I am always looking for examples of great marketing to include in my different courses. For the past few years, one of my favorite examples in the area of new business strategy has been Flip.
Flip is a wonderful example of a company changing the rules in an established category. When Flip entered the video camera market, the existing products were expensive, high-tech devices, and category leaders such as Sony focused on making cameras with more and more resolution, features and technology.
Pure Digital Technologies launched Flip in 2007. It was a completely different sort of camera, with low resolution and few features. But Flip was simple, cheap and easy to use. By looking at the category differently, Pure Digital created a very unique and appealing product. Flip quickly became a huge success and Cisco bought the company for $590 million in 2009.
Yesterday, however, Cisco announced that it was killing Flip.
This is astonishing. It is remarkable that Cisco would be scraping a product it paid almost $600 million to buy just two years ago. It is also remarkable that Cisco couldn’t sell the brand; if someone wanted to buy Flip I am very confident Cisco would sell it: a bit of money is better than nothing.
Did Cisco mismanage Flip? Perhaps: it is clear that the brand didn’t flourish under Cisco’s stewardship.
I suspect Flip died primarily because technology changed; Flip is now fighting against very strong competitors including Apple’s iPhone and iPad. Cisco presumably decided there was no way Flip could compete long term.
Regardless, I suppose I have to stop talking about Flip in my courses.
Or not! Looking back, it is clear that we need to give even more credit to people at Pure Digital than we thought; they created a successful new product and then shrewdly sold it at the right moment. Flip is actually an example of two things: how to innovate and then how to monetize.
I will have to update my slides, but I’ll keep talking about Flip. It remains a great example of smart, strategic marketing.