For Flip Video Camera, Four Years From Hot Start-Up to Obsolete
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It was one of the great tech start-up success stories of the last decade.
The Flip video camera, conceived by a few entrepreneurs in an office above Gump's department store in San Francisco, went on sale in 2007, and quickly dominated the camcorder market.
The start-up sold two million of the pocket-size, easy-to-use cameras in the first two years. Then, in 2009, the founders cashed out and sold to Cisco Systems, the computer networking giant, for $590 million.
On Tuesday, Cisco announced it was shutting down its Flip video camera division.
Even in the life cycle of the tech world, this is fast.
From the outset, the acquisition was an odd fit for Cisco, which is known for its enterprise networking services. To some analysts, the decision to shutter Flip was an admission by Cisco that it made a mistake.
"Cisco was swayed by the sexiness of selling to the consumer," said Mo Koyfman, a principal at Spark Capital, a Boston venture capital firm. "They're not wired to do it themselves, so they do it by acquisition. Flip was one of the most visible targets out there. But it's really hard to turn an elephant into a horse. Cisco's an elephant."
But the rapid rise, and now demise, of Flip is also a vivid illustration of the ferocious metabolism of the consumer marketplace and of the smartphone's power to destroy other gadgets.
"It was unusually fast," said Brent Bracelin, an analyst with Pacific Crest Securities. "It's a testament to the pace of innovation in consumer electronics and smartphone technology. More and more functionality is being integrated into smartphones."
The rapid innovation of smartphones, he said, is "one of the most disruptive trends we've seen."
As newer and faster technologies beget newer and faster technologies, consumers move on to the next big thing with alacrity. In four years, Flip has gone from start-up, to dominant camcorder maker, to defunct. It took I.B.M. about four years just to reach dominance with its PC in the early 1980s. The iPad is only one year old.
First Published April 13, 2011 12:01 am
