Indulge me in an enlightening thought experiment, I’d like to go back-in-time twenty years and describe 2015 to my younger self. Tell ‘95-Len about the internet’s huge role in 2015 life, so ubiquitous it has become nearly invisible. Show my past-self smart and mobile phones which load music, video, games, and utilities. Talk about how eCommerce revenue is now measured not in the millions or billions...but trillions of dollars... then I’d wow ‘95-Len with the interconnected online community comprised of nearly everyone, the billions of people chattering away on myriad social networks.
So imagine I’ve told 1995-Len what the future holds and I ask him, “Hey, you handsome devil! Which company will take advantage and be dominating in 2015?” I am certain that ‘95-Len would say Sony ...and boy would he be wrong.
Sony had everything going for them in 1995. People paid a premium for their products, they had amassed a significant content library, and also owned a formidable distribution infrastructure. Sony generated $45 billion in revenue with significant profit margin that year. This is all while Apple was struggling to stay alive and Samsung was a ‘budget brand.’ In theory, no one was better positioned to lead the way in internet-enable consumer electronics, computers and smartphones. But, it never happened and from a 1995 perspective it is hard to believe that the “iPod” came from Apple rather than Sony. Instead, the opportunity bypassed Sony and cost them their leadership position.
In 2012, The New York Times ran a great piece about Sony’s slide, the author highlights a few reasons for this:
- Infighting between engineers and media execs
- Reliance on proprietary technology and services
- Slowness to embrace new technology like flat-screens and digital music.
Here today in 2015, these are still issues that impact many traditional companies. What are your thoughts? How do leaders push their our companies to become the next Apple rather than the next Sony? How do you view Sony’s decline? Do you think ‘95-Len enjoys Crystal Pepsi? How do today’s legacy companies avoid a similar fate?