Sony had pioneered the transistor radio in the 1950s, setting out to create what was considered an impossible feat at the time. It seemed completely unimaginable when the average radio was so large that it was considered to be a piece of furniture that Sony could create a transistor based pocket sized radio and when they did they had won over the mindshare and the hearts of a technology appeasing audience. Perhaps mastering that early challenge is why Sony set itself up for a new challenge to be the first with another new technology that would ultimately be a winner, or would it?
It was the early 1970s and TV had become the dominant medium for entertainment and education. The number of TV networks was growing and now the consumer often had so much TV programming choice that there was bound to be a clash of two good programs. Now a real innovation would have been to build a time machine to be in multiple places at the same time to watch all of the TV you needed, but considering it is now 2011 and the idea of a time machine is still a fantasy, we’ll have to settle for the next best innovation that lets us enjoy clashing TV programs – the video recorder. And that was Sony’s sure winner. Though it may have faded as the centrepiece of the living room with the DVD player, Digital Video Recorder (DVR), video games console and even Internet connected TVs nowadays, for about a quarter of a century the video cassette recorder, or VCR, for short had its glory days. The very concept of being able to capture a TV program to watch it at a later stage was a major innovation and Sony was first.
But, as I am sure you will know, Sony was not the winner. Just a few years later, another company also created its own version of the VCR which used an incompatible technology and video format, but surely that was not a threat. After all, Sony was the first, and Sony’s technology and video format was superior. What Sony failed to do was make the technology accessible. Sony kept its technology to itself, whereas JVC realized that it could license its technology to other technology manufacturers and collect royalties in doing so. Sony was about to embark on an ill-fated journey with its Betamax format as the video wars commenced and JVC and its licensed VHS partners took the lead. Despite Sony’s ongoing innovations with its superior technology, it suffered not only from a lack of presence in both technology and titles to rent from the video libraries but also a lack of recording time. One VHS video tape could capture as much content as three Betamax video tapes. Sony eventually admitted defeat and produced a VHS VCR in the 1980s and seemingly learned its lesson having won the high definition digital video disc format wars with its Blu-ray technology.
You can have the best products and be first to market, but unless you make your products accessible either directly or through affiliates, if necessary, then your good work may be at a loss.
Being first doesn’t necessarily make you a winner.
Lot to think about in your post. You could add MySpace and Yahoo to your list. A lesson learned is to keep your eye on the competition. They will always be nipping at your heels with new innovations and distribution channels (Netflix).
Thanks for your great input Jeannette. You are right. There are so many more examples that illustrate this point. I guess for younger generations Betamax vs VHS may not have a lot of meaning and examples such as Nokia losing market share to Apple in the current smartphone battles, MySpace getting blitzed by Facebook and Yahoo losing the prime spot when Google came on the scene are superb examples from the last decade of would be winners having the limelight stolen by newcomers who knew their target markets better and/or had better reach to their target markets.
For anyone reading this comment, Jeannette has a fantastic blog at http://writespeaksell.com. Well worth a read.