Apple and Innovation

The e Economist wrote (in a cover story) a couple weeks ago:

Apple has at least four important wider lessons to teach other companies.

The first is that innovation can come from without as well as within.

Second, Apple illustrates the importance of designing new products around the needs of the user, not the demands of the technology.

A third lesson from Apple is that smart companies should sometimes ignore what the market says it wants today.

The fourth lesson from Apple is to fail wisely.

Peripheral Vision

Steh Levine writes: “One of the great challenges of business in general and smaller, fast growing businesses in particular is figuring out the balance between near term focus and long term vision. While all companies become slaves to the calendar (striving for quarterly sales targets, specific product release dates, etc.) too many never look up to see where they are really headed…To borrow an analogy from mountain biking (sorry cycling season is in full force and it’s on my brain), companies need to be focused on where they are headed, as opposed to where they are, and use their peripheral vision to avoid current obstacles. In cycling you look up trail focusing not on what you’re riding over at the moment, but what you’re about to come upon (and by the time you’re there, you’re focused on the next thing). The faster you’re moving, the farther ahead you need to be looking (because it’s on you before you know it).”


The Economist profiles K Ganesh:

TutorVista further hammers home its labour-cost advantage through its pricing model. It offers unlimited tuition in a range of subjects for a subscription fee of $100 per month in America (and 50 a month in Britain, where the service launched earlier this year) rather than charging by the hour. Tutors are available around the clock; appointments can be made with only 12 hours’ notice.

It is too early to gauge the impact of the service on educational outcomes, says Mr Ganesh, but take-up is brisk. TutorVista has 2,200 paying subscribers at the moment (most of them in America) and hopes to boost that figure to 10,000 by the end of the year. The company is expected to become profitable in 2008. Even cheaper pricing packages are on the way. Launches of the service are planned for Australia and Canada. Mr Ganesh is also investigating the potential of offering tuition in English as a second language to students in South Korea, where high rates of broadband penetration make the market attractive. Get that right, and China looms as an even bigger prize.

Clay Christensen Interview

Business Week interviews the author of “The Innovator’s Dilemma” on the 10th anniversary of the book’s publication.

The book’s themethat good management is no guard against the disruptive power of new entrants who go after new customer groups or low-end marketsremains important today. “More than ever it has become shorthand for a classic problem,” says Patrick Whitney, director of the Institute of Design at the Illinois Institute of Technology. “People never have to explain it, they just mention Clayton’s name or The Innovator’s Dilemma and everyone gets what the problem is.”

Ten years later, however, the innovation landscape is rather different. Globalization has exponentially expanded where threats lie. Design thinking and its focus on the customer has captured the minds of managers. And as chief executives increasingly look to reinvent their business models, innovation is no longer defined in terms of mere technological breakthroughs. So how relevant is a book that chronicles the upending of the disk drive, steel, and earth excavator industries?

Steve Jobs Story

New York Magazine writes: “he Steve Jobs story is one of the classic narrativesmaybe the classic narrativeof American business life. Its structure has been rigorous, traditional, and symmetrical: three acts of ten years each. Act One (19751985) is The Rise, in which Jobs goes into business with his pal, Steve Wozniak; starts Apple in his parents Silicon Valley garage; essentially invents the personal-computer industry with the Apple II; takes Apple public, making himself a multimillionaire at age 25; and changes the face of technology with the Macintosh. Act Two (19851996) is The Fall: the expulsion from Apple, the wilderness years battling depression and struggling to keep afloat two floundering new businesses, NeXT and Pixar. Act Three (19972007) is The Resurrection: the return to Apple and its restoration, the efflorescence of Pixar and its sale to Disney, the megabillionairehood, the sanctification as god of design and seer of the digital-media future.”

Outcomes vs Activity

[via Om Malik] Chris Michel writes:

It is all about outcomes and not activities.

Most people tend to confuse activity with outcomes and it is a breathtakingly expensive mistake. In a world of infinite choices, choosing which activities will occupy your day is likely to be your single greatest driver of effectiveness. Beyond picking the right objectives to pursue, you need to focus on the results, not just the means to that end.

Need for Financial Planning

Basab Pradhan writes:

Great products, and anchor customer wins are the things that hog the limelight with startups. But in my opinion, sound financial planning is the unsung hero of the early stage of a companys life.

Sound financial planning can mean the difference between survival and an early demise. More commonly, an absence of financial planning means you have to raise a round of funding before you expect to do soand that is never optimal for a young company.

Your primary tool is your budget. The most important purpose of a budget is to forecast cash flows. It is easy to become lax about forecasts, especially beyond the next quarter, since there is so much uncertainty in the early stages of your business. You might be asking yourself: How do I forecast revenue when I havent sold anything yet!? But the absence of revenue is not a good enough reason to leave a revenue line out of your budget.

HP’s Turnaround

WSJ writes how HP reclained its lead over Dell: “H-P owes that remarkable turnabout to something Mr. Bradley concluded within weeks of arriving at the Palo Alto, Calif., company: H-P was fighting on the wrong battlefield. H-P was concentrating its resources to fight Dell where Dell was strong, in direct sales over the Internet and phone. Instead, he decided, H-P should focus on its strength, retail stores, where Dell had no presence at all. H-P was neglecting that advantage, Mr. Bradley found as he visited retailers and H-P factories, hearing complaints about late or incomplete deliveries. He worked hard to fix the logistical snafus and build better relations with the retailers, helping H-P surpass Dell in world sales late last year for the first time since 2003.”

Business Core

800-CEO-READ Blog writes about a new book “Unstoppable: Finding Hidden Assets to Renew the Core and Fuel Profitable Growth” by Chris Zook:

Zook has always stressed looking at the industry profit pool rather than the market size. He suggests it is changes in the profit pool that signal the need for redefining a company’s core. Your company could be losing your share of the pool (U.S. vs. Japanese automakers) but the market has not changed; the profit pool could have shifted to a different point in the value chain (Intel and Microsoft in PCs); new technology could completely change the economics of an industry (Amazon in books).

The core is where companies must find strength to withstand industry turbulence, Zook argues. But he also suggests that all companies have hidden assets that can be utilized when a company must redefine its core. Like any good consultant, Zook has classified them into three broad categories. The first is undervalued business platforms ranging from adjacencies into new geographies to support services to non-core businesses. The second is untapped customer insights, a familiar idea often hard to act on. Finally, underutilized capabilities are the most abstract of the three and were the least often used in the companies Zook examined.