Every now and then we witness as people in powerful positions are somehow affected by a virus which causes “Blind Arrogance Developmental Disorder" (BADD) -- (anyone have a better acronym?).
When a company, country, or team is led by someone affected with BADD they usually end up turning a corner they wish they never had. There are many examples of BADD in our industry and they almost always end up with unfavorable, sometimes devestating results.
Take for example Nvidia. Many years ago they thought they were unstoppable, their products were excellent, ATI was way behind, and they didn’t expect a change to come. BADD hit, and ATI just skated by (I’m talking way back when the Radeon was introduced). It most definitely wasn’t ATI’s ability to execute better than Nvidia that put them in the lead; it was Nvidia’s own BADD that caused it to happen. Since the failure of the 5800 (way back when) legend has it that Jen-Hsun Huang had a major internal meeting with his team where he openly recognized the company failures and humbly stated “never again…”
Remember when Intel was in a similar position? Intel thought AMD would never break the mainstream – in fact, Intel never even mentioned the “A” word ever, it was like they never existed. BADD set in and ultimately AMD beat Intel out of a few major contracts.
During the lengthy beating of Intel I can only assume that the engineers at AMD truly felt that they were well ahead of the game. Judging by current events one might assume that some sort of BADD set in somewhere at AMD because they entered this new war unprepared.
A few years ago a mild form of BADD hit Voodoo. We assumed only a few competitors in our space would remain. We were under the assumption that Voodoo would grow with few challenges. It seemed that out of nowhere new companies began coming out of the woodwork. Many were just little guys with big heart – although some of them did not possess gaming DNA. Then larger OEMs jumped in and validated the space. Thankfully we didn’t stay blind for too long, and now we’re in a fantastic position.
In February of 2005 Kevin Rollins was quoted as saying something to the effect of “The IPOD is little more than a fad”. Months later I had a conversation with Michael Dell, who happens to be incredibly intelligent; yet he commented that Apple was spending as much on R&D as Dell, therefore “Dell was more profitable”. I’m no numbers guy, but I certainly don’t need to tell you what Apple’s valuation is – and at the time I don’t believe they perceived Apple as a major threat. I guess even the smartest people in the world get caught up in their own arrogance.
The latest example of BADD – and man this is a good one – occurred on January 31st 2007. According to the New York Times, Dave Karraker, a Sony spokesperson, said the Wii did not belong in the same category as the more powerful PlayStation 3. “Wii could be considered an impulse buy more than anything else,” he declared.
Dave, here’s a clue from a 34 year old who has been playing games since I could lift a controller. I’ve gone through every one of those Mattel 9 volt battery LED sport games. I remember when I ran out of batteries I would rip the connector off the back and hook it up to our wall socket to make them extra bright. I grew up on Atari 2600, Intellivision, Colecovision, Sega(s), Apple //c , Amiga 500, Neo Geo (yeah a bloody Neo Geo, go try to find one of these), and an IBM compatible -- and then I started Voodoo.
I now own an Xbox, an Xbox 360, and I just purchased a WII. I love the Xbox 360 very much, but I must tell you – try Madden on the Xbox with the highest detail on your HDTV. Then go plug in your WII and run it at standard resolutions and see which system offers you a better experience. BTW – I did have a Sony PS3, because it’s my job. I could have kept it – but instead I returned it. It doesn’t offer a compelling upgrade to the Xbox 360, and it’s nowhere near as fun as the WII.
Dave’s quote is almost as bad as the “Ipod is a fad” quote. Ugh…
Some advice to Wall Street – here is a very unscientific method to understanding the future of a company without actually buying a crystal ball:
- Find the event that you believe triggered a “blind arrogant” reaction.
- Study the company, the product, the competition, the media, and the customer feedback.
- Make a decision; usually the answer is blatently obvious.
Some companies may possess a level of “mild arrogance”. They make great partners, and they understand their strengths and they are proud of them. They are more critical of themselves than others, and if they’re lucky they are open and honest about their weaknesses. The cool thing about companies like this is they prepare themselves for war long before the battle begins.
Companies like this are far and few between. Sure, all companies go through tough times as leadership changes and industry moves too quickly but finding the CEO who understands how to overcome BADD before it sets in is like winning a lottery.
There are many current examples of BADD that I have been watching closely. Our industry is full of arrogant bastards. Some might even say this article is somewhat arrogant. Perhaps it is – mildly amusing – I am not blind to that fact however.
Check out the new methodology for calculating BADD