This is an AI Transcription. It’s pretty good, but please forgive any errors.
[00:00:00] Jonathan: Welcome to The Difference Engine, the show for tech founders, investors, and innovators.
Here's what's coming up in our first episode of 2025. We ask if our obsession with an AI future is distracting us from today's critical tech. We'll also find out what happened to category plays of the past. Are they schmoozing, snoozing, or losing? But first, Intel. What does 2025 look like for this former category leader?
[00:00:37] Paul: Every now and again. On the difference engine, we like to look back, not with anger, but with Intel and occasionally we also like
[00:00:46] Jonathan: to give ourselves a pat on the back.
[00:00:47] Paul: Indeed,
[00:00:48] Jonathan: why not? Indeed, why not? It's the time of year to do that. So back in episode 31, I think, um, at approximately 23 minutes and 25 seconds into that episode, we looked at one of our favorite subjects, which would be categorize or be categorized.
And the subject of that section was the absolute state of the former semiconductor category leader, Intel. We concluded that, uh, revitalizing Intel in the age of AI was going to be a struggle. And that the very respected CEO, Pat Gelsinger, was probably not having a great time at work. Given the nature of the turnaround task, and despite the huge sums of public money being showered into, in Intel's direction by the U.
S. administration, um, that might help cushion any transition to the aforementioned, uh, age of AI. Um, but you know, even that looked in doubt and in recent weeks it was revealed that the Biden administration planned on reducing part of Intel's 8. 5 billion dollars in federal funding for computer chip plants around the country.
According to three people familiar with the grant, i. e. presumably working on the grant but didn't want to admit it, um, who spoke to the, um, the UK's esteemed broadsheet, uh, The Guardian.
[00:02:14] Paul: But isn't this a bit strange because, um, surely if anybody's going to subsidise US manufacturing, it would be the UK.
The Biden administration.
[00:02:22] Jonathan: Yes, indeed. But clearly they had a little bit of a vault fast, but actually it's believed that this was linked, um, to the 3 billion that Intel is also receiving to provide computer chips for the U S military. Um, so, uh, Biden announced agreement to provide Intel with up to 8. 5 originally, uh, direct funding and 11 billions in loan in March.
Anyway, meanwhile. The competition around Intel, uh, was rumored to be circling, um, at the slightly injured former category leader, um, offering various M& A deals. Um, so it was really only a matter before something gave. Well, something did give, and it was Gelsinger himself. Um, a man who began his career at Intel right back in 1979, um, and was Intel's first chief technology officer, and returned from a brief sojourn at EMC to lead Intel in 2021, just as the dark cloud started to appear.
Anyway, abruptly, he chose to retire, um, and according to the Intel press release, it was A retirement inverted commas Bloomberg, of course, on the other hand, said the board forced Pat out, giving him the option to retire or be removed. Um, apparently the board had become frustrated by the slow progress, uh,
[00:03:46] Paul: with the
[00:03:46] Jonathan: turnaround.
And wasn't it a
[00:03:47] Paul: previous CEO, in fact, the founder of Intel, Andy Grove, who's a book very well. Red book said only the paranoid survive only the paranoid survive, but
[00:03:56] Jonathan: nevermind, um, Pat did appear to leave with up to 10 million in his pocket for making the inverted commas right decision. Um, and you know, with his departure, the board, of course, pulled together and emphasize the need to restore investor confidence, refocus on product leadership, yada, yada, yada.
Um, however, predictably. The share price shot up as the news was announced. You never want that Bulmer move. You never want it to look like that. You never want to move like Bulmer on the stage, that's for sure. Definitely not. The retirement means, of course, that the board has formed a search committee to find a permanent successor.
Somebody to shoulder this. Well, you know, I don't know. 10 million if you leave. Meanwhile, David Zinsser and Michelle Johnson Holthouse have been appointed as interim Co Chief Executive Officers with Frank Yeary serving as Interim executive chair. Yes, this is good. That's going to be an interesting dynamic.
That
[00:04:53] Paul: always works out brilliantly. Doesn't it? Yeah, it always just amazing. I think
[00:04:57] Jonathan: it's going to work even more brilliantly because whole house has been specifically named CEO of Intel products. I guess we should call them key business groups, which includes client computing, a data center and AI group, AI group notice and network and edge group.
So. I think we're going to be watching this very closely in 2025, along with all the AI hype that's frankly been instrumental in Gelsinger's departure, and we'll be expecting to see more speculation about a potential Intel
[00:05:28] Paul: business split. Indeed, because somebody seems to have got all the good bank and someone's got a bit of the bad
[00:05:33] Jonathan: bank.
Indeed, you know, what about the business units that HopHouse won't be looking after, we wonder? You know, possible restructuring of the foundry and product businesses? Um, you know, the prospect of M& A, um, is there, I think the issue is for anybody looking at the company, it's the complexities of any deal complicated by Intel strategic position against an incoming administration.
20th of January. With profound America first leanings. Where
[00:06:08] Paul: are we going on this? You think that Trump's administration will block any M& A? They may interfere with it,
[00:06:14] Jonathan: shall we say. Um, but, again, this will be one of their first big tests to see if they can match
[00:06:19] Paul: rhetoric with action. Just a little side note, on the splitting of, uh, Tech brands, uh, as you hinted might happen here.
If this tends not to work brilliantly, I, you know, I used to work for HPE as you know, uh, which, uh, split its product sets variously to, uh, companies like Micro Focus in the UK. And we are witnessing, uh, Veritas now split itself into Cohesity and Arctera. That'll be interesting to watch. I mean, these things are tricky to navigate.
Surely it's better to keep good bank and bad bank together, cross subsidize a little bit. And see if you can innovate your way out of it. Well, I can't think of a company that
[00:06:54] Jonathan: split and go on to create a dominant category. And that would be one of our benchmarks about whether it's, whether a split is going to be successful or not, but I mean, anyway, you know, it really does need to be an end to this continuing uncertainty.
Around Intel strategic directions that the stakes are way too high, um, in the global economy to have a lame duck of Intel's importance. I guess, will Intel look the same this time in 2025? Uh, we don't think so.
[00:07:33] Paul: Is AI exuberance hiding a more concerning tech recession?
[00:07:37] Jonathan: Yeah, so for those that spend their days in the IT industry, it's becoming more and more apparent that enthusiasm about artificial intelligence is masking weakness across most of the technology sector. Has herd mentality enthusiasm for AI come at the expense of innovation in other less flashy IT basics that actually keep the lights on?
[00:07:58] Paul: So. Is this current AI bubble an exuberant, semi rational investment spike hiding a more concerning slowdown in IT and perhaps even a serious downturn?
[00:08:07] Jonathan: So why would this matter if everything's about AI?
[00:08:10] Paul: Well, if you look at the recent financial reports, many tech companies, even the leaders, May still be considered to be in a state of recession.
Um, and that's continuing a slowdown that, um, you know, some of us in the industry have spotted for a few years now.
[00:08:24] Jonathan: Yeah. And, and the irony, if that's the right word for this is, is we've seen some massive share price gains for large companies that were predicted to be the early boomers. beneficiaries of an AI boom, such as, of course, NVIDIA and Microsoft.
The problem that it's just a sticking plaster over the reality of a horrible 2022, when the value of the tech weighted NASDAQ composite index fell by almost a third, the impact of which we're
[00:08:55] Paul: still
[00:08:56] Jonathan: living
[00:08:56] Paul: with today. So we're all rabbits in the headlines, uh, and anything that can claim to have an A. I.
Angle is outshining more traditional tech areas such as software, I. T. Consulting and the production of tech equipment for other sectors in the economy, such as manufacturing, the auto industry, etcetera. The latest Hamilton Tech M. N. A. Market report shows tech support companies as some of the few where demand is still healthy.
[00:09:19] Jonathan: Yeah, but this is not just a reflection of uncertain economic times, thanks to warfare and a host of other factors. And these are the times in which we live and they're resulting in weak demand. It's also a perfect storm combining the hangover from an overexpansion, overstocking of supplier inventories during the Corona virus pandemic.
and business overspending and the belief that the changes in corporate structures and the nature of work we saw during the pandemic would actually endure.
[00:09:51] Paul: We're thinking there's something else at work. Some tech firms have already directly suffered from the growth of generative AI in particular and associated data center spending.
I saw the eight billion that Amazon is promising to spend somewhere and the South MIMS data center where Somebody's going to pay for it, and the developer doesn't know who, so there is a lot of spending allocated to AI, but customers with limited budgets redirect investment in that area for fear of being left behind.
[00:10:18] Jonathan: Yeah, and you know, the result of this is overall recent financial reports show that the majority of large tech companies have been growing. More slowly than the past, while many of the smaller ones, which we rely on for innovation, are actively shrinking. And that's not something that tech business has been used to in the past.
[00:10:38] Paul: Yeah, and the S& P 500 IT sub index shows increased revenues by an average of 6. 9 12 months. Not bad, you might think, according to Bloomberg. But that's compared with a five year average of 10 percent annually. In fact, about three quarters of companies grew more slowly than their recent average.
[00:10:55] Jonathan: Yeah, you know, Paul, other indicators don't make for better reading.
You know, earnings per share increased by an average of 16 percent in the last 12 months, down from 21 percent over the last five years. It gets worse too. If you really look at the numbers, the weakness is more obvious in small cap indices where there's no boost from the mega cap groups.
[00:11:14] Paul: Yeah, I'm just getting deeper and deeper.
You look at the Russell 2000 index, which measures the performance of approximately 2000 small cap US equities. Technology was the second worst performing sector in terms of revenue growth in the second quarter. So quite concerning. And according to LSA, that's the London Stock Exchange Group, revenue fell 6.
1 percent year on year while profits were down 2. 8%.
[00:11:35] Jonathan: Ouch. But the reality is that investor exuberance around. I focus companies. It's still in full swing. But of course, big tech is not traditionally where tech innovation comes from. As I mentioned earlier, mostly it's the companies that big tech acquires that have delivered the innovation for big tech to distribute.
[00:11:56] Paul: And so apart from the big tech universe where everybody's saying AI, AI, AI, the issue is that can the tech sector prevent a prolonged period of, uh, investor attention moving away? From tech towards other things such as financial services and other sectors, or is it a belief that only it's only AI that's of interest in tech these days?
And that we think is mistaken. There's signs of the, that the old guard are getting cross because of all this throwing the baby out with the bathwater on tech spends.
[00:12:22] Jonathan: Would that be Mr. Benioff leading the charge on this as he so often does? Mark
[00:12:26] Paul: Benioff, CEO of Salesforce has enjoyed a rip roaring decade of growth.
But now he's, and there's no other word for it, hit stuff at the CEO of Klarna, the, um, buy now pay later, uh, service who has gone on the record to say that he's kicking out Workday and Salesforce from his operations and replacing it with guess what could begin with a and finish with I could. So, um, how that's going to work.
I don't know. Um, presumably, and hopefully the CEO of Klarna does know, uh, but Mark doesn't know and is on the record saying, what the hell is he going to use for his systems of record? So this is non AI tech being kicked out for AI. AI.
[00:13:09] Jonathan: So this is
[00:13:09] Paul: existing
[00:13:10] Jonathan: tech that works being kicked out for stuff that might work.
Yeah. Right. Always claimed to work. So let's hope it's not beyond the bounds of reality for guys like Benioff, the big leaders in the investment industry to move on from those big overpriced AI stocks to some of the more currently unloved corners of the industry in search of value. Um, you know, While few companies are predicting the sort of triple digit growth NVIDIA has reported in recent quarters, there are signs that some of the worst performing parts of the tech sector are possibly turning the corner, presumably as spending cycles turn, and, we think, if some of the leaders of the current tech environment
[00:13:56] Paul: really start pushing things forward.
So listeners, if health is going to be restored, it's going to require a much more compelling reason to innovate. That's what we love. That's what we're all about. That's what we're all about. Category creation, reframing customer problems. That's where category strategy comes in. The infrastructure we rely on needs to be refreshed.
Uh, and it's not just technical upgrades, but the focus on where we put our energy and where our needs are met. Um, we can't allow one part of the industry beginning with a, with I to dominate all of our thinking and. Uh, more worryingly, all of the investments.
[00:14:27] Jonathan: So, we think the industry and its investors need to take a deep breath and stabilize.
The, the idea that AI is the only thing pushing the industry forward, which has been the case for the last two years, should not be the case. To be the case for the next two, you know, the history tells us that the winners of every tech cycle have been the providers of the picks and shovels that enabled applications of increased sophistication and distribution to impact everything from the economy at large to our daily lives.
Yeah. We know AI has the potential to move things forward again in applications, but not if it's at the expense of everything else and our ability to absorb
[00:15:06] Paul: it. It's time to remove this AI cloak, uh, rebalance and think about. Brand new categories, big categories in tech category leaders and those with the aspirations to lead need to double down on what they've been creating and not be distracted.
And they need to make the case both for investment and for buying decisions that don't exclusively rotate around AI, get rid of all the AI modifiers and buzzwords focus on reframing customer needs and figure out how to best to satisfy those before inevitably the magical AI bubble bursts.
You've got to learn to earn. So, we all know you have to learn if you're going to earn. So, Jonathan, what's the lesson for today?
[00:15:57] Jonathan: Well, the lesson today is about losers, snoozers and schmoozers. What I want to talk about today is the fact that category design isn't all sweetness and light some categories are pretty much dead on Arrival some categories are not instant successes nor doesn't an eventually successful category designer get it all wrong Right, first time out.
[00:16:20] Paul: Whoa, that sounds like a massive downer. We're supposed to be lifting people up and thinking about positive things to do with categories.
[00:16:25] Jonathan: That's true. But you know, the reality is that some categories eventually re emerge in different forms after a bit of attention and usually a bit of M& A. These are the schmoozers.
Some may yet get to rise after a period of hibernation as conditions change. These are the snoozers. And some are long forgotten. They are the losers, but hopefully we're not going to talk too much about the losers. So let's have a look at 10 cautionary tales and whether they were a schmoozer, a snoozer or a loser.
Number one, the first one, smart home hubs. Now, the home of the future has been a recurring theme in futurology for a century. And in the last couple of decades, there are people Computing power, connectivity and smart devices available. So at last you could really talk to your fridge, but there was a strategic flaw.
Many manufacturers loaned smart home hubs without ensuring compatibility across different. Brands and devices, therefore severely limiting their impact. It was a lack of standardization and interoperability that made it difficult for the people you're trying to sell to either consumers to integrate the smart home devices that led to frustration.
And limited adoption, you know, remember Roomba and Google?
[00:17:44] Paul: Oh, yeah. Investigated by the EU. I don't know about your Roomba, but mine's sat under a sofa. It hasn't moved for years.
[00:17:49] Jonathan: I never got Roomba. I'm still, I'm still trailing my Nila around the house. Company failure and consolidation happened. Um, but what has happened is, is big tech and previous generations of cash rich companies, such as alarm systems and mobile infrastructure companies.
picked up the pieces. So I think again, a little bit more positive. Uh, smart home hubs. I think they're a schmoozer. Um, you know, as the individual use cases and smart home hubs normalize, so integrated technologies will appear from some of the big players. You like it. I do. All right. So number three, wearable tech.
Um, you know, again, wearable tech from smart clothes to wrist televisions has been another. Recurring theme in futurology for a century. Um, and yet again, in the last 15 years, that appeared to be enough microcomputing power connectivity and smart devices available. So at last you could connect yourself to the global IT system.
Just a great idea, isn't it?
[00:18:51] Paul: Well, yeah, I mean, this is something that took off. First of all, you've got the big running watches and the downloadable, um, heart rate monitors and all this, the, the early really cringey, you know, things. Versions of wearable technology. There seems to be enough functionality coming together now that these things make sense.
The
[00:19:09] Jonathan: strategic flaw in all of this was manufacturers rushing to market with immature technology that actually didn't meet user needs or expectations. They wanted more and they wanted different. They weren't getting it. So, For instance, there were some really tactical missteps. So that early wearable tech had really poor battery life, limited functionality, couldn't do much with it.
And the performance was frankly unreliable, i. e. not accurate. Now, if you're trying to measure your heart rate, you need it to be accurate. Um, and that damaged consumer trust and just slowed market growth. People got excited. Then they got very, very bored with it. But what happened was it took a while for fitness to emerge after a battle between a number of early stage companies.
And these were taken out in a series of mergers, um, and large ecosystems started to be built. Um, and one of the key things too, was for Apple to realize that just being able to tell the time in many different formats wasn't going to justify the expense of buying an Apple watch. So I think again. Bit of light on this one.
It's a schmoozer. I think we're just at the beginning of real integration, um, and particularly with the healthcare systems, which is going to be the really, really big, powerful, and hopefully beneficial use case.
[00:20:32] Paul: Number four then, H
[00:20:33] Jonathan: D D V D. There they are. I said it first time. That's a five letter
[00:20:37] Paul: acronym.
[00:20:37] Jonathan: It's a five letter acronym for failure. Oops, did I, um, I said that too soon, did I? Plot spoiler. Okay. Anyway, just to go back, H D D V D. Was a format that engaged in a format war with Blu ray without securing sufficient industry support or consumer interest, right?
It's a video format, storage and display format. What amazes me about this. Did they learn nothing from VHS versus Betamax in the videotape standards war for those of you who aren't familiar with it VHS became the dominant technical standard in videotapes despite being technically inferior and And, uh, larger and many other deficiency compared to the Betamax standard.
The one thing that, uh, JVC, who, who, uh, created the VHS, uh, standard did was license it to other players. So therefore you got more machines with one standard and you got more software on it.
[00:21:40] Paul: For listeners, um, Uh, you know, born recently, I should explain this is in a time before the cloud. This is when you actually had to have your own medium in your house.
That's what we're talking about.
[00:21:51] Jonathan: For those of you who are now getting trendily into cassette tapes for music, they're coming back. You know, um, these were just like great big cassette tapes. So why did this particular format? Um, that's a HD DVD. Why did it fail? Well, it was just history repeating itself.
You know, Blu ray's broader support from major studios and better marketing led to the quick demise of HD DVD, despite significant investment. However, there's a sting in the tail on this one. It was a pyrrhic victory for Blu ray. The world is going online and, you know, for its high definition and later, your HD video consumption.
[00:22:30] Paul: So we don't even need that. We don't need this technology at all. This is the speed of technology. Meets an ecosystem done.
[00:22:35] Jonathan: It was a pyrrhic victory. It was it was a very very quick win But that was a disaster in itself. And while we're talking about blu ray Let's go on to number five because just eight years ago Blu ray launched ultra HD version of its digital optical disk storage.
I've never heard
[00:22:53] Paul: a better Ultra HD, ultra high definition of an existing category. That's a
[00:22:59] Jonathan: beta. Absolutely. It's an uber beta. Uber beta. Mega beta. Yeah, it was an enhanced version of, uh, of Blu ray. Um, you know, you'd think natural evolution of the HD devices, televisions, and you know, what games addicts have been buying to enhance their large screen viewing and playing pleasure.
You know, I mean, after all Blu ray had won the HD war with HD DVD. But as you say, it's the absolute epitome of better. And the strategic floor was pushing a new physical media format in an era rapidly moving towards digital streaming. This was to those of you remember it CT1. Mobile telephony against cellular.
This was steam cars, you know, against internal combustion engines. Broad gauge to standard gauge railways that players, you know, you know, why it failed was that they were. In the middle of a paradigm shift, you know, the investment in the convenience of, and the growing quality of streaming service made physical media less attractive.
Just to
[00:24:01] Paul: make this, um, you know, history lesson absolutely opposite to today's time. Industry analysts are forever looking in the rear view mirror. If you want to dominate a category, they'll help you dominate a category that they agree with. But very likely the world has moved on. It's already
[00:24:16] Jonathan: too late.
Yes. So, you know, Ultra HD Blu ray was a loser. Which brings us on to number six. Standalone VR headsets. Ah,
[00:24:26] Paul: the metaverse.
[00:24:26] Jonathan: You know, ish metaverse ish, but you know, 20 years ago, standalone VR headsets were coming out of gaming. You know, the first one on the market was really the Sega VR in 94. And then the Forte VXF1, 95?
Nindo, Virtual Boy in 96?
[00:24:44] Paul: No, I just remember the little, no.
[00:24:45] Jonathan: Yeah. Well, I mean, what could be more fun than replacing a screen experience with one of immersive VR? One that doesn't give you a headache? Well, now there was a strategic flaw here, as you would expect. People were coming into the market early.
They were launching VR headsets, um, just to be, You know, they thought different, um, but with limited content, high prices and significant technological limitations, you know, and what did they get wrong from a category view point? There was no compelling ecosystem of applications and games and valued brands in it, you know, early VR headsets struggle to justify their cost.
Personally, I think the latest versions still do, but that's where
[00:25:26] Paul: we disagree. I think vision pro, you know, I think there's, there's a shot for that. Maybe not in its first, uh, edition, but soon thereafter, I'm pretty sure. Um, and don't forget Apple's got this amazing reputation as being a fast follower. The, the iPod was certainly no, not the first MP3 player and, um, you know, the, the, the laptop, certainly not.
And even their, their, their Mac. Uh, original Macintosh, not first, they fast follow pretty well. So I don't know if I would say this, the game's over here. I don't
[00:25:56] Jonathan: think it is. I think it's a snoozer. Um, but I think VR for now is really a B2B tech with potentially some very high value and compelling applications in, in healthcare and engineering in particular, which when we're talking about sophisticated stuff, that brings us on to number seven.
All right. Satellite phones for the mass market. Okay. Yes, please. Yeah. A phone you could use anywhere without worrying about cellular coverage. What could possibly go wrong? Satellite phones started to appear in the late 1990s, but guess what? Big strategy flaw. They were attempting to market satellite phones to the general public instead of focusing on niche markets that truly needed them.
They failed because expensive, bulky designs and poor timing, because they were trying to push this in just as well. Cellular networks were really expanding, quality was increasing, price was going down. That simply made satellite phones impractical for most consumers. Wrong ecosystem. It is the wrong ecosystem.
And
[00:26:55] Paul: maybe in terms of some of those design flaws, wrong blueprint.
[00:26:58] Jonathan: No, possibly. And you might think these might be losers, but I don't think so. I think they are proving to be schmoozers. You know, we're seeing smaller footprint, better tech. Okay. Uh, all the way through more realistic price points. And I think the key to this to go from schmoozer to success is the integration with existing devices.
Um, and that will start building the market. And I think this started with iPhone 14, which supported sending emergency text messages via global star. And then 15 added satellite comms with roadside services in the States. And meanwhile in 22, T Mobile, I think, formed a partnership to use Starlink services on the existing LTA spectrum.
Um, and that's expected to be around later this year. And one of the things I think is going to make a big difference is that Iridium, which is the original, is going to launch project Starlink. Dardus, which is a standards based satellite, a cell phone service in 2026. All
[00:28:03] Paul: going to pop off in satellites.
[00:28:04] Jonathan: So lots of schmoozing going on there, and I think we could end up with a big success. Lovely. Which is unfortunately not the case for web portals. No, you're just getting all positive then. Those who are old will remember 20 years ago, these web portals were essentially a space. Website that brought information from diverse sources like emails online forum search engines together in one place And that seemed like a great idea The strategic flaw there was there was some heavy investment in web portals.
The web portal companies were the sexy players of their day But what they were was a digital land grab trying to be Everything to everybody and all encompassing destination. What they didn't do was focus on core competencies or unique or compelling customer value propositions. I, where was the difference?
And many of these web portals collapsed during the dot com bubble. Um, and that just showed that spreading resources too thin without a clear strategy led to failure. Um, particularly when a new generation of vendors were coming in with key components of the web portals, Google being the absolute example of that in search and emerged doing a much better Job, so ultimately again loser, but I think, you know, if you, if you look at history and unintended consequences Um, you know google's late.
Uh, we have to have to say now workspace and Microsoft 365 and teams emerged, you know, they're they were a collision of the desktop and the web portal world So some of the web portal legacy lives on but still Loser. So lastly, one of our favorites, the Windows phone. So, hey, said Microsoft. Uh, we make the world's most successful desktop operating system.
Let's grab ourselves a chunk of the exploding mobile market and give consumers more choice. Great. Hey. But there was a strategic flaw, and we've touched on this before, in entering the smartphone market late with an operating system that lacked app support and distinct advantages over iOS and Android.
[00:30:08] Paul: They were trying to be better than what they perceived the market to be, possibly including BlackBerry at the time. But they missed the different, which was the app store.
[00:30:15] Jonathan: I think this is also to do with one particular person and his need to, uh, to be shown to have done something significant. I mean, don't lock the case after the horse has bolted.
Yes. And I'm afraid the mobile operating system horse as well and truly bolted by the time Microsoft woke up, you know, and it chucked everything at it. It chucked its strong brand. Uh, it struck piles of investments, but Windows Phone couldn't overcome The established ecosystems are very, very strongly established ecosystems of iOS, Apple, and Android for everybody else.
So in this case, two's a company and three is definitely a crowd. Basically, nobody gave a flying. About Windows phone and that just led to its discontinuation and adding insult to injury. Um, Microsoft then went off on to buy Nokia at one time, the category leader in mobile phones, which was an absolute disaster.
This is total loserville. It's Balmer era hubris. And luckily, Microsoft appears to have learned its lesson. So talking about lessons, what have we learned here?
[00:31:19] Paul: Big history lesson here. So. I think one of the things we've learned is that, you know, successful categories do take time and can take twists and turns.
And if you don't look out far enough, and you just go for better, and your yesterday's better, and a different comes along, you are hosed.
[00:31:35] Jonathan: You are absolutely hosed. So, you know, we know that successful tech category strategy involves reframing consumer needs. Or business needs. Right? Identifying the right market conditions.
A lot of new product offerings, bullets proof technology, which people often forget in the rush to get stuff out and remorseless execution, strike after strike after strikes, what was seen here, these 10 examples are strategic missteps, misjudging market readiness, overestimating consumer interest, failing ecosystems, entering markets without clear differentiation, and of course, some very poor timing and of course, what we always need, a bit of luck.
But, of course, we can't deliver luck, can we? We can't. So Unless any of your relatives are handy with a shamrock porn, to be sure, we can help all our listeners with discipline. And this is what it comes down to, discipline in a category design process and help avoid such issues.