Monday, September 12, 2011

Apple Post Steve - Complete Disaster!

Did the headline get your attention? It's true. In the post-Steve Jobs era, over the course of 10 years, Apple falls apart completely. Crappy products, weak leadership, eroding margins, loss of marketshare, loss of technology leadership, terrible financials. You don't believe me, do you?

Well, it's true. That's how it went down went Steve left Apple 1.0 in 1985.  I was at Apple from 1988 to 1997 and witnessed the decline first-hand. Perhaps you thought I was referring to Apple's fate with Steve leaving in 2011? No, no, no. That's a story that hasn't been told yet and I think that will turn out very differently.

Despite all the press around Steve Job's recent departure from Apple, no one has reflected back on Steve's previous decampment from the six colored fruit company (remember when the logo had six colors?).  Thus this post.

Quick plot summary on Steve exodus 1.0: Steve and Steve achieve marketing and engineering success with launch of Apple II in 1977, aided in part by a program called VisiCalc. Steve Jobs, Apple CEO, is America's technology wunderkind. Steve Jobs visits Xerox Parc in 1979 and decides the future of personal computing is the GUI. Apple fails with the Apple III. While the company works on two GUI personal computer projects, the Lisa and Steve's baby, the Macintosh. The Lisa fails commercially in 1983 and the Mac launches with huge fanfair in 1984, though not stunning financial success. In 1983, Steve hires PepsiCo. executive John Sculley to come in and be the Apple "grown up" CEO. In 1985, Jobs and Sculley begin scuffling for power. Steve is not getting along nicely with many in the company and Sculley moves to oust Steve. The board sides with Sculley. Jobs is out.

Not this Sculley

The correct Sculley and Jobs 1.0

Fast forward 3 years to 1988. I end up joining Apple and running the Apple 401(k) program, which like many things at Apple, was royally screwed up due to years of hyper-growth and a lack of systems, attention and a lack of talent in the non-engineering ranks. Over the next 9 years, through roles in support, higher eduction, power macintosh, consumer and organizations, I had a front row seat on Apple's decline. Didn't see it that clearly at the time. The Mac OS was the best computer operating system by a mile. Margins were fat in those early years. Profit sharing and bonuses. Stock appreciation. Friday beer bashes. Flashy parties and amazing off-sites (remind me to tell you about the 3 day off-site to Santa Fe sometime).

But the lead was in the water (that's a clever allusion to decline of Rome by the way). Without Steve Job's fanatical approach to product definition and his uncanny knack for designing the product that the customer didn't even know they needed yet....Apple's product line slowly sank into mediocrity. While there was early sucess with the Mac II in late 88 and the Powerbook line in 91, the Quadra, Centris and other crappy Macs followed in the 90s. And the Mac OS aged. We won't even talk about the Newton. While we at Apple kept laughing at MS-DOS, corporate America kept buying it. And then Windows 95 came out and computer users could have their GUI and a reasonable product price too. I'll skip the John Sculley to Michael Spindler to Gil Amelio management shift from 88 to 97. Suffice to say it was a long downhill slide. Still a great company, still cool products, still a great place to "grow up" - I loved Apple then and love it now. But the company was living off the fumes of the magic and culture that Steve Jobs had brought.

So this tale has several lessons. Woe unto the Silicon Valley company at the pinnacle of success which becomes more infatuated with its own past success than on product innovation. These are the companies that get their lunch eaten by market shifts (hello SGI, Yahoo and Apple 1.0). Also, most importantly, be careful when you cast out the innovative (and maybe difficult) founder - sometimes you cast out the magic.

My last job at Apple in late 96 was manager of properties. So my very last professional assignment was covering the December 1996 press conference announcing Apple's acquisition of Next. It was a weeknight right before Christmas in the Apple auditorium. There were about 100 screaming Next employees there and about 20 Apple employees. Steve was more impressive on stage that night than Gil. Foreshadowing. The rest is history. I went off to start-up land and Steve revived Apple. Absolutely magnificent job. That first iMac (remember than fat squat blue plastic thing?) was the beginning of a series of incredible market disruptions. But you know all about that.

Apple post-Steve 2.0 will be very different. Steve has had time to prepare the company and build an impressive management team. He's still around as Chairman the help with the important stuff. The company's product line and talent pool are both deep.

I do regret never having worked in an Apple run by Steve Jobs. But I do treasure my years at Apple, the company he founded and the culture he molded. I thank him for saving the company that all of us Apple alum still love deeply, for creating insanely great products and for proving that a devotion to great software and hardware design do win out in the end.

In closing, I wish the best of health to you Steve and great thanks for the impact you've had on my life and so many others.

1 comment:

  1. Nice post Des. Hope all is well with you, JeanMarie and the kids.

    - James Glanville