What Would Steve Jobs Do? How the Steve Jobs Way Can Inspire Anyone to Think Differently and Win (5 page)

But the Apple standard became increasingly marginalized during this period. It languished as Windows captured all the personal computer growth, especially with the blockbuster Windows 95 release and with much cheaper hardware because of the memory and powerful processors that had become available. Dell and Compaq pretty much owned the space, especially in the business world. Apple’s response was to sue Microsoft for copying Lisa’s graphical interface, but this never went forward. Eventually, after a series of product and marketing failures, Sculley was shown the door (by Markkula, actually).

Things were not improved by the efforts of the next two CEOs: Michael Spindler and Gil Amelio. The company actually lost money for three years, 1996 to 1998. Amelio chose to focus on cutting operating costs, which is rarely an effective strategy, especially at a creative and innovative enterprise. The company struggled to enter other markets, like the PDA market, with Newton, another expensive failure. But he did have the vision to see the NeXT operating system as a good core for the next generation of Macintoshes. Apple also got Steve Jobs back as part of the $429 million deal.

Everyone could see the writing on the wall—except Amelio. Soon he was also ousted by a board that was frustrated by bland business results and a low stock price.
Steve Jobs took over as “interim” CEO (“iCEO,” as many pundits, including Steve, referred to it) after being an energetic advisor for a while.

It’s hard to imagine today, but Apple was really on the ropes in 1997. It had too many products, and most of them were just incremental, warmed-over versions of Mac desktops and laptops. It had failed with Newton. Its stock price was languishing. It had a small following, mostly of graphic designers, students, and teachers. There was no killer app. The operating system was aging and not particularly compelling. Software was limited, and many titles that hadn’t been developed on the Mac didn’t run well on it. Its dealer network was fading. And Windows was eating its lunch.

The company was now producing and cataloging 15 product platforms and thousands of variations among those platforms. Steve immediately saw this as a fundamental problem, one of lack of focus and poor strategic direction. It was like throwing a bunch of things at a wall to see what would stick—not a formula for success anywhere in business, and especially not in technology. Steve saw it as an extension of the battle for shelf space—lots of products, but not particularly good products; quantity instead of quality. This was not good for the products themselves, not good for the channel, not good for the brand, and, most of all, not good for the customer. And it was not good for profitability, as it required too many resources, spread too thin.

So Steve slashed and burned. He looked at the market as a very simple four-quadrant grid. One dimension was Customer, divided into Consumer and Professional. The other dimension was Product, divided into Desktop and Portable. He wanted one platform for each of the four quadrants and nothing more. Using this approach, by the end of 1998, he had whittled 350 specific products down to 10. The Steve Jobs Leadership Model was about to bloom, and Apple was about to take over the world.

I’
LL
H
AVE AN I
M
AC
 

At about the same time, the Internet was becoming all the rage, not only in the business world, but also for consumers. Steve Jobs had a vision for a bold new design for a new “all-in-one” computer with brightly colored side panels, an optical drive, a USB port,
no
floppy drive, and a “back that looked better than the front of everyone else’s.” The design details were taken care of by the renowned British-born industrial designer Jonathan Ive in a secret lab.

The iMac was a bold statement at a time when computers had become really boring beige boxes. It was designed for considerable eyeball appeal in a retail setting, was cool all over, and celebrated the change to a new millennium.

It worked, and it sold well. It got top praise from reviewers and critics. The iMac and its descendants,
coupled with the revamped and highly visual OS X operating system introduced in 2000, returned Apple to its leading role in personal computing design, if not in terms of numbers, at least in terms of the appreciation of its loyal and growing audience.

And what is the “i” in iMac? When the iMac was first released, Apple claimed that it stood for “internet.” That’s plausible, but it also more tacitly represents its positioning as an “individual” or personal device. The brand strength of this single lowercase letter proved enormous in the marketplace.

It also gave a hint of a not-too-distant vision and the beginnings of Apple’s transformation from a computer company into a digital company. On deck: the iPod.

T
HE
V
ISION
G
ETS A
S
OUNDTRACK
 

At the height of the dot-com boom, a small tremor was felt in the world of recorded music. It was called Napster, and for the first time, it allowed people to download and share music off the Internet—for free. It was cumbersome, and it was later determined to be illegal. But it could be done.

Steve Jobs noticed this. And Steve Jobs had long been a lover of music. He saw quite clearly that music would go digital some day. He thought about the current customer experience—what it was and what it should be.
Reliable downloads. Simple technology. Personal, convenient design. Easy shopping for new tunes. Fair revenues and profits for the sellers involved. It was a fairly obvious vision (in hindsight), but the current state of the art was far from it.

Fast forward: the iPod was the happy result. A tiny 1.8-inch hard disk drive had been developed by Toshiba in Japan. It was a solution looking for a problem, and Steve and Apple thought they had the problem. The few music players that had been made before that had relied on memory chips, so they couldn’t hold very many songs. They certainly couldn’t hold an entire music library.

Innovation is synthesis. Customers would want a device that could store a lot of songs—an entire library was best. But the device had to have the battery power to last long enough to play more than a few. It had to download those songs quickly—in five seconds, not five minutes. Customers would want it to be simple—no fiddling with 10 buttons while trying to jog. And, they would want a simple, legal, relatively inexpensive one-stop shop to acquire their music.

What did Steve do? He put it all together to provide a complete solution. The 1.8-inch drive supplied the storage. A new battery supplied the juice. Another Apple product, the FireWire, provided the fast download. Now, what about the music store?

That took some ingenuity. Steve himself took on this last piece of the vision with a music industry that was already gun-shy about the idea of Internet downloads. He proposed the 99-cent sale price, which was cheap enough for most consumers to accept the value proposition of an easy and legal download, but rich enough to give the record labels an acceptable cut. It was a win-win, and it provided a massive revenue stream for Apple once the original product was sold.

It all came together for a late 2001 launch. Jobs played an instrumental role in putting the pieces together to solve a major customer pain. People didn’t even know they had the pain, but when they started to use the iPod and iTunes, they figured it out and switched immediately. Sales to date exceed 300 million. The meteoric rise in the company’s value began shortly thereafter. And most of us spend far less time listening to music on traditional hi-fi systems, and fewer still buy packaged CDs these days.

O
NE
-B
UTTON
S
UCCESS
: T
HE I
P
HONE
 

The success of the iPod emboldened Steve and his team to take on another big customer challenge: the mobile phone. Customers hated their phones. Apple engineers hated their phones: they were ugly and too complex,
with too many buttons, clunky retractable keyboards, not enough features, and not enough “cool.”

To make a long story short, Apple engineers quickly designed an elegant, simple solution, the iPhone. It has one button. Like the iPod, it was a synthesis of iPod miniaturization and design, elements of the Mac OS, and excellent display, battery, and other hardware design.

And like the iPod, the real win was in developing the “ecosystem” around the phone—in this case, the “app.” A huge network of developers, now numbering more than 100,000, saw the compelling platform and immediately went to work designing apps. There are more than 500,000 apps available through Apple’s app store. The apps support the phone; the phone supports the apps. This symbiotic relationship hasn’t come close to being matched elsewhere (Google is trying with its Android OS) and provides an enormous competitive advantage.

It also provided the basis to go one step further.

P
UTTING
I
T
A
LL
T
OGETHER
: T
HE I
P
AD
 

You have apps. You have an app store. You have iTunes. You have excellent display technology. You have excellent touch-screen technology. You have an increasingly visual, increasingly connected world, with Wi-Fi
almost everywhere and 3G service where it isn’t. There are e-books and e-book readers already out there. There are games and plenty of other electronic content in the form of newspapers, magazines, and so forth. And you have a customer base that is weary of the complexity, the form factor, the long boot-up times, the size and weight, the reading position, and the relative inconvenience of the laptop PC. And that customer wants to be connected in real time, as much as possible, from almost anywhere.

What would you do? What did Steve do?

Bring to market the iPad, that’s what. It was almost a no-brainer after the iPod and the iPhone.

People thought it was so cool that they lined up outside Apple Stores everywhere to look at it. People could browse the Web, watch videos, read a book or a newspaper, or play a game from almost anywhere, and it was real easy. There was no mouse and no physical keyboard; you didn’t need a table or flat surface to use it.

Most customers didn’t know they needed one until they saw it. They were sold at first sight.

The iPad has become the mainstream consumer and business Web access device, while the PC has been relegated to a niche role for things that PCs do well—storing lots of data, writing and producing big reports and PowerPoints, and doing other more comprehensive tasks. Some people have to do that sort of thing some of
the time, but the iPad captures what most people do with computers
most
of the time. It was a brilliant epiphany and a synthesis of what was already there—to the credit of Apple and the leadership of Steve Jobs.

A
GAINST THE
G
RAIN
: A
CHIEVING
E
XCELLENCE IN
R
ETAIL
 

Ever since the first Apple Is flew off the shelves at The Byte Shop in Mountain View, California, Apple had marketed its products through the retail channel. Over time, Apple had created a network of authorized and exclusive Apple dealers, and by the late 1990s, it had also begun to sell through the “big-box” chains such as CompUSA and Best Buy.

The dealer network had served Apple fairly well, but it was beginning to struggle as Apple’s fortunes struggled in the mid-1990s. Computers were becoming less of a specialty item, and customers had started shopping more on price and selection—and they wanted to shop the choice between Apple and the booming Windows PC standard. The growth component of the industry migrated toward the big-box retailers.

The problem was, the kind of people these chains hired to work their floor weren’t likely to be experts on computing, and were even less likely to be experts on Apple and Apple products. They were salespeople, and
their objective was to move boxes. They didn’t really care what brand they sold.

N
O
U
SED
-C
AR
S
ALESPEOPLE
, P
LEASE
 

Meanwhile, in the late 1990s, the PC manufacturer Gateway had set up its own retail channel in an effort to differentiate its brand and market its service and buying assistance as an extension of its whole product. At first these stores did quite well, particularly in combination with the company’s friendly, down-home dairy cow trademarking and its South Dakota roots. But soon this concept wore out; Gateway moved its headquarters to San Diego, the cows went away, and the company lost its edge. People wanted to comparison-shop all PC choices for price, and to test-drive and buy printers and other accessories along with their PC; all this drove customers away from the Gateway stores and toward the big-box retailers.

Steve Jobs didn’t like the big-box experience, as he thought it was detrimental to the Apple brand. He likened it to the used-car-buying experience, where customers had the “deal of the day” shoved down their throats. There was no connection with a brand, except perhaps the retailer itself, and there wasn’t much connection there. Steve looked at the buying experience as an extension of the whole product, and he wanted control
of that experience to make it a positive and to increase emotional involvement with the Apple brand.

Steve wanted a retail format that would enrich people’s lives—an obvious extension of the product philosophy.

T
HE
“T
HINK
D
IFFERENT
” R
ETAIL
S
TORE
 

When Steve Jobs disclosed his intentions to start the Apple Retail Store chain in the year 2000, most industry experts were doubters. They had witnessed the failure of the Gateway stores. They felt that Apple would have to make a painfully large investment in such brick-and-mortar facilities when the dot-com boom and the success of big-box retailers suggested a different course. Steve stuck to his guns.

Other books

The Cases of Susan Dare by Mignon G. Eberhart
Rise of the Firebird by Amy K Kuivalainen
Hell to Pay by Simon R. Green
Possession by Violetta Rand
Jewelweed by Rhodes, David
A Cockney's Journey by Eddie Allen
Alphas Unleashed 2 by Cora Wolf
The 13th Prophecy by Ward, H.M.


readsbookonline.com Copyright 2016 - 2024