This is a really non trivial task. Cisco has made a lot of acquisitions over the years and they’ve generally done very well. Spending around half a billion dollars on Flip isn’t going to go down as one of their better decisions. In their defense, they likely acquired some amount of intellectual property that will help offset that cost. I tend to doubt they’ll break even though.
So if a company as experienced and tech savvy as Cisco can fail to see the pitfalls of purchasing Flip, you know it’s not easy.
The primary inflection point in the case of the Flips eventual demise was the advent of the smart phone as envisioned by Apple. I know smart phones existed prior to Apple entering the market but as has been the case with MP3 players and Tablets Apple managed to clarify and popularize the smart phone market by creating the original iPhone.
The Flip wasn’t the only device to be impacted by the development of smart phones. Personal GPS’s have been under increasing pressure the past few years, particularly since Google introduced their free navigation software.
This brings up a potentially interesting avenue of exploration. If you can’t easily determine what technologies/markets have a short viable life in isolation then perhaps you can look at emerging technologies and try to figure out how they might be used to create new products. One example of a company doing this is Oculis Labs. In the interest of full disclosure, Oculis Founder and CEO Bill Anderson was the head guy of the division I worked for in a technology company around 2000. There were a couple of layers of management between us and I don’t think we exchanged more than a couple of dozen words the whole time I worked for him. We haven’t talked since.
Oculis aims to secure the last two feet of the Internet. By this they mean the space between where you’re sitting and the screen. Here’s a description of one of their products
PrivateEye™ is active display security software that responds conveniently and automatically to a user. PrivateEye presents a normal clear screen when the user is present and looking at the display, but when the user’s attention moves away from the display the software immediately blurs the screen. Similarly, if PrivateEye detects an eavesdropper it can automatically blur the screen. The solution also includes a facial recognition engine. PrivateEye requires only a standard webcam.
Notice that last sentence? Web cameras are essentially ubiquitous these days. Oculis apparently saw this emerging trend and asked a very important question. “Is there an opportunity there?” The answer appears to be yes.
Of course if Oculis is successful they’ll spawn imitators. Being (apparently) first to market and generating intellectual property does give them a leg up though. Companies like Cisco, Google and Microsoft have been known to pay good money for these kinds of companies and that isn’t a bad outcome if it comes to pass.
It’s entirely possible that computer companies such as Apple and Dell might start incorporating the functionality of the PrivateEye software into their offerings. If this happens then the PrivateEye product would quickly cease to be viable and thus become a short term gap technology.
This brings up an important point, short term gap technologies don’t always vanish because they are supplanted by something else. Sometimes they lose viability because they are incorporated into some other product/technology and become ubiquitous.
Before I wrap up, a few words about Cisco & Flip. Some people have pointed out that Flip was still selling well and that the end of the line was likely years away since not everyone has a smart phone. There has also been speculation that the reason Cisco killed Flip rather than selling is to a consumer electronics company is that they want to incorporate some of the Flips technology into their video conferencing offerings.
Those assertions may have some credibility but I lean towards the theory that Cisco realized they were in a lot of trouble and that they needed to get focused back on their core business quickly. Taking the time and effort to sell Flip was going to take up valuable resources that needed to be engaged elsewhere. If you were in charge of Cisco and you suddenly came to the realization that you might be approaching a tipping point where the company would see significant losses in market share if drastic changes weren't made what would you do?
Image via CrunchBase
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