Posts Tagged ‘sea’

How Steve does it

Thursday, May 24th, 2007

Why is Steve Jobs so good at making products people want? An Apple engineer I know had this to say on September 25, 2005:

“Say what you will about SJ, but he (and/or the people he surrounds himself with) are genius. I feel part of the secret is simply having built a culture where everyone cares about things down to the smallest detail — we sure do that with some of the stuff I’m
working on now — but there’s also the quality of what I’ve always thought of as ‘yummy.’ You make a yummy little morsel of a couple of different kinds of already-existing technology and mash them together, make sure it is (deceptively) simple, and make sure the fit+finish is perfect, and use ultra-clean modern design. Still, it’s that ‘yummy’ quality that’s paramount.”

Can this be copied? Possibly not. Why?

Aesthetics and integration are organizationally thankless. They require heavy up-front investment in things that are not identifiable product features, and thus carry benefits that are hard to communicate. Integration is particularly thankless, because it requires iterative design, causing unpredictable delays and blown budgets, again in return for no specific feature. Middle managers are typically punished for such things, and learn to avoid them.

Most companies are unable to measure the benefit of aesthetics and integration. So even when these ideas can be communicated, their benefit (price premium, increased sales, increased customer satisfaction) cannot be assessed internally before release, and so there is no way to decide how much to invest. So no one else does it.

Simplicity is worth more, but appears less.Ease of use often takes the form of superficial simplicity, creating the appearance of fewer features, and thus is potentially risky to an organization unable to assess its true market impact.

Apple has invested decades in a corporate culture that values aesthetics.This is singular. Apple has been indoctrinating new hires with its aesthetic “rules” for at least twenty years, giving them a big advantage at producing products where such things are valued. Since everyone in a software company imagines himself a creative genius, it’s a huge advantage for Apple to get everyone pointed in the same direction from the very beginning. That said, it’s probably safe to say Apple’s vision is all Steve, and wouldn’t survive his departure. Similar to Akio Morita at Sony: when he passed away in 1999, the company ran down like an old battery.

To the extent Jobs’ Apple enforces a unified, simple, aesthetic design sense, it’s unreasonable to expect any other company to copy. Thus it constitutes a sustainable competitive advantage.

Influence at negative cost

Thursday, May 24th, 2007

Be worthy of imitation.

Self-improvement is intrinsincally worthwhile, but has the side effect of inspiring imitation, which in turn amounts to influence.

My best investment return ever

Saturday, May 12th, 2007

The highest investment return I have ever achieved was not on a stock, bond or business investment.

It was to replace my home thermostat.

My home was built in 1977. Almost exactly 30 years later, in March 2007, I updated to a modern programmable digital thermostat, which cost $40 plus a half hour of installation time, using only a screwdriver.

In the first 8 weeks, our gas use fell by more than half compared to last year, despite colder weather this year. The savings are at least $150. Summer air conditioning results remain to be measured, but the implication is we will save between $500 and $1500 in the first year, on a $40 investment.

This can happen because programmable thermostats are flexible. By day, you want the temperature at 67 degrees, but at night, no one cares if it falls to 62. That 5-degree change causes a nonlinear reduction in energy use — depending on outside temperature, it can be the difference between running the heater 10% of the time or 100% of the time at night.

Whether you value energy conservation or frugality, this is an astonishing result. The implication is that, if you have an old house, you can save more energy with a $40 thermostat upgrade than by buying a $20,000 Toyota Prius.

Prozac ate your net worth?

Thursday, June 16th, 2005

In the past 10 years, we have witnessed two of the four biggest asset bubbles in U.S. history: the Nasdaq in 1997-2000, and the mortgage bubble of 2005 (and counting). (5/3/07 update: a third mega-bubble is now taking shape in private equity.)

Irrational exuberance runs rampant, it seems. Why?

Interestingly, this historical anomaly has occurred at almost exactly the same time that SRI drugs (seratonin reuptake inhibitors, including Prozac, Paxil, etc.) rose to prominence, with millions of prescriptions written. Their express purpose: to make you exuberant, regardless of circumstances.

Not to say SRIs don’t serve a legitimate purpose. But somebody ought to run a regression analysis of Prozac prescriptions against Nasdaq — there’s a story there.