Thursday, August 02, 2012

RIM's Waterloo

This below is another commentary on a city's tech ecosystem. (Come Early)

There is a hint that a patent battle seriously marred the culture, and the downswing began. There is a lesson there for the big names in tech in the valley.

Will Yahoo turn around? Will RIM?

High and low: what RIM's failure is doing to the people of Waterloo
Redmond. Cupertino. Mountain View. ... Microsoft, Apple, Google .... Waterloo, Ontario, is another city stamped by the accomplishments of a tech giant. Research in Motion began there in 1984, and with its era-defining success came an influx of talent and a growing community. But RIM has stumbled ...... Coming from Detroit, the route to Waterloo is flat and grassy, a gently undulating expanse of land much like Ohio but with less obvious signs of industrialization. ..... Waterloo, population just shy of 100,000 ..... The University of Waterloo, alma mater of RIM co-founder Mike Lazaridis .... RIM itself lies just off the UW campus — indeed, there’s no real physical boundary between the two. .... About half of RIM’s workforce is located here, some 8,000 or so people ..... Their new CEO has been on a PR offensive, telling the press that the company’s not “in a death spiral.” RIM stock sits mired in the single digits, having lost 90 per cent of its value in the last three years. ..... the “worst corporate culture in the world.” After RIM lost a long and brutal patent battle with NTP in early 2006, he says, lawyers came to dominate the culture. The company’s earlier rapid growth had meant hiring a layer of lifelong managers, many of them risk-averse. Fiefdoms were carved out and protected; a degree of complacency settled in. After NTP, that complacency — especially about creating new products — was joined by an obsession with secrecy and legalistic wrangling. The environment inhibited new ideas; instead of daring to be bold, he says, employees worked in fear because, “if something goes wrong, someone has to get fired.” ....... the BlackBerry sips data compared to its competitors, it’s secure and reliable, it conveys a professional image (all of those belt holsters), and it has a physical keyboard. He thinks the layoffs could be good for the company; having grown too big too fast ........ The local tech industry has matured: Silicon Valley companies (including Intel, Google, and Facebook) have opened local offices and there’s a flourishing startup community. If RIM goes, he says, it’ll free up talent for other companies. ....... OpenText, the content management provider and Canada’s largest software company, for example, was spun out of the university in 1991, allowing several faculty members to found a company. The university values entrepreneurship. Mike Lazaridis, for one, received early encouragement to found RIM from a UW economics professor. He dropped out to start Research in Motion. ...... Iain Klugman .. “The American dream is to make it big, to build a big company, to become a rock star,” he says. “I think for many years the Canadian dream was to win the lottery.” ...... Waterloo and the surrounding area has the right combination of ingredients to enable tech entrepreneurs: strong academic brands, including UW and several other schools; a culture that accepts deviance (risking your future by going into business for yourself rather than someone else), and a network of capital comfortable with risk. He’s long been working to build on that foundation, and where the area had maybe 50 tech companies 15 years ago, today there are 1000 by his count. He says on average one local startup is founded every day. ........ I come from Kitchener-Waterloo, and yes, RIM has made it known on the world’s radar.” RIM is like a family member that’s done well ...... Co-founder Mike Lazaridis has donated $250 million to create the Perimeter Institute for Theoretical Physics, while Jim Balsillie spent $30 million to found the Centre for International Governance Innovation. Both men have donated generously to the University of Waterloo, with Lazaridis and his wife contributing over $100 million to the school’s affiliated research center, the Institute for Quantum Computing ...... “As much as I’m rooting for RIM, I have an iPhone.”
What are RIM's options?

Nokia used to be a paper manufacturing company.

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