Goodbye Skype.
The delicate balance between a company's love for its product and the evolving needs of its customers.
Series based on the book, Ideas Don’t Die, Companies Do.
In my upcoming book, Ideas Don’t Die, Companies Do., I explain the tensions and conflicts facing leaders when faced with an idea. I explain this through my framework ‘Thinking On The Edges’.
This framework describes four key ‘edges’ where leaders and companies face conflicts that can either promote or hinder breakthrough ideas. These edges involve tensions that significantly impact a company's ability to innovate and sustain ideas over time. The four edges are not a transition from one to another but a continous lateral and parallel thinking process.
Breakthrough ideas come from "thinking on the edges," balancing conflicting priorities and overcoming biases.
The business world is littered with the remains of companies that failed to adapt to changing market conditions, technological advancements, and evolving customer preferences.
One such example is Skype, a once-dominant communication platform that has now been superseded by Microsoft Teams. To understand Skype's decline, it is helpful to analyze its trajectory through the "Thinking on the Edges" framework. This framework, which emphasizes the critical balance between conflicting priorities and the necessity of overcoming biases, provides valuable insights into why some companies thrive while others falter.
Skype's journey from a revolutionary communication tool to its impending sunset in May 2025 serves as a poignant example of the delicate balance between a company's love for its product and the evolving needs of its customers.
‘Thinking on the Edges’ Is The Key Skill For Leaders To Develop
"Thinking on the Edges" framework posits that breakthrough ideas emerge from navigating four key tensions:
Your love of your products vs. the features your customers want.
The expertise of the company vs. ideas that fall outside of the company’s expertise.
Emerging ideas from your industry Vs. emerging disruptive ideas from other industries.
Enterprise focus vs. ecosystem strategy.
In today's rapidly evolving business landscape, the ability of leaders to simply maintain the status quo is a recipe for eventual decline. The ‘Thinking on the edges’ concept is a fundamental skill for navigating the complexities of modern markets and fostering innovation. Thinking on the edges is not a transition from one state to another but a lateral and parallel thinking process that helps understand challenges and opportunities inherent in new ideas. It involves a mindset that continuously seeks the interoperability of ideas, drawing inspiration from dissimilar contexts and applying them to one's own business.
Skype was a verb long before Uber was. I can Skype you, but I cannot ‘Teams’ you. It is symbolic of the lost simplicity in experience and product design. It is the lost balance in thinking on the edges.
Thinking on these edges is not a one-time exercise but an ongoing, parallel process. It requires leaders to constantly question assumptions, challenge biases, and overcome the comfort of the existing state of business. The inability to think on the edges often leads to companies to fail because their leaders become unimaginative and pose the greatest threat to a company's future. The best ideas often die, not at the hands of customers or competitors but due to the entropy of company leaders.
Cultivating the ability to think on the edges is directly linked to a company's capacity for innovation and agility. By understanding the conflicts inherent in the four edges, leaders can better identify opportunities for building unnatural or dissimilar capabilities.
Video calling existed before Skype and will continue to exist after Zoom. The question is how do different leaders and in different companies through history, understand an idea and context to bring it to become a normal human habit. But television existed long before the first video call in 1964. On 7 September 1927, U.S. inventor Philo Farnsworth's image dissector camera tube transmitted its first image, a simple straight line, at his laboratory at 202 Green Street in San Francisco. But television existed long before the first video call in 1964. So why did it so long for an image on the screen to jump and become the way people communicate?
“What reporters witnessed in a New York City auditorium on April 7, 1927 was a fundamentally startling notion: seeing someone speak—from hundreds of miles away—in real time. When then-Commerce Secretary Herbert Hoover appeared on screen from Washington, D.C., he declared that “human genius has now destroyed the impediment of distance in a new respect, and in a manner hitherto unknown.”
“It was as if a photograph had suddenly come to life and begun to talk, smile, nod its head and look this way and that,” the New York Times marveled.
In retrospect, we might deem that the moment video calling was born.” - Francine Uenuma in Time Magazine, May 11th, 2020, Video Chat Is Helping Us Stay Connected in Lockdown. But the Tech Was Once a ‘Spectacular Flop’
By examining Skype's history through these four lenses, we can gain a deeper understanding of some of choices and decisions that make an idea successful. Ideas don’t die. Companies do.
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Let’s dive in.
1. Product vs. Customer: The Pitfalls of Stagnation
The first edge, "Your love of your products vs. the features your customers want," highlights the importance of balancing a company's vision with the evolving needs and desires of its user base. Skype, initially celebrated for its innovative approach to free online calls, struggled to maintain this balance as the market shifted toward mobile platforms.
While Skype pioneered audio and video calling, it failed to adapt quickly enough to the rise of mobile messaging apps like WhatsApp and the integrated communication features of operating systems like Apple's iMessage and FaceTime. Despite implementing multiple redesigns, Skype faced criticism from its user base, suggesting a disconnect between the company's vision and customer expectations. Blindly implementing every feature request can lead to a bloated, unfocused product. However, completely ignoring customer feedback can result in a product that becomes outdated and irrelevant.
2. Expertise vs. External Ideas: The Trap of Insularity
The second edge, "Expertise vs. External Ideas," underscores the need for companies to embrace ideas and insights from outside their immediate area of expertise. Skype's original team, comprised of individuals with "zero experience in telecommunications," initially benefited from this perspective, disrupting the traditional telecommunications industry with its innovative VoIP technology.
However, as the market evolved, Skype may have become too insular, failing to integrate external ideas and adapt to emerging trends effectively. Companies often justify decisions based on internal considerations, neglecting the potential of ideas that fall outside their comfort zone. This reluctance to embrace external perspectives can stifle innovation and lead to strategic missteps.
3. Emerging ideas from your industry Vs. emerging disruptive ideas from other industries:
The third edge emphasizes the need for companies to be aware and adapt to emerging and disruptive ideas both within and outside of their industries. Skype's failure to address this is evident in its slow response to the increasing popularity of mobile messaging and video conferencing trends that were emerging in other technology sectors. As the 'Skype' source notes, in 2014, Facebook bought WhatsApp, a mobile messaging app, and months later, users gained the ability to place calls across borders.
The "Skype" source also notes that services like Zoom and Cisco also enabled video calls, further increasing competition in the market. An ability to stay abreast of new technologies can give a company an edge to be agile.
4. Enterprise Focus vs. Ecosystem Strategy: The Limitations of a Narrow Approach
The fourth edge, "Enterprise Focus vs. Ecosystem Strategy," highlights the importance of building a broad network of interconnected products, services, and partnerships. Initially, Skype aimed to connect buyers and sellers on eBay, envisioning a synergistic relationship between the two platforms. However, this vision did not fully materialize, and Skype remained largely a standalone communication tool.
Later, as part of Microsoft, Skype was intended to integrate with various Microsoft products, creating a more cohesive ecosystem. Yet, Skype never achieved the level of integration and ecosystem development seen in its competitors. Ecosystems often demand substantial upfront investments before profitability is achieved, and failure to commit to this long-term strategy can lead to failure.
Wrap-Up
Skype's decline serves as a cautionary tale for businesses operating in dynamic and competitive markets. By failing to navigate the four edges of effectively, Skype lost its competitive edge and was ultimately overtaken by more agile and adaptable platforms.
In today's rapidly evolving business landscape, leaders will win by embracing a "Thinking on the Edges" mindset. By continuously balancing conflicting priorities, embracing external perspectives, and building robust ecosystems, organizations can increase their agility, foster innovation, and position themselves for long-term success.
References:
1. https://www.hariabburi.com/p/ideasdontdie
2. https://www.cnbc.com/2025/02/28/microsoft-is-retiring-skype-in-may-encouraging-people-to-adopt-teams.html
3. https://www.forbes.com/councils/forbeshumanresourcescouncil/2020/08/24/ideas-dont-die-companies-do/
https://time.com/5834516/video-chat-zoom-history/