The Real Lesson of Cisco's Billion-Dollar Flip Debacle

The Real Lesson of Cisco's Billion-Dollar Flip Debacle:

Michael Mace, partly refuting the assumption all of us made after yesterday's "RIP Flip" announcement:

Most online analysis of the announcement doesn't really explain what happened. The consensus is that Flip was doomed by competition with smartphones, but that says more about the mindset of the tech media than it does about Cisco's actual decisions. I think the reality is that Cisco just doesn't know how to manage a consumer business….

Cisco is an outstanding company, and an excellent place to work. But it screams respectable enterprise hardware supplier. To someone from a funky consumer company, going there would feel like having your heart ripped out and replaced with a brick.

However, Michael doesn't completely avoid the assumption that smartphone competition led to the demise of Flip:

If Pure Digital had remained independent, would it have innovated quickly enough? Maybe not; it's very hard for a young company to think beyond the product that made it successful. But merging with Cisco, and going through all of the associated disruptions, probably made the task almost impossible.

And finally:

The lesson in all of this: If you're at an enterprise company that wants to enter the consumer market, or vice-versa, you need to wall off the new business completely from your existing company. Different management, different financial model, different HR and legal.