10 Lessons Learned in the Rear View Mirror

History is not a definitive predictor of the future. At the same time, we can learn from history - ours and others. Let's start the dialog on moving forward by first taking a look in the rear view mirror...

In 2001 and 2002 the consumer was already speaking. They wanted their digital music to be easily accessible across their devices. They wanted MP3 files. In fact they were screaming, "I WANT MY MP3." in full parody of Dire Strait's "I want my MTV."  Napster had opened pandora's box. The record industry's plans for SDMI (secure digital media initiative), an early version of DRM (digital rights management) had failed miserably. So it seemed obvious to many that the issue would be devising distribution models that worked with MP3 files. Who would have thought it would take until 2008 and 2009 for the industry as a whole to stop fighting the consumer and to offer MP3 files everywhere digital music is sold. Not me. And not most of my friends. We were all wrong. Old dogs didn't want to learn new tricks. Most had to fade into the sunset or be put down before their companies would listen to their consumers.

Lesson 1: Listen to your customer.

Lesson 2: Your customer is not your enemy.

Apple got off to an early lead in 2003 by buying up an 18 month supply of new tiny hard drives from Toshiba. Following this brilliant strategic move, Apple extended their lead by buying up huge quantities of newly minted larger flash memory sizes, giving their iPod platform a continued and growing lead over the pack of media players from every other consumer electronics company. And during this time, the stroke of genius was buying player technology from a third party developer to deliver the iTunes + iPod knockout punch. Most beautifully, iTunes + iPod simply worked. All technology should be this beautiful... plug it in and it works. No need for a call to tech support.

Lesson 3: Simple is beautiful. Real technology is magic. The best technology is invisible.

Lesson 4: Strategic marketing is more than just messaging. It means taking bold moves to understand the key drivers and critical success factors in emerging markets. Southwest Airlines did it by buying futures on airplane fuel, allowing them to operate profitably in the gas crisis of 2007-2008 while all other airlines started collapsing under the weight of simply flying their planes. Apple's strategic moves were equally brilliant.

Apple's iPod was an exception to the DRM rule. Even though Apple's files all came in the AAC format with Apple's proprietary DRM known as "Fairplay", consumers didn't care. iTunes + iPod worked. It would take years before the cry of the more technical users reached enough volume to demand the removal of DRM so the files could play on all devices. And, even with this consumer demand, Apple chose to deliver "DRM free" in the less popular AAC format, continuing to extend the "walled garden" approach of iTunes + iPod even longer.

Lesson 5: Simple lets you change the game. Elegance is rewarded - your customers will let you get away with things they will not let your competitors get away with (at least for a period of time.)

During this same period, Creative Labs delivered MP3 players that also played Microsoft's WMA format files with DRM. And for over a year the first thing a consumer would see when pulling their new Creative Zen from its box and turning it on for the first time and connecting it to their PC  was a message stating that a firmware update was needed. Are you kidding?? Creative was too lazy to update their existing inventory and fix this problem. They had strong patents that showed they had pioneered in the digital media player space. It didn't matter. The poor consumer experience and lack of marketing prowess to take on Apple by Creative and others proved fatal to many players in the market.

Creative then decided to release so may different flavors of its MP3 players that even its employees couldn't explain why you'd want one over the other. Compare this with Apple who reduced the number of options in the market. "Would you like the Baby Bear, Mama Bear or Papa Bear size of porridge?" Keep it simple.

Lesson 6: Laziness is death. If you see a major problem, fix it. In this day of social networking, a slow response is no response and will be broadcast from the highest mountains to all of your prospects. Respond strongly. Tell your customers you are sorry. Turn a disaster into a win.

Lesson 7: Simple is better. (I know I said this earlier. It is worth repeating and deserves multiple places in this top ten.)

Who, in 2002, would have bet that Microsoft and its army of OEM's and ODM's would be totally ineffective at playing in the digital media space. Not me. And I am a fan of many of the things Apple has done over the years. None of my Apple friends predicted that Apple would, even 7 years later, maintain such a dominant market share lead.

Lesson 8: Past success is no guarantee of future success. When I was at Microsoft (1985-1993 in sales and marketing and then 1994 - 1995 in product development) we took on IBM and won. They were entrenched and the saying was "Nobody gets fired for buying IBM." You must keep re-inventing yourself. Nokia used to be a tire and oil company.

Lesson 9: If you call something "Plays For Sure" make sure that it does. Your consumers are smart enough to see through the marketing.

Lesson 10: Continuing to repeat the same steps and expecting a different outcome is the definition of insanity. Many players in digital media space are guilty on this one.

A key to success is to learn and grow as we move forward. The creator of the Dockers line of clothing for Levi Strauss failed on his first two clothing line creations. Edison is said to have tried 99 different options before he found one that worked, creating the lightbulb, and changing the world as a result of his persistence. I am totally optimistic for digital media's future. We have learned so much. Time to apply what we've learned as we look ahead.

What lessons have you learned as you look in your rear view mirror? And, more importantly, what will you do next as a result?

Comments

[William Fleming]

Dave I am so with you on this. I believe that TurnItUp Media is a direct answer to your last question.

Look forward to working with you.

Cheers,

William