The Blessing of Failure

Last month marked the first year anniversary of the Apple Watch. While there’s little doubt it has sold impressively for a first generation product, if you had to associate one word with it… well, what would it be?

Confused?

What is its purpose? Sure, it boasts impressive sales; but what if people aren’t wearing it, and really they only bought it in the first place because of their faith in Apple — rather than because Apple got the Watch right?

And if that’s true, then perhaps the most important question of all becomes: how did the best product company in the world — one famous for shipping things that people didn’t even know they wanted until after Apple showed it to them — ship something that people aren’t really sure they want?


If you step back, there’s a parallel here — to another company, one that also seemed to be poised to win the next paradigm of personal computing. This company’s core product had by and large crushed its competition, and although its founding CEO had recently stepped down, it seemed well positioned to dominate things in the next big market. They had used integration of its new product with the previous paradigm as a key selling point, and early on had reached the point of being the most popular product in its category in the US.

I’m talking, of course, about Microsoft — and its attempt to win mobile.


Here’s the thing about big tech companies: unlike startups, if they don’t manage to obtain product-market fit within a new category, they’ll probably still survive. If said big tech company is lucky (or they’ve been successful enough in the past), they’ll often get multiple swings. This dynamic means that, in the context of tech’s ongoing paradigm shifts, the competition between these companies makes for fascinating viewing.

One thing has become apparent as this story has played out many generations over: the curse of success runs deep.

At the turn of the century, Microsoft’s victory in the desktop wars was complete. In fact, it was so emphatic as to result in the United States Government bringing an anti-trust case to bear on it (as did the EU). Beyond those cases, nobody could see a crack in the walls of the empire. Steve Jobs famously made peace with Microsoft at Macworld, in exchange for Microsoft guaranteeing the Office suite would continued to be published on the Mac platform (without which, Apple might well have died). And Internet Explorer had headed off the Netscape threat at the pass.

For all these reasons, Microsoft seemed perfectly positioned to take the mantle in the transition that was to come: mobile. They certainly had the vision to see the shift coming; Bill Gates publicly demoed smartphones as far back as 1997, and even went so far as to update Microsoft’s vision statement in 1999 to reflect mobile’s growing importance. Microsoft leveraged their dominance on the desktop to build impressive momentum — and by 2007, they had gained the position of most popular mobile operating system in the U.S.

It wasn’t to last.

Microsoft could see the future coming. But their vision of the future was predicated in what had made them so successful — the past. Their success, and the culture that had sprung up around it, meant that they couldn’t untether themselves from the paradigm of the PC. And so that’s what they shipped. Sure, it looked like a phone, but really, it felt like a squashed-down computer.

People tolerated this because they wanted mobility, but was the right answer one in which the starting point was the past?

Apple soon provided the answer to that question. But they also demonstrated something else: if there is such a thing as the curse of success, there’s also a corollary: the blessing of failure. It’s almost hard to cast your mind back now, but in the early 2000s, Apple’s desktop offerings were so marginalized that it was easy for them to to imagine a world without the PC at the heart of it — simply because for most people, the PC that they had was running Windows.

And Apple had no interest in imagining that.

This meant that when Apple set out to build a phone, they weren’t anchored in the existing paradigm — and they certainly weren’t going to build a product to support someone else’s.

Apple were freed from the shackles of the past. The failure, relatively speaking, of the Mac, sowed the seeds of success with the iPhone — a product which has propelled Apple to being the most valuable company in the world.


Last month was the one year anniversary of the Apple Watch. But we’re also nigh-on the ten year anniversary of the iPhone. As we crest the smartphone wave and come down the other side, it’s time to ask: has the tide turned?

Apple’s big bet on it’s post-phone future is the Watch. This is how the Watch was introduced:

Look familiar?

Apple’s position in the market now is much more analogous to Microsoft’s, back when Microsoft was trying to navigate the shift from the PC to mobile.

And it appears that Apple has fallen into exactly the same trap. Rather than start anew — with a beginner’s mind—what the above reveals to me is that they’ve tried to take the last paradigm and just jam it into the new one. The old has bled into the new. The result, at least as it stands now: just like Microsoft did, Apple knows what needs to be built — a phone-disrupting device. It’s just that they can’t bring themselves to let go of the past in order to do the job properly.

The result is a product that is half intended to rely on the iPhone, and half-intended to replace it. It’s part mimicking the iPhone, and halfway to reimagining it.

Well, where I’m from, we have a term for this: one foot on either side of a barbed-wire fence. As a result, Apple are leaving themselves open to exactly the same fate that befell Microsoft back in 2007:

Slipping.


This phenomenon is also worth considering in light of another contender for the smartphone crown. One that failed dismally: Amazon. Amazon famously poured a huge volume of resources into its Fire phone — Bezos himself was personally, and very heavily, involved. It turned out to be one of Amazon’s biggest flops, and Amazon will not remember its foray into the smartphone era fondly:

You know it’s bad when Time Magazine runs this headline

And yet, right now, Amazon are sitting atop one of the most promising platform-like products that has emerged post-smartphone: the Echo. It’s a surprise hit. Rather than try to supplement the phone, Amazon understood the way in which you’d engage with a device at home was fundamentally different from the way that you’d engage with a device like a phone outside of the home.

And so they didn’t try to add a whole host of interaction features from the previous paradigm. There was none of Microsoft’s adding keyboards and styluses to their phones. Nor was there any of Apple‘s three modes of interaction for its Watch (through a dial, through voice, through a touch screen; and with a home screen full of apps, too… a kitchen sink design effort if ever there was one).

Instead, you interact with the Echo just one way. And just as Apple nailed the touch screen of the iPhone because that was the only was to interact with the device, Amazon have completely nailed the interaction method of the Echo: voice.

It really is awesome.

It’s focused. Almost as if Amazon were able to approach the problem not sitting atop a monumentally successful phone business.


There’s still a long way to run in the search for the killer post-mobile products and platforms.

When Microsoft demoed the very first Windows CE devices back in the nineties, the true killer product — the iPhone — was not to come for almost another decade. So we’re likely early days yet.

It’s also hard to bet against a company like Apple. They have an unbelievable track record — with many firsts to their corporate crown. But at the same time, with the above in mind, I challenge you to think about the number of companies that have successfully managed to dominate generation after generation.

And so as we reach the beginning of the end of the smartphone epoch — and as the next begins to take shape — this is the challenge Apple faces.

The question becomes: are they going to be able to get there without the blessing of failure?


If you enjoyed this, I’d appreciate you hitting the recommend button (the little heart) below; or even the follow button. If you’re interested in receiving an update when I post something, whether it’s on Medium or elsewhere, I have a newsletter you can subscribe to here. It’s on the intersection of managing business and managing yourself.

You might also enjoy my podcast, Exponent, that I co-host with Ben Thompson. We talked about this topic on Episode 70.

Finally, my thanks to Andrew Nunnelly for reading a draft of this and providing excellent feedback (and for his impeccable taste in gifs).