Lessons From Steve Jobs

A lot of people have posted tributes to Steve Jobs over the past week. I’ve seen him called the CEO of the Decade (something I agree with) and also compared to Henry Ford (I sort of agree with). I’d like to call attention to four lessons we can learn from Steve Jobs’ Apple, two positive and two negative. First the good:

Apple avoided falling into the trap of the Innovator’s Dilemma

Apple avoided falling into the trap of the Innovator’s Dilemma. In a nutshell, the Innovator’s Dilemma says the following (I am paraphrasing): when you invent something, first you are trying to penetrate a new market and convince people to buy your invention. At this stage you will do anything to get noticed. After a while, your invention becomes mainstream.  Your profits predictable. Your investors complacent. Then a new disruptive technology is starting to show up here and there. You ask your customers (who are all mainstream consumers or businesses) what they want and you build that for them. Pretty soon, you go out of business (or drastically lose share) because the new disruptive technology overtook you. You failed because you made good management decisions (focusing on profits, listening to customers, etc), hence the dilemma. Henry Ford is credited with saying:  “If I listened to my customers, I’d have built a faster horse.”

Apple constantly churned and churned out new products, defining new categories. The pace of innovation was breathtaking, as soon as a new iPhone was released, there were rumors of a newer and faster one. Some would say that Apple was going to cannibalize their older products with the new, but they forged ahead anyway, with the profits to show for it. Apple embraced the disruptive technologies, not fought them.

Apple worked to create an experience, not just raw technology

When you buy an iPad, you are buying an experience. With the integration with iTunes you can download Apps, books, movies, magazines, and of course music. There is a whole ecosystem around Apple and the iPad, that is why they don’t OEM iOS to other vendors to build a device, Apple wants to control the experience.

Android on the other hand has no such ecosystem. They build the OS and let the OEMs build the hardware. There are phones running Android that are much better than the iPhone and there are tablets that are just as good as the iPad, but don’t sell well. Why? There is no ecosystem. I went into the local electronics shop here in Hong Kong and played with the Lenovo and Samsung tablets and there was no true “feel” to them, it was just a screen waiting for you to configure stuff on. Good for geeks, but not for consumers. My mom needs the simplicity of an ecosystem and an integrated experience. 

Google and by extension their OEMs, figured that slick and cool technology was going to be enough to win. Apple realized that good technology was not enough, users demanded an experience, and Apple gave it to them.

Now some lessons from things that Steve could have done better:

Apple suffers from the “Curse of the superstar CEO”

When I was in business school, I read a case study called “Curse of the superstar CEO”. The article stated that recently we have looked to leaders (CEOs) who have a lot of charisma and we tend to worship them like a religious figure. The curse of the superstar CEO is very problematic, it leads to leadership succession problems as well as exaggerates the impact that the CEO has on the company they are leading.

Steve Jobs was larger than life, the black turtle neck shirt and jeans (which I liked) became a cultural icon. No matter how great a CEO Tim Cook will be, he will always be compared to Steve Jobs and will always disappoint simply for not being Steve. (If you don’t believe me, just ask Steve Ballmer how he is doing not being Bill Gates.)

Apple Took secrecy to an extreme

I understand how you want to keep things secret in a competitive marketplace. I also understand the value of trying to control the message. That all said, Apple took this all to an extreme. They shut down fan rumor sites (by suing fans who were kids!), sent the police to people’s homes to look for a lost iPhone prototype, and never talked to the press.

While this creates a tremendous amount of buzz, it also leads to misaligned expectations. When the MacBook Air and the iPhone 4S were announced, their reviews and reception were not that great as people were holding out and expecting something more. While the secrecy worked to generate buzz, it did not always work out as a positive. When secrecy is taken to such an extreme, it can work against you. While Apple is still super positive, they can get away with a lot, but not forever.