Saturday, January 21, 2012

Traits of Steve Jobs

Steve Jobs well known for his bad temper, cruelty against employees, arrogance and ignorance. Despite the intensity of his behaviour reduced as he matured, he defended himself as “This is who I am, and you can’t expect me to be someone I’m not”. In his book “Steve Jobs” Walter Isaacson (2011) writes “many would end their litany of horror stories by saying that he got them to do things they never dreamed possible.”
Other than his personal traits, which forced employees to the edge of their potential, it is important to scrutinize his business traits in order to use for later comparison.
Jobs lived in an environment where an emerging technology was well known and applied. So he had chance to meet and exchange ideas with enthusiasts of this new technology. Being in an environment where the emerging technology is widely acknowledged provides the entrepreneurs to closely examine the opportunities.

Jobs had a talented partner who is a computer expert, Wozniak, and Jobs had a never ending energy for marketing the product in local fairs. Business, no matter how gifted, is not a one man activity. It requires capital, knowledge and marketing expertise to produce a product or service. Focusing on a specific type of technology or product enables entrepreneurs to gain the opportunity for producing an innovative product thanks to the absorptive capacity of the experts in the production team. Jobs employed the best experts in their fields, which provided him the crucial input, the absorptive capacity, to make innovative products.
Silicon Valley was becoming an attractive area for venture capitalist, who made their fortunes from sectors like oil, finance, constructing and retail. Jobs knew that he needed capital to produce Apple II and his search for capital was met by Mark Markkula with a $250,000 investment. One other crucial asset for producing innovative products is the capital. Since a new technology is hard to produce and expensive to gain, entrepreneurs need seed/venture capital to establish in order to start and continue the production of the technological product. Also the technological products involve high risk of failure due to the changing and competitive nature of that technology, so a venture capitalist is crucial to back-up the entrepreneur financially in order to keep the company produce. So it is important to mention that strong venture capitalist structure is necessary for successful entrepreneurship.

Despite his young age, 25, Jobs managed to accumulate a personal wealth of $200 million. As well-known from the economy theory, the capital accumulation by the capitalist enables him/her to invest to new / emerging technologies. Also, Jobs was lucky for living in an era in which the world is experiencing a passage from modernity to post-modernity with the crisis of Fordism and birth of Information and Communication Technologies.

Jobs was not the only entrepreneur in the computer industry of course. There was strong competition among IBM, Apple, Commodore, Tandy, Atari, Texas Instruments and many other firms. Not only the computer production firms existed in USA but also there were numerous part producers who work in a vertical relationship with large computer production companies. The networks and interactions among these companies enabled them to keep each other informed about the innovations in the computer components and production processes.

From the very beginning it is seen that Jobs paid great attention for the usage of highest technological products available on the market and he had spent great amount time in the design of the products. There is not any explicit reference but it is possible that Jobs was very well aware why Commodore company went bankrupt, and he did not want to happen the same thing to Apple. Commodore 64 had a bad reputation in home users market that it is slow and low-quality.

Also it is necessary to mention that a strong Intellectual Property Rights (IPR) system enables entrepreneurs to gain the profits they deserved for investing capital and effort in the production of innovative products. USA is well known for its IPR system, and entrepreneurs, by knowing that they are protected against infringements, are more eager in innovation.

Despite his criticized management skills, his company was Jobs’ life. He dedicated himself for the survival of his company which operates in a harsh competitive environment. So another issue that deserves mentioning is the dedication of entrepreneur to his/her company and its products.

He experienced successive market failures of this company’s products, namely Apple II, Lisa and Mac. Despite they were very successful products their high price prevented them gaining a big portion of the market share. In a high-technology company that relies on scale economy to compensate the high investment expenditures, the market share is crucial. So Jobs experienced and learned the consumer markets by failing over and over again. It took many years and many projects to be able to come up with revolutionary products like iPod and iPhone.

By making investments in a computer animation company, Pixar, which operates in a very new industry, Jobs again was able to gain the opportunity of being the first entrepreneur in market full with high profits. This investment of Jobs may be used as a proof of his ability in forecasting the market for a technology, which eventually raised his personal wealth to $1.5 billion.
Instead of producing a large set of products and services, Jobs focused on a very limited set of products in Apple after he re-assigned as the CEO of Apple Computer Inc in 1997. This enabled him and the company to focus their limited resources on products that could make a difference for the company in competition. So, again, other than losing energy for a wide range of products, focusing on a limited product family seems to be crucial.

Jobs, with the release of Power Mac G3 and PowerBook, came up with a slogan, Think Differently, in order to create a consumer loyalty for Apple products by giving them the message that they could change the world if they use a Power Mac or PowerBook. Consumer loyalty is crucial for the survival of a company and Jobs was aware of it. He achieved this with the release of iMac and iBook which were really innovative products and increased the market share of Apple.
Another technological forecasting of the company was their positioning for market in which the digital lifestyles of next generation will have a big impact. So by focusing on the digital hub products, iPod was created. It became so popular that Apple acquired the %75 of the digital music player market. Again, it is seen that their ability to forecast the next big market enabled them huge profits.

iPhone was one of the most innovative product not only Apple produced but also any of its rivals produced. It revolutionized the way people communicate and interact. When dismounted, iPhone is in fact a bundled hardware which includes many technological innovations within it. Thanks to the technological advancements, the size of each component was small enough to be assembled altogether. So many man hours spent on the design on the product; Jobs spent in the design room of Apple with its design team lead for hours trying to make it more easy to use, more robust and more fashionable. His ability to bundle such new technologies and to present them in a fashionable was worth mentioning. Also creating an application market that is open only to Mac users is another marketing success of Jobs.
In one of his speeches Jobs said that he thought the iPad long before the iPhone but he decided that iPhone should be released first. By warming the consumers to the concept of touch screen electronics gadgets, he was well aware that iPad sales will be more easy and profitable. So, it is worth mentioning that Jobs had a strong insight about the market and about the consumer products. Despite the general belief that user involvement during the design of a product is beneficial for the success of the product, Jobs refused to involve consumers to the design process saying that “People do not know what they want until you show it to them”. Jobs was very interested with the aesthetics and the simplicity concept, but involving consumers to this process would increase the complexity of the final product. So again dedication of the entrepreneur and easy-to-use concept of the product are important to note.

It is necessary to summarize the above mentioned traits of Jobs as keywords, a high technology entrepreneur who successfully managed to innovate revolutionary products: Started at early ages of his life, being in the core of the technology valley, having computer enthusiast partner, marketing ability, opportunity-based entrepreneurship, focusing on a specific set of products, working with experts in their areas, connections with venture capitalists, using the high-quality latest components, a strong IPR system, dedication, business and market experience, technology and market forecasting, earning consumer loyalty, incremental innovations after a successful innovative product, attention to the design and usability, bundling and presentation of innovative products.

These keywords are useful in order to decide whether or not next Steve Jobs will be a Turkish entrepreneur or not, and if not, what kind of traits and systems needed to bring out the next Steve Jobs among Turkish entrepreneurs. For this aim, it is necessary to study the traits of Turkish entrepreneurs.

No comments: