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Letter from a Moto Insider: How Stupid Execs Ran Moto Into the Ground

moto.jpgGeoffrey Frost was Motorola's Chief Marketing Officer, and the RAZR was his baby. Last month, we got a letter from his former personal adviser, Numair Faraz, written to current Motorola CEO Greg Brown about how a cabal of inept, out-of-touch executives more worried about their golf score than the company drove once mighty Moto into the ground. It got lost in our bloated inbox, but with Moto splitting up today, Engadget reminded us we had it. For anyone wondering what the hell happened to Moto, with its endless string of RAZR knockoffs and crappy handsets, it's a must-read:

I've always considered it Motorola's dirty little secret that the strategy for their entire profit machine was run by the company's CMO—not the rest of the company's executives, who are as inept now as they have ever been. Many close to Geoffrey believed Ed Zander worked him to death, putting the pressure of the fate of the company in his hands.
That's just a touch.

From: Numair Faraz Date: February 5, 2008 7:27:58 PM EST To: Nick Denton Subject: Open letter to Greg Brown

Hi Nick,

Was wondering if you could have your guys publish this on Gizmodo. Would really appreciate it, and I am sure it would get a couple hits.

-numair

==

Dear Greg,

After making repeated attempts to contact you via your office, I am forced to write this open letter to publicly air my grievances concerning Motorola.

As you may or may not recall, I was the young person who worked with Geoffrey Frost during his days as CMO of the company. I was the one quoted in Forbes in 2003 as saying "Motorola's biggest problem is that Samsung kicks ass," and helped Geoffrey in his efforts to revamp the company's mobile lineup — an effort that eventually lead to the creation of the RAZR. As I told the company's senior designers at Motorola's 75th anniversary meeting: create something cooler and more expensive than anything else out there, and everyone will want it.

After the success of the RAZR, I implored the company to beef up their software expertise, and focus on creating socially networked devices (this, in the era before MySpace and Facebook became the juggernauts they are today). Your predecessor, Ed Zander, had little interest in this, and instead proceeded to prop up Motorola's stock price by parlaying his friendship with Steve Jobs into the ill-fated ROKR effort. Zander, who seemed to care more about his golf score than running one of America's greatest corporations, left all of the hard work to Geoffrey; I've always considered it Motorola's dirty little secret that their entire profit machine and strategy was run by their CMO — not the rest of the company's executives, who are as inept as they have ever been.

Many believe Ed Zander worked Geoffrey to death, putting the pressure of the fate of the company in his hands. I took his untimely death in 2005 very badly, and knew that the company would head downhill in the aftermath. Ed Zander continued to reap the dividends of Geoffrey's work, and the company made billions in profit from overselling the RAZR. Instead of channelling that money into the obvious — you know, further development of consumer devices — Zander purchased enterprise companies such as Symbol, and engineered massive stock repurchases.

As I told Zander in a phone call in 2007, I felt that he was setting the company up for massive failure. He had the audacity to say "well, maybe Geoffrey should have come up with a better successor to the RAZR," and told me to "wait for big things in 2008." I guess he was right — he got a big golden parachute, and exited out of the company. Your appointment to the position of chief executive gave me cause for hope, and I reached out to you; I knew you were one of the main drivers behind the enterprise acquisitions, and that you had zero expertise in consumer devices. Surely you could use some help in turning that business around?

It really angers me to see that you're really no different from the rest of the incompetent senior executives at Motorola — but instead of merely being incompetent, you killing the company. Your lack of understanding of the consumer business doesn't give you a valid reason for selling the business; moreover, publicly disclosing your explorations of such a move, in an attempt to keep Carl Icahn off your back, shows how much you value the safety of your incompetence. You have no interest in fighting the good fight and attempting to mould Motorola into the market leader it can and should be; taking control of the handset division, as you have recently done, will accomplish very little — it will simply give you an ability to say "we tried our best" when you finally cart the business off to the highest bidder.

In order to turn the handset division around, you need to bring in another Geoffrey; someone worldly and dynamic who is more interested in success than their corporate career. You need to task the company's designers with the same mantra that created the RAZR — make me a phone that looks, feels, and works like a symbol of wealth and privilege. Recognize the superiority of American software, and bring back those jobs so irresponsibly outsourced to China and Russia. Fully embrace embedded Linux and Google's Android initiative, and take the phone operating system out of the stone age. Recognize that, while rich people don't really know what they want, the lower end of the market does — and fund the development of an online "crowdsourced" device design platform to take advantage of this fact. Get rid of all of your silly, useless marketing, including those overpriced and completely ineffective celebrity endorsements, and do one solidified global campaign with Daft Punk (the only group whose global appeal extends from American hip hoppers to trendy Shanghai club kids to middle-aged Londoners). Understand that the next big feature in handsets isn't a camera or a music player — it is social connectedness; build expertise in this area, and sell it down the entire value chain.

I've been there when Motorola's handset division was brought back from the brink of death 5 years ago; follow my advice, and we can do it again.

Maybe it sounds like I take the downfall of Motorola personally; I do. It was my experience at Motorola, with people like Geoffrey and all of the loyal employees who still remain, that taught me that Corporate America can and should be; now, with people such as Zander and yourself, Motorola symbolizes the worst of Corporate America. As an immigrant, and someone who has traveled all over the world, I really do appreciate the uniqueness and importance of the American culture of creativity and ingenuity; whereas other countries back their money on gold and commodities, we back ours on our ability to invent the future. As an American, I believe that the protection of this culture is more important than anything else — as such, I feel it necessary to publicly shame you and your incompetent executive team. The failure of Motorola as an American institution of creativity and innovation, should you let it happen, will be entirely of your doing. Hopefully you'll keep that in mind while relaxing with your golden parachute.


Regards,

Numair Faraz
numair@numair.com

3:15 PM on Wed Mar 26 2008
By matt buchanan
20,342 views
80 comments

Comments

  • Ouch! Someone please make this guy CEO or he will leave (get canned) and creates a company that either rivals Moto or ends up buying it.

  • Zing!

  • AWWWWWWW SNAP! Moto just got verbally F'ed in the A.

  • That guy has balls of steel.

  • I have a feeling that Numair and Greg won't be hanging out together for drinks anytime soon.

  • And thus we see the death of American industry, American innovation, and America's place in the world economy. American corporations are becoming so blinded by the almighty dollar that short-term gains, windfall profits, and personal stock portfolios have taken the place of any pride in quality, craftsmanship, and originality. "As long as I get mine" is the new standard of corporate success. Long-term stability, and producing quality products that actually help people do what they want to do, is literally a foreign concept to CEOs in this country.

  • You know, there's a fair point in how Samsung (amongst others) kick ass, and a lot of that has to do with a willingness to occasionally screw up. Samsung's taken quite a few more gambles over time than Motorola, but that has led to more hits than just the RAZR, as well as more flops than the ROKR. It's a nasty tradeoff to consider, in a lot of cases, but the cost of failure isn't necessarily all that cut-and-dry.

    Motorola's clearly not going to get anywhere by trying for an iPhone killer, but that doesn't mean that they can't fix the things that they are missing: Decent featurephones, good software, and proper Internet functionality.

    Me? I don't give a rat's ass about Facebook/MySpace/YouTube on my phone, but apparently, some kids *do.* Take a gamble on that, and see what you can get out of it. Don't be afraid to render last year's hot new handset obsolete this year. You can't milk the RAZR design forever, after all. Try something crazy. Release a QWERTY-based messaging device that is also a phone, not the other way around. Spread yourself a little thin, it's not like you have much left to lose.

    It's a little disturbing that Motorola has fallen so far from their older mission statements, and I do have to question if they have any chance at all of recovering from this current collapse.

  • That man is a true marketing genius.
    He'd give Jobs a run for his money.

  • I work in the Public Safety/Enterprise Communications Solutions Industry and have been to Moto HQ's multiple times, the measeum they have there does show a lot of Moto History, and it would be a shame if this great american company went under. But I fear what will happen is the mobile business once split will just get gobbled up by a rival and thus moto goes away forever.

  • @ClemClone: Geoffrey was. His death was massive forshadowing for Motorola.

  • Wow! I'm sure this is soon to be followed by a resignation letter?

  • What exactly is a personal adviser? Sounds like a glorified way of saying he was a secretary. Considering that this guy is 22 or 23 years old, I can't imagine that he had too much power at Moto.

    Sounds like a self-important kid who happened to work for a very smart guy.

  • The fall of Motorola will make a fantastic documentary some day. I certainly would not say they have no hope of recovering, but this letter has to make you wonder.

  • Man, another boring article. I'm going back to that one that was super interesting, on um... Super300Bs uh G.

  • That was the most eloquent insulting of another human being's integrity i've ever read.

  • @DiddyBear: Dont discredit the guy becuase of his age. Just becuase your young doesnt mean you arent smart (Facebook, google, youtube etc). And even if he was an assistant/secretary, they are the ones with all the dirt.

  • @DiddyBear: I can see how he can come off as 'self-important' in the letter, but his analysis of the problem is right on point. And I'd be careful about dismissing someone as a 'kid'- the tech industry is driven by the 20 something age group. Judging by his letter, this ain't no ordinary kid either. And the smart guy he worked for certainly won't have hired a dumb kid.

  • up until last year, I really saw a lot of potential in Moto. More for their brand than for their product. Their downfall is almost tragic; looks like another case of a bunch of corporate dinosaurs hanging onto an obsolete business model. I see along of similarity between Moto and Palm.

  • you know what they say about rotting fish

  • it's always the same:

    managers KILL every fine company because they just want too much money for their own!

    It's everywhere in the world: US, Europe, Asia ...

    And when they destroyed a company they got 50.000.000 Dollar as a gift, too.

    I can't understand this ...

  • Respect...As someone on the advertising side of things, this is the kind of person I want on the client side. He not only has a vision and stands by it, but he makes others want to stand beside him. Respect...

  • Ouch!

    kp

  • Props for Daft Punk reference that can only be gleamed by someone who actually cares about what unites ppl rather than divide.

  • Is there a good reason for numair.com to have no web presence, for Numair Faraz to not be in LinkedIn, to nobody owning numair.com, and to the only Numair Faraz in FaceBook being some guy running on a beach?

    Or is this a fake?

  • Enron, Motorola, Bear Sterns, SGI... how many monsters must collapse under the weight of incompetent executives before the world changes?

  • Clearly Motorola needs to be "Harder, Better, Faster, Stronger". Gotta love the mention of Daft Punk.

  • @DiddyBear: A good and smart administrative assistant to a senior executive at a large company usually has more influence than your middle management layer.

  • @DiddyBear: Another dipshit comment by someone who insists in discrediting the writer rather than thoughtfully considering the words he has written.

    Thanks!

  • What almost always drives this companies, is an individual who actually cares more about the success of the company than his own bottom line.

    That sort of personality is a vital part to grow a business, rather than simply coast.

  • What could save Moto?
    Telepresence love robot-phones.

    The ultimate in social networking phone gizmos!


  • Image of 92BuickLeSabre 92BuickLeSabre at 04:29 PM on 03/26/08 *
  • @matt buchanan: Uhh, how the hell could this important message have been left in an inbox for a month? Whoever dropped that ball should be fired.

    Motorola got greedy with the RAZR and dilluted its stature so much that even my grandfather had one. It feels like typical large-company attitude to absolutely milk a product until its dead. What the heck was the Moto RnD team doing during the success of the RAZR? I'm sure whatever they were developing came from upper-command. The greed is so obvious.

  • I reallly like this guy and I would totally buy into whatever he wants to do if I worked for him.

    But it's sort of weird that his writing lacks some polish or belies a lack of business communications skills. I bet he's kept in a lot of dark closets wherever he works because he doesn't know how to play nice, or might have some kind of chip on his shoulder/axe to grind, etc.

  • "create something cooler and more expensive than anything else out there, and everyone will want it....You need to task the company's designers with the same mantra that created the RAZR -- make me a phone that looks, feels, and works like a symbol of wealth and privilege"

    boom.

    exactly.

    this is apple's philosohy, this is why they have been so successful in the marketplace

  • and come on Giz...you should have published this! you're better than that.

  • Come on,

    Anyone with a pulse that is ever interested in gadgets (and if you are reading this blog then likely you are) can tell that the cell phone market needs an innovative approach. What surprises me is that this young guy seems to know more than the execs. That is dumb.

  • Being that I have two family members who work(ed) for Motorola for the past 20 years I have seen this downfall coming and coming. Just from an employee perspective my uncle and cousin really were proud to be Motorola employees years and years ago. My Uncle left after the first round of restructuring that occurred in the late nineties. I remember having a conversation with him on Christmas of that year about how Motorola blew the market share they had but he believed they could get it back. For a while there they had that upswing that he predicted, but man has Motorola fallen hard again. This time I am not so sure they can recover. They are almost as deep in it as Palm is with the inability to create something compelling running deep.

  • This is this guy's Jerry McGuire thesis.

    He had me at "Daft"

  • So what's the deal with this guy? He isn't in LinkedIn, his domain name doesn't have a website, ARIN doesn't show the domain name at all, he doesn't have good writing skills. Does he even exist?

  • I think you can replace the words "Motorola" "RAZR" "Handset" with any other company name and product nowadays.

    Where I work, the President and the VP of a subdivision will sit around the workers and BS about golf, issue derogatory remarks about employees, females, racist remarks about people they would never hire nor vote for, (exhibit behavior that is improper in the workplace...).
    It may be a small company (not traded nor public) but it makes money. And within another year, have assents that would make for a nice lawsuit (hint hint).

    Do I care about Motorola handsets? After reading this, I want to ditch my Moto cell phone for something else, maybe by LG (Lucky Goldstar) or Samsung.

    Numair (if that is a person and not some fictional rhetoric), you should be running a company. You are wasting time and talent and air on "US Executives that are nothing more than insecure, greed-driven imbeciles, driven to succeed infront of their peers and yap about golf scores and latest unimportant crap, with more focus on their goldenparachutes than a quality product, a reputation and success for all".

    I'm moving to Europe. They don't oppress over there anymore. And its getting stuffier and dumber over here.

  • Ed Zander == Terry Semel ?

  • I use a 3 year old Motorola v551 right now. Every phone within my current price range is no better than the model I have right now. No innovation, except Cingular/ATT/Apple Iphone, has happened in the last 3 years. What happened to all of those non-pda qwerty text messaging phones? Motorola, Nokia, and LG all had them. They were discontinued by all the carriers to be replaced by expensive PDA phones requiring data plans.

    Crippling the phones in order to sell me more expensive services isn't going to win me over. I'll just go out of my way not to use the services.

  • @SigmundTheSeaMonster: Don't go to Europe, you will have more layers of Crud than you can ever imagine

  • i'm not surprised at all. The last Motorola phone I purchased was the RAZR when it orgininally came out. The only good thing about it was the form factor, and now most phones are slim. Motorola hasn't had anything going for them for a while.

  • @SigmundTheSeaMonster:

    Don't let the door hit you in the ass on the way out.

  • i agree this was written by someone who has no idea how a company is run and that it was possibly written by an angry child.

    Although, maybe he will be a good attaboy golf game manager one day.

    After all, why pay expensive American developers when you can get some kids to "crowdsource" your designs for free? Just let them into your design rooms and have at it.

    Also, Daft Punk is crap.

  • What's really amazing is that they managed to produce the RAZR at all. If you've ever worked in a bloated, management heavy, politically driven technology company, you know how everyone talks about change and cutting edge and reinventing this or that but rarely does a really great product ever get out the door.

    In any case, it doesn't really matter that Motorola dies. Corporations don't exist to create great products or meet consumer needs, they exist to produce wealth for the people who own and run them. Sometimes they manage to do that by creating great products and meeting consumer need and when that does happen, it's almost inevitable that everyone will grab the money and run.

    Dinosaurs die and monkeys take their place... then the monkeys become dinosaurs and new, smaller and faster monkeys come along. It's the way things go. Don't shed a tear for Motorola. Congratulate the fat white men who managed to get smart immigrants to make them rich and be happy for the brief burst of cool stuff that came from it.

    And for those left in the aftermath a great company's demise, don't waste your time with the teeth gnashing and the rending of cloth... dust off your resumé and move on.

  • I'm sorry, but what exactly is surprising about a CMO creating "the strategy for their entire profit machine"? CMOs are in charge of market research, "what do people want", and marketing, "hey! everyone will like you if you buy this".

    Doing these things allow you to repackage current gen technology into a sexy package that everyone is willing to pay next-gen prices for (see: Apple). If the buzz can be maintained, you can string out each market segment as you slowly lower the price while maintaining your margins.

    Sounds like Moto just lost the wrong guy on the product side and the other execs got focused on share price (like they're supposed to be) without replacing the talent they'd lost.

  • @openfly: Enron, Motorola, Bear Sterns, SGI

    You cannot make that comparison. Motorola has one section that is doing poorly. The other businesses are doing well, and will continue to for a while.

  • @ FuzzysFriedChicken : you must have hella stocks in Motorola.

  • I don't mean to take away anything from what this kid says. I'm sure he's right about them needing to bring in someone with fresh ideas. And as someone who never liked the RAZR, I agree that they've milked it for far too long.

    I just think he comes across as a petulant child when he basically blames Moto's downfall on their not following his advice. His social networking strategy may or may not have worked when he proposed it. But hindsight is 20/20.

  • @drewheyman: Daft Punk is not crap. Daft Punk is glorious and widely accepted, as Numair points out.