Selling a Bear in Bulls clothing

This article is one part of the story about how understanding the VBE model of Nokia would have enabled Microsoft to be relevant in the Mobile business. But Nokia managed to pull off a heist at Microsoft by selling a dying VBE model to Microsoft for 7.2BUSD and this brought some breathing space to Nokia to stabilize their network business which still remained with Nokia.

I have started a VBE series of short stories of corporate companies, in these I put in perspective stories we all experienced with the VBE models and the obvious outcomes. The first of these stories is here and it happened on 25th April 2014. I remember that day as I was in Helsinki for a meeting and my meeting started at 10.00 am and finished at 11.00 am and then all the people in the meeting room started discussing that today Microsoft had acquired Nokia and that feeling was like someone taking over Finland's crown jewels. Nokia was now no longer Finnish, but an American company. It seems that the news had arrived in Finland at 6.30 Am in the morning on that day and phones had started ringing in Finland since the morning and everyone had a guilt feeling that a Finnish Icon was lost.

However what surprised me was the deal which Nokia had with Microsoft to let Microsoft acquire the Nokia brand to keep its foot in the Mobile Ecosystem against two formidable players which had taken over a big part of the Mobile Ecosystem Apple iOS and Google Android Ecosystem. On the way back to the Airport, even the Taxi driver had a forlorn face as he was mouthing a tragedy that had fallen over Finland. While there was a negative mood in Finland about loosing Nokia, what surprised me was that the Nokia guys had pulled of a gamble in dressing up Nokia as a Bull and sold it to Microsoft for 7.2 BUSD. Nokia managers had pulled of a heist at Microsoft. The VBE model of Nokia was bound for failure as I had asked myself a question which validated Microsoft's future mobile prospects. I had asked a question of How thrilled I would be if I had the option of a third car rental company in addition to Avis and Hertz. And my response to that I would not be excited at the prospects of a third car rental company. What was interesting was that Nokia had managed to convince Microsoft that acquiring Nokia's Mobile Business would change the prospects for Microsoft in its mobile ecosystem. But none at Neither Nokia or Microsoft had evaluated the VBE model they had acquired from Nokia. To put it in perspective, if the third car rental company had advertised that you could order self driving electric cars from them which would not be harmful to the environment, then the third ecosystem had a chance of survival, but Microsoft was going to put a similar ecosystem in play where the users would have apps on Microsoft phones and the users had to choose between Apple, Android and Microsoft. Apple had already taken the higher end of the Market And Android had taken the lower end of the VBE model with a free Operating system for mobile hardware makers like Samsung, Google Pixel, Sony, HTC, Huawei, Vivo etc. This left Microsoft neither in the upper end or lower end of the ecosystem.

But what was surprising was that no one at Microsoft asked questions about how their VBE model positioning would perform in the market and in just one year Microsoft wrote off the entire Nokia acquisition of 7.2 BUSD in 2015 and in May 2016 Microsoft exited the Mobile phone business by selling off the Nokia feature phones and trademark rights to Finnish company HMD global. The Microsoft CEO of that time Steve Ballmer was bullish on acquiring Nokia. While the next CEO Satya Nadella wrote of the business the next year. What the Nokia management achieved was incredible selling off a Bear in Bulls clothing. A Bear in the VBE Market sense of a business whose Value would go down and it was sold to Microsoft as a Bull VBE model or as a business whose Value would go up. But neither Nokia or Microsoft Management team had understood how VBE model for companies work, even though they were the beneficiaries till the year 2000 of having a strong VBE model to dominate the Computer software Market with a 98% market share against Apples 2% market share.

As with Aesops fables every story has a moral and in the VBE fables every story has a moral to examine and understand.

Moral of this VBE model Bear in a Bulls clothing fable is : Always understand the VBE model of the company you are acquiring or are partnering with and how it fits in your existing VBE model.

There is a short video I had prepared on how Apple used the VBE model to bankrupt Nokia's business and why the Nokia team failed to pick up on the manner in which the Apple team had launched an Attack on Nokia's business. https://youtu.be/sXiKeSmpLlQ?si=ZizFNidRfMFj7v2m

To Understand what a companies VBE model is and how it affects a companies business refer this video https://youtu.be/2f5FXiRkAuc?si=PJ-Ubg4gaCoW2wl1 This describes what VBE model of a company is and every company that is in business has a VBE model and aslong as its VBE model is strong, it stays in business. Hence it is important for every company to evaluate its VBE model.