Your company is only as good as the people you hire. Everyone knows this, especially Nokia, who according to a recent piece in the Finnish publication Helsingen Sanomat paid $200 million in 1997 to keep 44 engineers from leaving the company to join Nokia product developer Jyrki Hallikainen at a new company he was setting up called Microcell. For some strange reason GigaOM says that the decision to do that may be what started Nokia’s inevitable decline. We argue that such a conclusion is total hogwash and that American companies are known for doing this all the time. When Google was losing employees to Facebook, they gave everyone a raise. When Google showed off Google Wallet, Paypal complained because the project was lead by one of their former employees. People move from one company to another quite frequently, especially in Silicon Valley, this shouldn’t surprise anyone. The old saying goes that men are only as faithful as their options, and if someone offers a talented engineer double or triple what he’s currently making, then he’d be foolish not to take said offer.
So what has behind Nokia’s decline? It’s a complicated issue, but it all boils down to arrogance. Instead of partnering with companies who make best in class services for music, photo sharing, etc., Nokia decided to build everything in house. Remember all the acquisitions we used to write about back in 2008 and 2009 when Nokia was trying to get Ovi off the ground? Those are now all useless as the Finnish handset maker has decided to let Microsoft handle all their online offerings. Then there’s North America, which Nokia laughed at because of their (admittedly at the time) inferior market, dominated by operators. What they failed to realize was that as the internet became a key to you relationship with your mobile device, you needed developers to make their services available to mobile phones, and where do today’s most popular web services hail from?
[Image above is from the 1996 film “Jerry Maguire” that spawned the infamous “Show me the money!” tagline]