Steve Jobs - A Lesson for us All

Why Steve Jobs Will be a Business Model for the Next Hundred Years
Neil Voorsanger

With the passing of Steve Jobs, industry has lost a model of innovation and success that will be imitated for a hundred years. Business schools will create future courses for executives on the “Steve Jobs Effect.” What was the essence of his success? Can his genius be duplicated, or taught?

Here is my reading of the genius of Steve Jobs. He integrated three forces of product and marketing innovation: Extrapolation of product innovation, accessible to all, and made “luxury” affordable:

Extrapolation: With few exceptions, most product innovators work around the edges, improve a product by 10%, ‘add features’ typical of the automobile market, such as speed, comfort, sound proofing, fuel consumption, green technology, beauty, with the hopeful winner having the most and best of features. Jobs was not an incrementalist, a me-tooer at a lower price, Jobs extrapolated into the future. He thought to himself, what is the logical next step in innovation from the main frame? From the desk top? From mobile to networking? Jobs always thought not 10% better but what are going to be the logical progression of our product two product generations from now? Few R&D or product innovators think this way. He was unique for his time. So to be a Steve Jobs ask, where will social networking be ‘two generations’ from now? Where will medical care be ‘two generations’ from now?

Accessible to All: Twenty or thirty years ago to be legitimate programmer one had to be able to create a computer spreadsheet in computer language. This created an artificial class distinction between the Techies and the “Dummies.” The buying markets were the big corporations with their huge IT departments. But which market is bigger … always the Dummies. So Jobs said, don’t worry I will make operating a computer so easy you will be able to operate it in ten minutes. He made a complicated technology operate invisibly so it could be accessible to everyone. Outcome, his company is the richest company in the world, and over the past 30 years “ease of use” increased personal productivity by a factor of 10 if not a 100; now billions can use computers versus thousands.

Luxury at an affordable price: His last most brilliant contribution was not to provide a MP3 player with exposed circuit boards and a 30 page manual but provided an aesthetically gorgeous product, priced 20% more than the competitors but always within an affordable range, capturing two key markets: First Adopters and Status Joiners. First Adopters are the 5%-10% of the market that always want to buy first, who are intensely loyal, will buy even if there are a few bugs because they want to be first. The genius of pleasing this market is they pay for a major chunk of the R&D investment, so thereafter later consumers will contribute 40% to 80% to overhead and profit. Of course the largest market is the latter group, the Status Joiners, and because of the elegance and beauty of design, utility, and affordability, give them status at an affordable price.

Many, many companies have made fortunes with just one of these forces; Steve Jobs was the first to combine all three. Wherever Steve Jobs is I am sure that he is already working on taking Heaven to the second generation. Pure genius.

Neil Voorsanger: An executive coach for thirty years; clients use me to take them from very good to excellent. Online access through fastlearn.net; available December 1, 2011.

© 2011. Neil Voorsanger. All Rights Reserved