Losing the Signal: The Spectacular Rise and Fall of BlackBerry by Jacquie McNish, Sean Silcoff
Authors: Jacquie McNish, Sean Silcoff
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important that the user had no sense of the complexity involved: the device should simply send and receive e-mails in sync with the desktop, like magic. As for his engineers, they would spend well over a year building the software and relay system to make wireless e-mail a reality.
By fall 1997 Mousseau was overwhelmed. He was working long hours and rarely able to see his four children. He was getting lost in the possibilities of what the device could do. Around the office, his colleagues began to call him “the Blur.” Late one night, RIM cofounder Doug Fregin peered into Mousseau’s office to see the software engineer seemingly frozen in his chair, his hands on his keyboard. Mousseau’s eyes were open but he was asleep.
Lazaridis could see Mousseau was struggling. He reined in the developer’s ambition to add such features as synchronized calendar and contact information—like the hot product of the moment, the Palm Pilot personal digital assistant—and Internet browsing. “We’re going to focus on mail only,” Lazaridis told him. He also promised to get Mousseau some help. One engineering co-op student recruited from University of Waterloo subsequently got pulled so deeply into the project that he failed several courses. (As a consolation, he was eventually hired on at RIM.)
Despite the brutal hours, Mousseau and the team were able to deliver what Lazaridis had requested: a working system to route work e-mails to and from its wireless devices.
Now, RIM just needed a wireless network to put the system into operation. Since BellSouth wasn’t willing to offer wireless e-mail, Balsillie andLazaridis crafted an alternative idea in late 1997: buying airtime on the Mobitex network from the disinterested carrier and running a service themselves. “What if I go in now and offer to buy $5 million worth of airtime, cash, now, and then I could sell it over a period of time?” Lazaridis asked Balsillie. “If we did that, then we could sell the devices for $500, but sell the airtime for $50 per month”—at a time when BellSouth was charging about three times as much each month for two-way paging service. “That would be much more appealing to the customer. We can sell it ourselves.”
It was an audacious move by a small device maker, to even think a big carrier would allow a puny upstart to start its own wireless data service and set its own terms. BellSouth’s Lenahan thought the idea was preposterous. Wireless carriers did not resell airtime; it weakened their hold on the market. What was RIM thinking? It was a small company with no back office staff to handle billing, sales, or customer service. “I thought RIM was getting itself into something they were not going to be any good at,” says Lenahan.
What Balsillie and Lazaridis understood was BellSouth Wireless Data’s vulnerability. Always on the lookout for potential opponents’ frailties, the RIM co-chiefs had learned that the Mobitex operator was facing a $10 million budget shortfall. It was still a weak ward of a large telecom company, and it needed to show any kind of return for the big investment its owner had made. The RIM bosses offered to pay $5 million up front out of the cash from its stock offering for two years of unlimited airtime on Mobitex. Although Lenahan was uncomfortable giving up airtime to a supplier, the lure of up-front cash was irresistible. He agreed that RIM’s cash offer was a better bet than RIM’s long-shot chance of generating profits selling airtime for an e-mail device. “I felt like it was our best option at the time,” he says.
RIM forged a similar deal in the smaller Canadian market with Rogers for $1 million. By 1998, the enchanted forest’s marketing guru, David Neale, had returned to Rogers and, like Lenahan, was keen to accept an offer that yielded “up-front revenues on an otherwise empty network.”
The novel agreements gave RIM full control to sell, promote, and manage e-mail traffic using the same device
By fall 1997 Mousseau was overwhelmed. He was working long hours and rarely able to see his four children. He was getting lost in the possibilities of what the device could do. Around the office, his colleagues began to call him “the Blur.” Late one night, RIM cofounder Doug Fregin peered into Mousseau’s office to see the software engineer seemingly frozen in his chair, his hands on his keyboard. Mousseau’s eyes were open but he was asleep.
Lazaridis could see Mousseau was struggling. He reined in the developer’s ambition to add such features as synchronized calendar and contact information—like the hot product of the moment, the Palm Pilot personal digital assistant—and Internet browsing. “We’re going to focus on mail only,” Lazaridis told him. He also promised to get Mousseau some help. One engineering co-op student recruited from University of Waterloo subsequently got pulled so deeply into the project that he failed several courses. (As a consolation, he was eventually hired on at RIM.)
Despite the brutal hours, Mousseau and the team were able to deliver what Lazaridis had requested: a working system to route work e-mails to and from its wireless devices.
Now, RIM just needed a wireless network to put the system into operation. Since BellSouth wasn’t willing to offer wireless e-mail, Balsillie andLazaridis crafted an alternative idea in late 1997: buying airtime on the Mobitex network from the disinterested carrier and running a service themselves. “What if I go in now and offer to buy $5 million worth of airtime, cash, now, and then I could sell it over a period of time?” Lazaridis asked Balsillie. “If we did that, then we could sell the devices for $500, but sell the airtime for $50 per month”—at a time when BellSouth was charging about three times as much each month for two-way paging service. “That would be much more appealing to the customer. We can sell it ourselves.”
It was an audacious move by a small device maker, to even think a big carrier would allow a puny upstart to start its own wireless data service and set its own terms. BellSouth’s Lenahan thought the idea was preposterous. Wireless carriers did not resell airtime; it weakened their hold on the market. What was RIM thinking? It was a small company with no back office staff to handle billing, sales, or customer service. “I thought RIM was getting itself into something they were not going to be any good at,” says Lenahan.
What Balsillie and Lazaridis understood was BellSouth Wireless Data’s vulnerability. Always on the lookout for potential opponents’ frailties, the RIM co-chiefs had learned that the Mobitex operator was facing a $10 million budget shortfall. It was still a weak ward of a large telecom company, and it needed to show any kind of return for the big investment its owner had made. The RIM bosses offered to pay $5 million up front out of the cash from its stock offering for two years of unlimited airtime on Mobitex. Although Lenahan was uncomfortable giving up airtime to a supplier, the lure of up-front cash was irresistible. He agreed that RIM’s cash offer was a better bet than RIM’s long-shot chance of generating profits selling airtime for an e-mail device. “I felt like it was our best option at the time,” he says.
RIM forged a similar deal in the smaller Canadian market with Rogers for $1 million. By 1998, the enchanted forest’s marketing guru, David Neale, had returned to Rogers and, like Lenahan, was keen to accept an offer that yielded “up-front revenues on an otherwise empty network.”
The novel agreements gave RIM full control to sell, promote, and manage e-mail traffic using the same device
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