Steve Jobs wasn’t even Steve Jobs

I’ve been noodling on a post for a while about the effects Steve Jobs has on the business world. He’s seen as a hero and other leaders want to also be heroes. They love hearing about this guy who was so difficult, meticulous and sort-of command-and-control. It makes them think they can do it too.

But, they usually turn out to be envious goats who take the batta-batta-batta-“iPad”-swing, miss, then get fired.

The leaders of Intuit don’t want to be Steve Jobs. This is from an excellent piece in Forbes about innovation at that company.

Plenty of companies are a religion, where people take their cues from the top. Intuit is a science lab, where anything can be tested and proven incorrect. “When you have only one test, you don’t have entrepreneurs; you have politicians. When you have lots of ideas you have entrepreneurs,” says Cook.

He’s found a kindred spirit in Smith, who became CEO in 2008. “Genius and a thousand helpers are not going to solve the problems of today or tomorrow,” says Smith, 48… “There are very few Steve Jobses out there. We run small teams and lots of rapid experiments. No politics. No PowerPoints.”

I agree. I’ve seen innovation choked by politics in organizations that take their cues from the top. I’ve seen those same organizations languish and go through multiple leaders who all had the same general idea — their idea, whatever that was.

Other ideas could not get the resources even for a small test because those would take resources away from the leader’s idea. Too bad the hit rate for new ideas is so small. That’s the key insight that the leaders either don’t realize or think they can outsmart it. Or they don’t care because they’ll make a decent sum whether they produce or not.

But, I even think the Steve Jobs story as command-and-control genius is overplayed. No doubt the guy was hard-charging genius. But his greatest genius of all was opening his products to benefit from lots of small tests that would come through the iTunes and app communities.

If iPods and iPhones were just music boxes and phones, I would probably have neither. But, along with these devices, Jobs created a wide community to create stuff for them to make them more useful with minimal political drag on which apps and podcasts could be made available.

This resulted in lots of small bets placed by the thousands of developers and podcast creators and that resulted in tons of content and functions that more and more people found useful, even if it was just a handy way to kill time while standing in line at the grocery store or as a pacifier to keep me from saying truthful, but career-limiting, things in business meetings.

I bought my first iPod when I got tired of listening to the few podcasts that I followed on my computer and discovered that listening to those podcasts while exercising and traveling was something I valued. That was a start.

So, now I have both. And since then, I have found many other ways to make them useful — most of which are not produced by Apple. I have three music boxes: my library, Pandora and another app that lets me tune in radio stations. I play Words/Chess with Friends, but with Family. I ask Siri stupid questions and occasionally, it gives me a useful answer. I don’t get lost. And so on.

The key point: It was those many other things that made iPod, iPhones and iPads the success. I don’t believe any of Apple products would have been nearly the success if they only stored music and surfed the web. iPods probably would have been slightly more successful than the Nomad MP3 players if all they did was store and play music.

So, congrats Steve Jobs. You figured out how to make money off Wikipedia’s operation model and Wikipedia itself (another tool I often refer to through my Apple devices) (I wonder if there is a Wikipedia article on that?) and fool most folks into thinking it was all you.

Why didn’t I think of that?

Yeesh! Sometimes the simplest ideas are the best.

FitDeck is a unique deck of 56 playing cards containing illustrations and instructions describing over 50 different exercises, stretches, and movements.

These ‘no-equipment’ FitDecks contain exercises that require only your bodyweight to perform. ‘FitDeck Bodyweight’ is our flagship product in this popular series of ‘no-equipment’ FitDecks.

This idea emerged from an accident. Here’s more about that from a Shine on Yahoo! article:

It [FitDeck] is the brainchild of Phil Black, who got the idea when a card game in college turned into a push-up contest.

Based on the Shine on Yahoo! article, the FitDeck seems to be selling well. I’m a big believer in ‘boot camp’ style exercises. You can get a full body workout in a short time and they help strengthen muscles that reduce injury and aches and pains.

The biggest problem with a boot camp routine is deciding which exercises to do. If you are deciding that for yourself it’s easy to get distracted and lose focus and you end up not getting as good a workout.

That’s why classes and DVD’s are popular, because the instructor keeps you on a set, goal-oriented path. The FitDeck is another way to solve that problem.

Another product featured in the Shine article is the Knork (fork/knife combination). It’s not really a knife (wouldn’t want to slice the inside of your cheek). It’s just a fork with a beveled edge, rather than a sharp edge, to make it easier to cut through food.

I believe my brother had this same idea years ago, which is proof to the phrase that the difference between a good idea and a good business is hard work.

Coop Education

Commenter lornephi asked for my comments about these three blog posts on a cooperative education program on a piping blog.

1. Helping to Build the Next Generation

2. Cooperative Education from a Student’s Perspective

3. Cooperative Education from a Teacher’s Perspective

I think these posts deserve a read.

When we fret over test scores, we forget that nobody takes tests for a living and when we come across something we don’t know, we look it up.

It’s good to see an education program that is getting kids ready to be productive in the real world, rather than filling them with useless knowledge that they can pick up on Wikipedia whenever it strikes their fancy.

When we think about ‘fixing’ education, these types of programs are the solutions I expect to see, not more test performance nonsense. I know plenty of productive people who didn’t do so well on those tests.

When I think about the skills I use to put food on the table, I learned as many or perhaps even more useful things mowing lawns, assembling bikes for a bike shop, waiting tables and dipping ice cream than I did past a certain point in school.

Exit is more powerful than voice

In this post, I wrote about how competition and choice is important for encouraging bottom-up innovation. When we say things like “roads are socialized” we gloss over something very important. There isn’t a single road department. There are many. We have Federal highways, state highways, county roads and city roads.

Each department operates somewhat independently and tries different things to solve the problems they face. Every now and then, one happens across an improvement that works well and other road departments can choose to adopt it. That type of innovation would not happen as often if there was a single road department that pushed one set of standards.

Alex Tabarrok of Marginal Revolution makes this point well in this post about how education was rebuilt in New Orleans after Katrina, when describing the source of innovation in education:

What really drives innovation, however, is not a simple substitution of private for public but a system substitution of competition for monopoly.

I agree. In the comments of his post, I suggested re-framing this in terms of the benefit to the user (edited slightly here):

It is not a simple substitution of a choice between free-to-the user public and cost-to-the-user private, but a system substitution of more choice by the user.’

We often get hung up on the public/private distinction. That doesn’t matter as much as how free the users — the direct beneficiaries — are to make a choice.

The freer the users are to choose to exit their current option if it isn’t working for them, the better.

This dynamic drives innovation. Why, you might ask? Because the freer your users are to leave you, the harder competitors will try to give your users what they want to encourage them to leave and the more honest soul-searching you may do to figure out why your users are leaving you. If you can’t figure it out, you end up going away.

My parents decided to move to exit a school district that wasn’t giving them what they wanted. That choice was much more powerful than their voice would have been had they decided to stay and try to change the direction of the school district.

So, whenever we think about why one system works and another doesn’t, maybe we should think in terms of how free users are to choose.

Walmart emerged from a willingness to try new things and learn

Thanks to Mark Perry at Carpe Diem for the link to this video illustrating Walmart and Sam’s Club growth.

We see the success stories after they’ve become successful and don’t often think how they got to that point.

I recommend reading Sam Walton’s book Made in America. It paints a good picture of how Walmart emerged from Walton’s constant experimentation and trial-and-error learning, in the store, store location and in the supply chain. It took him years to evolve the retailing model into something that would fund its own expansion by simply pleasing its customers.

It’s been awhile since I’ve read it (~15 years), but a few stories are stuck in mind.

Walton started his first store in a town on the eastern side of Arkansas. He grew it into a success and when it came time to renew his lease, the landlord kicked him out to take Walton’s store for himself. There Walton learned to build renewal options into his leases.

When Walton opened his store right across from a competitor in Bentonville, most people thought he was crazy, but Walton relished the competition and would try things to get people to try his store and keep them coming back, which was great for the customer. Walmart still gets a lot of resistance to this strategy — generally from people who care less about the customer.

He wasn’t too proud to borrow ideas from competitors. When he read an article about a store with a self-serve model in Minnesota or Wisconsin, he hopped on a bus (or train) and visited to see how it worked and then adopted the model in his stores and changed the retailing industry forever.

As he opened more locations, he tinkered with various ownership structures and incentives to drive the right behavior. He discovered joint ownership was the best incentive structure, which carried through all the way to employees of the eventual Walmart earning shares of stock. Early stores were partnerships between him and the store’s general manager.

Even after Walmart was getting larger, they tried new things. They took on a massive project in the warehouse in the 1980s to improve product distribution efficiency. It took years and a few costly mistakes, but it eventually paid off. I often think about that when I see companies ditch a project after the first failure. I wonder if it could be successful with some more learnings applied.

Businesses emerge from the interactions of customers and business owners. They aren’t designed by consultants in board rooms.

Innovation v Bureaucrats

George Will’s column, The Inexorable March of Creative Destruction, is a good overview of the most effective innovation process (bottoms-up trial-and-error experimentation) and what impedes it (people who believe they can plan progress).

All Sorts of Awesome

This is all sorts of awesome (from Alex Tabarrok at Marginal Revolution).  

Key highlights:

  • Stanford computer science Prof offers online course on Artificial Intelligence.
  • 160,000 people take it.
  • On campus class size dwindles from 200 to 30, as more folks say they learn better from the online lecture.
  • Professor decides to change the goal of his course from weeding out students to teaching them.

Now for the awesome part:

  • That computer science professor quits Stanford and starts his own, online university, Udacity.

Bill Gates: Treating symptoms rather than causes

While reading a November Forbes interview with Bill Gates about his philanthropic activities, I had a few thoughts I wish he would consider.

In the interview, Gates explains his charitable efforts in public health and elimination of disease:

The logic was crisp and Bill Gates-friendly. Health = resources ÷ people. And since resources, as Gates noted, are relatively fixed, the answer lay in population control. Thus, vaccines made no sense to him: Why save kids only to consign them to life in overcrowded countries where they risked starving to death or being killed in civil war?

Gates is wrong on two accounts here.  Population control is not the answer and resources are not “relatively fixed.”

The western world enjoys the best standards of living ever on this planet not through population control, but by an abundance of resources that were developed and allocated through innovation and trade.  We’ve discovered how to use resources more effectively to sustain larger populations with a grand standard of living.

The true equation is:  Health = Freedom, innovation and trade.  Seeking ways to improve this equation is THE answer.

More from the interview:

In society after society, he saw, when the mortality rate falls—specifically, below 10 deaths per 1,000 people—the birth rate follows, and population growth stabilizes. “It goes against common sense,” Gates says. Most parents don’t choose to have eight children because they want to have big families, it turns out, but because they know many of their children will die.

“If a mother and father know their child is going to live to adulthood, they start to naturally reduce their population size,” says Melinda.

This doesn’t go against common sense.   It is common sense.  Too bad it took that long for him to figure that out and more unfortunate that he states it as if it’s some unique finding of his.  This is well-known from anyone who have given any thought to their own ancestry.  There are reasons why two to three generations ago the birth rate in my family was much higher than it is today.  One of those reasons is that there was a greater likelihood of death, so parents had more kids to improve their chances of keeping the family going.

What’s especially frustrating here is that the Gates’ only see part of the picture.  Low mortality rate is a result (or output) of something bigger than the availability of vaccines, it’s not an input to it.

Low mortality rates are a result of a wealthy society that derives from freedom, innovation and trading.

It’s no accident that free societies grow wealthy enough where vaccines and other things that save lives, like nourishment, shelter, low crime rates, drug stores, paved roads to get to the drug stores, indoor plumbing, hand soap, sanitary conditions, disinfectants, antibiotics, bandages and clean water aren’t that difficult to come by.

In the U.S., vaccines are usually cheap and plentiful.  Even the poorest families here don’t need a billionaire to give them a vaccine.

Would Bill Gates rather have societies that are dependent on his benevolence for addressing a part of the problem, or societies that could become self-sufficient in that regard and not only would he save lives from disease, but also make available all the other advances that help make our lives better?

I don’t fault the guy for wanting to make a visible impact.  Giving a vaccine to a child that otherwise wouldn’t have had it is good.

But, I think it’s important to recognize that this doesn’t address the root cause of why a child in a third world country has such a difficult time getting medical treatment that is plentiful and basic to children in first world countries.

And, think about what happens when Bill Gates’ money runs out.  Either more philanthropy will have to take its place or the conditions will return, because the root cause has not been addressed.  He’s creating a dependency.

So, what is this root cause?  It’s concentration of political power.

At a young age, I crossed the border into Mexico at Laredo, Texas and was befuddled by the drastic difference in the standards of living on the north and south side of that river.

This was an eye-opening test-and-control.  The difference in the standard of living didn’t derive from the richness of the soil, or the availability of natural resources or differences in climate.  Folks on the north and south side of the Rio Grande have all of this in common.

The only difference between the two was how political power was distributed.  Period.

If Bill Gates wants to make a lasting impact for third world countries, he could do no better than to find ways to de-concentrate political power in those areas.

That is THE answer to improve public health.  It also happens to be the answer to improving education.

This is from the same interview:

It wasn’t dissimilar from the formula that he was developing behind a multibillion-dollar push into education reform. In that case, he based his giving on this formula: Success = teachers ÷ students. Smaller class sizes would result in more attention per student and smarter kids.

But much as Gates loves elegant solutions, his greatest achievements have resulted from perseverance and adaptability. It took three versions to get Windows right, and the Xbox originally lost billions. He’s not afraid to challenge assumptions when they don’t work. And in education he’s had a clear reversal: Class size, it turns out, is not the best determinant of student outcome. Teacher quality is. So after spending a fortune, Gates shifted course.

Here again, Gates stops short of the root cause.  Teacher quality is important.  But, it’s an output, rather than an input.

High teacher quality is an output of a system that decentralizes political power and allows the users of the system to choose the best teachers.

In third world countries, political power is concentrated in the hands of the dictators and warlords who run those countries.  Similarly, in public education, political power is concentrated in the hands of teacher unions, school boards and the so-called “education experts” whose often incorrect preferences for how things should work subjugate the preferences of the people who directly use the system — the parents.

In both health and education, he would do well to look for ways to decentralize the political power bases, instead of reinforcing them.

Kindle Everywhere

There was a homeless dude that camped near my home as a child.  We always saw him walking along the business strip and he often came into the shops and diners while we were there.  He’d chat with the business owners, something would change hands and he’d walkout.

Everybody liked him.  He was always nice and polite and even as a kid I recognized that he would do odd jobs for the business owners in exchange for a few bucks, a cup of coffee or bite to eat. That’s just the way things were.  They were that way for a long time before I was born.

His name was Kendall.  My brother and I would see him and say, “Man, that Kendall is everywhere.”

Back then, I never would have guessed our childhood observation would inspire the title of a blog post.  Nor could I imagine what blogs or computers were.

Back in this post, I wrote that one of the things keeping me from buying a Kindle was that I couldn’t check out library books on it or it didn’t have a Netflix-like subscription plan for checking out books.

I only buy a few of the books that I read.  I didn’t want to have to start buying more just to have something to read on a Kindle.

Not long ago, Amazon.com started offering Kindle library checkouts through a service called Overdrive.  My library hooked up with Overdrive.  I have a Kindle app for my iPhone.  I’ve read portions of a few free Kindle books on my iPod and iPhone, but nothing that has had held my interest of yet.

Until now.

I borrowed (or downloaded) Daniel Hannan‘s The New Road to Serfdom.  It’s holding my interest.  And, since the phone goes just about everywhere I go, so does the Kindle App that is loaded on it and my library checkouts.

Now, I’m finding new snippets of time to read my library books that I could not use to read before because it was too difficult to carry library books everywhere.

For example, this evening while I waited in line at a retailer, I pulled out my iPhone, tapped the Kindle app and read a few screens of my borrowed library book.

And for good measure, here’s a great quote from Hannan’s book that I read while standing in line.  Here, he’s contrasting the Constitutions of the United States and the European Union (p. 44):

Where the one was based on empowering the people and controlling the state, the other was based on empowering the state and controlling the people.

I’m sure you can guess which was which.  Or maybe not.  Who knows?

Anyway, thanks to the folks at Amazon, Apple, Overdrive and my local library and the ever present communications networks (that allowed me to check out a library book and receive it instantaneously and not have to worry about getting it back on time) for helping me improve my life a little bit and read books in places I would not before.

Bureaucrats and innovators, part two

This is from Peggy Noonan’s column in the Wall Street Journal today:

Then he turned to the rise and fall of various businesses. He has a theory about “why decline happens” at great companies: “The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesman, because they’re the ones who can move the needle on revenues.” So salesmen are put in charge, and product engineers and designers feel demoted: Their efforts are no longer at the white-hot center of the company’s daily life. They “turn off.” IBM and Xerox, Jobs said, faltered in precisely this way. The salesmen who led the companies were smart and eloquent, but “they didn’t know anything about the product.” In the end this can doom a great company, because what consumers want is good products.

I agree.  This reminds me of a few of my previous posts where I write about the secret of good business, bureaucrats vs. innovators and bureaucrats and innovators.

Jobs just uses the term salesman in place of bureaucrat and product engineers in place of innovator.

Salesmen stifle innovation by favoring their own projects and restricting other projects.  That lowers the chance that the company will discover something truly valuable for customers.

I’ve witnessed projects that showed early promise get nixed because they weren’t the saleman’s project.  I’ve also seen projects that show no signs of promise continue to get resources, because it is the salesman’s project.  The salesman can sell others (for awhile) that the project is working, even when all measures suggest it is not.