September 27, 2004
non-commodified
Back in the 60s and 70s, Received Wisdom would say that a computer company should make both main bits of the machine– the hardware and software. IBM, Digital etc all followed this model.
But 25 or so years ago Microsoft asked themselves one of the best questions ever in the history of business:
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Illegal?!? The reason Microsoft
I think Jeremy hits it on the head, except that we may already be there. Advertising is largely commoditized already– conversations are not.
If you don’t think illegal is plausible, Jeremy, how about invisible? Give everyone a TiVo and good ad blocking software and a large fraction of advertising simply disappears. (As does the money used to pay for it.)
When ads are illegal… story tellers will still be needed
)
Corporate bard! that’s who you’ll be!
singing songs of great ventures (& aquisitions) with stories of victories, and tragedies
From a recent HBR article http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=R0306B
“Robert McKee, the world’s best-known screenwriting lecturer, argues that executives can engage people in a much deeper – and ultimately more convincing – way if they toss out their PowerPoint slides and memos and learn to tell good stories. As human beings, we make sense of our experiences through stories. But becoming a good storyteller is hard. It requires imagination and an understanding of what makes a story worth telling. All great stories deal with the conflict between subjective expectations and an uncooperative objective reality. They show a protagonist wrestling with antagonizing forces, not a rosy picture of results meeting expectations – which no one ends up believing. Consider the CEO of a biotech start-up that has discovered a chemical compound to prevent heart attacks. He could make a pitch to investors by offering up market projections, the business plan, and upbeat, hypothetical scenarios. Or he could captivate them by telling the story of his father, who died of a heart attack, and of the CEO’s subsequent struggle against various antagonists – nature, the FDA, potential rivals – to bring to market the effective, low-cost test that might have prevented his father’s death. Good storytellers are not necessarily good leaders, but they do share certain traits. Both are self-aware and both are skeptics who realize that all people – and institutions – wear masks. Compelling stories can be found behind those masks.”
I think you missed the point. Badly. Microsoft never was interested in hardware. Apple has always been a hardware company. It also happened to develop its own software to run its machines. And bar a slack period in the late-eighties and early-nineties, it was always a better brand than Microsoft. Where Gates imitates, Apples innovates. And that, not avoiding hardware, is what made Microsoft great (although not “great” in the Apple sense…). It waits for other people to innovate then copies them and muscles them out of the market or buys them. It’s a corporate feudal lord, made powerful by lawyers and capitalism and some insanely bullying contracts to supply PC makers with an operating system and by market share. Where on earth did you get the idea that there was some smart move to avoid hardware in its history?
Then look at the situation now. Everyone bar its stockholders, employees and developers hates Microsoft. My 70 year-old mother-in-law who can barely turn on her PC hates its products. But Apple is hip. It’s revolutionised two whole indiustries (music and portable entertainment). Its users, by and large love the brand. And it makes lots of money now. By doing hardware. And software. Together.
On this one, Hugh, your analysis sucks. Maybe you should try to re-invent the commodified part of advertising. Make something moribund better. Turn the walkman into the iPod. Be Steve Jobs, not Bill Gates.
Richard, I was talking about the tension in companies between the becoming-less-valuable parts and the becoming-more-valuable parts.
Commodification management.
Using the PC market as an example. Granted, maybe there are better examples out there. You tell me.
I once interviewed Intel’s then chief technology officer, Pat Gelsinger. Smart guy: he headed up the 386 development team when he was 26. I wondered whether he found it depressing that all that money invested in 386 fab plants, billions of dollars, was goign to be rendered worthless when Intel developed the 486 — and that every couple of years, they’d be wasting all that money again. “If we don’t eat our children, someone else will,” was his reply. A bit hackneyed, but very true. Point being, Intel was never in the 386 manufacturing business (which got commoditised — it still exists), it’s in the cutting edge microprocessor business. It’s a question of concept. Must dash, more if I have time later…
There is no doubt you get me to thinking. Out with indifference etc etc. I will be back to this site.