Nokia is a startup(swombat.com)
swombat.com
Nokia is a startup
http://swombat.com/2011/2/9/nokia-is-a-startup
5 comments
I could go out and raise $10M and do a better job at doing what Nokia wants to become, than Nokia itself. True story.
That's quite a claim.
That's quite a claim.
At least I didn't say I could do it in a weekend.
I didn't meant that Nokia has all the benefits of being a startup. Clearly, it doesn't. But it has most of the drawbacks of being a startup (i.e. limited runway, need to innovate or die, etc).
I also suspect that it will fail, but you never know... your analysis would have been correct for Apple 10 years ago - and yet, things turned out very differently. This Stephen Elop is an unknown quantity at this stage. This memo is certainly a decent start in the right direction. He's only been there for 6 months or so, and it takes that long before you have the credibility to make this kind of statement about a 130'000 people profitable company.
So yes, they have hurdles, and they're very hard to jump over, but it is technically possible to do so.
I also suspect that it will fail, but you never know... your analysis would have been correct for Apple 10 years ago - and yet, things turned out very differently. This Stephen Elop is an unknown quantity at this stage. This memo is certainly a decent start in the right direction. He's only been there for 6 months or so, and it takes that long before you have the credibility to make this kind of statement about a 130'000 people profitable company.
So yes, they have hurdles, and they're very hard to jump over, but it is technically possible to do so.
While I agree with most things you said, I don't agree that nokia has no chances in pivoting. They've got good engineers and they can start a new brand with a fresh new approach to products.
Why do they have good engineers? Surely even people internal of Nokia are aware their products have been shockingly poor for the past few years? Why would you stay?
Because there isn't really anyone to defect to in Finland?
Just to get a sense for the dominance of Nokia in the Finish economy – Nokia is a full quarter of Finland's GDP.
Just to get a sense for the dominance of Nokia in the Finish economy – Nokia is a full quarter of Finland's GDP.
Nokia accounts for about 1.6% percent of .fi GDP.
http://www.helsinkitimes.fi/htimes/domestic-news/business/10...
Also, I don't think Nokia currently attracts the best and the brightest around here, or has for some time.
http://www.helsinkitimes.fi/htimes/domestic-news/business/10...
Also, I don't think Nokia currently attracts the best and the brightest around here, or has for some time.
I wonder how the number sited there is calculated. Nokia's 2010 revenues were $58 billion, whereas the Finish GDP was $240 billion.
In a sense, yes. They have a 98% chance of failing in the next two years ;-)
(I am not sure what the number is for the US or Finland, but in Brazil, this was the death rate for commercial partnerships in their first two years)
(I am not sure what the number is for the US or Finland, but in Brazil, this was the death rate for commercial partnerships in their first two years)
They were in similar situation in 90s when they decided to sell their PC, TV, and cable divisions etc. and bet everything on mobile.
This reminds me of how the Atlantic turned a profit:
http://www.nytimes.com/2010/12/13/business/media/13atlantic....
http://www.nytimes.com/2010/12/13/business/media/13atlantic....
Definitely, impressive stuff. That said, the Atlantic had rather a lot less than 130,000 employees to steer into a new direction... And Nokia needs to find a new niche where it will make some €40b of profitable business, if it is to avoid being acquired... in the large, public corporation world, it's grow or die.
Very true, but the Atlantic also has a steeper history, which may or may not be advantageous to it's ability to pivot. On one hand, the management probably realized that publishing has changed so much over it's 135 year lifespan so it was only natural for them to pivot. On the other hand, it may think that the company has been able to survive for so long by selling content. I don't know enough about the history of change within Atlantic to really give my opinion on it.
At the end of the day this has to do with breaking a company's embedded culture and at least Nokia's CEO is taking the first steps to doing that.
On a different note, I wonder if Microsoft will take a hint here. They essentially need to do the same thing.
At the end of the day this has to do with breaking a company's embedded culture and at least Nokia's CEO is taking the first steps to doing that.
On a different note, I wonder if Microsoft will take a hint here. They essentially need to do the same thing.
And Nokia seems to be gambling like a startup. If the Atom based smartphone doesn't work out well, they may be wiped out of the smartphone market altogether. A MeeGo phone with a powerful ARM processor (OMPA4/Tegra2) may have been a safer bet.
Nokia has legacy junk (products, technology, software, patents, brand perception) all of which is declining in value. Nokia is still profitable - for now.
The idea that Nokia will be able to change, is, IMHO, hilarious. Most leaders can assess why a company is dying, but understanding how to fix it - is exceptionally hard. His memo states the same advice any idiot would tell you (why yes, we should focus on something and crush it) but what?
It took Nokia over 3 years to realise this? How long will it take to resolve it? A decade?
Nokia will never convince stakeholders (being a public company and having 130,000 employees) to scrap products that generate billions of dollars - even if it is in decline. It's like asking news orgs to stop printing newspapers.
this is why big companies die to startups
You probably think you can continue your mediocre efforts and products and also do something new and innovative, but when you put it like I just did - it sounds impossible. It is.
I could go out and raise $10M and do a better job at doing what Nokia wants to become, than Nokia itself. True story.