Archive for Pricing
Key Lessons from Steve Jobs at All Things Digital (D8)
Posted by: | CommentsWhenever Steve Jobs speaks, it’s usually worth listening. Love him or hate him, he’s always worth listening to–especially because he masterminded one of the most amazing comebacks of all time. Thirteen years ago when he returned to Apple they were just 90 days away from going bankrupt. And then, just last week, they surpassed Microsoft on market cap making them the second most valuable company in the WORLD–not a bad come back.
Now, if you’ve been reading my blog for any length of time, you know I don’t write about technology, I write about what leads to growth. And my audience isn’t techies, it’s owners and CEO’s (or other execs at the top). So, as I listened to Steve’s responses to the questions of Walt Mossberg and Kara Swisher at the All Things Digital (D8) Conference, my ears were tuned into Jobs’ comments related to strategy and leadership, marketing and R&D. And the following would be, IMHO, the most important things he said on that front.
Note: Thanks to Macrumors and Engadget for tracking the conversation.
1. Never Underestimate the Power of Vision.
- On his return to Apple in the ’90s: “Apple was about 90 days from going bankrupt. It was much worse than I thought back then. I expected all the good people had left, but I found many of them still there, and I asked them, “Why are you still here?” They said it was because they believed in Apple.”
In other words, Steve and crew had done such a great job of establishing the culture and vision of Apple, that even when things were going bad under different leadership, great people stayed on. As I say over and over again, you can’t cast vision too much.
2. It’s Okay to Zig When Everyone Else Is Zagging
- On the Adobe Flash controversy: “Apple doesn’t have the resources others have, and we have to choose which horses to ride. We try to ride those that are on the way up. If you choose wisely, you save yourself an enormous amount of work.”
As proof of this strategy, Steve pointed to Apple’s moves over the years (ahead of almost everyone else) to moving to 3.5-inch floppies, to discontinuing floppy drives, to removing serial and parallel ports, to adopting USB, to the current removal of even an optical drive in the MacBook Air. In “typical Jobsian” fashion, Steve concluded by saying, “Sometimes people call us crazy.”
In other words, just because ”everyone“ has something or does something in a certain way, doesn’t mean you have to do it that way. All trailblazers at some point realize that have to break with what ”everyone“ is doing.
3. Be Clear on What Drives Your Company–And Stick With It
- On the future of Apple and “platform wars” with Microsoft, Google, Facebook, etc.: “I don’t see it. We never saw ourselves in a platform war with MSFT, and maybe that’s why we lost. We think about the competition, but we’re focused on building a better product.”
Steve is clear on what drives Apple–they’re a product-driven company. They’re not a services-driven company or a knowledge-driven company or a market-driven company etc. They are a product-driven company. When they lost sight of that in the late 80’s and 90’s, they got into trouble. Once they got clear on that again (under Jobs), everything began to change.
4. What You Think Has to Be in a Product/Service Doesn’t
- On tablets: “We did something similar to what we did with the iPhone. We started from scratch and threw out the existing paradigm of handwriting recognition.”
In other words, sometimes, you have to start by deconstructing what you believe to be true. In other words, you have to start from scratch, with a blank slate, and question every part or thing you want to put in to it.
5. Be Willing to Change Your Plans in Response to New Information
At one point, Steve acknowledged that the tablet project (what’s now the iPad) actually came before phone, but realized that phone was more important.
In other words, strategic plans need to be flexible. I’m shocked at how many leaders stick by a plan long after the market is telling them something different. I’m a strategy consultant, and I’m forever reminding leaders that the plan we created last year needs to change as we go through this year. Things change, and what seemed right in October last year, may not be what’s best in June of this year.
6. Stick to Your Values Even When It’s Not Politically In Your Favor
Regarding rejected political cartoon content, Jobs said, “We had a rule that said you can’t defame people. By definition, they defame people.”
Similar to Google’s, ”Do no evil,“ creed, great leaders stick to their values even when it’s not convenient. To me, that’s the real test of a value. For example, are you willing to fire your best producing employee because they’ve broken (and usually consistently broken) a core value? If not, then it’s either not a core value or you’re not doing your job as the leader.
7. Price Aggressively and Go For Volume
During his comments on newspapers, Jobs noted that iPad opens up a way to offer much more than print or static webpages. But he also noted that newspapers should charge less for the online content than their print content … “The biggest lesson Apple has learned is price it aggressively and go for volume.”
So, which of Steve’s lessons do you need to take to heart and apply in your business? Playing out of Jobs’ playbook isn’t a bad strategy to start with. It’s clearly worked for him :-)
To your accelerated success!
It’s Not About Your Product!
Posted by: | CommentsI received an email from my mother last evening about a social experiment that the Washington Post conducted two years ago with Joshua Bell, the world famous violinist. That said, I think the real value of the experiment drives home an incredibly important message for business owners and senior executives.
The basic story line goes like this (note: hang in there, this has a great ending).
To test their ideas, the Washington Post had Joshua Bell, dress like a street musician and play six Bach violin concertos for 45 minutes on a cold January morning at a DC Metro stop. During that time frame, approximately 2,000 people passed by him on their way to work–only a few of whom stopped to listen.
All totaled, by the time he was finished 45 minutes later, only six people had stopped long enough to listen for any length of time and only 20 people had given him any money. The total take for 45 minutes of Joshua Bell’s playing time that morning at the DC Metro stop, $32. The applause, none.
Now, what makes that so remarkable, is that Bell often plays to sold-out audiences in the best performance halls around the world, he’s undoubtedly one of the best violinists on planet earth, he plays on a $3.5 million violin, he normally charges around $100 per person to hear him perform (e.g. 1500 people x $100 = $150,000), and he normally plays to standing ovations (I know, I’ve seen him play).
So, let’s recap what happened. The same Joshua Bell, playing on the same $3.5M violin, playing six of the most beautiful violin concertos of all time–and with the same brilliance as he normally does in a performance hall (where the receipts might be anywhere from $100K-$150K) only walked away with $32 and a few people willing to stop for a few minutes to listen.
So, what made the difference? It wasn’t the product (Bell playing Bach on his $3.5M violin), was it? No! It was the context, the perception of value, and the packaging of the product that made the difference–NOT the product itself.
But isn’t that exactly the mistake that most businesses make. They keep thinking it’s about their product or service. So they keep talking about their product or service as though that were everything–but it’s not. Whenever anyone gets sucked into focusing on how great their product or service is, they’re almost always sucked into a commodity mindset (and they end up with $32 playing on a DC Metro stop).
However, there is another alternative. The other alternative is to boost the perceived value. Looking at Bell’s normal marketing plan, changing the venue (i.e. the packaging) to a first-class performance hall, like the Kennedy Center, changes his perceived value immensely. Raising his ticket prices, changes his perceived value.
Doing PR on TV and radio, increases his perceived value. Winning competitions increases his perceived value. Being the featured violinist in Hollywood films increases his perceived value. Playing alongside some of the greatest violinists and conductors, increases his perceived value. Letting people know he plays on a $3.5M violin increases his perceived value. Sharing testimonials of listeners, conductors, and famous people increases his perceived value. Etc.
In other words, it’s not the product itself that creates the value. Whether Bell is playing at a DC Metro Stop or at the Kennedy Center, it’s still the same product. However, the difference in perceived value is the difference between $32 and $150,000.
So, as you look at your products and services, what can you start doing NOW to increase the perceived value of what you offer? Remember, you don’t want to focus on your product or service alone. You want to focus on increasing the perceived value of what you offer–and when you do that, you’ll immediately begin making more and more money for the same product or service–just like Joshua Bell!
To your accelerated success!