The Death of the Little Flip That Could

Cisco’s announcement this week that The Flip video camera will be killed and 500+ people laid off in that group is a damn shame to me for two reasons, one somewhat personal and the other professional.

The personal grief for us is that The Flip was an early client of our San Francisco-based agency, Native Instinct.  We built their Website, designed their E-commerce site, helped design features including FlipShare, the one click video sharing service.   We built their first Facebook page in the Flip social media strategy three years ago.  (By the way, as of this morning The Flip has 345,841 friends on Facebook.)

We have friends and collaborators at Cisco who may lose their jobs in this move.

The professional anguish is that from a market perspective this move seems so unnecessary—the Flip continues to thrive as a business, filling a market that The Flip invented: low cost, just good enough, one click video recording.  Before the Flip was invented camcorders were expensive and bulky.  The Flip fits in your shirt pocket and can shoot in an instant, all for $129.

Now all that brand equity and market share will be flushed down the Internet’s sewer system.  Gone.

David Pogue of the New York Times has perhaps the most insightful obituary, published last Thursday, “The Tragic Death of the Flip,” which speculates that what Cisco wanted all along was not the Flip product and it’s marketplace, but the core technology of the Flip that created very low cost decent quality video recording.

Furthermore, according to Pogue, Thursday was the day that Flip was scheduled to release FlipLive, a version that would allow one-click live video streaming to the Internet, ala UStream.  Perhaps it was this new innovation that Cisco feared—that one of its own divisions would create a mass video streaming market and all Cisco would get out of it is selling the cameras.   There may be unspoken reasons why Cisco bought Pure Digital, the inventors of the Flip for more than $500 million and then shut them down two years later.

Supposedly the reason Cisco bought  the Flip was they thought it would be good for Cisco to actively promote anything that caused people to push more video over the Internet—and therefore through Cisco routers.  This is the same strategy supposedly behind Google’s acquisition of You Tube—anything that drives more use of the Internet is good for Google.  The math behind these strategies escapes me, and unfortunately I don’t get to make those decisions.

The title of the press release issued this week by Cisco was “Cisco Restructures Consumer Business.”  At first that might sound misleading, since the real news was the death of the Flip.  But perhaps that’s really what it was—Cisco realizing they were taking their eyes off their core business by expanding into selling video cameras.

Cisco wants to be become the leader in video networking.   Selling video cameras at a small margin wasn’t good business from Cisco management’s perspective.

Flip was in the business of turning everybody into their own video studio for a very low, one-time cost of less than $200. That apparently was a good enough business model for Pure Digital Technologies, the builders of the Flip.  It wasn’t good enough for a company focused on routers.

Some people say that smart phones that can shoot video were the death of The Flip, and I think that’s what Cisco would like us to believe.  As Pogue points out, the overwhelming majority of people own cell phones that don’t have video capabilities.  Yes, there are competitors coming from Sony and Kodak, but Flip had the brand equity, the reputation.

The Internet has always smiled on people who can figure out ways to provide low-cost / no-cost products and services online.  Google is a $175 billion company today because it provides the best search via one simple box to everyone for free.  All the huge successes online today are free or almost free, from Facebook and Twitter to Mint and Basecamp.

The Flip was a huge hit not only with social media mavens and software nerds, it was big with moms and dads and grandparents.  As my friend SEO maven Adam Prohl put it after buying his mother a Flip, “it passed the Mom test.”  It was so simple.

But the Internet has also seen products and companies that flash into prominence, and then disappear: Overture, Inktomi, eToys, GeoCities.   There’s not much rhyme or reason about which acquisitions work and which don’t.  eBay bought PayPal and both thrive today.  Yahoo acquired and all that did was make Mark Cuban a billionaire and owner of the Dallas Mavericks.  Microsoft bought Hotmail and, well….I’m not sure what to think of that.

Maybe the Flip was too simple to survive.  It just was a great little camera with one-click shooting, and one-click upload.

I think the loss of the Flip is a bigger emotional wallop for owners and fans because it’s a thing that each of us carried wherever we went.  And we used it to capture a lot of video we wouldn’t have otherwise gotten—professional and personal.  The closest parallel I can think of is when Polaroid shut down.  I grew up with a Polaroid in our house.  When I heard a few years ago Polaroid was shutting down, I thought about when I was a kid and we would take a photograph with our family Polaroid and then gather around, waiting for the image to appear, like magic.

The Flip brought us magic, too: one-click, full motion video from a camera that fit in your pocket.  Now it’s just a former Cisco acquisition that was judged to be a low-margin business.  That makes us all a little sad.

I wonder what that next piece of magic we find on the Internet will be.  No matter—I know millions of Flip camera owners will still keep a place of honor on their desks–or in their pockets–for that little Flip that could.



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About Rohn Jay Miller

I'm a strategic designer who works with clients who are transforming their business models because of change brought on by the Internet. Solving disruption is often a problem and an opportunity at the same time. Previously I was a founding partner of Ikonic/USWeb in San Francisco, and Senior Vice President--Product & Technology for Knight Ridder in San Jose.

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