Present at the Creation
"The kiss of death is when you allow marketing to dumb down innovation."
Mike Lazaridis still thinks of his company as an upstart, a small Canadian firm taking on the established players.
Its unassuming offices are scattered only a few blocks from the
University of Waterloo, his alma mater, to which he's donated $123
million to support science and math. He'd come there in 1979, a
blue-collar boy from Windsor, Ontario, his mother a seamstress and
journalist, his father running a retail store. When he began studying
for an electrical engineering degree, he sold the $600 quiz-show buzzers
he'd designed in high school to help pay his tuition.
University was a heady time for Laziridis, providing him the
resources for engineering projects he dreamed of since he was young. As a
four year-old he'd turned a pile of LEGO bricks into a model
phonograph; by eight he'd built a pendulum clock that kept actual time.
He absorbed knowledge, especially when it came to physics and
electronics. Science fiction, which he read voraciously, provided
continual inspiration, as did Star Trek, starring fellow Canuck
William Shatner. The show's wireless communicators especially stuck with
him, and his high school shop teacher, Mr. Micsinszki, had warned him,
"Be careful not to get too involved in computers. In the future,
electronics, computers, and wireless are all going to combine, and
that's going to be the next big thing."
In UW's well-regarded engineering department he found kindred spirits
and an environment in which he'd thrive, where academic learning
combined with practical co-op training. When he enrolled, much of the
department's excitement centered on the burgeoning computer industry. A
young company named Microsoft had begun to hire away Waterloo's
promising students, but mainframe computing still largely defined the
industry. A well-known supercomputing company, Control Data Corporation
(CDC), became Lazaridis's first co-op, where he studied automatic data
detection and correction.
There he developed a business philosophy that became RIM's defining
ethos, foreshadowing both its meteoric rise and later difficulties. A
number of Japanese competitors had emerged to challenge CDC, putting the
company on the defensive. By trying to chase customers, as Lazaridis
saw it, the marketing department had hamstrung its engineers. Rather
than doing cutting-edge work, those best and brightest had to simplify
their products for the perceived needs of consumers. The frustrated
engineers soon began decamping for the sunnier prospects of Silicon
Valley, further dulling CDC's competitive edge. It was a mistake
Lazaridis told himself he'd never make: his company would nurture
engineers, giving them the time and space in which to build the future.
"The kiss of death," he later said, "is when you allow marketing to dumb
down innovations."
All through university he worked on his own innovations. In high
school he'd gotten into wireless communications, using ham radio to
broadcast text to televisions. At UW he refined his work, and by 1984,
his final year, he'd developed a similar system. He'd engineered his way
into a business opportunity. As he imagined it, retailers could use his
wireless, programmable displays to replace printed advertising. Though
he admitted having almost no business experience, his economics
professor convinced him of the idea's viability. With his childhood
friend and fellow engineer Doug Fregin, he decided to take the risk. The
23-year-old Lazaridis had his company; after running through a few
names, he dubbed it Research In Motion.
Waning RIM
On January 9, 2007, with his customary dramatic flair, Steve
Jobs introduced the iPhone by saying, "every once in a while, a
revolutionary product comes along that changes everything." He
sprinkled his demo with words like "magic" and "cool," but also lamented
the current crop of smartphones, for everything from needless
complexity to mobile web browsing: "Boy, it's bad out there."
He lined up four current smartphones, Motorola's Moto Q, a Palm Treo,
the Nokia E62, and BlackBerry's Pearl. The problem with them, he said,
is in the bottom 40; the screen cut to show their keyboards. "They all
have these keyboards that are there whether you need them or not. They
all have these control buttons that are fixed in plastic and are the
same for every application," he said, "What we're gonna do is get rid of
all these buttons, and just make a giant screen." Apple had turned the
keyboard into a piece of software.
Jobs declared the iPhone software five years ahead of its time.
Indeed, one apocryphal story describes an all-hands meeting, days after
the Jobs keynote, where RIM executives deemed the "Jesus phone"
technically impossible. True or not, it fits with Lazaridis's
contrasting focus on hardware. He didn't dispute the elegance of iOS;
Lazaridis had long respected Apple's design acumen. But, he said,"Not
everyone can type on a piece of glass. Every laptop and virtually every
other phone has a tactile keyboard. I think our design gives us an
advantage." Superior hardware would win out, he believed.
Publicly, RIM displayed a cavalier attitude toward the iPhone,
dismissing it as another in a long line of supposed BlackBerry killers.
Balsillie said, "It's kind of one more entrant into an already very busy
space with lots of choice for consumers … But in terms of a sort of a
sea-change for BlackBerry, I would think that's overstating it."
Meanwhile, it began engineering a response.
By many accounts, the problems at RIM go deeper than just outdated software.
Things reached a crisis point in 2011, which could be known as "The
Year of the Open Letter." In July, just before the company announced its
layoffs, BGR published a letter attributed to a "high-level RIM
executive." It described the "transition" as "chaotic," with the
workforce feeling "demotivated" by a lack of leadership. The author
portrayed him or herself as a frustrated company loyalist needing to
tell some hard truths.
"We missed not boldly reacting to the threat of iPhone when we saw it
in January over four years ago," the letter read. "We laughed and said
they are trying to put a computer on a phone, that it won't work. We
should have made the QNX-like transition then. We are now 3-4 years too
late. That is the painful truth… it was a major strategic oversight and
we know who is responsible."
Delaying the transition had made RIM's position even more difficult.
Not only would it be developing an entirely new operating system,
eventually dubbed BlackBerry 10, but in the meantime it would maintain
the previous version, BlackBerry 7. Any BlackBerry fan considering an
upgrade would have to choose between buying an already obsolete device
or waiting for the much-delayed BB10. It's a situation so common that
business schools have a name for it: the Osborne Effect. When you
announce great new products before they're ready, you may excite your
customers. But you also give them reason to hold off buying, which can
have a serious effect on sales. RIM hoped to use BB7 as a stop-gap, but
the company says 80 to 90 percent of its US users don't run it — there's
little reason to buy a new phone for a dead-end OS, and loyal fans may
be waiting for BB10.
If customers were unenthusiastic about buying a dead-end OS, it's not
surprising that employees didn't want to work on one. Yet according to
Maclean's, the company split off its BB10 development group, hoping to
give it the feel of a cohesive, passionate startup within the larger
company. Similar compartmentalizing had worked at other companies,
including Apple, but in this case it proved a predictable disaster.
Those not working on BB10 recognized their work on legacy code would
soon be obsolete. It created competition between haves and have-nots
precisely when the company needed a unified effort, leading to employee
protests and declining morale.
Alastair Sweeny knows how bad morale has gotten at RIM. He's the author of BlackBerry Planet: The Story of Research In Motion and the Little Device that Took the World by Storm,
from which much of this history draws. Dysfunction is not new: that
four-fold increase in its workforce that the company likes to brag about
has meant an increase in bureaucracy, politicking, and what Sweeny
calls a population of "time servers." He says, "It's like the Soviet
Union. Everyone's pretending to work." Sweeny compares it to another
brand-named tech firm with a reputation, deserved or not, for hidebound
bureaucracy: Microsoft. RIM, he says, has lost the fire of a startup
(despite heavy-handed efforts to recapture it), but without developing
into a mature company. One anonymous employee agreed, telling BGR, "We are no longer a company that is innovative and energetic, we are drowning in paperwork."
A company at the top of its game can suffer some "time servers," but
in times of adversity it's often the more confident, agile workers who
go elsewhere. RIM's both seen an exodus of talent and had difficulty
bringing in new recruits. If you're a bright, promising engineer, why
stay in Waterloo, Ontario, when you can move to Silicon Valley and work
for Facebook or Twitter? Last year's layoffs appeared designed only to
reduce headcount, not to cull the well-insulated "time servers."
Instead, many talented employees chose to leave — or were shown the
door.
"It's like the Soviet Union. Everybody's pretending to work."
Jamie
Murai was a student the University of Waterloo who had considered
working with RIM. Not as an employee, but as a developer. Having written
apps for iOS, he thought he'd try doing so on the PlayBook. He found
the process so cumbersome that he posted a blog entry, "You Win, RIM! (An Open Letter To RIM's Developer Relations)."
It went viral, getting 33,000 hits on the first day, he says. Soon
after, Tyler Lessard, then the VP for developer relations, met him for
coffee.
Much of what he'd written about, Murai says, Lessard already knew.
The shortcomings in RIM's developer platform had long frustrated his
team. "When they got all this bad press from my letter," Murai says,
"all of a sudden their bosses were saying, 'Ok, you have the resources
now get it fixed.' So it seems it was kind of a catalyst to get some
things changed."
Rather than work on PlayBook software, Murai founded his own company,
Maide, and moved to iOS apps. Tyler Lessard left RIM, but the company's
new VP of developer relations, Alec Saunders, sees a bright future for
developers. He told The Verge that, "For the first time, the
company has an evangelism team." If Saunders is any indication, RIM now
understands itself as a platform company competing with Apple. It's
targeted Android developers especially, offering a tool to convert their
apps, as well as free PlayBooks. Saunders often cites RIM data showing
that the BB App World serves over six million downloads a day,
generating 40 percent more revenue for developers than the Android
Market. Where once the company's focus fell mainly on hardware, building
an app ecosystem means strong attention to software. It also means
recruitment: turning developers themselves into evangelists.
Persuasion offers its own challenges: two app ecosystems already
compete for developer attention and resources. Given RIM's market and
mindshare, Saunders understands the task before him. "Yeah, we're going
through a transition, and every business, especially a platform
business, goes through this," Saunders says, "My challenge, when you
pick up a BB10 handset, is to make sure you don't say, 'Where are the
apps?'"
Irish developer Steven Troughton-Smith attended a demonstration of
the PlayBook 2.0 OS at this year's BlackBerry DevCon Europe. He left
impressed at the interface, and eager to see BB10 shipping on phones.
"If they can get everything to the level of the demos they showed
today," he says, "then it could be a very interesting operating system.
And with luck people will flock to it as upgrading Blackberrys; they can
see these devices are just as graphical and awesome as an iPhone or
Android phone or Windows Phone." He's already ported apps from Android
to the PlayBook, and found the developer framework compelling. "If they
can continue to make quality stuff and if BlackBerry 10 actually ships,"
he says, "I don't see any reason why I wouldn't release apps for it. I
mean if it's good enough."
Timeline: BlackBerry 10
April 2010:
RIM announces it will acquire QNX Software Systems from Harmon
International. Company press releases focus on in-car displays and
embedded devices; no mention is made of a new BlackBerry OS.
August 2010:
Bloomberg reports the upcoming BlackBerry tablet will sport a QNX-built
OS, offering a fresh code base and separating it from BlackBerry 6.
December 2010: RIM buys Swedish UI designers The Astonishing Tribe.
May 2011:
At its annual BlackBerry World conference, RIM announces BlackBerry 7.
It is not compatible with older devices, nor does it incorporate the new
work of the PlayBook OS.
August 2011:
Bloomberg reports that the next-gen phones will support Android apps
when they debut in "early" 2012. Rumors circulate about a BlackBerry
device codenamed "Colt," intended to debut in the first quarter of 2012.
October 2011:
RIM announces BBX, its next generation, QNX-based OS. "It'll be for
phones, it'll be for tablets, and it'll be for embedded devices," says
QNX founder Dan Dodge. The "whole company is aligning behind a single
platform and a single vision."
November 2011:
The company says its new phones will have the same resolution and
aspect ratio as the PlayBook, making for easier development across
devices. Todd Wood, RIM’s senior vice president of Industrial Design,
tells Pocket-Lint the new phones will be "charming, whimsical and fun."
Photos surface of a purported BBX device, the BlackBerry "London."
December 2011:
Reacting to a trademark battle started in October, RIM changes the name
of its upcoming operating system from BBX to BlackBerry 10. It also
announces that, needing a "highly integrated dual-core LTE platform"
that’s not yet available, BlackBerry 10 devices won’t launch until "the
latter part of calendar 2012."
January 2012:
News breaks that RIM has canceled the BlackBerry Colt and BlackBerry
Milan, leaving it with one BlackBerry 10 handset for 2012. Company reps
say the London will appear at Mobile World Congress in February, but
will not launch until the third quarter.