3 Lessons Entrepreneurs can Learn From Palm Failure
Palm Corp. was lauded as the business that would alter the way people used personal digital assistants (PDAs), when it was created in 1992. Palm, in 2000 was value at $53.3 Billion, which at that point was higher than McDonald's, Chevron, and General Motors, as one of the greatest benefactors of the 2000 dot-com boom.
In the early 2000s, the company's breakthrough products, such as the Palm Pilot and Treo smartphone, were best-sellers, but by the 2010s, Palm was in decline. HP paid $1.2 billion buying the firm in April 2010 and less than two years later, HP announced the end of the Palm brand.
Palm's failure teaches lessons that every entrepreneur may apply. Here are three main ones:
1. Do not underestimate your competitors
The Palm Pilot was a big hit when it originally came out. Nevertheless, other firms quickly began to release their own mobile devices, and Palm was unable to keep up. They underestimated how quickly the competition would catch up, and they lacked a strategy for staying ahead.
Palm was sure that when the Pre was unveiled in June 2009, it could compete with Apple and BlackBerry. Palm believed that Pre's revolutionary design and user experience would entice buyers away from Apple. They, however, grossly misjudged the competition. Palm just couldn't compete with the iPhone's robust ecosystem of applications and accessories. Also, the Pre was undercut by less expensive Android devices. As a result, it failed to establish customer momentum and was swiftly surpassed by competitors.
2. Invent or perish
Palm was the market leader in the personal digital assistant (PDA) sector in the early 2000s. Palm attempted to play catch-up as the smartphone industry took off, introducing a slew of new models, including the Pre and Pixi. Yet, these products were not competitive with the iPhone and other top smartphones.
Palm also made the error of depending too much on its legacy products, such as the Palm Pilot, which grew more obsolete. Palm's last opportunity to remain relevant in the smartphone industry was the Palm Pre. Nevertheless, the Pre was not creative enough to preserve Palm from extinction.
3. Keep your primary consumers in mind
Palm made certain strategic mistakes in an attempt to appeal to a larger audience, such as collaborating with Sprint to offer the Pre on a contract that forced customers to sign up for a data plan. This turned off Palm's core consumers, who preferred to use their Palm devices on a pay-as-you-go basis. When HP purchased Palm, many industry experts predicted that HP would utilize its marketing prowess to revitalize the Palm brand, which never materialized.
The Pre was also a significant letdown for Palm's main corporate users. These clients had been loyal to Palm for years and were anticipating a revolutionary gadget that would help them operate more effectively. Instead, they received a consumer-oriented product that was problematic and untrustworthy. As a result, many corporate customers switched away from Palm in favor of competing platforms such as BlackBerry and Windows Mobile.
Palm's downfall serves as a cautionary story for entrepreneurs. Existing businesses may be a strong force, but complacency can be fatal. Companies must always innovate, align with customer expectations and never underestimate the competitors, in order to prosper.
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