At D8 in 2010, Walt Mossberg asked Steve Jobs whether he wins all inter-company disputes. Jobs replied:

Jobs: Oh no I wish I did. No, you see you can’t. If you want to hire great people and have them stay working for you, you have to let them make a lot of decisions and you have to, you have to be run by ideas, not hierarchy. The best ideas have to win, otherwise good people don’t stay.

Ben Brooks wonders whether Microsoft should make their own PC:

If Microsoft did do this and they decided that they wanted to make the best possible PC — something that competes directly with, say, MacBook Pros — wouldn’t that be an interesting change?

I don’t even think it is a market that Microsoft would have to be making more than 2-3 models of computers to be in just a laptop, desktop, and tablet. All Microsoft would need to do is make the best stuff a Windows user could buy and then sell it with a healthy profit margin. Doing that, by comparison to all other PC makers, would make all others look pretty bad — both to consumers and investors.

HP exited the PC market because it’s a dying market—not only has it peaked and become a commodities business, but the iPad has shown that most people really don’t need a PC at all for what they do. HP realized that sales are going to decline in the next five to ten years and so there was no reason for them to stay in a business that isn’t profitable now and has no future.

Entering the PC business doesn’t make any more sense for Microsoft than it does for HP to remain in it. Even if we look at it purely as a question of whether it can (1) turn a profit and (2) improve the Windows PC image, they shouldn’t. The only possible path to profitability is selling a higher margin, nicely designed PC to Windows users who appreciate it. That’s possible, but they would be doing so (in the best case) at the expense of Lenovo’s Thinkpad line.

What’s the gain for Microsoft? Not much. A bit larger bottom line, at best, and they would be investing a terribly large amount of money, time and focus into a dying business.

Building a tablet, though, is a different question, and an idea that makes more sense for Microsoft to do. At the moment, Microsoft believes that “post-PC” really means “PC plus touch”—that their original tablet PCs are where we’re going to end up. That certainly isn’t a view point supported by the market, so they have a lot to prove. If they can build a tablet running Windows 8 that does everything we want a post-PC device to do, they certainly stand to benefit from it, because they would make their concept viable.

I don’t think that’s how they’re going to play it, though, because Microsoft is deluded about the future of computing. Whereas Apple sees the post-PC and PC as separate markets, Microsoft wants to believe that the tablet is another PC, and thus they can gain market share by selling them as such. They figure that they already have the vast majority of the market for PCs, so if they just conveniently make new PCs tablets, too, people will buy them just as they’ve bought every other PC they’ve ever owned. And if that’s the plan, there’s no way they’re going to build their own.

I bought my first Mac in December 2005, just before Apple announced their transition to Intel processors. Before then, all I had ever owned were Windows-running PCs. Windows was a never-ending puzzle, where I had to figure out how to make something work the way I wanted it to. Windows just was; asking why it was designed that way was superfluous, because Windows was something you worked around, not with.

For me at that time, computers were something you used to do work—they are the way they are, maddening though they might be at times, but you accepted it the way it was so you could work on whatever you needed to. Work was merely work, something that had to be done, the sooner the better, because work is work and once you’re done you’re no longer working.

The Mac changed that for me. It threw it out completely. I used a lampshade-iMac running Mac OS X Panther for the first time in late 2004 while doing class work in the school library. I knew it was very different than what I was used to, so I finished the assignment and started aimlessly wandering around the operating system.

Mac OS X seemed logically designed, as if someone intentionally designed it to work the way it does because it makes sense for it to work that way. People had thought through how it should work, spending God knows how much time just thinking about it, then building it and testing it, re-thinking and revising their work, until they were left with something that seemed intuitive. Until it seemed self-evident that it should work that way, and no other way made any sense at all. I opened every application I could to see how it was designed and how it worked, looked through the Finder—every inch of it I had time to look through.

That was like a smack upside my head. I was excited. At the time, I thought it was because I was a geek discovering a new computer, but now I’ve realized that wasn’t it. I started to realize that work doesn’t just have to be work.

Before then, I held to a dichotomy I think a lot of people do: there’s work, which is what you have to do, and there’s play, which is what you want to do and enjoy doing. Looking at that iMac, though, I knew that couldn’t be true for the people who designed it. There’s no way. If someone is going to pour so much of themselves into something, they must love doing it. This isn’t work for them—it’s something incredibly meaningful and real, something they feel is their live’s work.

His Greatest Contribution

That’s Steve Jobs’s greatest work. He built an entire company on the idea that not only can work be worth doing, but it should be worth doing.

Think about how radical an idea that is. For most people, their job in and of itself is unfulfilling. What’s rewarding to them, and what’s sought after most, is the paycheck. Their reward for slogging it out at a job they don’t enjoy is they get to take home enough money to live comfortably.

If you want to understand why Apple’s been so successful, it all starts with that idea. It’s because they’ve ruthlessly hewed to it. If something isn’t meaningful to them, if it doesn’t resonate inside them or they don’t think it makes sense for the company to do, they don’t. They don’t say, well, this’ll be a fine business to get into because it’ll make a lot of money for the company.

They ask, does it make sense for Apple to get into this business? Does it fit who we are? Does it excite us? Can we do it really, really well? You can’t make decisions like that unless you believe that your work should be worth doing, should accomplish something great.

That’s where it all begins. And that is Steve Jobs’s greatest contribution.

Steve Jobs just resigned as CEO of Apple. Here’s his letter to the board of directors.

He’s the greatest business leader we’ve ever seen. He’s defined product development, how businesses are organized, corporate strategy, and—most importantly—why we should enter into business in the first place for us all.

If you want the smartest take on HP ditching WebOS and spinning off its PC business, this piece by MG Siegler is the one you want:

But wait, then why is he exiting the tablet space after only a matter of weeks? Because when Apotheker says “the tablet effect”, he really means “the iPad effect”.

Put another way, “Apple, you win.”

That’s it. HP doesn’t think they can win the post-PC market and, even more surprising, they think the PC business is going to be dead before we know it. And they don’t want any part of it.

Jason Fried ordered a bike from Mission Bicycle Company, and it was damaged in shipping. How they handled it is nothing short of fantastic:

I sent an email to Mission with some pictures of the box and the damage and asked them what to do next. They wrote back quickly and asked me to give them a day to think about how best to handle the situation.

The next day I got an email from them. They said sending the whole bike back would be overkill since the only thing that was damaged was the frame. Further, the bike was ridable – it was just a paint problem – so sending the bike back would mean I didn’t have a bike for a week or so. They didn’t feel good about that.

Read it, learn from it. What’s important isn’t that they went through so much trouble for him. What’s important is they genuinely cared that his expectations were met and, when something bad happened, they did what they thought necessary to fix it for him.

In fact, they went beyond his expectations, because they had to meet much higher ones—their own.

Last month, I linked to a post by Ben Bleikamp where he argues that people shouldn’t try to emulate Steve Jobs’s management practices.

It’s a great post and I suggest you read it if you haven’t already. Bleikamp is right, but I want to talk about something underlying what he’s criticizing. There’s a tendency, when a person or company is successful, for others to copy the outward characteristics of their success.

I’m going to use Apple to illustrate this, but you can find any number of other examples.

When competitors realized Apple was selling a lot of MacBooks, they sat back and tried to understand why they were so popular. They looked at the MacBooks and saw pretty, metal-clad computers. So they made computers like this and figured they too would be successful.

They didn’t see that Apple’s MacBooks are not just good looking computers, but were well designed. The unibody design means the computer is rigid and sturdy; the display hinge is dependable; the trackpad is the best trackpad on notebook computers; the screen is bright and beautiful; and the keyboard is fantastic. And, more than anything, they didn’t understand that people are not just buying MacBooks because of the hardware, but because of the integration between the hardware and OS X. They buy them because they are cohesive devices that work very, very well.

When competitors saw that the iPad was selling so strongly, they decided that they needed to sell a tablet device, too, because they thought Apple was selling a ton of iPads because it is a tablet. They didn’t understand that people are actually buying them because the iPad is a confluence of purposefully-designed hardware and software. So they put Windows and Android-powered devices on the market, and sold very few devices.

We can’t make superficial analysis of other people’s success and expect to have their success, too. It won’t happen. You’ll fail every time. You have to understand the deeper reasons for it—market trends they’re taking advantage of, changes in society, their deeper strategy. And then you have to go beyond what they’ve accomplished, because there’s no point in merely reaching parity with your competitors. While you’re busy getting to where they are now, they’ll move even farther forward, and you’ll be perpetually chasing their taillights.

You have to change the game to win. You have to re-define it, so they’re playing on your terms, and are trying to catch up with you. If you’re always playing by your competitor’s rules, you’ll lose every time.

Walt Disney:

Over at our place, we’re sure of just one thing: everybody in the world was once a child. So in planning a new picture, we don’t think of grown-ups, and we don’t think of children, but just of that fine, clean, unspoiled spot down deep in every one of us that maybe the world has made us forget and that maybe our pictures can help recall.

Beautiful.

Julian Sanchez:

The very existence of such massive trade in “defensive patents” is, in itself, pretty strong evidence that there’s something systematically quite wrong with the American patent system—because a patent that’s useful for “defensive” purposes is very likely to be a bad patent.

Jason Snell’s chart of Apple’s revenue by product since 2005 says it all. Just look at how quickly iPhone and iPad are growing and how steep their overall revenue curve is. Ridiculous.

Here’s Philip Michaels’s breakdown of Apple’s quarterly report, too.

Apple announced their third-quarter results today, and they’re nothing short of incredible.

Apple’s turn-around is the best business story, ever. They went from impending death to the second most valuable company in the world, and they’ve done so the hard way: by risking the entire company in new growth markets.

There’s a lot to learn from the iPad and Google+.

Google built and released Google+ because they felt that Facebook, and the social-ification of the web it represents, is a mortal threat to the company’s future. Google+ is a defensive move to try to re-adjust the company to new realities, realities that exist now. They did not decide to make Google a “social” company to strategically position Google and provide it a competitive advantage its competitors cannot match. They built it so they can survive.

Apple built the iPad because they believe we are at a junction between PCs and “post-PCs,” and that they can make their vision for post-PCs reality. The iPad gives Apple a huge strategic advantage over their competitors, because not only is the hardware and software still much better than competing devices, but it means that Apple is defining the new post-PC market. This is offensive; Apple is defining the new market and setting the rules in its favor.

Releasing Google+ is inherently a defensive move. Whereas Apple has completely changed the nature of their business in just five years¹—they re-positioned themselves for the next decade—Google is re-thinking their entire business just to survive.

That doesn’t mean it was the wrong decision for Google; it was the right move. But it is instructive for us because it’s precisely the kind of decision you never want to make if you’re running a business. If you need to completely re-think your business just to survive, it means you missed a major shift in the market. It means your perception of your business and its realities are wrong, and you need to fix that as soon as possible.

You should recognize these trends and shifts in the market before they happen, because if you do, you can shift your business to take advantage of them.

You can release an iPad.

And if you can do that, you’re positioning yourself for the future, rather than the past.

1. Let that sink in for a second: in December 2006, Apple’s primary business was personal computers and portable media players. Five years later, their primary business is mobile computers. That’s a dramatic shift for a company Apple’s size and reflects just how big of a bet they made on post-PCs. [↩]

Boy Genius Report has a an inside look at RIM, and it’s not pretty:

The three-year roadmap for RIM products focused on refining the technology in phones had already been released, rather than looking at where to add major new componentry or trying to identify or even shape future trends. “One of the main reasons RIM missed the mark with the browser was because
they were always proud of how little data usage a user would use,” a former executive said. “There was no three-year plan at RIM.” RIM would be proud of the fact that someone would only use 1MB of data in a month in 2005, and as a result, there wasn’t ever any extensive R&D done within the browser space.

One day soon, and probably sooner than we expect, there’s going to be a case study written about RIM’s collapse, and this will be one of the main reasons cited for their failure. RIM ignored technological and societal trends and focused on iterating their devices.

They moved their horse-and-carriage toward perfection while their competitors built the automobile.

Craig Hockenberry on the proliferation of lawsuits against independent mobile application developers:

From our experience, it’s entirely possible that all the revenue for a product can be eaten up by legal fees. After years of pouring your heart and soul into that product, it’s devastating. It makes you question why the hell you’re in the business: when you can’t pay salaries from product sales, there’s no point in building it in the first place.

It’s something Apple needs to address as soon as possible and it’s a perfect example of why software patents are a terrible idea.

Horace Dediu shows why the iPhone needs to move into different price-points:

The first chart shows the global split between pre-/post-paid subscribers as of 2010. Roughly 1.5 billion are post-paid and 3.7 billion are pre-paid. That means that nearly 70% of the world is not being addressed by the iPhone as it currently stands. Put another way, a shift in positioning might result in a 250% increase in addressable market.

That also shows just how early in the game it is. Out of 5.2 billion cell phone subscribers, only 1.5 billion—less than 30 percent—are being heavily targeted for smartphone sales. And that’s now, in 2011; imagine what the market will be like in a decade as more people in China, India and the developing world acquire middle class-like incomes.

That’s why Apple has no choice but to move toward more affordable iPhone models. The mobile market is going to look nothing like it does right now in a decade, and Apple needs to succeed in developing world markets to be around.