06: Innovating for Cash, Palm Pilot
06: Innovating for Cash, Palm Pilot
Read “Innovating for Cash” available at https://hbsp.harvard.edu/tu/2a7fbcb4. The article discusses three alternative business models that firms may use to bring an innovative product to the market. Think about how this article applies to an entrepreneurial high-tech startup, which is typically characterized by well-defined core competencies and limited resources. What factors would influence an entrepreneur’s choice among the three approaches described in the article? Then, as you study today’s case on the Palm Pilot, think about how this article may apply to the case.
Read the “Palm Computing: The Pilot Organizer” case (HBS #9-599-040) available at https://hbsp.harvard.edu/tu/5abe37f3. Think about how you would answer the following study questions:
- Which of the three business models discussed in today’s reading, "Innovating for Cash," did Jeff Hawkins/Palm adopt for the Pilot organizer product? How did it differ from the business model Tandy adopted for the Zoomer? What are the benefits of each business model?
- Why did Jeff Hawkins succeed in launching a “personal digital assistant” (PDA) where others had invested $1 billion without success?
- What lessons did Jeff Hawkins learn from his “Zoomer” product?
- From the birth of Palm Computing in January 1992 to the time of the case in 1997, trace the product development process for the PalmPilot?
To tie it all together, watch the 4-minute video of Jeff Hawkins describing their market research for the Palm Pilot. The video is available at: https://ecorner.stanford.edu/videos/the-role-of-market-research/.
DUE
Following the guidelines in the Case Method Overview (posted in Canvas Files), write a concise 2-page essay addressing the question:
Jeff Hawkins launched a successful palm-sized PDA while others invested $1 billion without success. Why did he succeed?
Submit your essay via Canvas prior to class. This essay must be your own work subject to the University’s Code of Academic Integrity. You may use generative AI per the course policy.
1. Which business model did Jeff Hawkins/Palm adopt? How did it differ from Tandy’s model? What are the benefits of each?
Palm adopted the orchestrator model, focusing on software and outsourcing hardware manufacturing. Tandy used the integrator model, managing everything in-house, which increased costs and complexity.
- Integrator: Full control but expensive and slow.
- Orchestrator: Faster, cost-efficient, leverages partnerships.
- Licensor: Low investment, earns from royalties but loses control.
2. Why did Jeff Hawkins succeed where others failed?
- Learned from failures: Avoided Newton/Zoomer mistakes (poor usability, high cost).
- User-focused design: Simple, small, fast, and easy-to-use.
- Smart business model: Outsourced hardware, focused on core strengths.
- Seamless connectivity: One-button PC sync (HotSync).
- Efficient spending: Focused on key features, avoided unnecessary tech.
3. What lessons did Hawkins learn from the Zoomer?
- Simplicity wins: Zoomer was too complex; Palm Pilot kept features minimal.
- Connectivity matters: Made PC sync seamless.
- Handwriting recognition: Used Graffiti, a simplified system, instead of unreliable AI.
- Pricing is key: Made Palm Pilot affordable (<$300) to attract mass adoption.
4. How did PalmPilot develop from 1992 to 1997?
- 1992: Palm Computing founded.
- 1993: Zoomer failed, key lessons learned.
- 1994: Pivoted to a connected, simple PDA concept.
- 1995: U.S. Robotics acquired Palm, securing funding and distribution.
- 1996: Palm Pilot launched, priced at $299, with strong sales.
- 1997: Palm dominated the PDA market, setting industry standards.
Conclusion
Hawkins succeeded by focusing on usability, affordability, and smart partnerships, avoiding competitors' mistakes. The orchestrator model helped Palm Pilot become the market leader.
- Early Market Visionaries
- Intuitive
- Revolutionary
- Risk takes
- seek the possible
- Future
- General/Technology oriented
- Mainstream Pragmatists
- Evolutionary
- Industry
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Whose wants /need will be met