Strategy. Innovation. Brand.

Beware The Toy That Destroys

It's just a toy.

It’s just a toy.

As Clayton Christensen pointed out more than a decade ago, disruptive technologies are often seen as inferior to the technologies they replace. Leading companies can easily dismiss them as toys and ignore them. That’s when the trouble starts.

We’ve seen two examples of this phenomenon in the last week. The first is BlackBerry. Just four years ago, the company had 51% of the North American market for smartphones. Today, it has 3.4%.

There are, of course, many factors behind the decline, but I’d have to guess that the iPhone is the primary disrupter. Here’s how the New York Times describes BlackBerry’s response to the iPhone, “…BlackBerry insiders and executives viewed the iPhone as more of an inferior entertainment device than a credible smartphone, particularly for users in BlackBerry’s base of government and corporate users.”

In other words, BlackBerry dismissed the iPhone as a toy. In fact, long-time readers of this website will remember that BlackBerry actually used the word “toy” in one of its ad campaigns. BlackBerry users, the ad claimed, needed “tools, not toys”. That’s when I concluded that BlackBerry’s future was dismal.

The second example this week is the Washington Post. The Post used to be one of the most influential newspapers in the world. But somehow it missed the Internet wave. I’m guessing that executives at the Post once dismissed the Internet as nothing more than fluff and entertainment. No self-respecting citizen would get serious news and analysis from such a source. It was a toy. It could be ignored.

Now, of course, Jeff Bezos has bought the Post for $250 million. (Critics say he overpaid by a factor of two or three). I admire the Post and I hope that Bezos can help save it. But I can’t imagine how. The Internet has already thoroughly disrupted the Post’s business model.

In an entirely different arena, I see another disruption looming. In higher education, Massively Open Online Courses (MOOCs) threaten to disrupt the genteel world of higher education. Why pay $50,000 a year for a college education when you can get it virtually free on the Internet?

Some leading colleges, of course, are jumping on the MOOC bandwagon and experimenting with different offerings. Other colleges seem to be dismissing MOOCs as inferior “toys”. Just look at what MOOCs don’t offer: a campus, buildings, athletics, football, school spirit, dormitories, etc. But perhaps that’s no longer what customers want. Brick-and-mortar colleges may not crash as fast as BlackBerry did but, if they dismiss MOOCs as toys, their future is just as dismal.

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