The PearPad: A Cautionary Tale for Founders

April 19, 2010

I love my iPad.  I have discovered some great use cases for why I “need” it.

Now that I have that disclaimer out of the way, let’s talk about why the iPad is a terrible example for startup founders.  Apple has violated all of my deeply held beliefs about innovative product development and marketing.  It may work for Apple – time will tell – but it won’t work for the entrepreneurs that I know.

The challenge is that the iPad was not designed or marketed with a clear use case.  I think this has been the cause of much of the negativity about the iPad that I’ve seen in blogs,  and on Twitter.  Because Apple failed to present a clear use case, we have been left to imagine the use case for ourselves.  This has led way too many users to think of the iPad as a laptop replacement.  Unless a customer only previously used a laptop for consumption, and not productivity, the iPad falls way short of that use case.  Given that many people have now realized this, potential customers are wondering whether they need a computing device that sits between their smart phone and laptop or is the iPad just a cool extravagance.  Moreover, without a clearly articulated use case, marketing to find the right customers is expensive and inefficient. Without that focus, the company is pretty much marketing to everyone hoping that users figure out what to do with it. 

This can work for Apple, but I don’t believe it will work for my fellow startup founders.  Apple has an unmatched brand and loyalists (me included) are buying the iPad and figuring out their own use cases.  Apple also has an incredible marketing engine that not only inspires people, but also spends way more money than any startup can afford.  Apple has an unmatched developer community trying to create killer apps for the iPad.  Finally, Apple has terrific distribution that no startup can match.  For all these strengths, the iPad may succeed despite lacking a clear use case.

Let’s rewrite this story with a hypothetical startup.  Imagine that a product equivalent to the iPad was created by a startup called Pear and no one has ever seen such a device before.  Pear has no proven distribution and a very limited marketing budget.  Let’s assume that Pear had the extraordinary hardware design, software UX and supply chain expertise to create something as beautiful, low cost and multipurpose as the iPad and was the first in the world to market such a product.  Let’s call it the PearPad.  Let’s even assume that Pear is reasonably well financed for their launch with $15MM in fresh venture capital.  Would anyone buy the PearPad?  Besides a small group of fringe early adopters, I think the answer is no.  I think PearPad would be lucky to sell 1000 devices in its first month; far from Apple’s 1MM.  It would be a stretch to imagine how PearPad would ever recover its enormous R&D investment to create such a high quality product. Put another way, an innovative device marketed at everyone is likely to fail because it doesn’t solve a clear problem for anyone.

What would PearPad have to do to be a success?  Pear would need to design the system around a clear use case and market to customers that had the strongest need for that use case.  Over time that use case can broaden to target more customer segments.  However, at the beginning, a lack of focus makes it unclear what one does with the device, who should buy it, and how to market to the right customers.

The following are some pretty half baked examples of use cases, but hopefully the point is clear: the PearPad could be the world’s best mobile multimedia device, and will effectively replace the market for portable DVD players; then Pear could target family travel.  Or perhaps it is the world’s best lightweight road warrior device and will disrupt the netbook market; then Pear could target business people taking commuter flights and the product specification would emphasize productivity tools instead of entertainment tools, as in the last example.  Maybe it is the best home web surfing device; then Pear could target stay-at-home parents and focus the software on the browser – it may even need Flash. Pear might be the best portable gaming device; the specification would maximize graphics and marketing should be tilted at gamers and likely a younger demographic. Obviously any of these focused use cases would require a different product specification to maximize value and prove out the benefits.

Entrepreneurs beware.  You are not Apple and won’t be successful following its example.  Figure out who your customer is.  Focus the design of the product at a use case that creates clear value for this customer and utilize your very limited marketing dollars to gain the attention and admiration of that customer.  Otherwise, you’ll end up having the sad outcome I imagine for Pear; raising obscene amounts of money and never finding a market for your extraordinary but ill-defined product.

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25 Responses to “The PearPad: A Cautionary Tale for Founders”

  1. Scott Paley Says:

    And of course Eric, you have put your money where your mouth is here. When you started Brontes you had this great 3D camera technology with a billion potential use cases. You picked one (dentistry) and the rest, with a few major details glossed over, is history.

  2. Anonymous Says:

    Funny… Apple is what it is now, because it ‘crossed the chasm’ into the mainstream by going after specific use cases: graphics departments, education…

    Now they don’t have to.

    Regardless, your advice for startups is excellent. For any readers out there, pick up the book “Crossing the Chasm.” It’s dated, but still good advice…

  3. Scott Paley Says:

    Well, I’d say Apple is what it is now more because they went after the consumer mp3 market with the iPod, which drove demand for iTunes and Macs. And that grew into the iPhone, and now the iPad. The timing has been great, with a general explosion of end-user demand to produce content due to sites like Flickr, YouTube, etc., which Apple products tend to excel at (both on the production and consumption sides.)

    When Apple was focused on niche markets, they were on the verge of death. I remember having an argument sometime around 1994 or 1995 with a very close friend of mine. He was convinced that Apple would cease to exist within 3 years.

    Obviously it didn’t turn out that way.

    But, as Eric points out, Apple is an exception to many, many rules. It’s not just difficult to try to copy Apple, it’s probably foolish.

  4. Scott Paley Says:

    Also, agreed – “Crossing the Chasm” is a classic, and still worth reading.

  5. Anonymous Says:

    You hit the nail on the head in many ways, not the least of which is why many people, myself included, do not like the iPad. I see it as a device sold as extortion. Sure, there is a chance people *might* find useful things to do with it, but not necessarily at the price point and maybe not at all. Instead of providing something that has a clear chance to advance society in some fashion, they are just making more crap that their marketing department can compel you to buy. It would make me feel cheap if I purchased something without any clear indication that it had any value for me because of some ill-placed brand loyalty.

  6. steve cheney Says:

    nicely laid out argument – it’s amazing what apple can pull off!

  7. Anonymous Says:

    Apple is a bad example for startups because they were started in 1976. They’re 36 years old.

    But you’re missing half the story. Even if the PearPad had “extraordinary hardware design, software UX and supply chain expertise to create something as beautiful, low cost and multipurpose as the iPad and was the first in the world to market such a product” and even if they had $15M to assuage their cash flow, they’d still not have the iPad’s success because the iPad is not about the hardware. It’s about the software (nearly 150 000 apps), the media (Movies, Music on iTunes), the content (newspapers), the flow of information and the creation of an ecosystem that enables others to make money.

    You also have to remember that it’s a kick-ass web platform too.

    Apple did it well – they engineered a platform which would kill their current cash cow – which is better than letting a competitor kill your current cash cow.

    They “let a thousand flowers bloom” with the iPhone/iPod touch platform and it created 130 000 flowers. Then they introduced the platform which made people wonder if the iPad was just a big iPod touch or was the iPod touch just an “iPad nano”.

    My day job is helping media people make money. For years in print, the people making money were the people driving trucks and operating presses. The iPad can change that. For years, in movies it’s been about moving plastic disks around, the iPad can change that. I bump into people every day embracing new ways to interact with their data.

    As a creativity device, as a learning device and as an accessibility device, the iPad is inspiring change and change was sorely needed.

    You might not see or appreciate the use case for the iPad but upon the release of this device, I have personally seen a dozen different use cases, a dozen different market segments changing their ways to embrace it. It may partially be that because we have a very high percentage of iPhone developers in Ireland (compared to most regions) that we have interest and experience in developing for the platform.

    And I LOVE that the iPad is polarising people. That’s how I know it’s a killer product. Every time someone says that it’s a device that’s sold as ‘extortion’ or ‘crap’ I know that I’m right because I can find two or three that love it. Love it or hate it, you’d be a moron to ignore it.

    And yes, we’re early adopters. But someone has to take the lead.

  8. David Says:

    cimota, it is about hardware. Hardware that will not fit in your pocket and is too slow to run productivity apps, making it a third Apple device you’ll have to lug around in addition to your iPhone and MacBook.

  9. Anonymous Says:

    Hi David, No, this is something that folk forget. It’s never about the hardware.

    Heck – the iPad is about as minimalist as you can get. There’s more visible hardware on a digital photo frame. It is all about the software and ignoring the software ecosystem is exactly why PearPad would not succeed. The hardware is just a frame for the software.

    This is also why the competitors are such also-rans. Lack of attention to what people really want. Normal people don’t want USB, they don’t even know what USB is.

    I’m not worried about the odd day when I have to bring three devices to work because I already carry two. But most of those days I’ll only need to carry the two lightest devices. And that suits me fine.

    I’m not telling you to buy one. But I’m happy that folk are polarised on it. At least it’s not like the JooJoo or WePad or OpenFreeTablet where no-one really cares.

  10. Anonymous Says:

    the iPad was meant to make browsing the web a better experience. the iPhone was meant to make a phone a more useful device. simple as that. there’s no way they could have predicted what has happened with the iPhone, and that’s the point exactly. they aren’t in that business – they have no idea what will happen with the iPad. But considering the emergence of consumer web, it’s about time there was a better way to browse the internet. when you build an impeccable piece of hardware with a relevant purpose that encourages open development, history has shown that good things will happen.

  11. Anonymous Says:

    cimota, here is where I disagree with you. Now, I may just not have seen it, but to my knowledge Apple has not actually suggested any real use cases for the product. People may find some, but without their idea of a use case it is hard for anyone to judge it’s usefulness. There are plenty of products with clearly defined use cases that also find other uses by virtue of their users, but when that happens we give credit to the users, the market, and the producer. When Apple spits out more shiny garb with closed control marketed at mass America, and they do it without a use case, people give them all of the credit in the universe when their customers figure out how useful the product is. And beyond that, those customers pay them a healthy premium for it. Now, I am ok with that for the mass market, but not for the technologically intelligent. It is a slippery slope.

  12. Anonymous Says:

    What is the use case for a great web browser? What is the use case for a laptop? What’s the use case for art? What’s the use case for a pet dog?

    I see use cases for the device in several markets. You don’t. Your emotive language would tell anyone that you’re not one to be reasoned with.

    The solution is easy, however, don’t buy one.

  13. Anonymous Says:

    Apple has not actually suggested any real use cases for the product? They shipped an eBook reader and shouted about it quite loudly. Then they showed us comics on it.

    Maybe you just missed these announcements as it was a fairly low-key launch.

  14. Anonymous Says:

    Anyway – this isn’t about whether the iPad is any good.

    It’s about how comparing Apple to a startup is daft.

  15. Eric Paley Says:

    Amazing the reaction when people think you’re questioning Apple. By the way, I’m not enough of an authority to question Apple. I have little experience on what a company with such resources should do and Steve Jobs seems to be doing a great job without any input from me. I’m just studying this product from the lens of a startup entrepreneur and think that Apple’s approach might mislead some founders into introducing a platform without focusing on clearly being the best at a solving a specific problem for a targeted set of customers. I think few startups have the resources to make that approach successful.

  16. Scott Paley Says:

    Perhaps Twitter is an exception? Twitter has developed a nice platform ecosystem, and I’m not sure that on day 1 they could have told you exactly what the use cases would end up being.

  17. Anonymous Says:

    Eric, I’m not questioning Apple. I’m questioning your simile.
    How many startups have $35B in cash to force through a success?
    The PearPad example is just nonsense.

  18. Anonymous Says:

    Hi Scott, Twitter’s use-case was “yeah, I’d like to be able to broadcast my SMS’ to a group”.

    It’s turned into a bit of a monster searching for a business model since.

  19. Eric Paley Says:

    Because it’s absurd for startups to think like Apple, right?  That’s my point.  Perhaps obvious, but I sit with entrepreneurs regularly that use Apple as an example and aren’t sufficiently focused on a clear user need.  Sent from my iPhone

  20. Anonymous Says:

    Don’t confusion passionate argument with the absence of reason cimota. It is rude to be assumptive.

    To the point, I disagree that Twitter is an exception because it is not really the same category. Twitter doesn’t ask me to purchase a device that I didn’t already have. However, here is where cimota clearly is correct. Apple is replicating their prior successes by integrating vertically to include the hardware, but the real value for them lies in their content delivery system. Also, do not forget that Twitter also began by solving a problem for the people that built it. I am not sure the iPad does that (insert distinctly bland statement here).

  21. Anonymous Says:

    i was walking out of the mac store on the miracle mile in chicago about a week ago when i overheard, “i don’t get it. so it’s a giant iphone, but it doesn’t make calls. is that it? i’m understanding?” the ipad’s unclear use case has created controversy–no doubt. some of you may call that marketing genius and others may have something else to call it.

    i think eric’s point is accurate. wheather you like the ipad or not, the use case(s) for the ipad is at a minimum softly communicated and on the other hand perhaps not really there. in either case, start ups and entrepreneurs shouldn’t use apple’s soft communication or non-existent use case as a business model to follow. however, apple has mastered concepts of brand creation, simplicity of design, and platform creation; and nearly every company can benefit from reading those pages out of the apple playbook.

  22. Anonymous Says:

    I think you are hitting an interesting point. I’m not a full Mac geek (writing this on a Macbook and with my iPod touch near, an iPod nano somewhere… but my usual computer is an Acer Aspire One with Linux), but I may buy an iPad and look for uses. Just because it comes from Apple, and I know they make great devices. And that would not work for a startup making its first device, as good as it may be.

    Ruben

  23. Anonymous Says:

    “a laptop for consumption, and not productivity”, that’s exactly my observation as well, twitted a while ago…

  24. Anonymous Says:

    IPad is not intended to replace computer in anyway.It however does a lot of things which a computer does and surprisingly it does better and faster.Ipad is an amazing invention from apple.It has many flaws and drawbacks too.Apple should consider those things.It doesnt have camera even.I usually shop on this online shopping site for ipad when i came acros with different blogs.Do check it out for many other products.Ipad and blackberry books are both the same.Blackberry book comes with many new feature while ipad lacks sum functions.

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