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Where Are the Insanely Great Tech Companies? January 27, 2011

Posted by Peter Varhol in Strategy.

This article asks an interesting question – why aren’t there more Apples?  In other words, why aren’t there more companies that design products that catch the imagination of an increasingly large user base, to the point where, as a commenter on a previous article noted, “If Apple made a toilet, I would buy it.”

In the spirit of full disclosure, I am not of that ilk.  My consumer and business tech purchases are entirely about function and price, not style.  I’m not trying to make a statement of who I am with my gadgets (or maybe I am – my gadgets are boring and functional – yes, and cheap; maybe that’s me).  I don’t own Apple products, although I was a Mac aficionado from its introduction from the mid-1980s up until the mid-1990s.  I still own an original 128K Mac (and yes, it still boots).

I think the article is really off base, however.  The explanation seems to be that Apple focuses on simplicity of design (which it does, for the most part), at the expense of meeting quarterly revenue goals (which is simply not correct).

I don’t think meeting financial goals has a whole lot to do with it (although it is probably a minor factor).  For one thing, I think Apple’s circumstances are unique.  The dominant and visionary founder is sent off into the wilderness, while his company is run by the suits.  Eventually he returns with a new technical foundation (OS X) and greater maturity.  He commands leadership because of a combination of vision, history, and force of personality.

But in general I think it’s more than that.  In most tech companies, there are a lot of competing opinions and interests.  Marketing, engineering, and sales (and undoubtedly others) have competing voices at the table of product development and offering, and often these voices disagree.  The result is usually a compromise that pleases no one, least of all the customer.  Engineering wants to design the technically best, but the market wants something less comprehensive, and sales can’t sell it at the required price point.

I’ve been in meetings at some companies where the entire strategy discussion focuses on satisfying other constituencies in the company, rather than the customer.  In fairness, without such agreement, nothing would ever get done.  But ultimately, it means a muddled or even incorrect focus on the product, market, and customer.  We fail to delight, because we have to compromise to move forward.

In Apple, Steve Jobs drives everything.  I’m sure there are disagreements at the tactical level, and if these rise above a certain threshold, Jobs is the final arbiter.  An engineering or marketing person isn’t going to be passive-aggressive in the face of a decision by Jobs.  He has earned the right to expect compliance with his decisions.

I think it’s such unique circumstances that drive Apple to be better than other tech companies.  In comparison, Microsoft has promoted debate and dissent, which may help engineers define their product.  But it doesn’t send a clear message to the markets.

Apple’s approach isn’t an unalloyed good.  If they are wrong, they can be spectacularly wrong.  Jobs is too good to be that wrong.  But that doesn’t mean that the Apple innovation model can easily be replicated elsewhere.



1. Where Are the Insanely Great Tech Companies? - January 27, 2011

[…] imagination of an increasingly large user base, to the point where, as a commenter on a previous… [full post] Peter Varhol Cutting Edge Computing strategy 0 0 0 0 […]

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