It was my junior year in college that I picked up this free issue of BusinessWeek. It had a special section about Silicon Valley, and reading it was like an epiphany. It was amazing to read about unconventional folks, mavericks, and renegades were truly shaping our world. They were because after the industrial age, we live in formation age and these companies were creating innovative software and hardware that were fueling and driving information age. I wanted to be one of them, creating a company that would change the world and perhaps make a lot of money on the side. But, I wasn’t sure how I would go about doing it. I was naive and still trying to figure out my place in this relatively new world, having immigrated to US just about seven years ago.
Well, I had an opportunity to work for startups in the Silicon Valley, and it was during this time that I became fascinated with high-tech marketing, thanks to VP of Engineering at Caspian Networks who recommended Geoffrey Moore’s Crossing the Chasm. He is now founder and CEO of Ethernet fabric company. Since then, I wanted to move onto product marketing area, but the opportunity didn’t arise until 2004.
I had a chance to work for Samsung Electronics in Korea. It wasn’t an easy decision. It took me three months to decide. I’ve heard some horror stories about harsh treatment from jealous colleagues and cultural shock experienced by Korean Americans who went to work for a company in their mother land. Also, they were going into a very tough market, router market where Cisco owns 70% market share in all segments and 95% in mid-range segment. Other big telecommunications companies like Nortel, Alcatel and Lucent tried to challenge Cisco, but all failed. What I liked about Samsung was that it had huge amount of cash. If Samsung were in the game to win, it was going to be a long battle that would require lots of cash.
But, what I faced was quite dismal. Samsung, a large company in all aspects with 200K+ employees worldwide, truly exhibited everything you could expect from a large company. Working there was living the words of Clayton Christensen‘s Innovator’s Dilemma. And we are not even talking about a disruptive innovation. Actually, most of the leading Samsung products happen to be with sustaining technologies instead, like more dense memories or phones packed with more and more advanced features. Clayton Christensen’s definition of disruptive technology is not radically different technology, but entirely different application of current or new technology targeting entirely different market.
I am a Korean American, and I am somewhat passionate about Korean companies. In the back of my mind, I thought my high-tech marketing knowledge with heavy experiences in data networking and in startups, I could make a real impact and be the real change agent at Samsung. It didn’t happen, and I could spend another full post on why. At any rate, in the light of iPhone’s huge initial success, selling out 500K units last week, I wondered how come no Korean company, with heavy chips on their shoulder and arrogance could not create such “iconic” product that people could get really passionate about. Other foreign companies have done it. Sony certainly has done it…., many times with Walkman, Playstation, etc. According to Tony Seba and in his book, Winners Take All, success of Apple’s iPod could be attributed to creation of “whole product”. iPod was only successful with iTune application and iTune store by providing users a complete digital music experience. iPhone might actually fail because of poor experience with AT&T. Wireless carrier matters a lot to create “whole product” of a cellular phone since poor cellular quality will hinder users from positive experience.
I think it’s useless to exclaim R&D or technical strength if you cannot exploit it and lose in the market. To win in the market, you have to know the market. Peter Drucker once said that “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” Perhaps the problem with these Korean companies and why they have not been able to create an iconic product is that they do not know the market.