Why Apple Never Lost That Startup Feeling
With more than $100 billion in revenue and more than 50,000 employees, Apple, Inc. has been seesawing with Exxon Mobil to don the top-dog title as the world's most valuable public company. In the process, it has churned out hit after hit, revolutionized the consumer electronics products industry and created a cult following. Apple has comes a long way from its hardscrabble days as the newborn company that Steve Jobs and Stephen Wozniak breathed into life in 1976.
But size and scope notwithstanding, Apple still has more in common with its startup roots than with its multinational oil and gas rival, Adam Lashinsky, senior editor for Fortune, told BusinessNewsDaily. Lashinsky, who covers Silicon Valley and Wall Street, is the author of "Inside Apple: How America's Most Admired—and Secretive—Company ReallyWorks" (Business Press, 2012). In it, he takes a deep dive into the "secret sauce" that has been the soul of Apple's success since Jobs returned to Apple in 1997 following his exile in 1985.
In rekindling that startup spirit in Cupertino, Calif., and embedding it in Apple's double helix, Jobs may have created a legacy that rivals the iPod, iPhone and iPad in significance, Lashinsky suggests.
The haze of time and an unparalleled string of out-of-the-ballpark hits has dimmed the reality of how far Apple had fallen when Jobs re-entered the picture in 1997. It was that fall, though, that opened the doors for Jobs to reinfuse Apple with his startup ethic.
The core of that ethic, Lashinsky said, was to work in small teams, learn how to say "no," remain focused and assemble a team of like-minded people.
"Jobs had the advantage of Apple being in really bad shape, "Lashinsky said. "He needed to do a reboot of the company. Apple was on its knees. That gave him the ability to really paint with a fresh palette."
That's a luxury not available for big companies that are merely bad or lacking in certain areas.
"I think the harder thing for a big company is when it's not a disaster," Lashinsky said. "You have a company that's essentially working and you have meaningful revenue and profit. But you know you have a problem and need to change."
The biggest lesson that any company can learn from Job's overhaul of Apple in 1997 is the virtue of focus.
"Any company can ask themselves the question—are we focused on what we do best?" Lashinsky said. "Are we pursuing the things we know we have an edge on? And if the answer is 'no,' that provides a guidepost to start again. It at least gives a frame of reference to make the difficult decisions."
Though Jobs was known to fiercely guard his privacy, his influence on Apple's culture was unmistakable and well-known. He literally set the tone for Apple, both as a humble startup and later as a world-class enterprise. Focus was and is the linchpin.
"The tenor started at the top," Lashinsky said. "Jobs had nimbleness about him. He had a flexible mind and he was able to think about the business world in an entrepreneurial way. In business terms, he was a radical himself, so he was willing to try new ideas."
From a structural perspective, the single most important thing that Jobs did to keep Apple nimble was to insist that the company be focused, Lashinsky said.
"A startup can only do a handful of things at a time because it just doesn't have the resources to do anything more," Lashinsky said. "So a good startup will have one good idea and will focus intensely on that one good idea. And that was the ethos he tried to capture over the past 15 years. Now, Apple eventually started focusing on more than one good idea, but it wouldn't be a stretch to say it didn't focus on more than five or six good ideas simultaneously."
The ability to say "no" is what gets you to that focus, Lashinsky said.
"I make the case that this business of saying 'no' is multidimensional," he said. "It's not just saying no to projects. It's saying no to industry segments, it's saying no to features within a product and it's saying no to events that are going to be a distraction and that don't provide a return on the time invested. You could make a list and go on and on about the ways Apple says no."
Another thing that Jobs said no to was large teams and layers of hierarchy, Lashinsky said, echoing anthropologist Robin Dunbar's theory that humans are capable of maintaining meaningful relationships with no more than an average of 150 people. Apple's teams are intentionally kept small, he said.
"The number isn't important," Lashinsky said. "What's important is that smaller is better than bigger in terms of getting things done. Jobs recognition was this: we are now a big company and we need to do all these various things. But we can't have a large group working on critical projects. Small groups lead to responsibility and accountability. The same is true of the small group that runs Apple — the executive team."
Jobs recruited his team with the same eye for detecting simpatico qualities that he had used to envision from the next top-selling consumer electronics product. His reality distortion field gave way to a sharp-sighted assessment of human capital when it came to assembling his team.
When Jobs returned to Apple, said Lashinsky, the company was much smaller than it is today. But it was still a big, important company even though at that point it has had largely failed in the marketplace. Nonetheless, it was still revered by a certain group of people for the beautiful products it had created.
"It was almost like he was a chef returning to the restaurant he founded," Lashinsky said. "No matter if the restaurant were ever going to be successful again, there was a core of people who wanted to cook with him because they knew he was going to make great meals and they didn't care about anything other than great meals."
Tim Cook took over the helm of the company from the ailing Jobs last August and is now the keeper of that flame as his anointed successor. Will Apple change or remain true to Jobs' startup vision?
"Apple has a culture and Cook's not going to want to change it," Lashinsky said. "I think he has an obligation to follow his own judgment and to lead the company where he thinks it should go. He is going to have to make certain decisions different from the way Jobs would have made them. I think he'll follow his own instincts on that."
Cook, though, is not an Apple newbie.
"He's been integral to what's already happened," said Lashinsky. "He's been running the company for quite a few years now. It would be a mistake to assume he stepped in on Aug. 24. And all of a sudden started making decisions about what goes on at Apple. He's been intimately involved for years."