At Apple, everything is “revolutionary”

Apple launched its App Store for the Mac today. The press release announcing that the store was open for business includes this bit of puffery: “The Mac App Store brings the revolutionary App Store experience to the Mac…”

Revolutionary. Hmmm, where have I heard that word before? Oh yeah, in just about every Apple press release since 1999. – Ed Bott, ZDNet

When I first read this article I thought, “Ha ha yeah, puffery indeed.”

But soon after, I realized that this isn’t mere puffery.  When Apple uses “revolutionary” it’s not just PR, but a key Apple secret hiding in plain sight.

When Apple creates products, they are asking themselves every time “Is what we are doing revolutionary? What would be revolutionary? Okay, let’s do that.”

• A revolutionary music player would let you have 1000 songs in your pocket.
• A revolutionary battery would tell you how much charge it has
• A revolutionary adapter cord could be yanked out intentionally or accidentally without throwing your laptop on the floor
• A revolutionary laptop would hold enough of a charge that you wouldn’t need to replace the battery and could make it lighter than ever
• A revolutionary movie editing program would…
• A revolutionary phone would…
• A revolutionary tablet computer would…
• A revolutionary retail store experience would…
• A revolutionary product package would…

This is important.  Apple is one of the very few companies that hits it out of the ballpark again and again and again.  For the largest and smallest things, Apple is asking, “What would be ‘revolutionary’?”  They are starting by thinking through the radical innovation and working backwards to figure out what it will take to get there.

Anyone else who doesn’t think this way — and that is almost everyone except the Google, Amazon and few others — is anchored firmly to terra firma by the incremental requests of current customers who can only possibly know to ask for what they know they need today.  They cannot envision the revolutionary solution.

Being revolutionary is easier said than done. It’s higher risk: higher cost with the expectation of radically higher return. You have to accept expensive failures (Apple has had plenty).  You have to mold your organization around the product you need to create, rather than creating what you are already good at creating.  You have to fend off the pragmatists and naysayers who don’t think achieving a revolution is possible or worthwhile.  You have to know your customers and their deep needs far better than they do.  And you have to have the organizational competence to do it from top to bottom.  That includes the vision to generate and curate revolutionary possibilities, which is somewhat rare but can be nurtured with practice.

A good place to start, today, is by getting your best and brightest away from their regular environment and asking, “What would be ‘revolutionary’?”

And it’s spurred plenty of streaming competitors.  Vudu and Amazon are offering recent release movies streaming (at a premium price).  Today you can only get that stuff from Netflix in hardcopy (i.e. physical DVDs).

Netflix can’t sit still for this.

Their x-disc-at-a-time concept, while brilliant in the era of shipping atoms, is quickly becoming obsolete.  When you are streaming you don’t just have 4 movies to pick from at once, you have thousands.

So I’d expect Netflix or its competitors, to shortly:

• have a premium streaming service, and broaden their business model to permit more recent movies to be rented.  I’d expect something like, “Unlimited streaming of main library, up to x premium movies per month for $y dollars.” with a range of values for x and y.  This way it’s seen as an expansion of what they offer rather than taking something away.  They collect the higher fees to offset the higher licensing cost.  They continue to get recurring revenue.  And customers still get that happy Netflix feeling of abundance.  You don’t have to deliberate about making and paying for the rental each time.  It’s prepaid.  Just watch and enjoy.

• stream everything.  The moment a produced show has finished being broadcast, make it available on streaming.  Why not?  There’s a need for it, a demand for it and there’s nothing technically stopping it from being real.  When there is a clear gap like this, it’s a safe bet that it will be filled.
• Stream premium live events like concerts, sports events, operas, symphonies, plays, speeches, special-interest events and count it against the premium quota.  Over-the-air broadcasts have a role (it’s the cheapest way to distribute the bits), but it should keep diminishing in favor of specialized content that each viewer cares about.
• Expand internationally like crazy to be the world’s provider of streaming content.  The underlying customer needs are universal.  It’s another obvious gap that not every country has Netflix.

Let’s see how long it takes these predictions to pan out!

Now what next… is it REALLY just about creating iAds?  What are the broader direction and implications of this tool?  What’s the business case?

Is it the HTML5 substitute for Flash, the exit for people going, “okay, flash bad, now what?”

Why would they?  To sell tools?  That would be something.

Tools which only run on Macs and therefore which sell Macs?    Sure, that’s nice too.

What about the influence such tools would have on the creation of great experiences…. great experiences that require modern browsers… like, say Webkit browsers… like, say Safari… which is a revenue generator for Apple?  Yeah maybe, but an indirect benefit for Apple.

Or, what about the presence of awesome, effective dynamic ads on the iPad?  Why just on the iPad? What if it connects to Apple’s ad infrastructure on, I don’t know, any browser on Macs and Windows?  Which get Apple more seriously in the ad provision business?

Apple, the ad agency for the web?

There’s an extra reason why Steve Jobs has been using his considerable cred to undermine Flash: because Apple wants to take over the tools business for animation & high-fi UI creation from Adobe.

What is the argument?

HTML5 isn’t really an apples-to-apples replacement of Flash/Flex. People make a Flash/Flex comparison wrongly, because HTML5 is a lower level technology.  Or to put it differently, it’s not a whole technology stack.  There isn’t a proper authoring tool or higher level constructs or development environment.  Nothing compared to Flash/Flex development environment, anyway.  The world still needs such tools for HTML5, but the technology is still too young, or maybe nobody has thought of it yet (ha).

Apple has been maintaining secrecy and control over iAd development.  iAds are rich experiences based on HTML5.You want an iAd?  No problem.  Fork over a million bucks for the campaign and Apple will build it for you.  Does Apple really intend to be an interactive agency and do all iAds forevermore as (some highly paid people believe)?  Of course not; it would never scale.  My take: Apple is controlling the iAd creation process now to bootstrap their proprietary authoring tools for rich HTML5 content.  When they are ready, the world will get them.

It’s analogous to the first iPhone which everyone criticized for being a closed platform.  (People forget that the iPhone didn’t always have an app store.)  Duh, they were working on a killer SDK the whole time.  It just takes time.  Same thing here.

If you haven’t noticed, the web is still a sucky user experience compared with GUI apps.  The world needs high fidelity user experiences delivered as web apps.  Flash and Flex and Air could have been contenders but have faltered.  Google has made heroic strides with Google Maps and Google Docs and Google Spreadsheets.  Amazing what is possible by stretching today’s tech to the limits.  But still nowhere near the fidelity of a desktop app.  The field is still open to creating the basis for the next generation of web apps.  Apple is the user experience company.  2 plus 2 equals 4.  There’s an opportunity for Apple to drive the next generation of web apps that feels as slick and polished as a desktop app or even better – an iPhone or iPad app.

By the way, Palm gets credit for proving with its WebOS and the Palm Pre that good old HTML/Javascript can serve as the technical foundation for a high fidelity user experience.

Finally, take a look at Apple’s recently launched me.com login page.  To paraphrase AC/DC, it’s the best damn login page I’ve ever seen.  The components load in a logical sequence, not arbitrarily and messily as is the norm today.  Everything is sculpted.  The input focus field glows.  If you type in the wrong password it “shakes its head” like the Mac OS X login dialog.  And there’s a lovely Flash animation of magic dust gracing elegant outlines of iPhones and iPads.  Except it’s not Flash because Apple hates Flash.  It’s an extraordinarily Flash-like animation done in Javascript.  Was all of this hand-coded from scratch?  Sure, it could have been an eager Apple engineer’s hand-coded pet project, like these other cool HTML5 demos.  But my guess is it’s another manifestation of some killer hi-fi UI development kit for web apps.

And of course Apple is a key driver of webkit, so they have what it takes to make browsers bend to their will.

If I’m right, Apple’s got a Flash/Flex/AIR-killing tech up its sleeve that it will unleash within a year.  Which begs the next questions: what is their ultimate motive, and how influential will it be?  And if I’m wrong, who will create the badly needed Flash-killer?

Here is how their nice graphic links to my uglier but more specific one:

Optimization only goes so far. UX Designers need to make bold leaps to find the next mountain

Getting to that higher peak is where product vision comes in.  Optimization methods (including metrics-driven design and usability testing) don’t take you there — you need product vision methods.

After the initial rush, nobody will buy it, except for:

1. Gadgetphiles (because it’s nifty)
2. Anyone who was considering a Kindle.  (I mean, why bother?)
3. Anyone who needs a living room surfing computer
4. Anyone who travels a lot
5. Apple-philes (who must collect ‘em all)
6. The status conscious (you look mahvelous with it)
7. Your parents, who will receive one as a gift from you (especially when it does video conferencing)
8. Lucky kids of wealthy people
9. Many who had been considering getting an inexpensive netbook.
10. You, because you will receive one as a gift.  (And you will love it.)

So  please temper your expectations.  Except for these groups of people, nobody will buy an iPad.

Legendary.

1. Satisfy important unmet needs
2. Convince people that they are doing #1 (whether or not they actually are)
3. Exploit a human weakness
4. Exploit cracks in the system (creating them if necessary)

You might want to think about this a bit.  What types of companies epitomize each?

The focus of this blog and my company is succeeding on the basis of method #1, satisfying important unmet needs.  It’s the sustainable, no-BS way to go about it.

But we must acknowledge that companies can and do succeed — at least from a financial standpoint — without actually having to do so.  You can, in fact, make a good living selling snake oil.

How about you?  How does your company succeed?  What type of business do you, personally, like to be involved in?  Which of the four are you personally driven to, and which are you repulsed by?

A commenter asked, and I paraphrase, “The question is, will people care? Is existing voice quality ‘good enough’ that a jump in quality won’t matter that much?”

What is important about this question is that it gets to the product vision skill of being able to distinguish revolutionary technologies from those that only sound revolutionary.

One guy seemed to think HD audio was radical, “This is a bigger innovation than cameras on handsets or app stores for the industry.”

Is he right?  Here was my response on Steve’s blog:

Will customers care about HD audio? I like to think about these things in terms of needs. The HD audio people cited in the NYTimes thinks that this is more revolutionary than the camera in the mobile or the app store.

The guy is wrong. The cellphone camera and the app store are important because they enable the satisfaction of a host of new needs and scenarios. You can now email a picture of a sinking airplane from a boat on the Hudson river.  The innovation is valuable to customers because more real needs are being met.  Simple as that.

HD audio,while difficult to do and very welcome, is still an incremental innovation to customers, because it merely does a better job of addressing needs that were adequately covered for the last 70 years.

In the market, incremental refinements like HD Audio are not irrelevant, but they tend to be tie-breakers.  Given two otherwise equal offerings, a customer might as well choose the more refined one.

Eventually the competition responds, and the refinement becomes table stakes for all players.  But until the advantage is neutralized, the company with the more refined solution has bragging rights that can distract customers from more important unmet needs.

It may be fairly obvious that HD audio is a nice-to-have, because we are all intimate users of telephony.  However this way of thinking — connecting the technology back to scenarios and needs — applies to less familiar ideas.  It’s a useful way to break through reality distortion fields and make predictions about the true relevance of exciting looking technologies to customers.

And if none of us make it that far, why not make as much money as we can?

Here is an inflation-adjusted chart of 100 high-tech companies (click for interactive chart):

This chart is a useful reality check on business plans.  It’s very hard to be a “rocketship” – one of the red curve companies in the chart that attains $50mm within 5 years.  Neither Microsoft nor Oracle did so and if your business plan says you will, it’s probably incorrect.

Nokia reported a $1.36 billion loss in the third quarter as the company wrote down the value of its wireless networks venture by $1.35 billion and global sales declined 20 percent.

The company [..] acknowledged that its lead in smartphones, the fastest-growing segment of the market, had fallen to 35 percent from 41 percent, losing ground to Apple’s iPhone and Research in Motion’s BlackBerry devices.

Nokia’s problem is not execution.  It knows how to build things and bring them to market: it cranks out new models by the dozen.  Its problem is not innovation, at least not at the tactical level: every feature you’ve heard has made it into a shipping Nokia device.  Nokia’s problem is in product vision, of being able to imagine a coherent future reality with an ideal smartphone.

You might think that Nokia, with 25 years in the business, wouldn’t have allowed itself to be surpassed so easily.  But we should expect it.  It’s common pattern among big, old, successful companies.  Sony, Dell, GM, Motorola and countless others have fallen into the product vision trap, opening the door to disruptors.

Product vision becomes a bigger factor the more dials there are to turn in product formulation.

Sony traveled a similar arc in consumer electronics.  Sony was untouchable when their gadgets did only one or two things.  Like Nokia, it could master those core capabilities and move on to providing a variety of product variants for every segment, on marketing and on operations.  These were the business drivers as long as there was a steady state in the market.

But as technology enabled new classes of products, those old recipes no longer worked.  As the number of dials to turn in product formulation increase, the tried-and-true approach of cranking out incrementally better products breaks down.  Leadership gets overwhelmed by the plethora of choice.  In lieu of product vision to guide the way, they resort to guesswork, throwing everything against the wall to see what might stick.

Without a clear, coherent image of how things should be, design suffers.   Nokia’s products (and Sony’s, and Motorola’s, etc.) became complex, incoherent, and frustrating to use.  When products take on more capabilities, keeping things simple gets exponentially harder, because every feature relates to every other feature.  The possible associations grows with the square of the number of features.  (Even the best-of-class iPhone and Palm Pre are not immune.  Both could do their core tasks considerably easier.)

When products get more and more capable, the only way to cut through the jungle of choice, and the only way to keep the user experience coherent is with a clear product vision.

PS: Nokia has the market power but not the product vision.  Palm has the vision but not the market power.  I’m hungry for my Reese’s Peanut Butter Cup.  When will Nokia acquire Palm?

—

Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones.  To follow him on Twitter click here.

Mr. Jobs [..] insisted that Disney build a prototype store to work out kinks, a costly endeavor that most retailers skip.

Most retailers skip the prototype step for store redesigns?  Really?  Then how do they know the full rollout, which is much more costly, will work?

What is this, advertising?  (ba dum tchhh)

your top priority is to ensure that the team is building something worth building, and that the development team is a very big investment for the company and should not be wasted, either by having people waiting around or by rushing to build something that will just have to be done over again later.

Enter, product vision.

• a second on-board OS (Linux) and subsystem for instant-on computing:

“Some users Dell surveyed spent 70 percent of their time working in the instant-on mode. Microsoft is sure to take note of that figure. Windows has turned into a clunky, cup holder.”

(Then again, this sub-system is not integrated with the main system.  Different OS, different file system, different apps.  It’s like having a cheap netbook hacked into your laptop.

This all points to the still-unmet need of a truly instant-on system.  I still await the time when our main laptops achieve the instant-on performance of the 1983′s TRS-80 model 100.)

• a docking without cables, including inductive charging (is that energy efficient?),
• wireless USB (sweet!) and:
• wireless display interface (beat Apple to the punch)
• a super thin enclosure (Zzzz)
• an interesting black cherry finish (ooh aah)
• “the right side of the monitor acts as a sort of touch-wheel, letting you scroll through application icons and start applications just by rubbing your finger along the edge of the laptop.”

  It reportedly doesn’t work well in this incarnation, but the idea of having more touchable surfaces has potential.  (Wouldn’t it have been more convenient to reach along the edge of the base rather than the edge of the display?)

• a few other minor innovations

Good for Dell.  These premium innovations can be perfected, reduced in cost, and trickle down over time to their lower end hardware.

Take this as a sign that the world is finally learning Apple’s lessons.  Consumers will be better off.  Product companies better be prepared for more intense competition.

My big question: did Dell pull all of this off in-house?  Or did they enlist the help and vision of an external innovation agency?

If you can’t beat ‘em, buy ‘em, and then either grow ‘em or eliminate ‘em off the market.   It’s a common tactic for the big guys who have trouble growing breakthrough products in-house.

The problem is, it’s too risky to be a reliable strategy.  A competitor might snap up the company first.  It could start a bidding war forcing you to overpay.  Bad acquisitions will happen, as with any huge investment.  (I’ve seen too many).  And the upstart may refuse to sell themselves to you for inordinate greed or non-business reasons (such as, you are Microsoft).  You have to be among the fattest of cats to be able to absorb this risk.

Intuit has struggled to invent substantial new products.  And the Quicken business was slowly dying off (even Microsoft exited the business).  Intuit got a great deal by buying the disruptive Mint.com for a mere $170m.

Let’s focus on a great Yahoo! Our average user is just trying to get through the day…looking to find out what’s going on in the big world and their own world. They want their Internet site to be great, and to work. They don’t care about how or about deals. They care that we are a trusted dependable site.

That is our simple mission. Focus on it!!!

Let’s itemize that.  Yahoo’s simple mission is to:

1. Help users get through the day
2. Help users find out what’s going on in the world and their own world
3. Make an Internet site that is great, and works
4. Have a site that is trusted and dependable

That’s a rather hazy vision to try and focus on.  Only #2 provides a modicum of guidance.  And even that amounts to, “Let’s do more of what we’ve been doing for the past 10 years.”  If that was the right strategy I doubt Yahoo would be where they are now.

Someone could use a little help with their product vision.

1. The New, Faster Face of Innovation

This article discusses the qualitative changes taking place in the nature of innovation itself:

Technology is [..] allowing companies to test new ideas at speeds—and prices—that were unimaginable even a decade ago. They can stick features on Web sites and tell within hours how customers respond. They can see results from in-store promotions, or efforts to boost process productivity, almost as quickly.

The result? Innovation initiatives that used to take months and megabucks to coordinate and launch can often be started in seconds for cents.

And that makes innovation, the lifeblood of growth, more efficient and cheaper. Companies are able to get a much better idea of how their customers behave and what they want. This gives new offerings and marketing efforts a better shot at success.

2. Succeeding with Scrum: Start by Creating an Effective Product Vision

A common question I am asked is how my product vision process fits in with Agile.  The short answer is that they are complementary.  The product vision process is for establishing the product vision.  Agile, on the other hand, is a development methodology.  It can help tune the vision, but it is not a proper process for generating the idea.

Have you ever worked on a Scrum project where the overall goal was not clear? Where you had a product backlog but the people involved in the development effort only vaguely understood the purpose of the release? It happens more frequently than any of us would like, even on projects with multi-million dollar budgets! Often Scrum’s emphasis on “getting work done” is misunderstood as a rush to develop with not enough thought to where the project should be going. Don’t make that mistake. Every Scrum project needs a product vision that acts as the project’s true north, sets the direction and guides the Scrum team.

3. Apple Afraid Google is Taking Over the iPhone?

If you consider yourself a student of product vision and strategy, you might want to follow the fascinating dance playing out between Apple and Google.  Two of the world’s most visionary companies are erstwhile friends, and now, looming competitors.  Techcrunch has the scoop:

[..] Apple expressed dismay at the number of core iPhone apps that are powered by Google. Search, maps, YouTube, and other key popular apps are powered by Google. Other than the browser, Apple has little else to call its own other than the core phone, contacts and calendar features. The Google Voice App takes things one step further, by giving users an incentive to abandon their iPhone phone number and use their Google Voice phone number instead (transcription of voicemails is reason enough alone). Apple was afraid, say our sources, that Google was gaining too much power on the iPhone, and that’s why they rejected the application.

4. Reed Hastings on Culture of Innovation

This slideshare on Netflix’s corporate culture is really about your corporate culture.  There are enough powerful insights and ideas here to warrant multiple careful viewings:

Lots of companies have nice sounding value statements.  Enron had a nice-sounding value statements with 4 values: Integrity, Communication, Respect, Excellence.  Their four values were chiseled in marble in the main lobby, but had little to do with the real values of the organization.  The real company values [..] are shown by who gets rewarded, promoted, or let go.

This remarkable deck on Netflix corporate culture reflects what he figured out in those two years.  It’s longish, but worth grabbing a cup of tea, closing your door, and taking time to reflect upon each slide and what it says about your company.

Reed Hastings has been added to my list of heroes.

But if it were to happen it would have to be done right.

Over at my sister blog, StealThisIdea, I describe a strategic approach for newspapers to start charging for content, that borrows heavily from the proven precedents and takes customer psychology into account.

Please check it out:  How to transition newspaper readers to paying customers

Earlier I wrote about the need for fundamental cultural transformation at GM.  I was cautiously optimistic that bringing in outside leadership might usher in real change.

Well, the “new” GM has brought back some old leadership, Bob Lutz, and here is what he had to say:

The problem we have right now is getting the breadth of the American public [..] to realize the transformation that has taken place in GM’s quality, design, fuel efficiency and so forth, and to expunge some of these hoary old conventional wisdoms that General Motors builds gas guzzlers, General Motors has sloppy interiors, General Motors this, General Motors that, none of which is true anymore.  But it tends to get endlessy repeated in the popular press.

Incredibly, this is the same story that GM has been telling itself for years.

Dear Bob, it cannot possibly be true that GM is transformed.  You just emerged from bankruptcy. You are still necessarily selling the cars built by the old GM.

Those “hoary old conventional wisdoms” you deride?  They are true.  Anyone who rents a GM vehicle can reconfirm this for you in a minute.

Your biggest job right now is not to “get the American public to realize the transformation that has taken place.”  That’s the old PR-driven culture rising from the ashes of the old GM.

Your biggest job is to actually to create better products for customers.  Drive success by driving better products that customers will, um, want to drive.

In contrast is Ford Motor Company, which, while suffering, is managing to get by without government bailout money.

What’s so different about their culture?  A group of prominent shareholders who passionately care about the company, the descendents of Henry Ford:

The Ford family members own a special class of stock that gives them 40 percent voting control.

“I feel this is one of Ford’s greatest assets, and one that G.M. has never had,” said David L. Lewis, a business historian at the University of Michigan. “The family has been an oasis of stability through the years.”