As one of the only people who ever truly gave Steve Jobs a job, Atari’s Nolan Bushnell has a pretty big claim to fame. Now 71 years old, Bushnell gave an interview to The Australian Financial Review over the weekend in which he talked about Jobs, passing up the opportunity to become a one-third owner of Apple, and the big problem the company faces today.
Speaking about Jobs, Bushnell says, “Steve and I got to be very close friends. We lived about two blocks away from each other and he would show up on his motorcycle on Saturday or Sunday mornings, and we would go and get a cup of tea and talk about various business issues that he had and I would give him advice.”
This advice led to Jobs approaching Bushnell in 1976, asking for $50,000 to start a computer company — a cash injection that would have given him a third ownership stake in Apple. Bushnell turned Jobs down, since Atari was also making computers, and he thought it would be a conflict of interest.
“Yeah … that was a big mistake, what can I say?” he told the paper.
Perhaps Bushnell’s most interesting talking point in the interview, however, is his thesis that Apple now faces a “dreadful problem” that threatens to bring it crashing back down to earth.
“I think Apple has a dreadful problem,” Bushnell told The Australian Financial Review. “There is a thing called the ‘innovator’s bonus’ where you can get an extraordinary margin based on your innovation. Even though the fast followers can match your features, you get known for being the innovator, so your brand has a better image.
“That bonus used to have a half-life of about eight years. I think that has now shrunk to four at most. If [Apple] don’t continue with some remarkable innovation, then pretty soon their ability to charge premium prices for their products will go away.”
This is far from the first time Bushnell has leveled such criticism at Apple, however. Back in the mid-1980s, he was one of the few people publicly saying that Jobs getting booted out of Apple was a bad idea. “Where is Apple’s innovation going to come from?” he told Time magazine. “Is Apple going to have all the romance of a new brand of Pepsi?” (a reference to then-CEO John Sculley’s background as a Pepsi executive).
Nolan turned out to be right on the money at that point, but times have certainly changed since then. Sure, it would be great to still have Jobs at the head of Apple were he alive, but Apple hasn’t shown any signs of slowing down on the innovation front since Tim Cook took over as CEO.
I’d also argue that innovation is just one of the elements that makes Apple a success here in 2015. It’s quite possible to argue that Samsung is more “innovative” in terms of sprinting to new markets (smartwatches, for instance), given the amount the company spends on R&D and the number of ideas it throws at the wall.
Meanwhile, Apple sits back, lets other people make mistakes, then swoops in with a perfected product.
It’s less about getting the early adopters, and more about turning ideas into mass-market products. And it’s a more sustainable business because of it.
Source: Australian Financial Review
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
48 responses to “The man who hired Steve Jobs explains Apple’s ‘dreadful problem’”
i haven’t seen any innovation from apple, post jobs era. Can anyone supply me with examples?
Touch ID and Apple Pay
hardly innovation. Polished execution, maybe.
Both have been available since 2011 in various forms.
TouchID > Motorola Mobility Atrix 4G
So was the iPhone, so was the iPad. Both products weren’t new, but they were better than the competing products and got really successful.
It was execution of an idea that someone else did that didn’t execute well.
Using your definition of innovation, please tell us some innovative things Apple did during the Jobs era.
Developing new processes and hardware that made Apple Pay and Touch ID work better than previous or existing similar products or services, is innovation. The word “innovation” has been so bastardized by people making the same tired un-innovative comments, that we’d probably be better off if people just quit using the word.
I think people are confused with the term “innovation”. You can have a great innovation and if it’s not executed well, then the “innovation” is USELESS. Execution is KING. People need to get off this brainwashed nonsense about “Innovation”. There are plenty of “innovations” that either weren’t executed well or the innovation turned out to be more of a GIMMICK.
Innovations that are gimmicks: bumping a phone to transfer information.
What has anyone else come up with that’s innovative, well executed and started a trend that others followed? Screen size? Screen size isn’t an innovation and it’s not patentable, it’s just a different screen size.
Its always been polished execution. That’s the company’s claim to fame. Apple has never been first to market, for any device that they have ever created. But they have always created the most personal, and intimate experiences. That’s what there good at. This is what there competition, and most naysayers just don’t get. They think being first to market with a new/different, or so called innovative device will bring instant success. EX: GOOGLE GLASS.
innovation is a bit of a loaded word I think. Sometimes you don’t need innovation to succeed, sometimes simply doing what others are doing but better can deliver the kind of dividends and customers that a company needs to keep on keepin’ on. It’s often overlooked when people talk about Apple. Innovation is only part of the equation.
Exactly. More often than not, it seems like when it’s used in the positive, to describe something as innovative, the writer/speaker is usually overselling something, that in fact wasn’t very innovative. When it’s used in the negative (saying something is not innovative) it’s use tends to be very restrictive (nothing is innovative if anything like it has ever existed or was thought about). People need to be innovative with their writing and speaking and find ways of not overusing/misusing this word.
Seems to me if it’s from Apple with Steve Jobs, it’s “innovation”. If it’s from Apple post Steve Jobs, it’s not. And apparently, you’re the only person who’s never heard of the AppleWatch.
Innovation ≠ Invention.
in·no·va·tion
ˌinəˈvāSH(ə)n/
noun
the action or process of innovating.
synonyms:change, alteration, revolution, upheaval, transformation, metamorphosis,breakthrough; More
a new method, idea, product, etc.
plural noun: innovations
“technological innovations designed to save energy”
In the past year alone, Apple announced Swift, which has become one of the fastest growing languages of all time. The new iPhones and iPad and then there was Apple Watch. These are just some of the broad brush strokes of Apple innovation. The reality is Apple is still one of the most innovative companies on the planet.
You better listen to the man that passed up 1/3 ownership of the most valuable company in history. He’s packed with sage advice.
This is a silly comment to make as the company wasn’t worth much at the time and $50k was a lot of money back then. It wasn’t easy to see that Apple would eventually become successful. Knowing what we know today it seems obvious, but I probably wouldn’t have bet on Apple back in the early days.
Yeah, but you aren’t being interviewed to tell us what Apple’s “dreadful problem” is.
Apple does *not* “sit back” at all, quite the opposite. It is that they try to avoid releasing immature products. So, generally (but not always) others are first to market, but Apple’s version works better because of the extra work that went into it.
A fast follower type of company like Samsung does not create a better product, only a cheaper product. The reason is that fast copying does not afford the time needed to improve upon the original. It is incorrect to place Apple in that ‘fast follower’ category.
That’s not completely fair. Samsung has made some of the best TVs and panels best out there, and they’re competing exceptionally well in SSDs. You are correct, though, that they often try to win by aggressive price cutting of often mediocre or worse products.
Indeed, Samsung makes very high quality components, they deserve much respect for that. That’s why Apple still depends on Samsung as a supplier.
However, integrating design, manufacturing, hardware, software and services to create extremely appealing devices is Apple’s strong suit. Samsung has trouble designing better than merely competent stuff in comparison.
Fair enough. Samsung has made some Amazing TVs and chips and phones and … They’re also one of the few phone makers actually making profits. Still, one look at Apple’s products and numbers should be enough to convince that they’re in a category of their own at this point.
Innovation is not enough, ie. Google Glass.
The concept of Google Glass has been played around with, but since they aren’t executing well, they aren’t selling them and they’ve gone through 3 managers of the Glass project now and it’s still an unproven success.
totally agree with that last point! it’s a lot less about being the first one’s out of the gate. it’s about perfecting a product.
Apple is different from most company’s because of it’s cult following. Even without innovation, millions of it’s followers will continue to blindly buy whatever products they bring to market.
Or you can say that Apple’s track record of selling devices that people are extremely satisfied with is so good that they have earned the trust of their customers.
As much as you want to think that people are so stupid that you can keep selling them crappy products forever and they’ll just keep buying them, the fact is most people aren’t. There will always be that small fringe that descend into cult behavior, but when you sell 1 billion devices, I don’t think there’s a cult on earth that is that big.
Since Apple only represents a small segment of any market that it compete in, while Android, Windows, etc have overwhelming market share, it seems that you have your mindless sheep herd analogy reversed.
Guess you’ve been ignoring market share figures. How’s life with your head in the sand?
Market share again? Apple takes 86% of the profits for the ENTIRE mobile industry!
A mindless sheep is someone that buys into the products with the biggest market segment because they try to leverage that market share to validate their purchase………
Apple PURPOSELY doesn’t go after market share and both Android and Windows do. Why? Because their business models are different and in order for Google and Microsoft have to be successful, they have to try to create a monopoly due to their business models aren’t the same as Apple. Apple only goes after the market segments that are profitable. Look at all of the Android and Windows OEM mfg. NONE of them make very good Net Profits as compared to Apple.
Wrong, sorry. Game over.
Cult following? Every platform has their own cult surrounding it. Linux has a cult following, Microsoft has a cult following, Android has a cult following.
Maybe, but do you see people camping in front of their stores, for a week or longer, when a product is about to be released to the public?
Do you see hundreds, sometimes thousands, of people lined up for hours to buy an Android phone?
Do you see major motion pictures being made about the CEO of Samsung or Motorola?
Whether or not you like it, Apple is a different kind of company.
Wow! Are you still stuck back in 1997?
Cults are usually small and insular, not HUGE like Apple’s customer base at this point. Calling them different from most companies b/c of cult following may have made a bit of sense in the late 90s. Now it’s just goofy.
It takes more than a cult following to make 18 BILLion DOLLars in profit in a single quarter.
NOW SCRAM before we make you drink the Kool-Aid! (Just kidding!)
I would hardly call Samsung’s thrashing about, spewing out one half-baked or ill-conceived dud product after another, hoping that something sticks to the wall, as “innovation”. Experimentation, perhaps.
What Samsung does is they spit out all of their “prototypes” and pass them on as a finished product. Apple, on the other hand, only spits out what they feel is their best “prototype” and if they did their job, the product sells well, if not, then they have to fix whatever was wrong to improve the problem or figure out ways to improve on it since newer technology becomes available or more affordable. It’s a lot easier to make money by just making two models and going after the market that has decent profitability, rather than just constantly spitting out models to see if they can get one of them to be a hit, which is rarely the case since they are just confusing their own users.
Looking back in history and saying “it’s quite possible to argue that a company like Samsung is more “innovative” in terms of getting to new markets (smart watches, for instance) first” may be ignoring the long term rumors that Apple was working on a smart watch, this was no secret, Samsung’s innovation was copying the idea and bringing something to market first. Still to be seen if it will become a major innovation for Apple, but I’m quite sure Samsung’s smart watch wouldn’t be selling very many till it can copy features designed by Apple engineers.
Otherwise, very nice story…
Yeah, you’re absolutely right. The trouble is that “innovation” is such a loaded word. Does it mean getting something out before anyone else, or does it mean tweaking it to turn it into a workable product? Apple does the latter, although there’s plenty of the former type of “innovation” that happens behind closed doors and never gets out.
The only reason why some think Samsung is more innovative is because they’re not as secretive as Apple in that area. Nobody really knows what they come up with next.
People dont care so much for innovation as much as they care for reliable features. Android has plenty of innovations and they are called gimmicks.
New ideas (innovation?) are the easy part, but successful execution is the hard part and the part that Apple does better over and over. Who gives a f… who had the idea of a smart phone or a tablet … or a personal computer, even. At the end of the day it’s all about the company that manifested best.
Success is the ultimate proof of a success.
Innovation to me was iTunes and the paying for music from your computer with a credit card not having to go to the shops to get the cd. Not only that but Apple gave you a portable device called the iPod to play the bought music on. That as far as I know had not been done before.
The personal MP3 player had been out a while but the joining of a player to a piece of software I hadn’t ever heard about.
You couldn’t talk about iTunes without mentioning the iPod and vice versa. For a long time people I knew thought you could only use one with the other and that was excellent marketing.
I have two words for you, Jony Ive….
Followed by “64 bit”…
Oh, I didn’t know they’d upgraded him already. :)
Wow. Even someone like Bushnell saying Apple is doomed.
Sounds like sour grapes for missing out on becoming a multi-billionaire. I don’t buy it.
As others have stated here Apple rarely “innovates” as much as they “perfect” existing technologies and when Apple does innovate like with the Newton it often finds itself too early or too late to the show. What Apple does do is use their unique blend of style and function together with the best advertising staff in the business to create products consumers want, crave, NEED that also happen to be well designed and manufactured and also come with an infrastructure that is almost as appealing as the product itself. Is the iPod or even iPhone as big a hit without the iTunes Store? I think not. Apple’s ability to create and expand their universe of products as a seamless entity is the real secret of their success. Steve Jobs was an absolute wizard at recognizing what customers wanted before they themselves knew and then supplying that need with great products and maybe even better advertising. One might imagine that Steve Jobs real legacy to Apple is all the ideas and concepts he left behind that Apple is working on now like wearable technology and expansion into mainstream consumer electronics with an Apple designed television. Again innovation is not the word you use with Apple. In some cases renovation might be more appropriate… :-)