In the technology sector we all know stories of storied companies that became too reliant on one product, only to be out-innovated or otherwise converted into a runner up in the marketplace. IBM with mainframes and Microsoft with Windows come to mind. Apple’s reliance on iPhones, though hardly having hurt the company yet, is a persistent concern.
Today, as I periodically do, I’m asking you to direct your attention completely away from technology, to another sector, this time the world of food. The decline of General Mills over a product you might not even have known it makes—yogurt—is a cautionary tale for any business, technology included. And in the current issue of Fortune it’s a well-told tale in an article by John Kell, part of our ace food-coverage team.
General Mills, as Kell recounts, has been around a very long time, specifically to “the year after the Civil War ended.” It is responsible for such staples of the American diet as Gold Medal flour, Wheaties, Bisquick, and Cheerios.
It’s also a big player in yogurt, through its ownership stake in Yoplait. General Mills cleverly played off Yoplait’s Frenchness to convince Americans they liked yogurt. But more recently the company got caught flat-footed by upstart Chobani, which brought “Greek-style” yogurt to the American palate. Where Yoplait connoted artificial sweeteners, Chobani oozed artisanal and natural ingredients. Marketing messages or reality, Chonani has schooled Yoplait, which accounts for enough of General Mills’ revenues to put the whole company in a slump.
Dominant incumbent felled by a newcomer better tuned into what consumers want: In this case it’s a food company. But if you think you’re in an industry that couldn’t be affected by a storyline like this, think again.
| Adam Lashinsky | |
| @adamlashinsky | |
| adam_lashinsky@fortune.com |
NEWSWORTHY
Next on deck. Security researchers caught a new strain of malware that targets the same vulnerability as the WannaCry ransomware bug that spread across the globe last week. Dubbed EternalRocks, it includes even greater capabilities for spreading, again via cyber techniques stolen from the NSA, making it potentially tougher to fight.
Fly, be free. A federal court shot down FAA rules requiring hobbyists to register their drones. The court said the agency's 2015 mandate conflicted with a 2012 law prohibiting the FAA from regulating "model aircraft."
Why didn't you come to me first? A tiny Boston company founded by Kenneth Weiss, one of the inventors of the RSA SecurID token, sued Apple and Visa, alleging that Apple Pay violates patents he holds.
Cart before the horse. Nextdoor, the neighborhood-oriented social network startup valued at over $1 billion in 2015, has finally settled on a business model after several false starts: advertising. It's feeling the pressure of being a unicorn, with revenue projected in the "tens of millions" this year.
Now you see me. Microsoft is holding an event in Shanghai on Tuesday to show off some expected new gadgets. But super leak collector Even Blass says he already has pictures of the main event, the company's updated Surface Pro 4 tablet.
What goes up. The digital currency bitcoin breached the symbolic $2,000 mark for the first time after soaring 65% in the last month. That's when regulators in Japan introduced new rules that treated bitcoin more as a part of the banking system.
Un-do. Google CEO Sundar Pichai announced last week that Android has hit 2 billion active devices, not users, as I had mistakenly noted in Thursday's Data Sheet.
FOOD FOR THOUGHT
Venture capitalists invested $69 billion in startup companies last year. How much did the public add via the new crowdsource fundraising techniques legalized by Congress last year?
Not much, Bloomberg reports. Only $38 million for 142 companies since the new law took affect last May, according to data from market tracker NextGen Crowdfunding LLC.
"Everyone in the industry thought there’d be more uptake," Richard Swart, a founding board member of the Crowdfunding Professional Association, tells the news service. "We all expected these numbers to be 2X to 5X what these numbers were."
IN CASE YOU MISSED IT
Cloud Computing Wins Preakness Stakes, and Techies Are Stoked by David Z. Morris
IRS Probe of Bitcoin Goes Too Far, GOP Warns by Jeff John Roberts
Striking AT&T Workers Take Credit For Sporadic Store Closings by Aaron Pressman
The Future Hotel Room Is Already Here: Meet Your Robot Butlers and Mechanical Mini-Bar by Chris Morris
Cannes vs. Netflix Is the Latest Battle in an Ongoing War by Matthew Ingram
Apple Reportedly Facing Trouble Over Tipping on Chinese Apps by Don Reisinger
Marc Benioff Touts Amazon as Salesforce’s New Best Friend by Barb Darrow
BEFORE YOU GO
Sometimes headlines exaggerate, would you believe? Part of the Svalbard Global Seed Vault, the super-secure storage facility deep in the Arctic circle in Norway that holds an agricultural legacy of 1 million seeds, was breached by melting permafrost. But despite some screaming headlines, the water only reached a tunnel that floods every year. Oh.
