This story is about, perhaps, one of the biggest write-offs you’ve heard in a while.
It involves a now strong voice in pretty much everything-publishing, tech, broadcasting and gaming.
This story is one of big risks, large losses but, eventually, great lessons and even larger payouts.
This is a war story!
If you have ever put time and money into creating or improving upon a product or service and, in the end, lost most, if not all of it, then this is for you. And, if you intend to attempt devoting time and resources into building a new product or service or improving upon something that already exists; you may just want to read this to the very end. Who knows, you might be the next Steve Jobs.
But, before I begin, did you know that Jeff Bezos, the CEO and founder of Amazon was the Vice President of a Hedge Fund before he resigned to start his own company? How is it that someone as well placed as he was would be willing to leave without a single guarantee of a good payout anywhere along the line. Well, the risk entrepreneurs take is unimaginable.
Again, dear reader, if you are looking to invest in a new product or service, you may want to take time to read this. However, if you want to stop reading at this point because you feel you’re not an entrepreneur or you’re not building any product, it is fine my friend… farewell (*painfully shaking my head for you) We shall meet again, somewhere.
Dear Reader, in war of smartphones, in a war to dominate the tech industry, dreams have risen and fallen in Silicon Valley, entrepreneurs burn with glory or went up in smokes and became a story of many lessons. This is one of such stories…
Now, we begin:
Our story begins with Jeff Bezos, from quitting his job as the youngest Senior Vice president of a hedge fund, to creating one of the most successful brands in the world, Amazon, to creating an innovative device in 2007, which you, dear reader must have heard of – the Amazon Kindle. It sold out in five hours and remained out of stock until early 2008 when it was restocked and continued to make massive sales. Take a look at Amazon devices and their achievements…
Amazon Kindle (Fire Tablet) Mind-Blowing Sales!!!
– Sold more than 5 million units in under 2months.
– By the next month it was selling more than a million units in a single week. The Amazon Fire tablet device was on fire!
By the way, it wasn’t just the Fire tablet that was selling like wildfire! The Fire TVs was also selling fast and raking in millions for the tech brand. So, it was safe to assume adding a Smartphone to the list of its products was the way to go.
Why?
Amazon saw ahead!
They knew the future of shopping is on mobile devices, hence, it would be smart to position their product as well as bank on the success of their previous devices. Genius, innit?
However, it was a declaration of war on the following:
– The iPhone (Apple)
– Galaxies (Samsung)
– Pixel (Google)
Dearest Reader, remember, this is a story of war. Business is war, a battle for customers, products superiority and profits. Bazos, fully aware of this, geared for war.
In June of 2014, the company announced the release of its first Smartphone.
Take a look at the features of the phone…
Features of the Fire Phone:
– Dynamic Perspective. A 3D feature that uses four-front cameras!
– Distinct X-Ray – a feature built to identify information about television shows, films, music and many more. This was an amazing feature!
– Mayday – this feature was a 24/7 customer service tool to give customers better shopping experience.
– Firefly – this was an out of the world feature! It was built to help users purchase items on Amazon based on sounds, words and things detected by the phone.
Amazzzziiinnngggg!!!
Mind you…
None of the aforementioned competition have these unique features. With such features and a giant brand behind this product, Amazon said… (watch video of what they said)👇🏾👇🏾👇🏾
But…
In the chaotic world of business, it’s not what you say most times. It’s the market that decides what is said about you. For you may conceive an amazing idea and the market calls it…
And that was exactly what happened to the Fire Phone.
– The Fire Phone success only lasted for a couple of weeks and that’s due to hype and publicity.
– Its Market share was at an alarming 0.02%
– Sold less than 35,000
– Hundreds of millions of dollars lost
– Tens of millions of Fire Phones unsold
If you ask Jeff Bezos what happened, he probably would tell you this 👇🏾👇🏾👇🏾
However, let us look at what could have gone wrong with the Fire Phone and what you can learn from it.
Lessons of Fire & Farewells:
– Those who bought the phone (I sure didn’t 😞😅) said it felt cheap. Meaning the device with all its features and promise felt like an inferior product when you hold it in your hands.
– It has a pair of earbuds that couldn’t match up with what’s already obtainable in the market… nowhere close to that of iPhone’s.
– The battery life was probably manufactured by NEPA/PHCN because it doesn’t last.
– Amazon had very little experience with design and manufacturing of sophisticated devices that combined hardware and software
Needless to say, the Fire Phone flopped and, fast. And even with a reduction in prices to the barest minimum, the consumers still didn’t want it! You can imagine that two months after its release and with less than thirty five thousand units sold, the price dropped from $650 to 99 cents, yet people didn’t want it!
Dearest Reader, in just under a year, they stopped producing the Amazon Fire Phone! If you’ve managed to sustain that your business for more than a year, I think you should pause and congratulate yourself. You sef dey try.
So, imagine this epic failure from a company which created the Kindle device that sold out in five hours, yer the Fire Phone gathered dust with millions unsold. Here’s what I want you to know…
1. Not All Product Will Be Successful In The Market
The Success of one product does not determine the success of the next. Though there are ways to go about building on the existing success of a particular product to make sales for the next. You can learn this in Marketing Strategies at Creative Chaos Marketing Institute (CCMI)
2. Look Beyond Yourself
Sometimes, to ensure the success of your product or brand, you have to look beyond the way you want a product or service to be or the way you feel it should be to the way the market (your customers/users) expect it to be.
In the design stages of the Fire Phone, Bezos intended for the phone to look 3D and even though that may sound super cool, customers obviously didn’t want their phones to look 3D. Sure, the idea may have sounded amazing, but, with the intention to stand toe-to-toe with companies whose sole purpose was the production and distribution of Smartphone (Apple and Samsung) it definitely was not enough.
3. You Can See The Promised Land But Never Get To Enter It (*I’m not talking of Moses)
You can see a future, it doesn’t mean you will be part of it if you have bad execution today. Amazon saw and understood that the future of digital sales, be it shopping or content consumption, would inevitably be on mobile devices and it only made sense that they try to control the platform. But sadly they lost total control of that market.
4. Good Idea Is Not Good Enough
Navigating the road from concept to delivery is astoundingly difficult. Engineering teams (assuming that’s what your idea requires) need to remain focused on the core business value and actual customer experience, rather than narrowing their focus on only specific and discreet feature set.
5. The Erroneous Assumptions & Pride of a Big Brand
Amazon assumed the product will automatically be a success because amazing is such a successful company. The market really is a respecter of no brand.
Nonetheless, it is doubt, that Amazon is a truly amazing company and Jeff Bezos a visionary reader. Matter of fact, in the same year, the company went on to acquire lots of smaller startups in different industries and made loads of money. So, it is important to say that, they are not a failed brand. They just had a failed product. But it begs the question, how has brands like Apple gone on to create such success from product to product? For one, the iPhone is not just another device with catchy designs, it is actually an innovative product…
Ooopsss
This is not a story about the iPhone. Do not miss my next read (The Untold Story Behind the Most Profitable Product In The World: The iPhone)
Dear Reader, as this read draws to a close, I want you to know building a startup or creating a new line of product is not for the faint of heart. If you want to stick to your day job, do it, let no one pressure you until you’re ready. If you want to build, roll your sleeves and prepare for both failure and success. My advice:
– Plan
– Research
– Repeat the cycle and most importantly, understand your customers.
Would Amazon create another Fire Phone, we can’t say for sure. Matter of fact, The New Yorker reported what Bezos to a key personnel concerning the Fire Phone:
…You can’t, for one minute, feel bad about the Fire Phone. Promise me you won’t lose a minute of sleep…
Meaning, there may be losses but, you have to get up and move on.
Fire… Sorry. Fair thee well my friend till next week.
Yours Fire-brandedly
– Lupel (I am new to the CC Team, but I am on fire 🔥🔥🔥)
This is not a piece. It is a firebrand article. It is filled with so much fire and passion. I just dey hear authority, authority!!! Action, Action!!!. The infusion of entertainment, information and education in this article is mindblowing. It is a 3-in-1 masterpiece. Amazing joy, my Fire-filled writer. I can’t wait for the next one on iPhone. I am learning and relearning, CC.❤️❤️🔥🔥🔥
This is a good story. I was vaguely aware that Amazon had failed in the smart phone business and this tells me a little more about that in a way that had me captivated until the last full stop. More please.