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The Birth of BlackBerry

by admin

Founding Vision and Startup Challenges

It’s common for startups, founded on a great idea, to be gobbled up by larger, established rivals. IBM used to say it only had to be second best. It let rivals take the leadership role, and the high risks that came with it. Then, if they should beat the odds and succeed, it would simply absorb them.

But more often than not, startups become stuck in a sort of purgatorial safe zone — taking small, profitable jobs that had no future, afraid or unwilling to risk it all on a big long-shot. For some, staying at two dozen or so employees was just fine. But by the time BlackBerry co-CEO Jim Balsillie joined, Lazaridis had made a conscious decision to resist short-term temptation for the home run. Soon, the company dropped its contracts to focus on wireless data.

But first, they needed a product.

Quest for the Right Product

In the early-90s, Apple CEO John Sculley, who had ousted Steve Jobs, delivered a keynote at CES, coining the now-famous term, “personal digital assistant,” or PDA. He believed, one day, handhelds as powerful as computers would tie everyone to all the world’s knowledge.

Apple unveiled the Newton, soon afterwards.

Unfortunately, the Newton was still more handheld computer than the ubiquitous future Sculley had described. It was the first of several devices, which would later launch Palm, Handspring and countless rivals into the nascent handheld market, but all the while, Lazaridis remained skeptical. He believed wireless connectivity, not palm-sized power, would be key.

Innovation and Development

Introduction of the Inter@ctive Pager 900

In 1996, Lazaridis unveiled a prototype wireless device, dubbed the Inter@ctive Pager 900 — the first pocket-sized, two-way pager. It also offered peer-to-peer messaging and an Internet gateway for e-mail. But the large, bulky device was full of glitches. Rod McQueen, author of “BlackBerry: The Inside Story of Research in Motion,” told Allan Gregg in an interview that the 900 was the size of a double cheeseburger, with a tiny screen that displayed four lines of text, a full keyboard below and a big, hinged lid that closed down. It also weighed well over three-quarters of a pound. If you had worn it on a belt, it would tilt your pants to that side.

Refinement and Production Partnerships

It wasn’t exactly sellable, but it was proof that a wireless device could be made. Research In Motion (the previous name of Blackberry company) looked for partners to refine and produce the device. Intel took a chance, investing time and money to design a chip that combined its internal components into a smaller package. To Balsillie’s credit, Intel forged the alliance, all the while, not knowing if RIM would agree to buy the parts, much less if its device would even work.

Development of the Leapfrog (BlackBerry 950)

According to Fast Company, a sign hung over hung the engineering cubicles that read: “Have you saved a milliwatt today?” With improved components, RIM went to work on its next device, the 950, nicknamed the “Leapfrog.” Measuring the size of a cigarette pack, it had a tiny screen, a smaller, superior keyboard with buttons the size of Tic Tacs, a now-iconic trackwheel for navigation and, most importantly, always-on e-mail. It also synchronized to a PC and corporate e-mail.

Revolutionary Features of the Leapfrog

It looked like a two-way pager because, in those days, consumers had yet to understand the concept of wireless data. But it was more. RIM promised it could send e-mails anytime, from anywhere, without any hassle. It was revolutionary. While the first BlackBerry was still a year away, the elements of wireless connectivity were now in place.

Market Penetration and Overcoming Obstacles

In 1997, Lazaridis and Balsillie, with a more portable and sellable Leapfrog in hand, tried to convince the world that e-mail was the future of mobile. But it fell on deaf ears. Now, on their last legs, they stood in a BellSouth conference room.

The telecom, meanwhile, had spent over $300 million to buy and build out its Mobitex network, all without even knowing if a device could even run on its service, and executives told RIM if it could show them a product — anything — they would be interested. BellSouth was hemorrhaging cash, and if it couldn’t find a way to turn things around, it would just sell the whole network.

Lazaridis knew that if that happened, RIM would have to shut down. As he began the pitch of his life, explained how the Leapfrog worked, how BellSouth would benefit from it and how a mass of customers would clamor for mobile e-mail. Suddenly, he realized that he’d left the Leapfrog models in the taxi. Regardless, he used wooden substitutes, pasted with strips of paper to mimic what users would see. As executives excitedly passed them around, he breathed a sigh of relief.

BellSouth would not only keep its network, but double its size, ordering over $60 million worth of Leapfrogs in 1997 alone.

Strategic Vision and Business Expansion

Later that night, Lazaridis sat in his basement, and from midnight to 3 a.m., typed out a five-page roadmap for BlackBerry’s design. “When is a tiny keyboard more efficient than a large one?” he wrote, believing long-term success depended not on what was added, but what was left out. To successfully launch e-mail from a two-watt transmitter, he would need to eliminate all but the core features to maximize battery life.

His called it “Success Lies in Paradox,” and it would become RIM’s business plan.

“I like really hard problems,” he told Bloomberg. “If you solve one of them, you create a new industry.”

With Intel on manufacturing and production, and BellSouth on bandwidth, Balsillie then focused on marketing. With limited funds, he came up with an ingenious guerilla tactic to court tastemakers. RIM sent “e-mail evangelists” on the road to give out free Leapfrog devices to celebrities and trend setters in the public eye. To save costs from the giveaways, they would stay at Red Roof Inns and Motel Sixes all across the U.S.

They were hooked. Soon friends saw and asked about the pager-like devices. RIM started to get subscribers.

Branding and Market Recognition

In 1999, Lazaridis led the development of the next version of its wireless device. With better parts, it had a bigger screen, yet kept the same portable size. Far removed from the double cheeseburger-sized Bullfrog, it was no longer a “frog.” It was small and nimble, and needed a new name.

So RIM hired Lexicon, the firm behind Apple’s PowerBook and Intel’s Pentium brands. With buttons that looked a bit like tiny seeds, an executive said it resembled a strawberry. But, strawberry wasn’t quite right.

No — it’s a “BlackBerry.”

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