Tag Archives: Steve Jobs

John Sculley, who turned around Pepsi and Apple, has a new cause

The 80-year-old executive is now trying to solve the problems of America’s health-care system — and inspiring students to help change the world

As a marketing manager, John Sculley developed the so-called Pepsi Challenge, which enabled the company to gain market share from Coca-Cola. In the 1980s, Sculley ran Apple — and had a famous run-in with Steve Jobs.

Today, Sculley, 80, is urging young people to take the “noble cause” challenge. That was his rallying cry to my students in a lecture at Carnegie Mellon’s school of engineering at Silicon Valley on Monday.

Having sold obesity and sugared water in his earlier days, Sculley is now trying to solve the problems of America’s health-care system — and inspiring the next generation of engineers to make the world a better place. He is making amends.

From Pepsi to Apple

Sculley told my students the story of how Jobs had recruited him as Apple’s  chief executive officer in 1983, asking him the now-famous question: “Do you want to sell sugar water all your life, or do you want to change the world?” The Macintosh had not yet been introduced. Computers were sold largely on their technology features. What made Apple different, said Sculley, was its goal to create, in Jobs’ words, an “insanely great consumer experience.”

“On the one hand,” Sculley told the class, “Apple might have missed something big by not being a technology-licensing company, but that’s not the business we were in. We were in the business of marketing the experience.” That led the Macintosh to become the top-selling personal computer in the world.

As Sculley explains it, the problem was Jobs’ “reality distortion field.” Jobs was clearly a genius, but one who never “let the laws of physics get in the way of his ambitions to put a dent in the universe.” He had the brilliance to see the world 20 years ahead of the rest of us, but wasn’t yet a sensible business executive. And, in early 1985, he was depressed. Jobs ran the Macintosh division. But his crown jewel, Macintosh Office, introduced in January that year, had rapidly become a laughing stock.

Jobs had bet everything on this first personal publishing system for non-technical consumers. It fulfilled his vision of an inspiring user experience by connecting a Mac with a laser printer to print a rastered image including fonts. But computers then didn’t have the processing speed for what was called desktop publishing. Today, even the cheapest computing devices can perform such tasks, because they have greater computational speed than the Cray supercomputers of that era; but Macintosh Office was beyond them then. It took the Mac a minute and a half to rasterise an image on its display and print its beautiful postscript fonts.

The Macintosh division was hemorrhaging cash. The Apple II division, which Sculley ran, was doing well and was the only source of the cash flow vital for keeping Apple financially alive.

Battle with Steve Jobs

Sculley says that Jobs, blaming him for the sales failure of Macintosh Office, demanded both a $500 reduction in the price of the Macintosh and a transfer of limited marketing funds from the Apple II to Macintosh Office. Sculley refused. They asked the board to decide, and, after hearing their arguments and consulting Apple’s most respected engineers, the board removed Jobs as head of the Macintosh group. (The board had previously removed him from the Lisa computer group for the same reason, before Sculley joined Apple, because they found Jobs too difficult to work with.)

Jobs wasn’t fired, though; in fact, he remained as chairman and was invited to head up any other projects he would like to. Less than four months later, Jobs resigned from Apple and founded NeXT computer — which Apple purchased 11 years later when it hired Jobs back as CEO.

What Jobs wanted became possible many years later because technology advances on an exponential curve, an industry standard of progress known as Moore’s Law. For more than 100 years, the processing power of computers had doubled every year or two, enabling faster computers to design faster computers.

World-changing inventions

And computers — and the information technology that they enable — are absorbing other fields. We are seeing exponential advances in fields such as sensors, artificial intelligence, robotics, medicine and synthetic biology, and these advances are making it possible to solve the problems of hunger, disease, poverty, clean energy and education — as well as rapid printing.

The best part is that it isn’t just governments and big research labs that can do this. With the declining costs of technologies, students can create world-changing inventions for less than the cost of a master’s degree. And it isn’t just the young students who can do it.

Sculley noted that, as we grow older, we don’t get smarter — but can get wiser. He himself is applying lessons he learned from those early days with Jobs to pursue his own “noble cause”: of mentoring a new generation of brilliant entrepreneurs to revolutionize health care. A startup he cofounded with Ravi Ika, RxAdvance, has built a platform-based prescription-drug system to simplify the many thousands of rules and regulations that greatly inflate the cost of medications. Their ambition is to reduce the uncontrolled cost of prescription drugs for the chronically ill by some $840 billion annually by making the prescription system fully transparent.

Sculley’s concluding message was this: If, at age 80, he can have such grand ambitions, imagine what the most brilliant of engineering students at one of the top engineering colleges in the world can do.

Why Apple failed in India — and how it can start innovating again

Apple’s iPhone sales in India are expected to have fallen dramatically this year to 2 million, from 3 million phones last year.

Reuters reports that at the peak shopping season, in Diwali, Apple stores were deserted. This occurred in the world’s fastest-growing market, in which smartphone sales are often increasing by more than 20 percent every quarter.

Yet Apple’s loss of the Indian market was entirely predictable. In a Washington Post column of March 2017, I described Apple’s repetition in India of the mistakes it made in China: Relying entirely on its brand recognition to build a market for its products there. Rather than attempt to understand the needs of its customers, Apple made insulting plans to market older and inferior versions of iPhones to its Indian customers — and lost their loyalty.

IPhone isn’t special

The iPhone no longer stands out as it once did from its competition. Chinese and domestic smartphones boasting capabilities similar to those of the iPhone are now available for a fraction of the iPhone’s cost. Samsung’s  high-end phones have far more advanced features. And, with practically no brand recognition by the hundreds of millions of Indians who are buying their first devices, Apple does not have any form of product lock-in as it does with Western consumers who have owned other Apple products and are now buying smartphones.

Apple also made no real attempt to customize its phones or applications to address the needs of Indian consumers; they are the same as in the United States. Siri struggles no less on an Indian iPhone than on a U.S. one to recognize an Indian name or city or to play Bollywood tunes.

It wasn’t even their technical superiority that made the earlier iPhones so appealing to the well-to-do in India; it was the status and accompanying social gratification they offered. There is no gratification in buying a product that is clearly inferior. Indian consumers who can afford iPhones want the latest and greatest, not hand-me-downs.

So Apple could hardly have botched its entry into the Indian market more perfectly.

Pursuit of perfection

And it’s not just Apple’s global distribution and marketing strategy that needs an overhaul. The company needs to rethink the way it innovates. Its pursuit of perfection is out of touch with the times.

The way in which innovation happens now is that you release a basic product and let the market tell you how to make it better. Google, Facebook, Tesla and tens of thousands of startup companies are always releasing what are called minimum viable products, functional prototypes with the most basic of features. The idea is to get something out as quickly as possible and learn from customer feedback. That is because in the fast-moving technology world, there is no time to get a product perfect; the perfected product may become obsolete even before it is released.

Apple hasn’t figured that out yet. It maintains a fortress of secrecy, and its leaders dictate product features. When it releases a new technology, it goes to extremes to ensure elegant design and perfection. Steve Jobs was a true visionary who refused to listen to customers — believing that he knew better than they did about what they needed. He ruled with an iron fist and did not tolerate dissension. And people in one Apple division never knew what others in the company were developing; that’s the kind of secrecy the company maintained.

Jobs’s tactics worked very well for him, and he created the most valuable company in the world. But, since those days, technological change has accelerated and cheaper alternatives have become available from all around the globe.

More experimentation

Apple’s last major innovation, the iPhone, was released in 2007. Since then, Apple has been tweaking that device’s componentry, adding faster processors and more-advanced sensors, and releasing it in larger and smaller form factors — as with the iPad and Apple Watch. Even Apple’s most recent announcements were uninspiring: yes, yet more smaller and larger iPhones, iPads and watches.

There is a way in which Apple could use India’s market to its advantage: to make it a test bed for its experimental technologies. No doubt Apple has a trove of products that need market validation and that are not yet perfect, such as TV sets, virtual-reality headsets and new types of medical devices. India provides a massive market that will lap up the innovations and provide critical advice. Apple could develop these products in Indian languages so that they aren’t usable back at home, and price them for affordability to their Indian customers.

To the visionaries who once guided Apple, experimenting with new ideas in new markets would have been an obvious possibility to explore. Taking instead the unimaginative option of dumping leftovers on a prime market suggests that Apple’s present leaders have let their imaginations wither on the vine.

Vivek Wadhwa is a Distinguished Fellow at Harvard Law School and Carnegie Mellon’s School of Engineering at Silicon Valley. He is the author, with Alex Salkever, of “Your Happiness Was Hacked: Why Tech Is Winning the Battle to Control Your Brain — and How to Fight Back.” Follow him on Twitter @wadhwa.

This article is published with permission from the author.

Dear Elon: Ask Apple or Google to Acquire Tesla

Steve Jobs wanted to build an electric car as far back as 2008.

In 2014, current Apple CEO Tim Cook reportedly funded the project. To date, though, Apple  has had little to show for it, and the rumors are that its electric vehicle will launch as late as 2025 — long after such things become common commodities. Alphabet’s Google  has had self-driving electric cars on the road for about four years, though it has decided to focus primarily on the software.

A decade after Tesla announced the Model S, and six years after its delivery, no other company has been able to produce anything comparable. The big automotive manufacturers are claiming that they will soon eat Tesla’s lunch, but even the strongest offerings — those of BMW and Mercedes — are merely souped-up cassette players trying to compete with an iPod.

Tesla learned the hard way the intricacies of combining legacy automotive technologies with modern software — through trial and error and constant delay. It also struggled to automate production. Using advanced robots, however, it has finally figured out how to build an astonishing 6,000 cars per week, some in a tent.

At a crossroads

Now, as Tesla struggles with its cash balances, extremely negative press, and CEO Elon Musk’s erratic tweets, it is at another crossroads and, in order to reach its potential, needs a strategic partner. It may not make sense for it to continue as a public company.

The best acquirer would not be Saudi Arabia, whose interest Musk tweeted about, because that nation’s interests inherently conflict with Tesla’s. Electric vehicles and solar technologies will cause the price of oil to plummet and decimate the value of Saudi oil reserves, so it would lose heavily if its investment in Tesla paid off. Technology companies, however, share Musk’s goals and ambitions, particularly Apple and Google. They have the money, technology, and marketing strengths to greatly enhance Tesla’s offerings. Apple also has great manufacturing prowess and distribution channels.

Tesla would provide Apple with an entirely new set of technology platforms on which it could build a new line of products. Apple desperately needs these in order to sustain its trillion-dollar market capitalization; after the release of the iPhone, in 2007, it has had virtually no world-changing products. It needs to enter new markets, and, with its automotive, energy storage and solar technologies, Tesla would provide them.

Apple’s existing products would also benefit from the advanced technologies that electric cars have incorporated, such a batteries and in-car electronics. And Apple would gain the second-best self-driving software in the industry.

The iCar

Tesla could, in turn, integrate the iPad, Apple TV, iTunes, and App Store into its automotives, literally turning its vehicles into iCars. And it could replace its clunky operating system with macOS. I am sure that all Tesla owners — such as me — would love to be able to download apps and music onto a console that’s more user friendly than the Tesla’s present one.

Apple would bring its world-class manufacturing and inventory-management process to Tesla and create new types of automobiles, in different sizes and shapes — and at lower prices. This would give it a second chance to wow markets it has largely lost; specifically India and China.

A match for Waymo

Google’s interests also coincide with Tesla’s. Google doesn’t have Apple’s manufacturing capability, but its maps and self-driving software are one or two notches above any other. Tesla’s mapping software is substandard, and its self-driving software could use a major upgrade. Google’s self-driving-car spinoff, Waymo, could focus on the software and let Google’s Tesla arm deal with the hardware.

Given that Morgan Stanley has just valued Waymo at $175 billion, Tesla’s $70 billion price would be a no-brainer, and the combination would be formidable.

Getting Musk to the table

Would Musk even entertain such an offer? Given that he reportedly turned down an offer from Google in 2013 and laughed off the idea of Apple buying Tesla in emails I exchanged with him in April 2014, and in an investor call last year, it would seem very unlikely. Yet, having reached his personal limits and being close to burnout, as Musk has admitted; after seeing the disastrous impact of his tweet about having secured funding; and with Saudi Arabia offering investment in a competing startup, things may have changed.

I’ll bet that Musk would take an offer that solved his financial problems and gave him autonomy. With the headaches of funding and quarterly stock pressure taken away, the world’s greatest innovator would be free to develop world-changing ideas that transform entire industries, including automotive, energy and space. That would be a win-win for Tesla — and for humanity.

This article has been reprinted with permission of the author.