Archive for February, 2010

Among the many crucial moments in the history of Research In Motion was the arrival of Jim Balsillie in 1992. At the time, when he was hired by Mike Lazaridis, there were only fourteen employees. As RIM’s new vice-president of finance and business development, Balsillie invested $125,000 for a one-third interest in the business.

“The arrival of Jim Balsillie was a turning point for the company in several respects,” said Dale Brubacher-Cressman, employee number five at RIM. “There was only so much Mike could do. He recognized the need to get business support into the company to get the company to grow. Prior to Jim’s arrival was the only time in the history of my working for the company that there was one month I thought I might not get a paycheque. Jim’s arrival brought some business expertise and some ability to focus on that side of the organization.”

Balsillie’s investment was quickly put to use. Two days after he joined, Balsillie asked accountant Mike Vasilliou to produce a balance sheet so he could see how much RIM’s corporate health had been improved by his $125,000.

“Well, it’s gone,” said Vasilliou.

“What do you mean, ‘it’s gone’?”

“We had all these pent-up payables. It’s all gone.”

“At that moment, I thought this was certainly by definition a one-way door,” recalled Balsillie.“I didn’t realize how much financial duress the company was in.”

Even after spending a quarter of a century building Research In Motion, Mike Lazaridis remains deeply passionate about what he’s doing. “Mike is still a little-boy gadget freak. Whenever I see him at a trade show, he takes me aside, pulls out the latest toy, and he oohs and he aahs all over it,” says California-based wireless consultant Andy Seybold. “Mike is not driven by money. He is driven by ‘What can I do next to take this platform and turn it into something super cool yet again?’ And he keeps doing it.”

Co-CEO Jim Balsillie equates their roles at RIM in a roiling, competitive world with the wild ride of surfers. “It’s like a beach which has got three or four series of waves. You have the rolling waves here, but then you sort of have a semi, loosely coupled set of rolling waves over here, and you have a set here, and they’re all one body of interrelationships, and wave by wave by wave, you have to understand that they’re separate but not. Between Mike and I they’re highly, highly interrelated. You’re surfing these waves but you are not in control, you are definitely not in control. You just aim and hold on and tweak where you can.”

Of all the erroneous allegations made about Research In Motion over the years, the most persistent has been that some competitor is developing a killer device that will either end RIM’s growing dominance or dispatch the company into oblivion. Analyst Mike Urlocker once drew up a list of all the products that had been billed by somebody as “BlackBerry killers.” They included Palm 7, Qualcomm PDQ, Motorola PageWriter, Motorola T900, 3G, MSFT Exchange Server 2003, Compaq Ipaq, Ogo, Sidekick, Nokia E62, Sendo, Microsoft Stinger, and Pocket PC. To that list could be added other, more recent, mainstream candidates such as Palm Pre and Apple’s iPhone.

“I couldn’t name another company that has been so consistently underestimated, even to this day,” Urlocker, a technology analyst with GMP Securities told me during the research for my book. “They don’t follow a trend, they create trends. How could some company in Waterloo get that right? The reason is that Mike Lazaridis stuck to fundamental principles of physics and engineering. He understood the limitations that a network, or a battery, or a colour screen imposed on devices.”

BlackBerry ranks #1 in North America and market share numbers on global smartphone sales released today by Strategy Analytics show that RIM is on a roll globally. According to the figures, there were 53 million smartphones sold in the fourth quarter of 2009. RIM, Apple and Nokia are all gaining market share with Nokia in the lead at 39 per cent, BlackBerry next at 20 per cent and the iPhone at 16 per cent. “RIM continues to expand its international footprint beyond the core territory of North America deeper into Western Europe and parts of Asia,” said the report from the Boston-based research firm.