I’ve watched companies try to defend their outmoded business models with the Next Big Thing staring them right in the face. It usually turns out badly. The most personal of these for me is Kodak.
I grew up in Rochester, where they printed money at Kodak Park, a 7 mile long vertically integrated plant that made film. My Dad’s group invented a better film process, and I can show you the building that exists because of that invention (unless they have imploded that building to reduce property tax). Kodak also invented the Kodak Killer, the digital camera, in 1975.
Instead of drinking this hemlock, they stayed the course. Later, a close friend led development (in Japan) of the world’s first consumer digital camera, the Kodak DC40 (and Apple QuickTake 100), introduced in 1994.
It seemed obvious to him where things were headed, but Kodak missed it, and has been working to shift gears (transmission grinding sounds) for 15 years. I know many who have suffered as a result. Stock down 90% from 1994. I do not think this will be Barnes & Noble’s fate.
B&N has been cheating death at the hands of Amazon by doing the old way really well. Their stores are a pleasure. But I think they saw an image of their ultimate demise on the screen of the Kindle. So instead of installing fireplaces or offering free massages to shore up the store paradigm, they decided to make the best e-reader, period. And credit to whomever set the bar high for that product, because they have apparently hurdled it. Many comparisons have already been written, focusing on features, standards, and content. For my part, I would like to point out their Killer App, which is listed most of the way down the lengthy “Product Comparison” page. Nook on left, Kindle on right:
Try reader in store before buying! Physically. In a comfortable place with books to compare and people to answer questions. It’s genius.
Think about what you know about adoption of new technology products. The timing is perfect. Kindle made a splash and spent big money to pioneer the category. They sold a goodly number to bleeding-edge consumers, and are on version two. Sony, Google, and others have validated the category. Now the Majority Market, which has questions about readability, weight, quality, usability, and what the heck 3G is, can come and kick the tires at a store that knows books. [This may be the fastest Chasm crossing ever.] While there, they can’t open two browser windows and compare price, or choose 1-Click to buy. They will even be able to come back in for help. And they’ll probably notice a $100 photography book while they’re there.
We study the need to innovate your own business models out of existence, or be vanquished by the one who does. This is a rare example of a company that sees the train coming, and runs to get on board, instead of just bracing for impact. I hope B&N survives the leap.