How Firms Can Recover From High-Tech Stumbles
DAVID GREENE, HOST:
High-tech gadgets are increasingly playing big roles in our daily lives and many people rely on them to do more and more - answer questions, document our lives. And the chances that something might go wrong with these complex devices are pretty high. So how a company handles the inevitable bugs in their technology; pretty important for the company.
To talk about a few recent high-tech stumbles, we brought in Rich Jaroslovsky. He's a technology columnist for Bloomberg News, who often joins us on the program, and he joined us from Stanford University.
Rich, good morning.
RICH JAROSLOVSKY: Good morning.
GREENE: You wrote a column that caught our eye about some of these pretty serious stumbles at technology companies. And one problem that we've heard of in the past, that Research In Motion or RIM, the company that makes the BlackBerry. Last year, RIM launched its first tablet. Really important moment. Remind us what went wrong.
JAROSLOVSKY: Well, just about everything that could go wrong did. But the big mistake that they made was that it was half-baked when they released it. The software didn't do some really basic things, like email, if you could imagine a BlackBerry that couldn't do email.
GREENE: You know, companies go through all sorts of triple checking, quadruple checking on these products before they come out. How does RIM release a product that can't do email? That seems so basic.
JAROSLOVSKY: Well, my guess is - I mean they knew when they released it that this is a problem. And they had a workaround but people didn't want that, and I think maybe the company was kind of hoping that they could kind of power through the bad publicity and get the fixed software out quickly. That didn't work out so well.
GREENE: And what is the lesson that you take from their handling of that stumble?
JAROSLOVSKY: Well, the lessons I think are first of all, you don't put something out when it's not ready. And second of all, when you do put something out and there are immediate problems, be forthright about what happened. Give your customers some extra benefit to get them to sort of stay with you and be loyal. And RIM really didn't do any of those things, and as a result it took a huge write-off late last year on the value of these tablets. And the irony is it's a pretty good product now, but nobody cares.
GREENE: you bring up another product in the column that we read. It's called Jawbone UP. It was, you know, highly anticipated. Maybe not as much as the BlackBerry tablet but, you know, there's a passionate audience waiting for it. Remind us about that product.
JAROSLOVSKY: Jawbone made this device which is a wristband that tracks your sleep patterns, tracks your physical activity. It was very widely anticipated and came out late last year. And almost immediately there was a blowback from people who found that although it was advertised as being waterproof, in fact, the batteries were being affected by moisture and some other problems. And so while they sold a bunch of them when it first hit the market late last year, by Christmastime they had to own up that they had problems. They stopped production. But what they have done is they played straight with the people who had bought it. They offered a no-questions-asked refund, and the result is that they engendered a reasonable amount of goodwill. Now, that goodwill won't last forever and the longer the thing is off the market without it being fixed, the less that's worth. But they've sort of giving themselves at least a shot at a second chance.
GREENE: Well, let's talk about the lessons from one other company. It's a product called Dropcam, which I guess get some parents pretty excited. Also people who are paranoid got pretty excited about it because you can actually use it to look in on your kids or even other people in your house while you're online.
JAROSLOVSKY: Well, that's an interesting product. There's this Dropcam, which came out a while ago and its original version was a very powerful, very easy to use product, but it had a really high price tag. So they decided to redo the Dropcam, redesign it, and they came out with something that's much less expensive, $149, and has more features, including night vision and the ability for you if you're watching on an iPad or an iPhone, to literally talk through the camera.
GREENE: You can tell your baby to go to bed or something like that.
JAROSLOVSKY: Exactly. Or tell the dog, you know, stop barking or something like that.
(SOUNDBITE OF LAUGHTER)
GREENE: You know, Rich, it feels like some of the lessons we're talking about are age-old lessons and crisis communication in the business world. I mean, are these old lessons or are there some sort of new things when we're talking about technology and gadget in these high-tech companies?
JAROSLOVSKY: I think what's changed is that consumer expectations are so high. These gadgets are - when you stop and think about it - they are all little miracles. And instead of the consumer looking at a device in saying, wow, this does amazing things, the amazing quickly becomes commonplace. And if you want to stand his business, which is so hotly competitive and moves so fast, you kind of have to deliver that miracle and if you don't you've got to go the extra mile to meet those expectations.
GREENE: Rich Jaroslovsky always delivers for us when he comes on the program. He's a technology columnist for Bloomberg News. Rich, good to have you as always. Thanks so much.
JAROSLOVSKY: Thank you.
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