Markets

Can Sony Win Again?

There's a great video report by Reuters on how Sony lost its cool.  The question is: Can it get it back again?

The short answer is: Yes.

This is the dilemma of every company that focuses on "quality" and then commoditizes it into nothing.  That's what happened at Sony.  They lost their focus on creating exquisite, innovative products with an exquisite user experience and went for speed-to-market instead.

This was a multi-faceted mistake.

  • First, for those who trusted the Sony brand, the company has as good as lost that trust - and it's WAY harder to regain trust than it is to establish it.
  • Second, for those who didn't know the brand - most importantly, the young consumer - all they know is that Sony doesn't cut it in experience or innovation.
  • Third, even while they were cutting their quality to near nothing, they kept their prices high.

What that left them with was a company that doesn't produce anything consumers can be excited about buying at too high a price to want to pay for it anyway.

Real good strategy, Sir Howard.

The good news is, the company is going back into the hands of the Japanese.  Their new CEO, Kazuo Hirai, is a "detail" guy, according to Reuters - and that puts the Japanese right back into their comfort zone and where they perform best.

I worked with Sony before Sir Howard Stringer took over as CEO.  Even then, they were looking with awe and envy at what the Silicon Valley was able to achieve - and rightly so.

But, what they forgot in the process is that they do things with their way of doing business that, demonstrably, take markets worldwide.  But only when they work to their strength.

Can anyone say Toyota?

So, good luck Sony.  I'm rooting for you to find your cool again.

Market Opportunities and Ethics - a Fascinating Juxtaposition

Just for the fun of it, take a look at two different articles in today's New York Times.

One is on the growing market in plus-sized clothes for women.  The other is on the expanding debt-relief industry.

Both are market opportunities.  In both cases, companies are looking for - and finding - new ways of making money.

Sure, there are challenges.  But what a difference.

For the fashion industry, it's figuring out how, with the increased costs of materials and the logistics of inventory storage, they can make adequate margins.  They will undoubtedly find a way.

For the debt-relief industry, it's figuring out how to keep one step ahead of the regulators as too many of them take advantage of a suddenly-needy population looking for answers.  They're finding ways, too.

Market opportunities are great things - and you always want to be on the lookout for them.

What you don't want to do - unless you want the sort of suntanned, well-lubricated description given in the latter of the two articles - is trade your ethics for a quick buck.

It's not good business - especially if your trajectory ends up being jail.

A VC-based View of Strategy

There's a fascinating article in Forbes which is, technically, about the next steps for gaming companies.

In fact, it's about lots more than that.  If you're paying attention, it is excellent guidance for any organization's strategy.

It's even better guidance for how to make lots of money.  Now.

It's all about application and distribution.

Just as in the heyday of the dot-com insanity, VCs started out with gaming companies just wanting games.  Now they want more.  Much more.

They want distribution channels - domestic and international.

They want a clear marketing strategy that will create the buying opportunities practically before the game goes live.

And, if you're really on top of your game (no pun intended), they want you to figure out how to take those games and create real-world applications of them.

Their example?  FarmVille - a virtual farming game that has taken the Internet by storm.

The lessons to be learned in this are simple:

  • Whatever you're doing, it isn't enough.  
  • However far your vision goes toward new markets and distribution channels, you've got to stretch further.
  • No matter what you may think the restrictions are on the application and use of your product or service, lift those limits and think beyond.
Most important, do it now - because if you don't, you can bet that someone else is.  And then you'll be gone.

This isn't about creating new games and gaming companies.  This is about strategy and tactics and profitability and growth.

VCs are always a good guide to how to make money.  It's worth paying attention to them.