualcomm's really cool chips and put bigger batteries in durham so they could do more and jam that we made a great game called jammed at bowling and between 2002 and 2003 we sold millions of copies of jammed up bowling along that same time we have noticed nokia what I had known as this giant the industry all they were really doing was they made the battery little bigger the added a color display but they really didn't get with the program in terms of content they were trying to wedge certain features into all their old little phones for his motorola I don't know if some of you remember built this thing called the razor which was one of the greatest most popular phones had a big screen on it and easy-to-use menu key made it perfect for playing games texting and doing all these cool things mobile phones are now being able to do meanwhile nokia stuck with their little mystical and candy bar phones little basic little phones and they just want with the program and actually they were kind of a pain in neck to work with because we're trying to make our content and games at jam that do all these really cool things on phones and unfortunately you have a nokia phone where you just couldn't do too much with it and so that was a I kind of saw everybody in the industry saw that there was going to be big changes for nokia and they were a giant a big giant giant sometimes it was tough to deal with they negotiated really tough with wireless carriers and they were also you know they could if you needed millions of phones to sell they could get you the millions of phones to sell and if you didn't have any phones to sell you know you are screwed so in a lot of ways you had to work with them but they were evolving to the future and I saw a lot of people saw it and I don't think Nokia side or if they did see it they weren't paying attention and they had such hubris and confidence in their position that they missed it let's go take a look a little chart i made because I'll tell you what happened interior in 2007 and Nokia's got fifty two percent market share and guess what happens sitting there in 2007 the iphone now my crude attempt at an apple logo but there's the iphone gets it introduced and if you're in the United States remember that it was introduced through one just one carrier and people thought wow that's a really cool phone those of us are making content we knew that was the future what was really interesting is there's a little company you may remember called danger that made a very very interesting phone that t-mobile had been able to get into the hands of celebrities and it was called the dangers of you i don't know if you remember it but ultimately google says I'm going to get into this game and the way I'm going to get in i'm gonna buy danger so here you have google not a mobile phone company not a mobile software company buying danger to get in the game all nokia really wasn't doing anything they were putting color in it then the content was important but when you look at their product line they really didn't get there and so what they didn't realize is what gets you hear the ability to make all these phones and make them fast and make millions of them isn't going to get you there a new world order where now content is king and you need storage you need bigger displays and you need features so that you and me could do so much more with getting to the internet playing games doing all these things well what got you there isn't going to get you over here and nokia found out the hard way this is a little chart here I drew but this is really what happened to their market share between 07 and in 2012 Nokia's marketshare went from 52-percent all the way down to two percent and here comes the android guide and here comes multiple versions of the iphone you you just can't think of an industry where somebody that had built up to such a dominant position was just gone in such a short amount of time I think that if you really you know look back you know now you can say Oh everybody saw it coming but then you say to yourself nokia had smart people and the answer was they just had a lot of corporate hubris about who they were they wished they didn't you know by companies where the opportunities that may be by companies that would get them there and they just missed on the content deal and the ending of the story is in 2014 Microsoft actually bought what was left of Nokia and I say what was left because they paid 7.2 billion dollars for it and after they bought it one year later with marketshare having dropped down again they actually wrote it off for 7.6 billion let me give you those two numbers they bought it for 7.2 and then they wrote it off 7.6 which means he made other investment after they bought it and Microsoft was like wow that that year was a bad dream and that was it and then Nokia's brand a few patents were sold to an offshore company if you look around you can see a few nokia phones because that little company is is trying to do it but big nokia they're gone this year when they have fifty-two percent market share they sold more than 450 million phones half billion phones almost half the billion phones too gone bought by microsoft and then written off when microsoft bought nokia everybody including Steve Ballmer who now owns the Los Angeles Clippers (NBA team) was very excited they thought that all that Nokia technology and what they were doing was going to add to microsoft windows phones and we know the Microsoft Windows Phones never got any sort of traction in 2016 when it all came to a head and it was done there is this press conference and the CEO of Nokia was seen there actually crying and saying you know we didn't do anything wrong and somehow we lost you know that really bothered me when I saw it because i said to myself wait a minute you did do something wrong you you forgot that life doesn't stand still and you were cocky you had a lot of hubris when you dealt with all the wireless carriers and here you're saying I didn't do anything wrong i just lost really what she did wrong was you fail to understand content what you did wrong was you underestimated competition you underestimated google it wasn't even in mobile phones buying a company called danger and building the android operating system you miss that yet you had the kind of cloud and the kind of dollars you could have done that you could have made that move so to sit there and cry and say we didn't do anything wrong but somehow we lost i just can't go with that that's hubris and that's denial and I think that just underlines the nokia didn't understand that what got you here can't get you there and they were full of hubris and they missed all the signs to terrible consequences because 7800 people lost their jobs and that's a huge tragedy so that's the nokia case study.
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