3 Lessons We Can Learn from the Resurrection of Palm

Palm Lives After All

If you follow the tech industry, it was hard to miss HP’s recent acquisition of Palm, Inc.

The Sunnyvale based smartphone maker was in serious trouble after its seemingly meteoric rise from a very similar grave in January of last year. Palm was on the ropes, its wonderful webOS platform overshadowed by ineffective marketing and distribution. The company’s audacious reentry into a space dominated by Google, RIM, and Apple seemed to be a lost cause.

Then HP, probably the most bland hardware manufacturer in the world, came to the rescue. The marriage of the two seems like the perfect solution, Palm will invigorate the stale HP brand with a fresh new mobile operating system that is light years ahead of HP’s own offerings, and HP provides the firm with the financial footing and market share to take some serious – and expensive – risks.

So what can small online businesses learn from this soap opera? Here are a few things that stuck out for me.

1. Reckless innovation is a good thing.

Of the many criticisms about Palm circulating before news of the acquisition broke, the most jarring – to me at least – was the idea that they had tried to do too much with webOS. I might buy that argument if they were making mousetraps, but they make smartphones.

Palm didn’t just update their OS, they put everyone at Apple, Google, Microsoft, and RIM on the defensive. They poured an immense amount of their talent, blood, sweat, and energy into completely rethinking the way people interact with their phones and it worked! Even though the company didn’t function quite as well when it was an entirely independent entity, they created something so unique that they were eyed for acquisition.

Reckless innovation didn’t put them out of business, it got them bought by one of the largest and most influential technology companies in the world. If Palm had taken the less risky route and made another Windows Phone or Centro, they’d be dead by now.

Of course, not everyone is getting bought by HP, but really good ideas don’t generally go away.

2. Choose your partners carefully.

Palm did many things right, and many things wrong, but it is almost universally accepted that Palm’s initial launch with Sprint in the United States was a debacle and their launch with Verizon this year was almost universally panned as well.

Both Sprint and Verizon simply didn’t care enough about Palm as a partner to push their arrangements effectively. Both companies advertised the Palm Pre to the wrong demographic, Sprint initially marketed to NASCAR fans and Verizon branded the Palm Pre and Pixi as “feminine” alternatives to their Droid line of Android phones. Neither company really tried to market the phone to the same tech savvy, 18-35 year old demographic that Apple’s iPhone and Verizon’s Droid had been so successful at targeting.

Compare those to the close relationship between Apple and AT&T, and Google and Verizon, and you’ll see what I mean.

What consumers were left with were ineffectual ads from Sprint and insulting ads from Verizon. Taking a look at their own ads, Palm wasn’t helping itself either.

Remember these commercials with the creepy lady?

Seriously, they actually ran those.

So choosing effective partners with a stake in your success is critical, and it was one of the biggest mistakes Palm made in the run up to their buyout. It’s an important lesson for any business to learn.

3. Identify, Embrace, and Reward your fanatics.

Soon after the release of the Pre and webOS, Palm announced the App Catalog, webOS’ version of an App Store. The SDK initially didn’t allow for applications as rich as the iPhone’s, so a very enthusiastic homebrew community grew around webOS that is still rich today.

Rather than clamp down on their most passionate promoters, Palm learned everything they could from the homebrew community, even going as far as thanking them during their recent keynote at CES during the unveiling of their more powerful Plugin Development Kit (PDK).

Palm crowdsourced its shortcomings and it didn’t punish its ardent fans; as a result it has a very deep seeded community of go to promoters. You can’t buy that kind of love.

So there’s a lot that we can learn from Palm’s recent ups and downs. No one ever broke any molds by taking the easy route and building a business is about as hard as it gets. The lessons above, while really obvious from a conceptual point of view, are actually quite challenging to implement on a day to day basis.

So keep your eyes peeled, your mind open, and creepy ladies out of your ads. You’ll do fine.

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Photo by 96dpi.