Friday, March 20, 2009

Simplicity

Do two successes equal a trend?

Pure Digital yesterday was acquired by Cisco for $590mm (15x invested capital). They were early advocates for the proposition that people are hungry for a simple point and shoot video experience. No bells or whistles, just get the primary job done without manuals, easy upload, and operations. Perfect for you and I.

Looking at the success, I really have to give credit to the management team, and investors (Sequoia) for sticking with the Company. The failure rate is high enough for start-ups, let alone firms that take two 'left turns'. In Pure's case, they began as a camera rental firm where users returned cameras to their local drug store for printing images. When this market disappeared, as digital camera prices fell, they morphed the proposition for video cameras; with content downloaded to CD's. When this market also commoditized, they pioneered the video point and shoot model and beat perennial also-ran Sony.

In an unrelated area, Twitter is building its user base and ecosystem by leaps and bounds by doing something just as simple. Such simplicity is creating a new category; real-time microblogging. I suspect they too will have a number of business model related 'left turns' which, I hope, they too will navigate successfully.

Success can be just a simple twist of fate away.

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