Why a product fails...
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
It is a relatively quiet day for news so instead I want to focus on a story in our latest Business Leader podcast episode.
A listener got in touch with me last week to say how much they enjoy the podcast because it is “not just another 40-minute podcast about leadership”. That is a pretty succinct summary of what we are trying to do with Business Leader.
There are plenty of fine podcasts out there about leadership or self-improvement. But rather than interviewing a management expert who has never been a leader or run a business, we speak to actual business leaders about what really happens behind-the-scenes. Not only are these fascinating stories in their own right, but they are the stories that the management experts study to build their views. You get to hear them directly. A biography in a 40-minute podcast.
Crucially, this includes stories of success and failure, highs and lows. There is a temptation when studying leadership, management or success stories to ignore two questions. Firstly, how do you know that people who failed didn’t have the same attributes? Historians will tell you that history is written by the winners, so this is a key question. Secondly, how did this person get the best out of their team and not just themselves? The stories in Business Leader delve deep into these questions.
The latest episode of Business Leader includes a collection of stories that could have been podcast episodes on their own. We spoke to Marc Allera, the chief executive of EE and BT’s consumer division, about how EE has gone from an upstart mobile phone brand to a business with big ambitions for the future. Allera is fascinating on this topic, talking about how BT initially planned to ditch the EE team when it bought the company for £12.5 billion in 2016 and how he drove a change in strategy.
But Allera also spoke about his career before EE and how that has shaped his approach. This includes how he led the launch of Sega’s Dreamcast games console in the UK in the early 2000s when he was just 26 years ago.
The story of the Dreamcast is a business case study in its own right. The launch was successful but the product ultimately failed. The Japanese company lost a fierce battle with Sony’s PlayStation 2 and Microsoft’s Xbox. Sega has never made a games console again. This is an edited version of what Allera said about the Dreamcast:
“I mean this is a podcast in itself. There's been a couple that have looked at this.
“The first thing is, being ahead of your time is not always a good thing. Look at Apple, for example. I think they're very, very famous for not being necessarily first, but when they come, they come better.
“It [the Dreamcast] was an online games console that could download, upload games - all this stuff. But there was no network to actually download or upload the games. So I feel like I've gone full circle now. I'm in a role where I can create the network that can help gamers and gaming more effectively.
“The Dreamcast was basically five to 10 years ahead of its time in its thinking. Sega were phenomenal in terms of the way they thought about the future.
“I think the biggest thing that Sony did brilliantly was to open up their developer kits and democratise it. Even to this day, Nintendo is still pretty closed, Sega was pretty closed. It was very Japanese-centric, quite hardcore-gaming-centric. Crazy Taxi was a brilliant game, but that only appealed to a certain number of people. Whereas Sony were the ones courting EA [Electronic Arts, the game developer] and getting FIFA first and all this kind of stuff. They were very smart at democratising, opening up and taking an international perspective as to what the big games were going to be. They were often more aggressive on pricing and had that long-term view.
“It could have all been very different. But it wasn't. It was a fascinating time to be part of Sega though.”
You can listen to the episode in full via Substack here, Apple here or Spotify here
There will be extra time to enjoy this episode as there will be no new Business Leader episode this week. The podcast is taking a one-week break. There is a good reason for that, which we will reveal tomorrow…
Other stories that matter…
1. The Body Shop’s UK business is set to fall into administration, putting more than 200 shops and hundreds of jobs at risk. The company was founded by Dame Anita Roddick in 1976 in Brighton. The private equity firm Aurelius bought The Body Shop for around £207 million in a deal that was completed at the start of this year. However, the new owners have concluded that The Body Shop’s finances are worse-than-expected, according to a story by Sky News here
2. “The hard truth is that Britain’s entrepreneurs simply don’t innovate”. That was the headline of a comment piece by The Observer’s economics editor Philip Inman which attracted a lot of attention on social media over the weekend. The piece argued that the government should give tax breaks to big companies rather than entrepreneurs. “If you want innovation and creativity, big companies with expertise to spare are a better bet – or the kind of startups that thrive, like arm’s-length subsidiaries, shielded by the umbrella of a university or private equity firm,” the piece said. “These are companies worthy of targeted state support. On the other hand, the idea of the entrepreneur as wealth generator par excellence is at best unproven and at worst entirely misplaced.” It’s a thought-provoking column and you can read it here
3. A piece from Saturday’s Financial Times that I wanted to share. The regular Lunch with the FT interview was with Sir George Iacobescu and looked at the story behind how Canary Wharf was built. I have been lucky enough to interview Sir George a few times myself. He is one of the most impressive - and generous - people I have ever met. As the piece says, what he has achieved is literally monumental. You can read the interview here
4. Some excellent data and graphics work from Bloomberg has visualised how the UK travels by train and what the most popular journeys are. It shows that London dominates, as you may expect, and that the rail links between cities in the north of England and the midlands need to be improved. You can find the maps here
5. The author David Epstein has published a Q&A he did with Gloria Mark, a psychologist, about her book Attention Span, which is all about how to focus on key tasks and the mistakes that people are making. A key point is recognising that you need to treat your mental resources like a tank and constantly need to fill it up. You can find the Q&A here
And finally…
It was the Super Bowl last night and as well as the sport there was, of course, the adverts.
40 years ago at the Super Bowl, Apple unveiled its 1984 advert for the Macintosh, which was directed by Ridley Scott. That advert remains one of the most influential of all-time.
There wasn’t anything quite so eye-catching last night, but some of the biggest companies in the world spent millions of dollars trying to get their message across, so it’s interesting to see what they did. You can find a round-up of all the adverts in the video below and then a separate video showing Apple’s 1984 advert…
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Best
Graham