In September, Renee Callahan wrote in Strategy & Innovation about the appealing GPS unit Dash Express, which distinguished itself in a very crowded field with its ability to aggregate data about users’ positions and speeds to generate real-time, accurate traffic information. However, Dash is now undergoing a complete overhaul of its business model: it will no longer sell its own branded devices and will focus instead on business-to-business sales of its software platform. If nothing else, this rapid death of a new device serves as a further warning of the dangers faced by new entrants with great ideas seeking to improve on existing offerings in sustaining ways.
This is a welcome change, and as Renee’s original article indicated, it was a foreseeable one. Dedicated GPS navigation devices from a few large incumbents have continued to become more ubiquitous and more affordable, while at the same time GPS has rapidly become an increasingly common feature in phones. After the Dash Express was introduced, it quickly became clear that positioning it among other devices with extremely similar features would be an ineffective strategy, as demonstrated by series of price cuts evidently driven by weak demand that brought the price from $600 to $399 to $299, not counting a monthly service fee.
Essentially, the Dash Express was positioned as a device that does what other devices do, only a little better and more accurately. Unfortunately, viewed from this perspective the Express was a sustaining play, and market entrants tend to do very poorly when attempting to one-up established players.
Dash’s new strategy, however, is substantially more promising. As a restructured business-to-business software platform developer, Dash is entering fairly new territory: GPS device manufacturers use their own closed, proprietary operating systems, and generally speaking mobile devices like phones run on an enormous variety of proprietary software platforms that have only recently shown some potential for standardization. Within this new, less-cutthroat competitive landscape, Dash may flourish. Of course, it’s also worth noting that the piece of Dash’s software that makes it truly compelling – its use of users’ data to provide extremely accurate traffic data – will only work better as it is made available in and gathers data from a wider variety of devices.
At the end of the day, the demise of Dash as a device maker demonstrates the difficulty of penetrating a mature market with established incumbents and fierce competition. The “new” Dash may also run into trouble, but from our perspective Dash’s new business-to-business model seems to be a safer, faster-moving road to success.