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1013 : STEP ONE – SEEKING AND SHAPING OPPORTUNITIES

By the same token, Iridium did not undertake extensive technical
testing which would have provided feedback earlier than the big-bang
launch in 1997. It did not launch a single ‘stripped-down’ satellite to
evaluate technical performance to and from a ground-based user. The
actual launch revealed humiliating technical problems, such as weak
signal strength which prevented the telephone from being used from
inside buildings or on the streets of cities with tall buildings. Nor was a
second satellite launched to test inter-satellite communication.

By developing a life of its own from an imperfect beginning, the Iridium
project illustrates the dangers of following the stage-gate process for
developing products which we discussed in Chapter 2. This process
accepts that the optimal product has been correctly developed early on
in the cycle. As a result, the subsequent highly focused execution
strategy fails to review regularly the assumption that the initial design
continues to represent the best option.

Unshakable belief in the original definition of the opportunity and in
Iridium’s technical solution, together with the difficulties encountered by
external stakeholders in evaluating such new-to-market technology,
meant that a number of external triggers which might have led Iridium
to be aborted were ignored or down-played.

In the early 1990s, market forecasts had universally underestimated
the growth and improved functionality of cellular phones. But by 1995,
a full two years ahead of Iridium’s initial service launch in 1997 with
47 of the eventual 66 satellites, improved forecasts had highlighted
that enhanced cell phones, together with the internet, were rapidly
making alternatives to cell phones when travelling considerably less
attractive.

Even when Realpolitik forced Iridium to create regional gateways,
sacrificing two of the three benefits of the initial solution – no capital
costs to establish land-based gateways and no loss of margin to the
government-owned landline systems – the need to be truly global was
never challenged. Despite the incremental cost of achieving total global
coverage having become massive, Iridium did not return to the original
definition of the opportunity to ensure that it was still valid.

Iridium filed for bankruptcy in 1999 and ended commercial service in
2000.
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