I've come to a conclusion that Cook's reign at Apple will probably mirror Ballmer's reign at Microsoft. Both are biz guys who inherited companies from technology visionaries with massive revenue streams and yet they both lacked vision and tech expertise to create successful new products. Ballmer tried it numerous times and Cook has tried it with Watch, Music and so on. Neither of them have succeeded. Apple's now become a "me too" company as they keep on releasing products that other companies have released already. Apparently, Apple is now working on their Amazon Echo and Google Home clone. They'll be third to market once it's out.
In 2014, when Apple bought an urban fashion brand that sells overpriced headphones, Google bought Deepmind for 1/6 of the price. That said it all about where both companies were headed. Steve Jobs is famous for quoting Gretzky's line about "skating where the puck is headed and not where it is" and it seems that Google's skating where the puck is going while Apple's skating backwards.
Apple's headed for a decade of stagnation... just like Microsoft was under Ballmer. My only question is: how long before Apple gets its own Nadella and who will be their savior? I don't see anyone in their executive ranks who's as good as Nadella.
Apple Watch and Music have barely been out for a year; it's a bit early to say they haven't succeeded.
Likewise, it's a bit early to high-five Google on the Deepmind aquisition. The Go achievement is great, but how will it help Google's business? IBM holds the previous big AI-beat-human trophies (Deep Blue and Watson) and neither has done much to help their bottom line. And of course Microsoft Research did a bunch of interesting work under Ballmer.
Also, what successful new products has Nadella personally delivered with his "vision and tech expertise"? The biggest thing he has done for Microsoft is help them get over the loss of the Windows monopoly. He's like Obama in 2009--he gets a lot of credit for just showing up and saying "I'm the new guy, we screwed up, and we're going to do better now."
I use it and I love it. I often find myself following down new and interesting rabbit holes discovering and rediscovering music. Could it be better? Probably. It is clear that it is geared towards the top 40 listener on one end and the explorer willing to click around to discover things on the other, but not much in the middle.
You can do this with youtube way better and the barrier for entry is lower. For artist and consumers.
A greater observation about apple. From the outside it interesting to see it transition from a company that did computers differently to more of a luxury good brand. A bit sad really. Apple used to lead with expert implementation of innovation. Now its just meh.
Microsoft is really leading the pack with its outreach to the tech world of tomorrow with so much of its stack opensourced. Apple just seems to be making the black box even more inaccesible
> Also, what successful new products has Nadella personally delivered with his "vision and tech expertise"? The biggest thing he has done for Microsoft is help them get over the loss of the Windows monopoly.
Well, the culture of the company has completely changed, although, that culture was probably present but forbidden and just needed someone to greenlight it.
I think you've oversold the similarities between Jobs and Gates and undersold the fact that Tim Cook is doing basically the same job at Apple that he did during most of 2004-2011 when a number of hit products were developed and launched. I also think you're underselling the Watch et al and forgetting about lots of underwhelming products that Jobs introduced. Is Apple Music a failure compared to Ping or MobileMe ... or only compared to Spotify a company that had dominated the category for 5 years? What % of the smartphone market did the smash hit iphone have 1 year in again? 2 years? 3 years?
>undersold the fact that Tim Cook is doing basically the same job at Apple that he did during most of 2004-2011 when a number of hit products were developed and launched.
Oh, no question Tim Cook is doing the same job: operations, supply chain. And being good at that is nothing to sneeze at.
But it doesn't look like that job was "visionary," R&D, or product development. The question is: who's doing that at Apple now?
I think the answer is more complicated than "Jony does what Steve used to do". I think the answer Apple wants to be true is that "what Steve did" was always way more than "just Steve doing stuff" and a lot of it was and is baked into the culture and institution (of Apple) itself. How accurate that is I can't say but there are a lot of companies I would bet against before Apple.
Jony Ive is not at Apple day-to-day anymore. I've heard from people who work there that they don't see his car in the lot anymore. There are other rumors that Jony now spends most of his time in London.
He's still listed on Apple's exec page but I have no idea what he does anymore.
I have some of the same concerns you do, but remember that the common complaint about Apple is that they "Don't come up with anything original, they just copy everybody else."
Their MO is that they bake other people's half-baked product ideas, and then make a killing on them while naysayers sit around scratching their heads trying to figure out why everybody else is acting crazy.
Whether Cook and Ive can do that I think remains to be seen. But just because they're producing a 'Me Too' product doesn't mean the party is over.
For me, I'll have my answer when version 3 of the apple watch comes out. If it's a flop, we're in big trouble. If it sells like crazy, then I'll know they still have it, or at least some of it.
If in the meantime they manage to pull off haptic touch screen interfaces or a curved phone, then I'll have my answer early.
A good example - the iPod and iPhone were both "Me, too" products. Apple just engineered, designed, produced, and delivered exponentially better versions of products everyone else was trying to build at the time.
One big difference - Microsoft's stock price languished under Ballmer, while Apple's is doing fine under Cook. (I haven't compared versus the market, but I suspect that it will still hold)
Cook's legacy will be if Apple pulls off the bet on autonomous cars. Auto manufacturing is very much a logistics challenge, which plays to his strengths. It's too early to write him off.
Microsoft's net income increased dramatically under Ballmer¹ however. Dude made money. Apple's stock has stagnated lately, though that may very well be temporary. I think people discredit how smart Ballmer actually was, given how badly Microsoft did technology-wise in that period. Ballmer was as logistically talented as Cook is, IMO.
I agree with you on cars though. Apple could strike gold on that one, and Cook may be the person to do it.
The dude made money, but it was already baked in to the stock price. People already saw the money coming in. (Monopoly on office, growing market for technology, etc) The mark of a CEO is how they do above and beyond the hand they were dealt. Ballmer underperformed expectations.
It's hard to read too much into short term stock moves. To quote Warren Buffett quoting Ben Graham, "In the short term the stock market is a voting machine. In the long term it's a weighing machine."
Agree on the stock market. Luckily I don't buy stocks and shares or (a) I would have made big losses or (b) made big wins and been jailed for insider trading....
has Apple done anything whatever in the self-driving car domain? I've seen literally nothing about it from them and I've been paying attention. I don't mean rumor mill stuff or "open secrets". Have they announced any products? Have they discussed any actual projects?
They have not. It's not Apple's style to make announcements about products they're not sure they'll release, and they won't release an Apple car unless they believe they can do it better than anyone else. I think it is a strength of their brand that it is plausible that even after investing $10b+ in autonomous car research they may well decide to scrap the project if they think it's not right.
The systematizer who takes up leadership from the visionary is an ancient pattern.
The systematizer may lack inspirational genius but makes up for it with analytical and organizational genius. They can turn a phenomenon into a movement, or a movement into a world power.
You see this a lot with religions and philosophies — if you have n systematizers who take up the leadership from the prophet, you probably end up with n religions (including n = 0).
> I've come to a conclusion that Cook's reign at Apple will probably mirror Ballmer's reign at Microsoft.
Doubtful. Cook seems well aware of his limitations in vision and abilities. You see a microcosm of this at the Keynotes: he wisely hands off to other experts as soon as possible.
You also see this in his handling of senior roles in Apple. He's not the visionary Steve was but he hires to keep the vision active in the culture by finding domain experts. This is true in retail, in industrial design, in chip design...
He's nothing like Balmer in how he actually handles the company and it's staff, and that's why I think you'll be surprised.
I mean, the "me too" thing is symptomatic of this line of thinking: Apple has always followed on; it's what they are best at. They see a market, see how it works, then take what works and distill it down to a product that is narrower in scope but "just works" for the general market.
First to market isn't a big deal, it never has been, it's getting the product right that's important. Apple is very good at that.
It happens with all big companies. I don't think Cook is a bad CEO, he's just not a -great- CEO. He also had the unlucky chance to step into Steve Jobs' shoes, and also came in so late in the cycle that much of the market is already saturated.
Similar happened to Balmer, he came in after the boom was over. But tried to push into new markets (and failed.) I don't honestly think Balmer was a bad CEO, he was just very bad at pushing into new markets...and they already had the FTC on their backs, so their strangle hold on the existing market was diminished. Doing walled gardens like Apple and Google did would draw FTC ire, so they couldn't really do it.
In the end, Apple doesn't have the FTC on its back, basically controls the supply chain. They'll be fine, but they are in a saturated market and their explosive growth is over. Investors are much more interested in explosive growth in tech than slow steady cash flow.
I'm more concerned about the Google model than the Apple model. Apple's margins will probably fall, but I think the Google PPC cashcow is soon going to hit a wall as millennials become the majority and their adblockers and immunity to online advertising drives down conversions.
> Similar happened to Balmer, he came in after the boom was over.
Steve Ballmer joined Microsoft on June 11, 1980, before DOS on the IBM PC transformed the company. He was a big part of its success all the way through.....
> But tried to push into new markets (and failed.)
When he became CEO the company was under close US judicial supervision (which lasted more than a decade), under attack from the EU, and paying out $billions in fines. So he started with a mess and operated with one hand tied behind his back, but he still managed to triple turnover and double profits.
Ballmer had some spectacular failures on the new product front, but when he handed over to Nadella, Azure was already a success, Microsoft had an online Office suite better than Google's, and it was already moving into Android and iOS apps (of which there are now dozens).
Not the best CEO of all time, but he could have done a lot worse. He certainly beat the forecasts of the Linux/OpenOffice fans of the day, who reckoned the company would be out of business by 2007 ;-)
DeepMind is probably losing Google tens of millions a year. Now, it may pay off financially in the future, but it's hard to disentagle its effects given that Google already had a deep learning research group, Google Brain.
I think having multiple approaches was the key here. Worse case scenario these teams converge, but the true best case scenario is discovery of different methods to solve Google's ambitions.
In some ways, the depth of the search team needs to be replicated by their AI-research groups. As you stated, what is unclear is if the investments will be obviously lucrative (as search has been).
Have they ever been anything other than a "me too" company. They really haven't invented anything (see this video by Tek Syndicate: https://www.youtube.com/watch?v=wFeC25BM9E0).
I'm a huge fan of Stratechery and Thompson. They've given me powerful ways of thinking about the world.
Are there others out there? While Thompson does talk a lot about the intersection of technology with business strategy, he tends to focus on large, well-known technology companies that primarily have consumer facing offering.
I'd pay to read something like Stratechery for biotechnology, or enterprise software but to the best of my knowledge none of these exist.
I don't get the love for Stratechery. Thompson is a good writer but the few articles I can recall from him were bad misses. For example he wrote a long piece about how the Nest acquisition heralded a major new consumer products business model for Google. How has that worked out?
I don't think it's because of his prediction accuracy. What I love about his writing is that he brings in a fresh perspective and an alternative way to think about tech and its future, whereas most normal tech press just reports what's happening today and not even the why of that.
FWIW, while I found this particular piece insightful in general, I think he ignored the huge importance of Android and iOS. Even if the future is voice, the medium for the voice is likely to continue to be the phone or other wearables connected to the phone for a long time (5 years or more). And hence Apple and Google are likely to remain dominant since they will be at the front of the funnel. Even if the actual intelligence is coming from other companies, they will still have to be packaged as "app/AI plugins" into Android/iOS, so the OS owners should be able to continue to extract their pound of flesh a.k.a. App store revenue cut.
Benedict Evans was like this and has since joined A16Z. His focus is mostly mobile, so you end up with a lot of overlap between the other people covering Google / Apple / MSFT, but he definitely has an interesting perspective (He formerly worked in research for an investment bank, so he knows the ins/outs of global telecom very well):
Within pharma, Derek Lowe has been blogging for many years, with a mix of posts focusing on new developments as well as broader strategic questions. http://blogs.sciencemag.org/pipeline/ The comment section there is also typically informed.
That's an interesting thought, but I'm afraid that the actual reason is far more trivial.
Companies are typically founded by highly passionate and creative people, who care a lot about what they do and are both able and willing to steer their startup in the right direction.
Once they grow, they start hiring new employees, many of those will inevitably be the kind of people who only want to do their job and go home. Over time, the management too gets filled by people who apply mainly because it's a high status and well paid position, and are not at all that interested in what the company does.
Eventually, all the remaining creative people and even the founders themselves get bored with the routine and leave to do something else and the company becomes hollowed out. The remaining people may be highly skilled and competent in their respective positions, but they are generally unaware of the big picture and the reasons behind how things are done.
As the result, the company slowly turns from succesful to dysfunctional as its ossified culture gets out of touch with the ever evolving reality, as there aren't any people left in the company who are able to notice practices that are no longer functional and care enough to change them.
A shorter version could be: startups are tempted to think radically different, to try new approaches, because they have nothing to lose. But a big, entrenched company has to protect the current cash flow first, then think about how to extend it. They have a lot to lose by cannibalizing the current business model in favor of a new, visionary model. They become victims of their own success.
Founders set the company culture, success ingrains that culture deep into a company's subconscious where it runs in the background regardless of whatever cultural reforms/artifacts are introduced - culture can only be changed when a new CEO (Jobs, Nadella) steps in and announces a huge change in culture, which usually stems from an otherwise unimaginable partnership (such as Apple/MSFT) that shows a concession to the realities of the market, which the company once thought it was above.
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Author singles out Apple and Google as companies he is worried about WRT current culture.
Apple - threatened by "big data AI services": Author calls for Apple to partner with Microsoft to get access to cheap backend services (Azure) and/or frontend services (Siri + Cortana), ostensibly to play in Amazon AWS (compute as a service) and IBM Watson's (AI/marketing as a service) markets, respectively. Alternatively, Apple should open iOS to enable customers to muck around with the latest and greatest Android developments and set Google services as defaults on their iOS devices.
Google - threatened by users spending time on social apps: Should partner with Facebook by building a bot for Facebook Messenger and a backend for Facebook Messenger developers.
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Questions/Comments
- It is unclear what unique advantages Apple would bring to the table for either the frontend/backend services market. Why break the intense in-house hardware/software coupling focus by leaning on MS for services? What backend services does Apple need to bring in-house through a partnership?
- What are the cool new Android services that iOS needs to integrate? I know the author says AI capabilities, but that is not a well-defined technology or use-case.
- I don't know a single person that likes using Facebook Messenger. Additionally, messaging applications have much, much lower barriers to entry than web browsers. Messenger is not comparable to Chrome. This is why Fbook purchased Whatsapp.
- Underlying premise: does Apple really need to play in the big data/AI space? Does Google really need to play in the social media space? Are these really going to be markets that drive future growth?
- What are the cool new Android services that iOS needs to integrate? I know the author says AI capabilities, but that is not a well-defined technology or use-case.
I'd much rather talk to Google than Siri. It works about 10x better. But I can't set a default assitant on my device. Nor can anything else interact with Siri, as it has no API. I'd love to see them open this stuff up more.
I love Apple's hardware and I like their mobile OS. Their software/services? Not so much. I hate iTunes, I find Siri worthless, notes is a bag of hurt, Calendar has syncing issues, the iWork suite other than Keynote is a joke for professionals since it was gutted a couple years ago, and on and on... I use alternatives for all of these things. But they cannot be integrated well.
>> I’m worried for Apple…If the landscape shifts to prioritize those big-data AI services, Apple will find itself in a similar position as BlackBerry did almost a decade ago:
Maybe Apple is betting that AI won't be achieved in the next 15-20 years.
Apple has been hiring AI people for a while, and there is a possibility that the openness of the rest of the world (academia, open source, other big companies working with academics and open sourcers) will diffuse AI discoveries fast enough for Apple to make almost as much use of them as Google & Facebook.
Of course, that still leaves the question of access to data, and the best of today's AI algorithms get their power from data more than clever logic. Google and Facebook have a huge lead in customer data, but how much data is enough? Presumably it depends on the product, and for some products (say, image processing magic in a smart camera), Apple might be able to come up with all the data they need.
The threat to Apple is not AI, it's that the mobile hardware market is maturing, that the growth opportunities seem to be in building in services that leverage mobile hardware and that those services are increasingly based on analyzing and evolving based on huge sets of customer data.
Wow, I wouldn't. We are on the cusp of a major paradigm shift. Some of the smartest people in the world are tackling small edges of an impressive graph of capabilities. As more and more of these edges are solved, general purpose computing inches ever closer to our grasp.
If I were a betting man, I'd put my money on 10 years or less.
I very much hope strong AI to be reality within my life span, it would bring singularity and other wonderful things. but the sad fact is, we have close to 0 idea what intelligence means. In this field, we are still in pre-Newton era where we might have all tools available but have 0 clue how to put them together. that's why the world now are busy tackling small edge cases.
The next question is, can we put enough resources (money, smart people, computing power) to brute force? I bet no, because it's not an engineering problem but an ill defined one.
historically, major paradigm shift happened where major vendors ignored. there is no reason to believe google folks are smarter than the old generations. if they were, we as consumers are doomed.
With the notable difference that there are actual practical applications of AI on the market, which are out right now, with many, many more coming in the near-future.
IMO what the article talks about is the business model, not the culture, they are two separate things - not entirely separate, but mostly. Business model is Apple shipping devices and Google providing ad-supported services over the Internet. Culture is how in one company you can't push changes to the central repository without a code review which might take a couple of days, while in another you can work whichever way you please but if things break you're expected to fix them on Sunday at 3 AM.
Like the business model, culture is certainly influenced by the people at the top, though I think it's defined by a somewhat larger number of early employees, and it's harder to change once established, compared to the business model. Both affect performance in the market, but it's not as straightforward to analyze, even in hindsight, how exactly culture affects market performance relatively to the business model where in hindsight it's perfectly clear.
It's discussing and means to be discussing organizational culture. The business model, controls, and processes are artifacts of the underlying hidden culture. This is what the beginning of the article is discussing, when it talks about going three degrees down. Think of Conway's Law: An organization is constrained to design systems that mirror its structure. This is basically the same thing, but abstracted a level; the organizational structures themselves are constrained to be shaped by the business' underlying assumptions.
("Tech culture", such as your example of code reviews, is usually an example of controls and processes. What controls and processes exist for creation and deployment of software? If we were making widgets on the factory floor instead, the fact that these aren't "culture" as being discussed would be more immediately obvious.)
> and the company (Apple) is almost certainly working on a car
I'm wondering how that will turn out. It looks like cars will be seen more and more as a service rather than as a product. And Apple has more experience in making products that people want to own.
Granted, Apple's recent market share numbers for mobile devices were down (and they are strong in US markets than globally; Android is doing better overseas). But they've got a legitimate shot at disruption as voice search grows.
That's a great scene, with Jobs announcing that Internet Explorer would be the default browser on the Macintosh, and the crowd booing. Jobs has to stop speaking, twice.
In 2014, when Apple bought an urban fashion brand that sells overpriced headphones, Google bought Deepmind for 1/6 of the price. That said it all about where both companies were headed. Steve Jobs is famous for quoting Gretzky's line about "skating where the puck is headed and not where it is" and it seems that Google's skating where the puck is going while Apple's skating backwards.
Apple's headed for a decade of stagnation... just like Microsoft was under Ballmer. My only question is: how long before Apple gets its own Nadella and who will be their savior? I don't see anyone in their executive ranks who's as good as Nadella.