| INTRODUCTION → 1. The Planet Goes BlackBerry → 2. The Birth of the BlackBerry → 3. Lawsuits in Motion → → 4. From Brand to Icon → 5. BlackBerry Jam → 6. The Rise of the TeleBrain → |
| WELCOME / INDEX - SAMPLE CHAPTER → DEVICES → Image Gallery → Audio/Video → Texts & Docs → Web Links → Appendix → |
BlackBerry Planet Sample Chapter
From BlackBerry Planet Web Support
Chapter Two. The Birth of the BlackBerry
| NOTE - This sample chapter contains additional information not found in the book and a more detailed account of the early development of the BlackBerry. |
Young Mike Lazaridis
- "Mike is a modern Leonardo da Vinci."
- Ken Wood, Microsoft Corp, Cambridge, England
The founder of Research in Motion and the lead architect of the BlackBerry was born Mihalis "Mihal" Lazaridis in 1961 in the bustling Greek quarter of Istanbul, Turkey.
Mike’s father Nick worked as a clothing salesman, and his mother Dorothy was a seamstress. In 1966, they grew worried about growing Turkish-Greek tensions in the Aegean Sea and Cyprus. Eager to make a fresh start, the family decided to pull up stakes and start a new life in Canada.
Nick and Dorothy sold their business, and packing all their belongings into just three suitcases, they flew to London, England, then took an ocean liner to Canada. One of Mike's first boyhood memories was flying his bird-shaped kite over the stern of the ship as it steamed over the Atlantic Ocean. He was fascinated by the motion of the boat and how the wind kept the kite in the air.
Reaching Montreal after a six day voyage, the family caught a train to Toronto, then Windsor, Ontario, across the river from the great motor city of Detroit. Nick got a job on the Chrysler Canada assembly line and Dorothy settled into working from home. Mike was just five years old.
Young Mike grew up in a hard-working blue collar neigbourhood, with good schools and libraries. His parents and teachers soon realized he was a sponge for knowledge, and they encouraged his life long love affair with science. At age 4 he made a model phonograph out of Lego, and then a working pendulum clock at age 8. He got turned on to electricity by an electric train. At age 12, he won a prize at the Windsor Public Library for reading every science book on the shelves.
"I was fascinated by all of it, particularly physics and electronics," he said. "One book that really caught my attention was The Boy Electrician by Alfred Morgan, which showed me how to make amplifiers and generators and things like that. I got a few electric shocks making them."<ref>Interview: Beyond the BlackBerry, New Scientist, 12 March 2008 by Paul Marks</ref>
"He was always in the basement concocting something," says his younger sister, Cleo. In Grade 6, Mike and best friends Doug Fregin and Ken Wood (a pastor's son who later became a Cambridge professor) set up a rec room workshop, where they built radios, rockets and iodine bombs made from chemicals supplied by Ken's mother, a science teacher. One Halloween, the boys constructed a mechanical haunted house in the church basement of Ken's father, with screaming heads, grasping hands and flying bats.
Mike and his friends were all rabid fans of the Star Trek TV show. The original Gene Rodenberry series, starring Montreal actor William Shatner as Captain James T. Kirk, was packed with gadgets, including wireless hand-held communicators, scanners and tricorders, cloaking devices, laser surgery and desktop computers.
Star Trek's futuristic tools inspired the boys to start some serious tech tinkering. Mike and his buddy Ken Wood even decided to see whether it was possible to build force fields using wires, switches and chemicals. In the end the young trekkies gave up. "That's one of the things that, however much tenacity either of us had, we never managed to finish," Wood later said. But in high school, he and Ken did succeed in building their own computer and programming it using primitive toggle switches.
Automated Amateur Television
The boys got a lot of guidance from their electronics shop teacher, who ran the local ham radio and amateur television club. Another of Mike's friends, Doug Fregin, later co-founder of RIM, recalled that if Mr. Micsinszki thought you had a good idea, he'd allow you to come in after hours and to try out your thinking. “There was something called ATV [amateur television] which allowed ham operators to put their call letters on a television screen, and people around the world could pick that up. Most of this is done in people's basements, but we designed a way to send that information over the air. Automated television. When we were in university, we got the idea that this would make an interesting point-of-purchase display system. So we decided to take some time off to develop it.”<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
Mike and Doug soon developed a passion for wireless technology. They spent hours in Mr. Micsinszki's labs tinkering with the equipment that a wealthy benefactor had donated to the school, and sending ATV signals between Windsor and Detroit. Micsinszki let the boys use the lab during the holidays, and they spent one whole summer helping unpack, set up and boot up all the new technology he had ordered for the fall term. Micsinszki also took them to ham-radio swap meets, where they could buy parts on the cheap.
"I loved problem-solving," Mike says, "and electronics became almost instinctive to me; I felt a tangible connection with how the electrons flowed. To me it wasn't an intellectual exercise. I could almost feel my way through circuit designs. I always wanted to be an electronics engineer, but what really inspired me was the fact that you could use mathematics to predict things - and some pretty amazing things, such as the way Maxwell's equations predicted electromagnetic waves to give us radio."<ref>Interview: Beyond the BlackBerry, New Scientist, 12 March 2008 by Paul Marks</ref>
Mike vividly remembers his teacher predicting, "Don't get too hooked on computers. Someday the person who puts computers and wireless technology together is really going to come up with something special."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
The friends always entered the Windsor science fair, and Mike and Doug won first prize with a solar-powered water heater that tracked the sun. In his final year of high school, he sold a buzzer system he had developed to the Reach for the Top school quiz show. The funds helped pay for his first year of college.
Mike Lazaridis still calls his old shop teacher, Mr. Micsinszki, every Christmas, to say hello and send best wishes.
Mixing Business and School
- "Going back and forth between work and university gives you a whole different view on what you're learning, and how it gets applied." - Mike Lazaridis
The city of Waterloo, Ontario sits on gently rolling hills along the Grand River, surrounded on the north by the fertile fields of prosperous Mennonite farmers. You can see them, dressed head to toe in black, driving their buggies to church, or pitching hay onto wagons in scenes right out of the middle ages.
The University of Waterloo, founded in 1957, was the first accredited university in North America to create a Faculty of Mathematics. It has the largest co-op program in the world, with students gaining credits for work in one of the local companies.<ref>RIM today hires over 600 co-op, intern and summer students every year from local and national universities and colleges. Mike Lazaridis often tells people that he “built his factory right next to the mine,” referring to nearby University of Waterloo, Wilfrid Laurier University and Conestoga College.</ref> UW's intellectual property policy wisely leaves ownership rights with the inventor, rather than the university. This has helped to foster a dazzling galaxy of high tech spin-offs, more than any other Canadian university. UW's Faculty of Engineering, considered Canada's best, holds the world record for the longest distance travelled by a solar car.
In the fall of 1979, at age 18, Mike Lazaridis enrolled at the University of Waterloo in electrical engineering with an option in computer science. The University, sometimes called "the MIT of the North" was a breeding ground for computer buffs with big ideas. A burgeoning Microsoft was about to start cherry-picking many of the best tech grads and shipping them off to its Redmond, Washington, campus.
Mike got co-op credits in his first year at the Waterloo branch of super computer maker Control Data Corporation (CDC). His job was to research automatic error detection and correction in computer memory. He recalled, "This made me realise that I could get paid to improve other research teams' operating systems, or build computer circuits for them."<ref>Interview: Beyond the BlackBerry, New Scientist, 12 March 2008 by Paul Marks</ref>
CDC's PLATO (Programmed Logic for Automated Teaching Operations) computerized learning system, launched in 1978, was pretty amazing for its day, pioneering concepts such as online forums and message boards, online testing, email, chat rooms, picture languages, instant messaging, remote screen sharing, and multiplayer online games.
While working at CDC, Mike learned an important lesson about business that made a huge difference to his later success. CDC was on the downslope as Japanese competitors were entering the supercomputer market. The CDC corporate culture was crumbling, and Mike saw first hand the damage done when engineers with cutting edge ideas had to butt heads with the marketing department, who demanded simple products to attract customers. Many of the Control Data engineering staff were so frustrated that they were quitting for the greener pastures of Silicon Valley.
His CDC work left a lasting impression on Lazaridis, and he learned that technology companies have to nurture engineers. Simplifying a product does not encourage customers to purchase newer models. "The kiss of death," he says, "is when you allow marketing to dumb down innovations."<ref>Amy Gunderson, Inc.com</ref>
Developing a Business Focus
Mr. Micsinszki's caution about not getting too captivated by computers still echoed in Mike's brain. So he focused on marrying computers and wireless technology with e-mail and the new local-area networks that were emerging in university. He did some more tinkering with wireless radio and the automated display system he had worked on in high school, and in 1984, he wrote a program called Budgie that generated a video signal to send four lines of data to any computer monitor. He thought about taking it to market, but wisely realized he had zero business experience. So he decided to talk to Larry Smith, his professor of economics, about how to produce and sell wireless data devices. As Smith recalled, “Mike gave me a general introduction to his whole idea. He had a maturity of view that was quite exceptional. One of my earliest impressions of Mike was his commitment to quality for its own sake. He understands that, pragmatically, quality sells. But he has pride in the craftsmanship of an engineer. That's an extremely admirable characteristic, not so common as one might hope.”<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
From his work at Control Data, Mike knew he had the skills to make a self-employed living. So he agreed to take the entrepreneurial step, even in the middle of a recession. He started off selling a few of his Budgie display systems to local stores, because, he says "there were no colour laser printers and to typeset display signs was really expensive. Stores would put our signs in their windows to advertise things, or inside the store to attract people to special deals. It was so popular that I even demonstrated it on the television news. That is really what got us started."<ref>Interview: Beyond the BlackBerry, New Scientist, 12 March 2008 by Paul Marks</ref>
At first, he attempted to mix business and school. “I tried,” he later related, “bicycling between work and school, studying for my midterms. I even tried to go back a year after, but I couldn't do it. The business kept growing. I realized I had to pick one."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref> So he decided to "take time off," just two months and a few credits shy of a degree in electrical engineering. His childhood friend Doug Fregin, then at the University of Windsor, agreed to join him. Their first big break came when General Motors Canada heard about the wireless message screens he was working on. GM wanted to try them out on the GM assembly line floor, and would be willing to pay for a trial.
Research in Motion
Mike's parents in Windsor were not entirely happy with his decision, and asked him to justify dropping out, but in the end they fully backed his vision. When he was able to rustle up a $15,000 Government of Ontario New Ventures loan, they came up with matching money for their 23 year old son. So in February 1985, Mike Lazaridis and Doug Fregin launched Research In Motion (RIM), Inc..
The next step was finding an office, and they landed in a 500-square foot room above the Bagel Bin on Erb Street East in Waterloo. Manfred Conrad, RIM's first landlord, recalls two young kids a one room office and a bike rack "because it was so hard to tie their bicycles up on the railings. I'll never forget that. They were really nice kids. I didn't know what kind of business they were in. They showed me what they were fiddling around with on the computer, but I had no clue. They were the smallest tenant in the building."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
Job number two was to find a good programmer, so they put up a posting on the local Usenet listings. They quickly picked Mike Barnstijn, later RIM vice president, software, who was just finishing his master's degree in computer science. As Barnstijn recalls, "There was a good personality fit. We were all enthusiastic about technology, had similar educational backgrounds and a big interest in cars. I was hired on the spot as their first full-time permanent employee. I became a partner less than a year later."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref> Those were happy days, biking to work and staying late in their cramped office to finish contracts. They soon had a team of three assistants and secretaries, and had to move into a larger office down the street.
Pagers in the Air
A company called Computer Advertising Signs of Toronto, which had heard of the Budgie, helped the team land their first major job, a $600,000 contract from the General Motors truck plant for networked display terminals that could scroll messages and updates across LED signs on GM's assembly lines. Says Lazaridis, "it's kind of noisy to use a phone or walkie-talkies, so most problems are enunciated on large display boards, like giant pagers in the air." RIM sold less than 100 units. "It probably failed for more than one reason," says Fregin. "We didn't have the funds to properly market it, and there was a lot of competition from the LED sign makers."
Still, they loved the work, in spite of the lack of traction. Says Mike Barnstijn. "We worked long hours back then, but it was what we wanted to do. There's a certain amount of freedom in being part of a very small company, and also a great deal of responsibility. But it was that freedom that all of us really enjoyed. The GM signs were a blast to work on. In the end, we sold the rights to the product to the company that was manufacturing them for us [Corman Technologies], and they installed a whole rack of them at GM's Oshawa plant. I'm not sure whether they're still there, but the way we built them, they could be."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001; Barnstijn cashed out his stock and retired in 1999.</ref>
The Coke Machine That Called Home
In 1987, Mike Lazaridis attended a trade show where a company was showing how to use wireless data technology for managing vending machines and delivery trucks for Coca-Cola. The Coke machines could call home when they needed servicing. A light went on in Mike's brain - the demo confirmed that wireless data networking was where RIM should be focusing all its efforts. "I realized that's what I wanted to do, and since then, that's all we've done," he said. "Frankly, we've never looked back."
Awarding Work
RIM had just three days to bid on the tender, but they won it, and in 1990 came out with their first DigiSync Film Barcode Reader. The digital footage, frame and time calculator soon became a big hit with film editors and negative cutters in Hollywood. Instead of dealing with strips of film hanging in a cutting room, and having to view each one and cut and splice them with scissors and tape, you could look at the original film, and passing it through RIM's DigiSync mark the barcode numbers of the clips you wanted use (and reject the rest). So now work that used to take a film editor two days now required only 20 minutes. DigiSync earned the company an Emmy Award (1994) and an Academy Award (1998) for technical achievement. Lazaridis attended a pre-Oscar ceremony in 1999, and accepted RIM's Academy Award in person from actress Anne Heche.
The DigiSync was a nice niche product at the time, but Mike soon realized that the company's real future lay elsewhere. “Winning the Academy Award was very exciting,” he said. “But I knew that eventually the film technology was going to saturate, and I'd need something new. That's when I came across this wireless digital technology. That was one where we bet the farm.”<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
That Technology was Mobitex.
The Mobitex Moment
“You have to understand, the BlackBerry didn't happen overnight; it happened over a decade. It's not like one day we woke up and said, 'Eureka!'" - Mike Lazaridis
By the mid 1980s, Canada's communications king, Ted Rogers, had finished building his national Cantel cellular network. One day, he was visiting his system supplier LM Ericsson in Sweden and noticed a wireless data terminal in the cab that the taxi company was using to dispatch calls to their drivers. Ericsson told him that it was the next big step in wireless services and showed him their new Mobitex network technology. Ted decided to buy into the system, and in early 1989 he hired Tom Pirner to head up Cantel’s new Data Communications Division.
In late 1989, Pirner brought on board engineering consultant Robert Fraser, to manage Cantel’s Mobitex development program. Fraser had worked on radio design with Motorola and operated his own wireless systems integration company. He and and Cantel marketing director David Neale soon saw there were no tools for developers who wanted to write programs for mobile terminals, and no easy way to connect clients’ computer systems to Mobitex.
The Mobitex Architecture
To jump start product development, Fraser also pulled together a Mobitex Terminal Specification (MTS), and seeded it along with Mobitalk and Mobilib to Neale's supply channel of system integrators and application developers. Essentially they gave it away free to anybody who wanted to build anything for Mobitex.
Mike said the gateway would take a while to develop. To solve the problem in the near term, he proposed a simple Mobitex Protocol Converter (MPC) with a standard modem AT command set on the client’s computer. RAM and Cantel agreed, and they jointly funded the MPC. RIM in the meantime started work on a gateway, which they would later introduce as RIMGate, the predecessor of the BlackBerry Enterprise Server.
For David Neale of Rogers, MobiLib was the basis of all the early Mobitex technology: "It was a library of commands that would allow people to use the wireless data network we'd just purchased. At that time, the Mobitex bible, the MTS [Mobitex Terminal Specification], was a thick binder full of impenetrable techno-ese. We needed someone to help us figure it out. I still remember being amazed, because not only could Mike Lazaridis read this stuff and understand it, but he could actually speak this language. He was one of the very few people in those early days who had the vaguest idea what it was all about."
The Mobitex Launch
Neale recalls the Mobitex launch on May 17, 1990, at Toronto's King Edward Hotel. "We rented a whole pile of trees, because we had all these tables with hardware on it and it looked a bit dull. But we put in these trees, and suddenly the basement looked like the Enchanted Forest. There were nearly 300 people there: customers, developers, press. But it bombed. In October of that year, most of us who had been working on the wireless-data project got moved up to the paging network. We were so, so far in advance of the market that nobody was ready." After almost two years and an investment of about $30 million, Cantel Mobitex had no paying customers except for Rogers Cable service trucks and few prospects. Ted Rogers downsized the operation only to reignite it again in 1993.
Mousseau, a Waterloo graduate, was a tech veteran in his thirties when he joined the kids at RIM in 1991. He had worked with Xicon in Ottawa, then National Semiconductors, building bridges from IBM terminals to mainframes. He was experienced in the areas of X.25 and SNA protocols, which were being used to build the fledgling Internet. The global X.25 community had already interconnnected over 75 countries by this time.<ref>X.25 has been largely replaced by the Internet protocol (IP).</ref>
David Neale was struck by how much a technology and hardware guy like Lazaridis was dedicated to pure science, and the need to motivate young people to study science and technology. "He would particularly like to see words such as 'geek' and 'nerd' eliminated," Neale said. "It's not because he doesn't like to be called geeky, but why would you dissuade somebody who is young - who has a hunger for this sort of knowledge - by describing this sort of stuff as geeky or nerdy?”
But techies they were, existing on caffeine and pizza and code, like the thousands of eager startup teams spreading out from Silicon Valley and colonizing the planet with their marvellous toys and tools. As Gary Mousseau, the senior employee and the only dad in the bunch, remembers it,
"In about 94 when RIMGate was going crazy I use to bring my 1 year old son (last of four kids) to work in a portable rocker. He would sit sleeping my office while I worked (someone reminded me of this fact recently). This way my wife had a break and he always fell asleep on the drive over to work. This was how I managed to work later and later at night. Herb on the other hand would just work all night, period. Occasionally I caught him building a little bed out of foam inserts and he would sleep there when he got too exhausted. Once when I dared to take a weekend off Herb decided to re-code my entire Session layer in the Mobilib-Plus product. He felt it just wasn’t up to his level of quality and he needed VERY, VERY long module names; he loved names like: SessionLayerCompressionEncoderDecoderModule and names that were even longer."
Two Way Pager vs Personal Communicator
In early 1991, RAM Mobile Data changed the game plan and issued a request for proposal (RFP) for a two-way Mobitex send-acknowledge pager, that would behave like the instant messaging (IM) we take for granted today.
Motorola had first used the word pager in 1959 when it came up with a way to let operators transmit a signal to people such as doctors, alerting them to phone home base to receive a message. Motorola's Pageboy, introduced in 1974, was the first successful consumer pager. But it was one-way only, had no display, and could not store messages.
A year after the Washington launch, the term PDA suddenly came into vogue when Apple CEO John Scully, a former PepsiCo president who had ousted Steve Jobs from Apple, used it in a speech at the 1992 Comdex show in Las Vegas. Six months later, in July, 1992, Scully told the Mobile '92 conference in San Diego that Apple was readying its own handheld PDA - the Newton. Scully famously predicted that the personal communicator would be "the mother of all markets”.
Rob Fraser was not impressed. Apple's Newton had no radio, and no mobile abilities. It could simply synch to a desktop computer using a cradle and wires.
Fraser had already published an article predicting the wireless PDA in the July 1991 issue of Communications Magazine. He laid out all the market potential and engineering challenges that he and David Neale wrestled with through 1990 including what he called the Personal Communicator, a handheld touch screen Mobitex device with email, computer bulletin board connectivity and a way to manage your calendar, contact list and other personal data.
Not everybody agreed with Scully and Fraser. Intel chairman Andrew Grove for example. Grove knew that the small radios and microprocessors of the day chewed up power, far more than current batteries could provide. He scoffed at the idea of a wireless personal communicator in every pocket, calling it "a pipe dream driven by greed”<ref>Peter H. Lewis, The Executive Computer; 'Mother of All Markets' or a 'Pipe Dream Driven by Greed'? New York Times, Sunday, July 19, 1992</ref> Ironically, within a few short years Intel’s low power processors became the heart of RIM’s product line.
The Mobitex Sandbox
Recently, Jim Balsillie called Mobitex "RIM’s sandbox." Meaning, the Mobitex platform let Research In Motion tinker with, master and incubate a whole range of technologies needed for its BlackBerry breakout. Fraser is still baffled how Mike Lazaridis led the way forward. “He had Motorola, Apple and General Magic, Bell South, AT&T, Palm and a host of other heavyweights trying to accomplish the same thing”.
When Fraser asked RIM's chief radio engineer Dr. Peter Edmonson to speculate, Edmonson laughed and said, “everyone else was trying to add a radio to a PDA, whereas Mike’s mindset was how to add a PDA to a radio.”
During these pioneering years, few knew that our planet was on the cusp of a gigantic cultural change brought about by the Internet. Mike Lazaridis was one, as was British computer scientist Tim Berners-Lee, who was playing around with a way to unify and interlink private network servers using hypertext, a browser and the global domain name system. Says Fraser, “My bottom line about Mike Lazaridis is that he’s always at the right place, at the right time, with the right solution. In the Mid 90’s when the World Wide Web dropped out of the sky onto millions of PC’s, dragging POP email with it, Mike Lazaridis was ready - with compression, encryption, synchronization, a thumbwheel, context ribbons, thumbpad, dual destination email, always on, push BES and enough bright minds and capital to get the job done.”
Balsillie on Board
- "Jim Balsillie and Mike Lazaridis are a very tenacious team" - David Neale, Rogers Cantel
Suzy Brown, a founder of RadioMail Corp. in San Mateo, California, led the first company to provide wireless e-mail services to pagers and laptops, and she had dealings with Mike Lazaridis. "Early on," she recalls, "RIM had the engineering talent, but no business sophistication. All of the discussions centred around development, and it was clear that they weren't going to develop into a long-lasting company."
Jim Balsillie was born on February 3, 1961, in Seaforth, north of London, Ontario. His father, Raymond, worked as an electronics technician at Ontario Hydro's Darlington nuclear reactor on Lake Huron, and mother Laurel raised a family of two boys and a girl. In 1966, Jim's family moved to Peterborough, Ontario, where the boy grew up playing hockey, basketball, badminton, and track and field.
Jim showed an early talent for business, selling greeting cards door to door at age seven and handling several paper routes at the same time. As a teenager, he helped out with a Big Brothers camp, ran a ski tow, managed a student painting franchise, and did maintenance jobs at a local trailer park. According to Balsillie's mother, "He just never let any opportunity pass up where he could learn or investigate something."
After graduation from high school, Jim studied commerce at the University of Toronto. His Trinity College roommates recall that he kept his hockey interest strong, playing at Varsity Arena and budgeting breaks from studying to watch the National Hockey League playoffs.
In 1984, Balsillie got his chartered accountant (CA) certificate and joined the old Toronto firm of Clarkson Gordon, now part of Ernst & Young. Three years later, he headed off to Harvard to do an MBA with new partner Heidi.
A dedicated golfer, hockey player, and triathlete, Balsillie was an aggressive, high-energy business competitor. He came on board RIM at a crucial time, and much of RIM's success in the late 1990s came from the new marketing focus engineered by Jim Balsillie.
When he joined RIM, Balsillie recalls, "There was great technology and great people at RIM, but the commercial situation was in clear need of attention. There were a lot of contracts where the ownership was unclear, the deliverables were unclear, and what it takes to get paid was unclear. That stuff is very non-trivial. That's where most companies with good technology fall down."
According to Lazaridis, Balsillie was "as creative on the business side as our team was on the science side…. RIM had been looking for a business partner like Jim for a long time. It didn't take me long to realize Jim had the talent and experience we needed to get to the next level. We could read each other's minds on a lot of things…. We're both aggressive about opportunities and going after them, and making sure we don't do things half-hearted. We make sure we have all the resources to get the job done and don't quit. But we're different in that Jim likes the business and financial ends a lot more than I do."
So while Lazaridis remained cautious about "marketing dumbing down innovation," a lesson he had learned at CDC, he trusted that Balsillie's marketing focus would not impact on RIM's technological thrusts. Like a team of horses, they knew they had to pull together toward a common goal or go into the ditch.
As co-CEOs of RIM, Lazaridis and Balsillie are the odd couple of the wireless business. "In a few areas, Mike and I are alike," says Balsillie. "In a few areas, we're very different. Mike's the visionary, I'm the parrot. I communicate the things he dreams up.... Whether I was the motor on the boat, or the one that plugged the hole on the boat is an angel-on-the-head-of-a-pin question. Good boats don't go with holes or without motors. When I met Mike, I thought he had big expectations and ambitious dreams. And he struck me as unconventional. Sometimes his stuff made sense, and sometimes it seemed overly ambitious. I'm a pretty systematic person when it comes to commercial development: step by step by step."
"This is what impressed me about Jim," Lazaridis continues. With all the other people I'd interviewed, it was more of, 'What are you willing to give me?' Jim came in and said, 'I want to invest. I know we can make this thing work. Let's figure out what I can bring to this company.' That made a huge positive impression on me."
Inspired by what he saw at RIM, Balsillie confidently mortgaged the family house and poured $250,000 - most of his life savings - into shares in Lazaridis' fledgling operation. "My wife believed I knew what I was doing," he says, "even though I'm a single breadwinner, and we'd just had a new baby, and I took a 60% cut in pay. I was thinking, this should be fun. I had had enough experience growing companies and making money that I felt I was plenty capable."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
Ericsson Buys In
- "Mike is one of the most tenacious people I've ever met. Keeps grinding towards his goal until he gets there. There were eight or nine failures before BlackBerry. He took lots of at-bats before he hit his home run." - Bill Frezza, Ericsson
Like Rogers, the Swedish telco Ericsson (known to the tech world as E///), was also struck by the quality of RIM's work. Bill Frezza, Director of Marketing and Business Development, was trying to push Ericsson to move into new horizontal markets just opening up, in particular portable PDA and laptop users. Growth was starting to stagnate in the classical vertical markets of dispatch, utilities, police/fire/ambulance and parcel delivery.
Frezza and Ericsson GE Mobile Data product manager Tim Meyer set up an entire development environment for RIM so they could adapt the Mobidem to communicate with PDAs and laptops using the standard Hayes AT modem command set. RAM Mobile Data had set up a Mobitex base station in Corvallis, Oregon to test mobile PDAs like the ultra cool Hewlett-Packard HP-95 palmtop computer, a kind of glorified calculator with a radio that had a beautiful ground breaking feature - it ran MS-DOS.
Frezza lobbied Ericsson to come up with an initial $50,000 loan for RIM. He also hired another company called Anterior Technology (RadioMail) to back up the system with a service bureau. Anterior was led by Geoff Goodfellow, the California techie who came up with the whole idea of wireless e-mail in 1982.<ref>See: Real World Services for the Technological Elite</ref>
By late 1991, Lazaridis and his RIM team had cranked out some decent software - their Mobitex Protocol Converter (MPC) was the critical link that enabled the world's first commercial wireless e-mail application. It worked very well with both Microsoft Mail and Lotus cc:Mail, and Ericsson were delighted with the quality of Mike and his team's work. Tim Meyer says "E/// needed the AT commands built into the Mobidem and he delivered beautifully on a very complex assignment."<ref>Meyer says, "The protocols being converted (from one to the other), were the Hayes AT commands (the de facto standard for land line modems) and the Mobitex packet protocol. This enabled Lotus cc:Mail to run pretty much unmodified on a HP95LX.</ref>
So Ericsson GE agreed to license RIM's technology. "That was a very big early highlight," recalls Lazaridis. "That was a very large wireless company adopting our technology. The first payment was for $250,000."
The Viking Express
In January 1992, Ericsson launched the Viking Express, the world's first commercial wireless email solution. Enveloped in a sleek black leather case, it featured the Ericsson Mobidem Velcroed together with an HP-95 palmtop and bundled with RIM's MobiLib-Plus application programming interface (API) to work with Goodfellow's gateway to major e-mail systems.
By the time Viking Express shipped there was a major falling out between RIM and RadioMail. Goodfellow and his group refused to work with the RIM mobile client application and demanded Ericsson use its RadioMail developed client. Ericsson caved in.
According to Tim Meyer, "Goodfellow had this vision of an email system that had a client and a server and he built both. Frezza liked RIM and pushed Mike to build a client application for the HP95 PDA, which he did. However Mike was not happy with the situation and I suspect neither was Goodfellow, so at the eve of the launch of the Viking Express we decided to go with RadioMail. I was not in the meeting where there was a shouting match between Goodfellow and Lazaridis, but Goodfellow won that one." Meyer felt that the sensible thing was to go with RadioMail, since RIM didn't yet have a workable client and server.
The Viking Express didn't go anywhere in particular. According to Frezza, "the concept was a smash even though Viking Express was a cumbersome kludge... Finally, we landed an OEM to take our product into the channels because Ericsson sure didn't have a clue. Behold, the Intel wireless modem. This 500 pound gorilla of the PC industry geared up for a nationwide launch. We had Intel training. We had Intel collateral. We had Intel support at the highest levels. Until a week before the launch date when they pulled the plug and everyone disappeared. Poof."<ref>Bill Frezza's Photos</ref>
Frezza's experience showed how tough it could be to work on the bleeding edge, ten years in advance of the market. In those early days, everybody was focused on voice not data. Says Jim Hobbs, wireless strategist with BellSouth. "It was late 1991, and RIM was wanting to build Mobitex radios. In those days, vendor support for Mobitex was just starting. Everybody was thinking cellular, not Mobitex."
"You needed all the friends you could get in those days. When you had a bunch of smart guys who had studied your technology, who had some ideas, then you were naturally drawn together. I thought Mike Lazaridis was brilliant because of his vision for the technology, his appreciation that it was about functionality and not speeds and feeds, and his willingness to innovate."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
Good Cop, Bad Cop
Mike Lazaridis had to back off, but he did get from his work with Ericsson the tech savvy and core knowledge of complex radio design that eventually led to the BlackBerry platform. He also learned from his experience with Ericsson that he needed a tough management sidekick, and that was when Jim Balsillie entered the picture. He and Jim quickly developed a complex code of shrugs and twitches to send signals to each other during contract meetings.
"The arc of deciding to build radios, then OEM modules, then PC cards, then the "two-way pager" were internal to RIM. We just speeded things up by showing them the guts of the Mobidem OS, design and development tools. Really handing them on a plate! So RIM danced with the elephant quite well and just left Ericsson in the dust in the Mobitex device business. Really Ericsson was focussed on a bigger nut, GSM mobile phones."
Meyer feels that Ericsson gave RIM a plum job, but there was no expectation of further business. "RIM could easily have gotten locked into RAM's orbit and kept supplying them with software drivers, adapters (The Mobitex Protocol Converter) and other bits and pieces. In other words become RAM's system integrator, but they did have the foresight of doing their own thing and charting their own course. Nowadays it is fashionable to talk about tight integration of hardware and software and that seamless integration is what it's all about. Apple is offered at the prime example, and Microsoft as the failure with Windows Mobile. But RIM practiced this back in the 90's!"
While Balsillie kept the company hard-nosed, Lazaridis and his team kept their eye on the ball and RIM soon rolled out its software developer's kit (SDK) for adding wireless connectivity to Windows 3.x applications. Version 2.5, released in 1995, was called RAD I/O Connectivity Tools. It contained a protocol that acted as an interface to the RAM Mobile Data network. So software developers and programmers could use RIM's code to build links between Windows programs and Mobitex.
By the mid-1990s, his experience with Ericsson and RadioMail had soured Lazaridis on working with the giant Swede, and the two sides stopped talking. They soon started competing with each other.
RIMGate
Mobitex also let RIM compete in other emerging markets. In 1992, the team started adapting the Mobitex Protocol Converter for use in point-of-sale products such as restaurant credit card readers. Two years later, RIM introduced the first Mobitex Mobile Point of Sale Terminal (MPT) at a football game in Toronto's Rogers SkyDome. It was the world's first handheld point of sale card reader, with all the bells and whistles needed to sell beer and popcorn right in the stands. It could verify and handle debit and credit transactions directly to the bank host, in this case, Rogers' bank, CIBC.
The MPT depended on Gary Mousseau's new RIMGate system, the first general purpose Mobitex X.25 gateway. Launched in 1993, it was a whole new way to "push" packets of information across wireless networks. It was a real-time, protocol-translating gateway that could link existing AT-modem applications to X.25 services such as bank computers, AT&T Easylink (a large mail solution), Compuserve (a forerunner to AOL), and INet2000, a directory of network services. Mousseau, Little and Barnstijn also developed what they called the ‘Presentation String’ that automated and sped up connections through RIM’s patented Time Efficient Remote Scripting (TERS).
Ericsson copied the RIMGate concept, but Mousseau's was superior. RIMGate could support up to 75 MOX (Mobitex Area Exchange) connections and hundreds of mobile calls at the same time. RIMGate also had a ‘last-known-location’ table for finding mobile devices. This made it possible to bridge independent Mobitex networks between countries - it could remember both the last location a mobile had been detected and the last three locations it had been detected. <ref>This same concept is now used within RIM’s own Network Operations Center (NOC) for the BlackBerry solution. Even some of the original X.25 code in RIMGate was used a model in the first NOC RIM created to interface to RAM’s and Rogers/Cantel’s Mobitex networks.</ref>
When Jim Balsillie came on board, one of his first goals was to leverage the RIMGate advantage. He sold major site licenses to RAM Mobile Data (US), Bell South (World Site License for UK, Australia and other installations they owned) and AT&T Easylink. These site licenses amounted to over a million dollars at a time when RIM was cash strapped and subsisting on contract work.
Building a Better Radio
At the same time, RIM also helped launch two wireless modems, the Ericsson Mobidem AT and the Intel Wireless Modem containing RIM modem firmware.<ref> In Canada, Mobitex is still handled by Rogers, and by Velocita Wireless in the US. The network is used for mission-critical dispatch, telemetry, POS, DB-access, Internet access, e-mail and interactive messaging. The system operates on 900 MHz frequency bands and covers major urban areas all across North America.</ref> Ericsson engineers had just launched the world's first modem card - a Type III PCMCIA radio modem that worked with laptops with Type III slots (two Type II slots, the thin ones, stacked). An impressive feat, but Mike Lazaridis knew that RIM could improve on the Ericsson product.
In fact, Lazaridis and his team were getting more and more frustrated doing wireless point-of-sale integration with another company's radios, so they started tinkering with a RIM-only solution. As Bill Frezza saw it, Mike "beavered away in obscurity, deciding to build his own hardware rather than rely on Ericsson. The Ericsson engineers laughed at this Canadian upstart who thought he could build a better radio."
As for Ericsson, they were hurt by RIM's attitude. Says Tim Meyer, Ericsson's PC card "was the first PCMCIA radio modem in existence. It was a technological tour de force and required extreme precision assembly and miniaturization. So imagine our surprise when RIM outdid us with a thinner PCMCIA card (a type II vs. ours a Type III, double the thickness, and requiring two stacked slots).
"Also we were shocked when RIM landed a private label deal for their PC Card modem with a modem company called Megahertz.<ref>now part of 3Com</ref> Things rapidly deteriorated when RIM launched a competitor OEM module to ours. We knew it was over.... RIM was a partner and then a competitor and it is interesting how we did not know how to deal with this situation."
Ericsson was slowly coming to realize that Lazaridis and Balsillie wanted to "control the whole value chain: making the radio, OS, software libraries, applications (client and server) and it is true Ericsson (especially the Mobitex product management team in Stockholm) didn't think they could do all that. "
Meyer feels that in the end, Ericsson missed the boat with RIM: "I eventually did get a peak at the Blackberry software under a tight NDA (non-disclosure agreement), and I told my boss we should buy RIM and he laughed and said the Swedes don't have a clue. So true!"
The Freedom Breakthrough
By this point Lazaridis and his engineers in "the pit" were running hot, determined to squeeze what was a big old alarm clock radio into the fine dimensions of a Swiss watch, with a battery life to match. "Have you saved a milliwatt today?" became RIM's unofficial in-house mantra. By 1995 Team Lazaridis had succeeded in building their own tiny radio modem, smaller than Ericsson's, that enabled wireless e-mail, and putting it on a PC card. The RIM Freedom radio modem, was the world's first Type II PCMCIA card for wireless.
The Freedom card was a major evolutionary leap in terms of size. Janet Boudris, VP of RAM Mobile Data, recalls that when she joined RAM in 1993, "a modem was the size of a brick and cost $1,875. The key was to identify a company that could produce smaller devices and less-expensive modems." RIM fit the bill perfectly.
Says Tim Meyer, "when RIM came out with the Freedom Radio Modem, RAM promptly plugged it into the Type II slot of the HP95LX (tossing out the Mobidem) and it worked fine as a demo. Unfortunately it had horrible battery life."
After RIM brought out the Freedom radio modem, Lazaridis paid a visit to Bill Lenahan, then-CEO of RAM Mobile Data, bringing him a wooden model of what was to be the Inter@ctive Pager 900, a wireless handheld that was the prototype of the BlackBerry. Mike chuckled and said to Bill, "Wouldn't it be great if we could figure out how to put all of this technology into a small footprint, like a pager, and be able to put the processing power of a computer into that kind of form factor?" <ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref> Lenahan and the RAM Mobile people thought it would be a great idea. Mike shot back with the news that the first 900s were already being tested.
RIM relied on Intel Corporation support to build the first Inter@ctive pager. It included a 16-bit operating system along with built-in contact manager, scheduler, and forms-based messaging applications. It sported a QWERTY keyboard and a small, text-only display screen that showed four lines of text. Network service was provided by RAM Mobile Data and Ardis Co.. The Inter@ctive pager could send and receive messages and had its own Internet address. It could store 100 kilobytes of data and had some pre-programmed responses, such as "I'll be late."
Research in Motion released its RIM 900 OEM Radio Modem and the RIM 900 Inter@ctive Pager in 1996. They marked the last step before the first BlackBerry.
The Battery Powered Hamburger
- "We have a saying here at RIM. It is 'do your math'. Our culture is to double-check, check twice, and ask customers before we undertake changes. If we work long enough we know users will find value in our products." - Mike Lazaridis
Bob Crow, now RIM's director of government and industry relations, says that RIM's graceful, simple designs masked incredibly complex engineering. Lazaridis and his engineers at RIM found themselves bashing against a very formidable wall. Unlike Moore's Law, which states that the number of transistors on a semiconductor chip will double every year, neither battery power nor available radio spectrum can be expanded quite so easily. So RIM had to pioneer the rational use of battery power, and find clever uses for bandwidth.
The first BlackBerrys were speedy, even though they operated on about the equivalent of 28.8 kilobytes per second. "This really was rocket science," says Crow. RIM also developed engineering that let the early BlackBerrys run for three weeks or more on a single AA battery feeding a lithium-ion battery, using an old 32-bit Intel 386 processor in a way that the chip was only used about one percent of the time. Where possible, software replaced hardware.
Gary Mousseau points out another RIM adage from those days: "RIM built EVERYTHING themselves (except the wireless network itself) and we fine tuned every piece to make it work fantastically. With Mobitex, our first wireless network, RIM suggested key changes and improvements to allow it to work better (power saving mode improvements mostly). Then we educated the wireless network carriers and fined tuned everything to work even better."
By early 1996, RIM's engineers had pulled together a usable two-way flip-top Mobitex pager, about the size of a large bar of soap. It was given to employees to use at work, but Mike Lazaridis soon noticed that people loved to be able to stay in touch outside work hours, at the shopping mall or as they picked up their kids from soccer games. According to Lazaridis, "our employees were embarrassed to admit they were taking them home to use. It was pretty big back then. People called it the hamburger."<ref>Infoworld, February 27, 2002 </ref>
"The more we interviewed them, we noticed that, even when the battery life was only a few hours and the device was the size of a hamburger and had wires sticking out of it, they still carried it everywhere. When you see something no one else is doing that your employees find that addictive, you jump on it." <ref>David Fielding, Leaps of Faith, Globe and Mail, April 25, 2008</ref>
Lazaridis believed that his potential customers craved solutions in the way of small, user-friendly handhelds with a secure and reliable system of transmission — a technology that would keep everyone in the loop, no matter where they were or what access they had to standard computer servers. All of RIM's nearly 100 employees were soon totally focused on getting their pager technology to market, and by the Autumn of 1996, RIM was ready to show the 900 to the world.
Launch Time
- "The BlackBerry is really the culmination of more than 10 years of investigating and researching and trying to get wireless e-mail to work. We always knew the experience was addictive. We had to make it practical." - Mike Lazaridis
Lazaridis launched the RIM-900 Inter@ctive Pager in September 1996 at the PCS '96 trade show in San Francisco. The list price was a hefty $675, not including service fees. It was one of the world's first wireless data devices, and the world’s first pocket-sized two-way pager. A clam shell flip-open device that fit on your belt, it sported a small keyboard for sending and receiving email and interactive messages wirelessly. The network service had all the features of a traditional one way paging system, but also added two way features such as peer-to-peer delivery and read receipts. It could also send faxes and text and leave voice messages on a telephone. The devices communicated to the Internet, peer users, and the phone network via a gateway which also served as the store and forward mailbox for the wireless user.
RAM Mobile Data was sold and renamed BellSouth Wireless Data in 1995 and later became Cingular Interactive when BellSouth and SBC formed Cingular Wireless (now renamed AT&T). Operator of the Mobitex network in the US, they brought the Inter@ctive Pager service to market in 1997. Corporate User Magazine named it Top Wireless Product of the year. But not everybody liked the device. Alan A. Reiter, writing in the Wireless Internet & Mobile Computer Newsletter<ref>Feb. 26, 1997</ref>, said "The RIM Inter@ctive Pager is a good device, but it's a bit too heavy, bulky and expensive to attract many mobile professionals."
There were also some hardware glitches with the 900, and as Gary Mousseau says, "it didn’t exactly go as expected. The failure rate on the clam-shell component was nasty and the ‘contracted’ number of devices were about all RIM sold." No time to sit around and fret about that. Says production team leader Dale Brubacher-Cressman, they were running hot, and already moving onto the next devices, "quickly evolving from the 900 to the 950 and beyond, iterating handhelds from generation to generation as we honed our hardware (handheld) design and manufacturing skills." He calls the 900 "the most successful product RIM had ever produced, but was quickly surpassed by subsequent generations of product."
Birth of the 950
- "Mike Lazaridis has nine lives. He came through one scrape after another. Because each time he built another product that solved one problem but not all, the product failed. He had to dust himself off and move to the next one. I like to describe wireless data as a safe with a 10-combo lock. A bunch of us were walking around with six of the numbers. Over the years, we would go to the lock and try to open it. Mike went to it again and again. When he came up with all 10 numbers, the BlackBerry popped out." - Bill Frezza
Lazaridis and his team worked tirelessly in those days to optimize the network performance of the early RIM 900. But it was still a large and cumbersome brick by today’s standards. He was determined to produce a cheaper, friendlier and even smaller device that could be the basis of what Ericsson, Rogers and BellSouth wanted - a true two-way Star Trek type communicator for business and consumers.
One of Mike's great innovations had come earlier, in 1997, during a writing blitz on his basement computer after nursing his baby son to sleep. In a midnight to 3 am marathon, he had a brain wave, and e-mailed to his office a white paper called "Success Lies in Paradox." In it he asked his team, "When is a tiny keyboard more efficient than a large one?" His answer - "When you use your thumbs". The resulting e-mail device, with keys angled and optimized for thumb computing, he still calls RIM's "secret sauce." The team filed for a patent for the device in June 1998. Besides Mike Lazaridis, the patent holders were Jason Griffin, John Holmes, Herb Little and Harry Major.
The Two Mailbox Solution
Another great innovation by Lazaridis and Gary Mousseau was the "Two Mailbox Solution." In those days, mobile users had to have a special, separate mailbox — apart from their corporate e-mail — for e-mail, fax and text-to-voice services. Says Mousseau, "People didn't know whether to reach users by sending e-mail to their desktop computers or wireless devices."
They first tried jury-rigging email by forwarding their work email inboxes to their RIM950 devices. "We discovered that we liked the experience of getting e-mail to our belts. But we were unable to reply to the messages, since the ‘from’ address was our desktop address and not the original sender. This messed up the reply path. Our IT Director, Wade Brown, was ‘extremely concerned’ about the security of forwarding all our communications outside the corporate firewall."
Eventually they had to stop the practice, says Mousseau, but "one day Mike just called me into his office and said, 'Gary, we're going to solve this two-mailbox problem once and for all,' and we just started hashing it out."<ref>Comment from Steve Carkner, former director of product development at RIM; Matt Walcoff, Memories of BlackBerry still vivid 10 years later, The Record, Jan. 31, 2009</ref> They brainstormed "all the work that Herb Little had done in compression and encryption, the many wireless transport layers RIM had built over the years, all the work Craig Dunk had done on MAPI interfaces for Exchange, and Barry Gilhuly and Harry Major had done on the VIM interface for cc:Mail."
They hit on an integrated, single-mailbox, end-to-end wireless data solution. It mirrored a user's e-mail account, making RIM's handheld an extension of their PC desktop inbox, with the same e-mail address doing double duty. They also perfected a continuously connected "push model" of e-mail delivery that automatically found the user. Lazaridis gave Mousseau the job of "putting together the first definition and design for the product and began drafting the first ‘single mailbox’ patent using the ideas Mike and I had come up with." The patent was filed on May 29, 1998.<ref>US Patent 6,219,694, Filed May 29, 1998</ref>
PocketLink
Toward the end of the summer of 1997 Mousseau assembled his software team and told them that they had a new job. From that time forward, they would develop a RIM client parallel to the one they had agreed to build for RAM. "At that time," says Mousseau, "the RAM client was almost shipped, and we had been using it in Beta for sometime with their gateway." He "assigned them roles to build the necessary user interface (UI) and personal information manager (PIM) components, plus the Network Operations Center (NOC), the Enterprise Server and the Desktop Redirector elements."
The NOC at Waterloo HQ was central to the process. It let a client's desktop redirector (later called the BlackBerry Enterprise Server or BES) push information to a virtual device on the NOC. The NOC then pushed the message to the real handheld on behalf of the BES.
RIM also patented a way to compress and re-envelope the message so it was completely secure and opaque as it moved through the NOC to the destination device. Waterloo grad student Hugh Hind, later VP of the radio protocol team, figured out a way to generate a two-to-one compression ratio on small bursts of data, then encrypt the data, which saved lots of bandwidth. Hind developed the compression and encryption technology working closely with Herb Little.
A few months later, all the late nights finally paid off in the form of a smaller, more efficient machine, the RIM Inter@ctive pager 950. The 950 measured 3.5 inches by 2.5 inches by 0.93 inches and weighed in at 3.95 ounces without the battery. It sported a monochrome LCD with backlighting, 2W transmitter and 32-bit Intel 386 processor with 1Mb of flash memory plus 204 kilobytes of SRAM.
The 950 had a 31-key PC-style keyboard and a thumb-operated clickable roller wheel that worked like a PC mouse. Plus it came with an address book that could store up to one thousand entries, selectable alerts and an intuitive menu-driven interface.
The killer app of the new 950 was its ability to replace a heavy PC or laptop for e-mail. With its "PocketLink" software, it could receive a response in an astounding 20 seconds. With the BlackBerry service, email was always on. You didn't need to retrieve your email. Your email found you, and discretely notified you it had arrived. But there was a bit of smoke and mirrors involved. Tim Meyer says that "One of the key insights that Mike had about wireless email was that by only giving an alert (beep) to the user AFTER the email was received gave the sense of instantaneous reception. No one knew that it took 20-30 seconds to receive the email. In comparison, using dialup modems you were waiting and staring at a screen after you had hit the Get Mail button. So the slow speed of the network was removed as a factor in the user experience."
The 950 also supported paging. Says Gary Mousseau, "Soon after RIM’s original launch they added support for links to Skytel and other pager companies. That means you could send a message using Pager technology and it would arrive at a BlackBerry. The paging companies gave BlackBerry users virtual pager phone numbers and we built a bridge between them and us to make it all work transparently."
The 950 could run about three weeks on a single AA alkaline battery, depending on usage. (Some cynics have quipped that things have gone downhill ever since.) One RIM veteran told me that "It was a decent device. For years, RIM left massive boxes of Duracell AA batteries around for workers who still used the 950 and 850. Every Christmas the batteries would disappear rapidly. RIM probably saved a bundle when they finally replaced all of the older devices with ones that would charge."
Marketing the Little Beast
Wireless projects weren't that unusual for telecom companies at the time, says Lazaridis, "but it was a consulting industry, not a product industry. A customer had to take products from tens to hundreds of different companies and weave them into a solution."<ref>Business 2.0 Interview, 2004</ref>
Bill Lenahan, CEO of RAM/Bell South, was delighted with the new form factor for the 950: "We committed to hundreds of thousands of these devices so they could get their manufacturing set up and their costs down. Without that, I don't think RIM would have been able to develop the products and manufacture them at the price point they did."
By early 1998 RIM had signed a contract to supply IBM with Inter@ctive pagers for use by its field service representatives across North America. Other customers included Panasonic Corp., Mobile Integrated Technologies, and Telxon Corp.
The new RIM Inter@ctive Pager 950 got rave reviews, and won the C|Net Editors’ Choice award: "The updated version, the Inter@ctive Pager 950, is even better. It’s more compact (you don’t have to fold it out), a brand-new interface makes it much easier to use, and a jog-dial switch takes you through the menus quickly and intuitively. And it still boasts nearly instantaneous send and receive times and excellent service prices."
Pricing for the RIM Inter@ctive Pager 950 started at $249 with a flat monthly fee of $24.95. Companies who wanted a BlackBerry Enterprise Server (BES) to manage company e-mail had to fork over $2,999 for a 20 user license, and $490 for every 10 additional users.
Many RIM people were frustrated that the company's customers were not taking full advantage of the 950's power, hooking it up to old servers and weak networks, using it mostly for paging, rather than email. Maybe the name was the problem....
Branding the Baby
- "As soon as I saw "BlackBerry", for some unknown reason... It's like when you first fall in love you know right away." - Mike Lazaridis
Lexicon President David Placek remembers being very impressed with the 950 LeapFrog. He told Mike the device deserved a name and personality of its own. "We wanted to give them a great name, which could really help them. At that time, they were going up against the pagers, and everybody had a pager... You need to have a really distinctive name. And let the operating companies, like AT&T, let them have the more conservative and descriptive names. But I had a sense that this was going to be a really good product."<ref>Meet Tech's Product Name Guru</ref>
"We looked at the form," says Placek, "and, with all the little buttons on there, began to create metaphors. We looked at the world of fruit because it does, from a distance, look like it could be some kind of fruit. Also, BlackBerry is a very friendly, approachable name. And it must have worked for RIM, because I keep seeing these things everywhere."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
"Lexicon research had shown that people associated the b sound with reliability," said David Placek, "while the short e evoked speed. Another syllable with a short vowel would nail it." Within seconds the Lexicon team had picked its fruit, and it was BlackBerry<ref>Words like BlackBerry, MySpace, YouTube and LinkedIn are all examples of CamelCase, or forming compound words by capitalising each chunk to preserve its identity. This produces "camel" words with a range of "humps". CamelCase has been around since the 1950s in a few brand names, such as CinemaScope.</ref>
Lazaridis paid a visit to Lexicon in Sausalito, and he remembers the occasion well. (see *Video). The Lexicon team came in with "boxes of white cardboard sheets, 40 of them, each one had a single word. They set them up on an easel." As Mike remembers, "after about 25 of them I thought gosh I've made a big mistake... they put up name after name... there were some strange ones... you might have heard of the HipTop."
"At that point," he thought, "I knew I was being set up, because the last one was so much better than all the others... What I decided to do was have some fun with them. I leaned back in my chair, crossed my arms and told them "I don't like ANY of them!" - You should have seen the look on their faces." And then he paused for effect... "except the last one. And we all burst out laughing."
Back home, the RIM engineers weren't sure they liked their baby being named after a fruit. Gary Mousseau was "just floored" by the choice of the California marketing pros. "But we didn't have the branding, marketing and sales experience of these guys. We just couldn't appreciate their skill set."
Mike liked it. The name stuck.
Launching the BlackBerry
RIM's timing was just about perfect. According to Balsillie, if the BlackBerry had come out a couple of years earlier, it may not have been very interesting because e-mail wasn't as popular yet. "It was the right time for us to do that because the offering and the market opportunity and the value proposition and the uniqueness stood on its own merit. We did it at that time and we certainly have no regrets. It appears, in hindsight, to have been a very wise strategy," he says with a grin.<ref> Industry Canada. Innovation Secretariat. Case 7. Research In Motion Limited</ref>
RIM launched its BlackBerry wireless e-mail service across North America in January, 1999 through partners Rogers CanTel and BellSouth. The package included the RIM 386-based wireless handheld device with typical PDA organizer software (calendar, address book, task list), along with a docking cradle and synchronizing software to connect with a PC. E-mail was encrypted using Triple DES and remained encrypted at all points between the desktop PC and the handheld device.
"The period leading up to the launch was frenetic," recalls Lazaridis. "It was very, very exciting because the early response to the product was overwhelming. We were seeding it in a number of target companies who took to the product immensely quickly. When you seed products, you expect a return rate of maybe half. Our putback rate was zero. That's staggering. At that point, we sit there and go, "This sticks. This sticks big."
"But the most exciting thing has been the holistic success of it. That we nailed it. That it was pulling through. That it was compelling. That it was going to be a big market, and everybody liked it."<ref>Laura Pratt, Persistence in Motion, Profit Magazine, May 2001</ref>
RIM marketing went into overdrive. Because RIM's workforce had all become BlackBerry addicts, Balsillie was sure that it would just take a few days for business users to get hooked on the device. He hired evangelists to seed thousands of BlackBerrys to influential professionals in Wall Street and on Capitol Hill. In no time flat it became a must-have tool for leading journalists, lawyers, political aides, members of the U.S. Congress and big banking and brokerage firms. "You immediately saw everyone get it," says Leonard G. Rosen, a former technology banker at Lehman Brothers.
The 950 became a huge commercial hit when it was rebranded as the BlackBerry, and the successful launch and publicity boosted RIM's sales that year by 80%, to US $85 million. In 2000, RIM revenue leapt another 160%, to US$221 million. By February, 2000, and even before entering Europe, RIM was boasting 164,000 BlackBerry subscribers in 7,800 companies. The payoff was spectacular: suddenly Research in Motion was earning 65%-plus margins on the service from the telcos and 35%-plus margins on the hardware<ref>according to National Bank Financial analyst Deepak Chopra</ref>.
The BlackBerry Brand
- "The BlackBerry is a synch engine because it synchronizes data across a mobile work force." - Mike Lazaridis
According to Jim Balsillie, RIM's original entry strategy into the marketplace was to build great handheld devices, and offer them to alliance partners, like Bell South, to integrate into their own operations. But they soon found they were at the point where a lot of technologies were converging - wireless handhelds, behind-the-firewall enterprise servers, and infrastructure to relay between wireless networks and the Internet. "That was definitely a spectacular step forward," he says. "The company got into the business of creating wireless software protocol stacks and application interfaces, and that's what BlackBerry is — a very sophisticated distributed set of wireless protocol stacks and application interfaces. It's just all the suite you need and all the distribution you need to connect what you need connected. So, in a sense, that sort of redefined the value proposition and really catapulted us forward in terms of a very, very valuable market and a very, very defined brand…. But we still got that market through alliances with great technology companies like Microsoft, Lotus, IBM and Sun, and outstanding wireless carriers like Rogers, Bell Mobility, Cingular, T-Mobile, Motient and AT&T."<ref>Industry Canada Innovation Secretariat. Case 7. Research In Motion Limited</ref>
The BlackBerry name itself soon had a profound impact, and the word quickly embedded itself into the popular consciousness. As British advertising genius Maurice Saatchi wrote, such “one-word equity” is a new business model for marketing, appropriate to the digital age. "In this model, companies compete for global ownership of one word in the public mind. In this new business model, companies seek to build one-word equity - to define the characteristic they most want instantly associated with their brand around the world, and then own it.”
The BlackBerry 957
On April 11, 2000, RIM released the first BlackBerry with a brick-style form factor - the RIM 957 Wireless Handheld, code named "Proton". RIM billed it as a "palm-sized wireless handheld with integrated support for wireless email, Internet, paging and organizer features." It measured 4.6 inches by 3.1 inches by 0.70 inches and weighed 5.3 ounces. It came with a crisper backlit screen, a 32-bit Intel 386 processor, 5 MB flash memory, a thumb friendly QWERTY keyboard and an embedded wireless modem. It was priced at $499.
With the 957, RIM took a giant step beyond the pager. It was a real "synch machine", with full support for BlackBerry wireless email. RIM's "Always On, Always Connected" campaign boasted that the BlackBerry 957 was much more than a two way pager. It could operate 24/7 while staying connected to the Mobitex network for incoming email and other functions like paging and stock alerts.
The 957's built-in organizer software also gave users access to their own calendar, address book, task list, memo pad, calculator and alarm. Users could synchronize the 957 with their office PC using a docking cradle and Puma Technology's Intellisync software.<ref>RIM eventually developed its own synching software and started competing directly with Intellisync. The company was acquired by Nokia in 2006.</ref> It used the trusty thumb-operated trackwheel for navigation and multiple notification alerts, including tone, vibrate, on-screen or LED indicator. It housed an internal rechargeable Lithium battery, and came with a docking/charging cradle.
The 957 did not have Internet access in the early days for lack of a browser, although internet based services were available via WolfeTech PocketGenie which supported limited HTML access. The browser was slow as molasses, but it worked.
According to one RIM veteran, "Mobitex, like DataPac, are decent networks but slow. I really enjoyed using my RIM 957 via the Mobitex network but the network never supported decent speeds or could handle a lot of traffic. The bonus to Mobitex was the distance you could be from a base station and still get signal strength. I heard a story years ago about some high end US politician who used his 957 to help get a plane down. The radio had failed and the flight crew were screwed, so the pol and his 957 came to the rescue by opening a line of communication with the tower. I remember taking a flight to Florida in 2002 with my 957 and having signal strength while airborne in places. My GPRS, EDGE and 3G devices can't do that because you have to be within a few km of a node to get a signal."<ref>Personal Correspondence</ref>
Financing The BlackBerry
"My job is to get the money, Mike's job is to spend it." - Jim Balsillie
Research in Motion was financed at the start by a Government of Ontario New Ventures loan, with matching funding from Lazaridis' parents in Windsor. By 1992 the company had sales of about half a million dollars a year, and three or four different business lines. Jim Balsillie also brought his own $250,000 investment into RIM. In 1994, the University of Waterloo helped RIM land a $100,000 grant from the Industrial Research Assistance Program. More funding came forward from the Business Development Bank of Canada (then the Federal Business Development Bank), and the Innovations Ontario Program provided them with a grant of close to $300,000.
Jack Barse of the Mobitex Operators Association was at a meeting in Singapore when news came of RIM's listing. "I remember RIM's Don McMurtry opening his presentation by saying, 'I'm very pleased to be here today representing a company that is now worth $140 million.' It was more money than anybody was worth in the business at that point, except for the Ericssons and the BellSouths. It was quite a dramatic moment, to think back to little RIM."
The Canadian and Ontario governments helped out as well, and RIM obtained $4.7 million from the Ontario Technology Fund and, in 1998, a $5.7 million loan from Industry Canada's Technology Partnerships Canada, which provides investments repayable out of future profits, to develop the next generation of handhelds. This was followed by another $33.9 million in 2000. RIM has also made use of the Government of Canada's Scientific Research and Experimental Development investment tax credits, which amounted to almost $12 million in 2002 alone.
"We are very systematic in how we fund the company, just like in how we develop our technology and build our markets," says Balsillie. "You must be ready to get money… there is a readiness process of networking and having people aware of your company, and having a plan ready and a cash flow driven by assumptions. It's not just 'Gosh, let's go get a cheque.' It isn't like that. It's a very systematic exercise. We are active in keeping the capital markets up-to-date and aware, and are always talking to the analysts."<ref>Industry Canada Innovation Secretariat. Case 7. Research In Motion Limited</ref>
The investment community liked what it heard. Balsillie had boosted the strength of the company by negotiating strategic alliances with BellSouth Wireless Data and Sybase. He also had in his pocket signed wireless handheld supply contracts with American Mobile (now Motient), IBM, Rogers Cantel (Rogers AT&T) and BellSouth Wireless Data (Cingular); plus wireless radio modem supply contracts with Telxon, Panasonic, GMSI Fleet Management Systems, Itronix Ruggedized Notebooks and DataWave and Gooitech.
Later in 1999, RIM listed on the Nasdaq (NASDAQ: RIMM) and raised another $250 million in capital, which RIM followed with a huge $900-million share issue in November 2000.
BlackBerry Enterprise Solutions
The RIM service gave users a "one mailbox" solution, combining their proprietary BlackBerry devices, middleware software (BlackBerry Enterprise Server or BES) and a network operations center (NOC) that retrieved your e-mail using triple DES encryption and "pushed" it to the device in your pocket. RIM's first NOC was a server located under software engineer Matthias Wandel's desk. Today, RIM's NOCs are large secure server farms, and there are now several around the world.
RIM also built its strength in the corporate market with secure "push-email" offerings that connected to Microsoft Exchange, Lotus Domino, and Novell GroupWise messaging and collaboration software. It worked on enterprise networks, and synchronized email and PIN messaging between desktop and mobile software.
With the BlackBerry Enterprise Server installed, its Mobile Data System Connection Service (MDS-CS) allows data to flow between your BlackBerry and the BES, and eventually onto your company's network. This effectively makes your BlackBerry device an extension of your desktop. The company BES delivers messages nearly instantaneously, and synchs calendar and contact changes between your device and the server as they are made. Today's BES allows administrators to fully control your BlackBerry, including how you browse the internet.
The BlackBerry Enterprise Solution soon became enormously popular with thrifty corporations. Because the data ran over RIM's network and was compressed for security, it saved massive amounts of bandwidth and slashed telecom costs, compared to mobile employees dialing in and accessing the data over the company's networks.
The consulting arm of RIM also programmed custom applications that let employees in the field access their company intranet, email, and content-management systems for sales.
The BlackBerry and 9/11
RIM's network managers and emergency service people saw a graphic demonstration of the real-world utility of the BlackBerry during the tragic 9/11 terrorist attacks in New York and Washington. People trapped in the Twin Towers were able to contact and communicate with loved ones after cell service failed. Police, firefighters and ambulance drivers and US Vice-President Dick Cheney all used their BlackBerry devices during the crisis.
According to a RIM insider at the time, "During 9/11, RIM staff were PINning the hell out of the Mobitex and DataPac devices used by people caught in the towers, while the support workers relied on them to communicate even while the regular cell lines were dead. The network survived while the cell network died because it was barely used and signal strength was possible from remote nodes."<ref>Personal Correspondence</ref>
Throughout the terrorist attacks and during the surge in traffic, Cingular kept the Mobitex network running despite losing many base stations in lower Manhattan. While text-only, and slow at 12.5 kilobits per second compared with newer networks, Mobitex showed how robust it could be during the crisis. It kept running while others failed because it did not have to share precious bandwidth with voice. Also, even if an e-mail got delayed a few seconds because of network congestion, the message was queued and sent a short time later.
After 9/11, police and fire departments as well as US federal authorities signed up for BlackBerry devices running on the Mobitex network. The US House of Representatives also decided to equip all 435 members and staff with the devices as a security measure.
BlackBerrys also shone during the great 2003 Northeast Blackout and hurricanes Anita and Katrina.<ref>At the time of writing, RIM still supports the old Mobitex devices including the only Java-based device they created for the Mobitex network, the data-only 5790.</ref>
In and Out of the Red
For 2001, RIM's revenue more than doubled to US$221.3 million, but growing operating expenses led to an overall net loss of US$7.6 million.
True to form, Lazaridis and Balsillie had gone ahead of the market and bet everything on the Java-based 5800 series. Prior to these devices, RIM sold direct. This let them pocket a greater percentage of the revenue. Once they switched to Java-based devices with cell phones, they had to sell through carriers.
The carriers were proving to be laggards in selling such high-end devices, and RIM's major investors were concerned that revenue growth was dipping and costs had spiraled almost out of control. So in 2002 the company had to undergo what is still called "The 10% Purge". They culled staff and cut back expenses to get into the black, then focused on developing even better devices and helping carriers learn how to sell the devices. The slim-down was useful and RIM emerged stronger than ever, able to keep up with skyrocketing demand for its flagship product, the BlackBerry.
FOOTNOTES
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