Aymco is wrong: there are several Apple imitators

[Crossposted at SpreadingScience]

apple by A Guy Taking Pictures

Why doesn’t anybody copy Apple?
[Via asymco]

Apple’s products are the envy of the world. They have been spectacularly successful and are widely imitated, if not copied. The expectation that precedes a new Apple product launch is only matched by the expectation of the replication of those products by competitors.

This cycle of product mimicry was succinctly summarized by Marc Andreessen regarding a rumored Apple TV product:

And once the television launches, everyone will scramble to copy it. ”There’s a pattern in our industry, Apple crystallizes the product, and the minute Apple crystallizes it, then everyone knows how to compete.”

This idea that the basis of competition is set by Apple and then the race is on to climb the trajectory of improvement is so well understood that it’s axiomatic: “It’s just the way things are.” Apple releases a product that defines a category or disrupts an industry and it becomes obvious what needs to be built.

But what I wonder is why there isn’t a desire to copy Apple’s product creation process. Why isn’t the catalyst for a new category or disruption put forward by another company? More precisely, why isn’t there another company which consistently re-defines categories and repeatedly, predictably even, re-defines how technology is used.

Put another way: Why is it that everyone wants to copy Apple’s products but nobody wants to copy being Apple?

[More]

I would submit that the question is wrong. There are several companies that have copied Apple – at least the Apple of Steve Jobs. Aysmco simply comes at the answer from the wrong view.

I say a few examples of those companies are Facebook, Google, Amazon and Tesla. “Why isn’t there another company which consistently re-defines categories and repeatedly, predictably even, re-defines how technology is used.” Asymco seems to miss the forest for the trees.

He even quotes Tim Cook who does have the answer:

Innovation is deeply embedded in Apple’s culture. The boldness, the ambition, the belief that there are no limits, the desire among our people to not just make good products [but to] make the very best products in the world. It’s in the values. It’s in the DNA of the company.

Read Increasing Returns and the New World of Business published in 1996 in the Harvard Business Review by W. Brian Arthur. You will see he described how to copy Apple while actually missing the changes Apple was making at the time. 

Even he did not see Apple coming, thinking it was MS that would lead. But he hit the nail on the head with how to recognize the leaders.

He says corporate leaders need to ask themselves 4 questions if they hope to lead the new economy:

  • Do I understand the feedbacks in my market?
  • Which ecologies am I in?
  • Do I have the resources to play?
  • What games are coming next? 

Now, there are many answers to these questions but I think there is a really easy rule that all these companies seem to exhibit – the feelings of Wall Street is only slightly material, if at all, to their plans.

Wall Street is useful for getting money to do what they want. But as for advice, well, Wall Street can pound sand for all they care.

The companies I mentioned all understand one thing – Wall Street is not a feedback. They know that their ecologies depend on empowering people, not making Wall Street richer. They generally create their own resources by their own creativity than by relying on Wall Street to provide the know how. And they know what games are coming next because they are creating them.

21st Century Companies, in contrast to normal ones, simply do not care very much about what Wall Street really thinks of them and are generally disdainful of Wall Street. Compare this to the normal CEO who seems tremendously cowed by Wall Street and worries every quarter of what to do to make them happy.

I think this is because these CEOs see their company as only a means to an end, as a way to cash out big time, not as a feeder for innovation.

In fact, the leaders of these Apple-imitating companies do not see cashing out Wall Street style as the next step – something most Wall Street types find confusing as they certainly would cash out if they could. Jobs, Musk, Bezos and others like them see their company as the end in itself and money as a means to that end. 

It is completely backwards from normal CEO worldviews. They have no exit strategy because they never expect to exit.

Apple under Jobs really cared little what Wall Street thought about  what it accomplished. It focussed on the feedback from its customers.

So it hoards billions of dollars and keeps little debt because that allows it to meet the feedback rapidly, even if Wall Street hates it and does not understand. And Wall Street gives Apple a very low PE ratio and Apple does not really care (we shall see how well Tim Cook really understands this lack of Wall Street feedback.)

Amazon barely has a profit and sells its tablets at a loss. In fact, Bezos seems to be quite happy barely making a profit while he increases the computing power of Amazon to eventually provide servers for all. Wall Street again fails to really understand, giving Amazon a PE ratio in the 1000s.

Facebook, while a public company, is still controlled by Zuckerberg not by any other investors. Yep, he took the company public yet still maintains a controlling interest. How in the world did that happen and why did Wall Street agree? I don’t know but Zuck can tell Wall Street to pound sand. He does not care and is free to do whatever he want.

In fact, I would say that the hallmark of a company that has successfully copied Apple is one that could really care less about what Wall Street says. They have created their own economy, their own ecology, that needs little feedback from Wall Street. They are successful in creating a sustainable company without being at the beck and call of Wall Street.

That is how you copy Apple.

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