Tuesday, October 27, 2009

Sustainability: The ‘must have’ holy grail

My guest post went up over at VentureBeat yesterday. I bit swamped with work, so I'm behind with my posts and links :)

Sustainability: The ‘must have’ holy grail

When I was a kid, Atari dominated the gaming scene. Sure, Mattel’s Intellivision and Coleco’s Colecovision had their loyalists, but to the general public, when you mentioned video games, Atari was the name that sprang to mind.

The company maintained that status for years, but as competitors like Nintendo and Sega became part of the industry, Atari quickly fell from its perch as gaming’s “must have” system to a nostalgic memory.

Sustaining a leadership role is a Herculean task. Once your product becomes a “must have,” how do you keep it that way for over a year? Five years? A decade?

Just like the music industry has one hit wonders, the business world is littered with product fads that were, at one time, must haves. Remember the Pet Rock? Cabbage Patch Kids? Or, if you’d like a more recent example, there’s Crocs. The company reported profits over $168 million in 2007 and then a $185 million loss in 2008.

Others? Kozmo.com, which promised free one-hour delivery of anything from DVD rentals to groceries, raised over $280 million in 1999 and landed a $150 million promotional deal with Starbucks. It was a “must have” service in NYC, but made costly expansions into less dense metro areas and liquidated by 2001. Friendster launched in 2003 with a lot of fanfare as it paved the way for the new age of social networking. Within two years, it was the ugly, unwanted pet that seemed to be consistently down or besieged with long server delays.

The fall from grace can be quick – and ugly. Brian Kellner knows this well... (full post)

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