Today’s edition of “Nobody Knows” is about the once-dominant mobile phone maker. 15 years ago, Nokia CEO Olli-Pekka Kallasvuo was featured in a new Forbes cover story. Title:
Nokia, one billion subscribers – can anyone catch the king of cell phones?
It was posted online on October 26, 2007 – 15 years ago today.
In a classic version of the innovator’s dilemma, Nokia was unable or unwilling to cannibalize their already highly successful handset business. Perhaps they failed to recognize the shift toward more powerful smartphones that gave consumers more mobile computing power. That same year, Apple introduced the iPhone, and shortly thereafter, Nokia’s mobile phone business began to decline. After 5 years (2013), Nokia sold its entire phone business to Microsoft.
Another reminder of what we tend to overlook:
1. The future is unknown and unknowable: Ignore anyone who pretends they know for sure what’s coming next – they don’t, because they can’t. Instead, think about the world in terms of probabilities and what is more or less likely to happen. You’ll still make these mistakes often, but your mistakes will be smaller and you’ll (hopefully) be more flexible in your thinking.
2. This too shall pass: There are many reasons why companies sometimes crash and burn from great success: the benefits gained may not last long; The skills that lead to greatness may not be the same as what it takes to maintain those advantages. Sometimes, the world changes before we know it. But it’s easy to forget that, and just assume that dominant companies will stay that way. BlackBerry, Lucent, Nokia, NT were the dominant telecom players in the 1990s/2000s; Which companies in the 2020s will suffer a similar fate?
3. We fail to evaluate what is in the media: Everything you take in should be analyzed for integrity and accuracy. You can’t simply accept or reject something because it’s in a magazine or on television; Better to rely on individual writers than publishing. Each piece of information needs to be evaluated on its own merits. Don’t assume anything is right or wrong without understanding the source’s track record.
4. We underestimate the cycle: Trends seem to be permanent, especially when they reach a turning point: Nokia looked unbeatable in 2007 but the seeds of its demise had already been planted. We have a hard time looking beyond the here and now, and this often prevents us from understanding the long-term life cycle of economies, markets, and companies.
5. Change is constant: The universe is dynamic, ever changing, and flux is a constant state. It is predisposed to miss incremental changes over time. We are experts in the world as before. This means we must constantly examine our own knowledge base as it ages and erodes over time.
If you pay attention to history, you see this sort of thing regularly. Great announcements about why a new service or product will be great or fail miserably. Our own pasts are so made up that it’s easy to miss when everything has changed.
How little you actually know is a superpower. If we were less sure of ourselves and more humble, we would all be better investors.
in the past:
Slowly, then suddenly (October 1, 2021)
Why the Apple Store Will Fail (May 20, 2021)
Nobody Knows Nuthin’ (May 5, 2016)
What News Looks Like When It’s Old (October 29, 2021)
Predictions and predictions
The next billion
By Bruce Upbin
Forbes, October 26, 2007