On the surface, Plastic Logic had it all. When the British company first emerged 12 years ago, it looked as if it could become a technology giant: after all, it was spun out of one of the world’s great universities, staffed by amazing engineers, and owned a killer product — electronic displays that could be printed on plastic as thin as a credit card.
But when the company announced on Wednesday that it was ditching its hardware business to focus on licensing its technology, it marked the end of a troubled decade in which it tried, and tried — and ultimately failed — to reach its ambitious goals.
Of course, the news was presented with an attempt at positive spin: chief executive Indro Mukerjee referred to the move as a revamp, suggesting that there were actually much bigger opportunities in selling the technology on to other businesses.
But he’s not fooling anybody: this strategic about-face might make sense for the business as it stands today, but it has finally killed off the company’s long-burning desire to revolutionize the consumer market. In fact, it’s such a strategic turnaround that, as of today, Plastic Logic has even stripped its once-expansive website down to a single page.
So what went wrong?
The inside story has yet to be told, but there are plenty of clear moments where the company’s dream fell apart — and lessons for anyone else wanting to take on a similar size challenge.
Timing is everything
Probably Plastic Logic’s biggest — and most obvious — mistake was in its inability to execute fast enough. The technology was there, sure, but the company struggled to turn it into any sort of viable product in time. It opened its first
factory fabrication plant in 2003, but still had no product by the time Amazon’s Kindle (s AMZN) first emerged at the end of 2007.
Still, perhaps executives at the Cambridge firm thought that a rising tide lifts all ships, and that they’d be able to capitalize on any success that Amazon had with the e-reader market. And by the time they announced the Que reader at the start of January 2010, it looked they might be able to deliver a superior product: it had a touchscreen, for starters.
But the Que’s moment in the sun was short lived. Just three weeks later, at an event in San Francisco, Steve Jobs unveiled the iPad (s AAPL) — and with it effectively blew Plastic Logic out of the water.
All that time that the company had spent building a product, and yet it had ignored what turned out to be its biggest threat: a screen that was not necessarily a better e-reader, but that sidestepped the entire proposition by being a vastly more powerful device.
It’s hard to fight momentum
Apple, of course, has been an unstoppable rise for the past decade. Amazon too. But it wasn’t just that they were big, powerful companies. They already had functioning ecosystems that their new devices could plug into — something that the Que had put to one side in its attempt to produce hardware.
That meant that while the Kindle and iPad offered a wealth of content at a click, Plastic Logic was left pitching its reader at business people: “Read your own documents with it,” went the pitch. “Save yourself from carrying around all those hefty bits of paperwork!”. But while a busy executive might not baulk at the cost of $800, surely they too realized that there was more value in a device that could also tap into a rich library of content.
And with potential content partners — like (say) News Corp (s NWS) or Hearst or Barnes & Noble(s BKS) — busy building their own rivals to Kindle, the future looked bleak for Que. In the end the device never even made it into stores, killed just eight months after it was unveiled, without shipping a single unit.
Pivot too many times and you’ll fall over
Pivots get talked about a lot these days, but although they can sometimes work — when Fab.com turned itself from a social network for gay men into a high-end design shop, for example — they have to be built on solid foundations.
When Plastic Logic was faced with disaster, the company tried to turn itself around again by ditching the consumer and business markets and focusing on another area where it thought it could get traction: education.
So it took a huge $700 million investment from Russian fund RUSNANO and started moving the heart of its operations eastwards in an attempt to find buyers. It worked hard to build a much cheaper version of the Que (the Plastic Logic 100) that it could sell into Russian schools.
Except Russian schools, it seemed, weren’t that interested either: in reality the company was still trying to sell the same product, just to a different audience — so it still had all the same problems as in the past, and was another couple of years down the line.
Now, unable to execute on that strategy and forced to pivot again, Plastic Logic may have run out of lives. At the very least, it’s going to have to face more turmoil before it can hope to come out the other side, with jobs lost in the U.S., U.K, Germany and Russia.
These are all lessons that the company has learned the hardest way. But it’s worth remembering, whoever you are: no matter how great your technology — and make no bones about it, Plastic Logic does have a remarkable breakthrough technology there — it has to be available at the right time and at the right price.
You’ve got to compete with your rivals in totality — across markets, across users, and not just on technical specs — and all the money in the world can’t save you if you can’t execute.
Clarification: A Plastic Logic spokeswoman got in touch to say that the was not a commercial factory, but a mini-fabrication plant (here’s an archived version of the opening announcement). It was another five years before the company’s first commercial manufacturing began in Dresden, Germany.