Disruption Report Card: Flip Video Scores High
A lively discussion about the Flip Video camera is happening at The Anti-Marketer. My friend, Sean Howard, began it by guest authoring a post where he described qualitatively why he believes the Flip is probably a disruptive innovation. Although Sean and I aren't in complete agreement about the subjective criteria he uses, we do agree that the Flip is a cool device and I thought it worth running a Disruption Report Card™ to get an objective grade to add to the convo.
The Flip has won rave reviews from many sources and is undoubtedly a hip, timely, exciting and successful product, but it's a common error for many in the tech business to label every successful and/or hip product as disruptive. (Our ebook "Disruptive Confusion Unraveled: What Disruptive Innovation Really Means and Why It Matters to Your Business" shines a light on this misconception and explains in plain English what disruption really looks like.)
It's a fallacy based on superficial understanding of disruption, or a frequent underlying belief that all innovation is inherently disruptive (it absolutely isn't). If it was that simple (or simplistic), disruption theory would have little predictive value in identifying those most likely to upset markets, forever alter their dynamics, and in the process become the new dominant players.
Still, if ever there was an obvious choice to declare a disruptor . . .
Key Features
The Flip Video is the ultimate in simplicity. It is a camcorder reduced to the absolute bare essentials. On, off. Start, stop. Record + store video. Play. And, most importantly, effortless upload to YouTube.
It has a relatively cheap, but decent "point-and-shoot" quality lens, no optical zoom, no flip out screen, no hi-def, no myriad editing and special effects features. Basically, in every way it is a low-end camcorder.
Low-end, but popular. Because it addresses a couple of key issues that most of us have with traditional camcorders.
It is tiny and light, which means you can slip it into a pocket or purse and take it with you anywhere effortlessly. It is painfully simple to use. Anyone, from little kids to your grandparents who still haven't set the clock on their VCR can use it.
Just turn it on, point at what you want to record, and push the big red button to capture. And, when you're done, it has a built-in USB port that flips out and plugs directly in to your PC, with software to make quick edits or directly upload to YouTube built right in to the camera. As brainless as video can be.
And, did I say CHEAP?
The list price for the Flip starts at $119.95, but you can easily find it online for around $100. Compared with an average price of about $350 for a regular camcorder and a few hundred more for high def.
And, although you could edit the video files with more sophisticated software on your PC, that $100 includes all the software you need for quick edits and uploading (video editing software can easily cost almost $100!). So cheap that even if you have an expensive, fully-loaded hi-def camera, you could easily see yourself buying one or two of these -- heck, why not three or four, and give one to everyone in your family?
Then you wouldn't have to worry about missing moments because you don't have your luggable with you. Just like most of us who have expensive digital SLR cameras also have at least one or two cheap "lipstick cameras" that we keep in our pockets and purses.
Disruption Report Card
No point in hiding the grade until the end. This one is pretty obvious -- so much so that you'd almost guess it was made to be disruptive. The Flip Video ranks as an A+.
Strongest Positives Affecting Grade
- targets segments unattractive (initially) to incumbents
- targets non-consumption (users who previously lacked money or skill to use mainstream products)
- "good enough" for low-end consumers, and all those places where you'd never have a full-featured camcorder
- significant cost advantage
- targets under-served needs
- simpler and more convenient to use
Negatives
Surprisingly from a disruption perspective, there are none. Of 37 attributes that the Report Card measures, only a couple are neutral or not applicable. On every other dimension, the Fip Video scores positively. Hence the remark -- you'd think it was designed to be disruptive.
Special Notes
The manufacturer of the Fip Video, Pure Digital Technologies, is still privately held, but has a sterling list of VCs and major capital funding behind it, including Heights Capital Management, Sequoia Capital, Benchmark Capital, Focus Ventures, Crescendo Ventures, Steamboat Ventures, VantagePoint Venture Partners, and Samsung Ventures. AllianceBernstein L.P. and Morgan Stanley Principal Investments (MSPI). Inc. provided $40M in additional investment at the introduction of the Flip Video to market to assist with growth and product distribution.
Given the explosive growth and popularity of the Flip Video cameras (over 1 million sold in first year, and capture of 13% of camcorder market share), ordinarily we'd expect a forthcoming IPO, but with current economic conditions, that's hard to predict. Nonetheless, we'd expect Pure Digital to be near the front of the line to go public once market liquidity and positive buying sentiment returns.
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