14
May

Regular visitors will have noticed a few alterations to my blog during recent days. The title, BlackBerry by Rod McQueen, has become the less specific Musings by Rod McQueen. My book about BlackBerry was published two years ago; it was time for a change. There’s also a new author photo and a new section called Next Book, another reason to change the blog heading.

Driven to Succeed, co-authored with Susan M. Papp, almost didn’t happen. In August 2010, I received an email from Dan Bjarnason, a CBC-TV reporter I met in Ottawa in the 1970s. He said he had a friend who was interested in advice about a business book. My first reaction was, “What a waste of time. I’ll just have my brain picked.” But after further thought, I decided to find out more.

Dan’s friend turned out to be Susan Papp, an award-winning journalist. She and Dan had worked together at CBC in the 1980s. Susan established her own production company in 1993. Among other creative work she produced and directed a documentary, The Young Rebels, featuring half a dozen individuals who’d fled Hungary after the 1956 Revolution, come to Canada, and risen to prominence in a variety of fields. Among them was Frank Hasenfratz who launched a one-man shop making oil pumps for Ford in the basement of his Guelph, Ont., home. Today, Linamar Corp. has almost 16,000 employees in eight countries.

When Hasenfratz decided he wanted a book about Linamar, he turned to Susan, who is also of Hungarian descent. Susan told him she felt comfortable writing about him growing up in Hungary and his participation in the Revolution but admitted she knew very little about business. That’s when she asked Dan to recommend a co-writer. When Susan and I first talked by phone I thought the idea was excellent but told her I’d had trouble with collaborators in the past. I then gave a lengthy list of things that could go wrong.

After I hung up, I thought, “Why are you so negative? This is a great entrepreneurial story.” I phoned Susan back and apologized. She just laughed and forgave my wet blanket ways. The result, Driven to Succeed, will be published in October by Dundurn.

Think about it. The Auto Pact has been in existence since 1965 but only two Canadians have taken advantage of that special access to the U.S. auto parts market and gone on to create a global firm. The other is the better known Magna and Frank Stronach. Driven to Succeed gives Frank Hasenfratz the prominence he deserves.

For me, the lesson is this: always to be open to new ideas. You just never know what might come about. Even a wet blanket can catch fire.

Category : General
10
May

There’s a house in Forest Hill that just sold for about $4 million. No one will live in it. The buyer plans to tear it down and build something even more grand. Imagine, $4 million for a teardown. That’s more than the average Joe will earn in a lifetime of schlepping to work every day.

Even in my far less fashionable neighborhood, teardowns are going for $750,000. In their place are being erected McMansions, oversized and out-of-place-monstrosities that all but block out the sun on the street. I fought one such proposal for more than two years through three sittings of the Committee of Adjustment. At the second hearing, the garage at the rear of the lot mysteriously disappeared from the submitted plans. Density was beyond the bylaws, but not enough to matter, said the committee. But the garage remained. The third hearing was all about maintaining the garage that had previously not existed on paper. Oops, said the developer. Despite the density being more than 25 per cent over what the bylaws allowed, the Committee of Adjustment approved. In his oral comments, the chairman said, “We’re here to give relief to the rules.”

There are more teardowns under way in my block. I didn’t protest any of them. Why waste time when the official approving agency pays more attention to protecting mature trees on the lot than preserving a neighbourhood of fine family homes.

Many of my neighbours don’t mind. They believe such activity raises the value of their own houses. Meanwhile, the area has become a construction zone. If I’d wanted such surroundings, I’d be living in tract housing. There’s more to life than seeing the value of your house increase. That’ll happen over time anyway. Meanwhile, what about serenity and quality of life. I place a value on that. Don’t you?

Category : General
5
May

My morning paper included a glossy 12-page ad supplement from Indigo. You know, the place that used to be a bookstore? Now, I like Indigo; they’ve sold a lot of my books. Plus they have more than half of the Canadian book market so attention must be paid. But Indigo is well on its way to becoming something else. In addition to the featured books, other advertised items include a vase, paperweight, tea pot and plates, sachets, honey, greeting cards, a scarf, and a tote bag.

I understand the business case. The items on the latter list have high profit margins. But so do books. Indigo makes more per book than either the publisher or the author. And, if a book doesn’t sell, Indigo can send it back to the publisher. Try doing that with a tote bag or a tea pot.

But while all of this might be irksome, to my mind what’s even worse is the selection of books offered in this Mother’s Day Gift Guide. Of the three dozen books shown, by my reckoning twenty of the authors are American. Second place goes to Britain with eight authors. France has two. All other countries, including Canada, are represented by one author. The lone Canadian book I could identify was Web of Angels by Lilian Nattel.

It wasn’t so long ago that Indigo played up its Canadian roots. The motto was “More Canada.” I’m happy sharing shelf space with sauces and saucers, but let’s not forget that there are thousands of books written by Canadian authors each year. Would it hurt to publicize more than one of them at a time?

Category : General
2
May

Here are seven things that have been bothering me in recent days.

1. Remember Elwy Yost on TVOntario’s Saturday Night at the Movies? He was a bit geeky but three times out of four his movie choice was worth watching. He’s been replaced by a stream of hosts. I couldn’t even tell you the name of the current guy. The number of movies aired each week has doubled from two to four. That means about 130 movies since Labor Day of which I’ve watched maybe five. Who’s picking these duds?

2. The media in Canada is all too cosy. The Toronto Star and The Globe and Mail are now sharing a distribution system. Shaw, Rogers and CBC are sharing online ads. Compare that with the U.S where Amazon, Apple and Microsoft are battling for supremacy in e-book sales. Such flabby mediocrity is why we get less choice and pay higher prices. For everything.

3. My granddaughter wants to be a veterinarian so I took her Saturday to an open house at the Ontario Veterinary College in Guelph. The ads had photos that showed animals at all three locations. At the first stop we saw labs, a therapy pool, surgeries, a doggie daycare centre and digital x-ray equipment, but no animals. At the second location, there were three horses. My granddaughter fed one of them some straw only to have someone come along and post a sign saying, Do not feed the horses. At the third and final location, people leaving the building warned us off saying it contained only skeletons and was boring. What a lost opportunity for good public relations with the local community and future vets.

4. The Picasso exhibit that just opened at the Art Gallery of Ontario is spectacular and sure to be a summer blockbuster. Too bad every room has a guard with a walkie-talkie blaring inanities. Haven’t they heard of earbuds?

5. I don’t want an instore boutique Bloomingdales at The Bay. That’s like the tiny Tim Hortons at the Esso station. I want the full-blown department store. Despite our sanctimonious view of ourselves as a financially well-run country, we don’t have the demographics for U.S. retailers except for low enders like Walmart and Lowe’s.

6. It doesn’t matter what time of day I tune in CBC Radio Two, the music is hopeless, the chatter vapid. The ratings must be awful.

7. What urban planner approved the spate of condos along the Gardiner Expressway that block the view of the Toronto skyline? One pair of buildings under construction is so close to the highway that you could do a drive-by handshake with residents. And there’s no neighbourhood. Living there would make a stone sick.

Category : General
27
Apr

There are many whose deaths signal the end of an era but none so much as Florence Mary McEachren (nee Eaton) who died this week. Florence was the last of the children of Sir John and Lady Eaton. Sir John was the merchant prince of Eaton’s, the son of Timothy, founder of that great institution. Sir John died in 1922, when Florence was just a toddler. Lady Eaton carried on as the family’s public face for almost 50 years before dying in 1970.

Florence lived a life of privilege of the sort that no longer exists. Her mother adopted an English child, Evlyn, so Florence would have company. The two attended finishing schools in England and Italy, were presented at the court of King George and Queen Elizabeth in 1938, and regularly sojourned to Cannes and Fiesole accompanied by a chauffer and a Rolls-Royce shipped to Europe for their conveyance.

Despite an upbringing that should have created a spoiled brat, Florence grew into a wise, witty and independent woman whom everyone admired. During the Second World War, she tried to enlist but in those days women needed their husband’s permission and Frank McEachren refused. So Florence signed on as a volunteer truck driver for the Canadian Red Cross and served her country at home.

There were those who said Florence was brighter than any of her four brothers and should have run Eaton’s. Sir John’s will said she could be president, but only if no brother was able. John David Eaton was eventually designated and she told me she was not unhappy with the choice. She was not, however, pleased with what occurred during the sad regime of John David’s four sons, John Craig, Fred, Thor and George when Eaton’s went bankrupt.

When I interviewed Florence in 1997 while researching my book, The Eatons, she talked first about John David’s brothers, saying, “The others didn’t have the talent.” She then continued on to talk about the trouble the modern-day Eaton’s had gotten into by saying, “You need a certain talent; look what’s happening now.”

Florence was also able to see the lighter side of life. When I asked about John David’s propensity for drink, she talked about the family’s pleasure in fast cars and fast times. “We’ve all got gasoline in our veins. And alcohol.”

I won’t attend the memorial service next month. The family doesn’t like me much and no one deserves such a person around on an occasion like that. But I’ll be celebrating Florence’s life in my own way and wondering what would have become of Eaton’s if she and her progeny had taken charge.

Category : General
25
Apr

Here’s the continuation of the dozen reasons why I think Research In Motion is in trouble:

• Seven: Too few at the top. For most of the last ten years, upper management at RIM remained  little changed. I admire a lean machine but as the company grew from a bit player to a Goliath, more talent at the top would have been helpful … particularly in marketing. They hired an outsider but he didn’t last. Jim took over the job despite the fact that he already had plenty on his plate.

• Eight: Too many outside interests. I greatly admire and respect Mike and Jim’s mid-life philanthropy but it’s possible they were distracted by their various think tanks, university projects, and other ventures that did not come to fruition. There’s a reason why most businesspeople don’t become philanthropists until later in life.

• Nine: Apps are crucial. An app might turn your smartphone into a flashlight or find a good restaurant in a new neighbourhood. Outside developers don’t care about RIM and they don’t invent apps for the BlackBerry so BlackBerry has far too few, maybe 15,000–25,000 compared to iPhone’s 500,000. No one could possibly use, let alone need, 500,000 apps, but the choice is there and BlackBerry suffers by comparison.

• Ten: RIM’s culture has always been a developer culture. The people who wrote the code were the only ones that mattered. That’s all well and good when you’re the market leader, but when you’re battling for market share, you better have a marketing culture. That was Steve Job’s forte. He knew what people wanted before they even knew what they wanted. Except for the Torch, which was not a great success, RIM stuck with the keyboard and assumed that was the only game in town. They were wrong.

• Eleven: RIM’s acquisition of QNX in April 2010, the company that’s developing the software for the BlackBerry 10, was a mistake for a variety of reasons. First, it sent a message to all of RIM’s developers that said: You and whatever you’re working on is not the future, it’s the past. So much for the developer culture. Second, an inordinate amount of time and effort was spent producing a dud, the PlayBook, launched a year ago, the first RIM product with QNX software. Even though it was a failure, RIM stuck with it and recently issued an update rather than focus on getting new smartphone models out the door fast.

• Twelve: the long time between product launches. The 9900 came out last August (with the old software, not the QNX version) but the BB 10 with QNX won’t be out until this fall. That’s more than a year, way too long to wait. Moreover, the 9900 has quality problems. People I know who bought that model say it resets on its own once a week. RIM’s reliability has never before been an issue. The three-day global outage last fall further reduced client confidence.

Category : General
24
Apr

In May 2010, I went to Washington, D.C. as part of the U.S. book launch and had lunch with two friends who live there. One of them arrived at the restaurant excitedly holding a new iPhone and she would not stop talking about it. Right then, I knew BlackBerry was in trouble. I’d read about the lineups at release dates, but this was my first encounter with a devotee. I thought to myself, I published that book about BlackBerry just in the nick of time. Since then, it’s been all down hill for Research In Motion (RIM). At the peak, Jim Balsillie was personally worth $3.4 billion and Mike Lazaridis about $3.6 billion. Their net worth is now $385 million and $408 million respectively. That’s still a lot of money, but how would you like to lose 90 per cent of your net worth?

• Reason number one, more competition. Three years ago, BlackBerry dominated the smartphone market in the U.S. and is now a distant third with a 16 per cent market share far behind Android with 47 per cent and iPhone with 30 per cent. RIM can talk all it likes about Indonesia or Nigeria or Latin America but those markets are mostly low-end phones with slim margins. The market that really matters is the U.S. I was in Arizona in February, pulled out my BlackBerry, and the man next to me said, “You must be the last man in America with a BlackBerry.” When people talk like that, the buzz has gone and the buzzsaw has begun.

• Two. Founder Syndrome. Jim was not in fact a founder, the unheralded Doug Fregin actually co-founded RIM with Mike in 1984, but when Jim joined in 1992, RIM had only fourteen employees compared to 15,000 today. Mike and Jim succeeded for so long they thought they would always succeed and didn’t need to listen to what users were saying or what the market was telling them.

• Three. RIM proudly points to their 75 million subscribers and notes that each of those people brings in money every month from the carriers who share what they get with RIM. Right now, that’s about $5 a month. Excellent cash flow. But it used to be $15 … and it will continue to shrink.

• Four: It’s not unusual for tech companies to rise and fall. Nortel is another homegrown example. In the 1990s, everybody had a Palm Pilot. Today, nobody’s heard of it. Yahoo used to be everybody’s favorite but has lost its way. In the last five years they’ve had four CEOs. AOL just sold 800 patents to Microsoft for $1.1 billion because they’re under attack and need the money.

• Five: Jim and Mike were co-CEOs starting in 1993 until they recently stepped down. For a long time, being co-CEOs worked and then it didn’t work. In a story in the current issue of Toronto Life, writer Andrea Mandel-Campbell claims the split began at the time of the stock options backdating fiasco in 2007. She does not cite a specific source, saying Mike was angry to have been roped into that. He felt Jim should have had his back. The Toronto Life story may be right … but I have my doubts. I saw both Mike and Jim many times after that problem and noticed no particular strains between them. Still, there is no question they built separate internal empires and grew further apart. The strengths they drew from each other slowly dissipated. After a while, one plus one no longer equalled three.

• Six: Succeeding in global markets is not for the faint of heart. When I was researching my book I thought the people at RIM were tough enough. I was wrong. Look at Mark Zuckerberg, the founder of Facebook. He just paid $1 billion for Instagram, a company with twelve employees. He wanted their location data – it was like one newspaper buying the subscriber list of another newspaper – but he also feared Instagram’s potential rivalry. Zuckerberg’s actions reminded me of another successful tech entrepreneur, Andy Grove, of Intel. When Grove wrote his memoirs, the title was “Only the Paranoid Survive.” Mike and Jim were insufficiently paranoid. They thought they would go unchallenged forever.

To be continued ….

Category : General