The man who hired Steve Jobs explains Apple's 'dreadful problem'

The man who hired Steve Jobs explains Apple’s ‘dreadful problem’

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Atari Founder Nolan Bushnell: Managing talent should include more fun and games Photo: Flickr/Campus Party Mexico
Atari's Nolan Bushnell was a mentor for Steve Jobs. Photo: Campus Party Mexico/Flickr

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