Apple WAS dead: Lessons on product development

"The road to bankruptcy is paved with indiscipline" 

90 Days to Bankruptcy

Apple of Cupertino, California was 90 days away from bankruptcy when the late Steve Jobs returned as the iCEO; interim CEO. Apple was bleeding cash in the face of plummeting sales. For most, it was the end for Apple. Everyone expected an obituary and the truth is, Apple almost lost its soul. This was in the mid-90s; 1996 to be precise.  In this post, I share my insights on the need for enterprises to resist the temptation of novelty. 

 

Beware of creating a dog's dinner 

Now, there are possible explanations for why and how Apple almost became a history but for the purpose of this post, I will zoom in on the most likely factor that in the words of Steve Jobs was far more troubling. Various literatures have documented this event but I will place reliance on the Biography of Steve Jobs by Walter Isaacson which in my view is the most authoritative publication on this subject. According to the late Steve Jobs, he experienced utter shock when his wife's sister wanted to buy an Apple PC and sought to get recommendation from Steve about which to buy. He couldn't offer any credible guide. It was at this moment he realized Apple was its own number one enemy. Indeed, Apple had multiple versions of the Mac at that time with indistinguishable class. Some claim that Apple lost its ability to innovate when Steve was ousted. This could be true but what is much truer is that Apple's product portfolio was a dog's dinner that needed alignment.

Focus is the number one strategy
In addition to securing an investment to the tune of $150m from an old friend and age-long competitor (Bill Gates of Microsoft), Steve Jobs shut down all the peripheral devices. At this time, Apple had the most advanced handwriting technology in the industry called Newton but it was shut down. The company re-organized its Mac division. It re-organized its supply chain and channels and evolved a contrarian retail strategy by opening an online store as well as pedaled on its legendary Store. This was the time when corporate America found brick and mortar stores un-attractive. Steve's response to the critiques was "We'll use glass instead of mortar and brick". At the end of the crusade, Apple was healthy again and on its way to become once again a formidable brand. The primary pursuit was to get Apple to focus again. Focus is a rare virtue. 

 

Learn from General Motors

The iconic American car manufacturer; General Motors of Detroit in its hay day was the undisputed leader. Its product strategy was structured along the income demographics. Then, you could readily tell the income class of a neighborhood by it’s the type of cars. You knew someone was on a six zero salary if he drove a Cadillac. Same for a man who drove a Buick; you knew his salary. This worked well for GM as the company was able to operate an agile sales and marketing strategy. There was focus. Like many enterprises, it was only time before GM fell for the temptation of proliferation. Most companies respond to competition by diluting their product portfolio. GM did and paid dearly. The result of mindless proliferation of product is self-induced cannibalism. This is entropy.

 

Keep the product pipeline alive

It is true that every product has its life cycle which is why the life time value (LTV) of every product with respect to the consumer is put into consideration in most marketing plans. Most products including those with seemingly irreplaceable Alpha status go through decline. In the long run, the marginal utility of a product to the consumer falls with the threat of substitutes and decline in consumer income. These events make it important for a company to maintain a fluid pipeline of products that will help bolster its cash flow in the winter. What is suicidal is to with little or no provocation from competition respond by releasing a "new" product. It may work in the interim but this eventually becomes a curse for the enterprise. 

 

If you must introduce a new product, don't forget this

Those who stand for nothing will fall for anything. Honda is the owner of Infinity. Toyota owns Lexus. In these two cases, Both Honda and Toyota desiring to play in the upper end of the automobile market created separate premium brands to play in these niche markets. DSTV (a digital cable network) playing in the Nigerian market created GoTV to play in the mass market and as a way of competing with HITV and other players. This is what intelligent brands do if they must diversify their products. Diversification could become a curse. Blackberry and others take note.

You cannot be everything to everyone. Resist the temptation.

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