Thoughts on Entrepreneurial Leadership and Steve Jobs

Like many of you I recently read, Steve Jobs, by Walter Isaacson, a deeply insightful study, especially for those of us up to our necks in technology entrepreneurship. Despite the obvious accomplishments of Steve Jobs during his career, the book deals with Jobs in all of his complexity. With Apple now the largest company in the world by market capitalization and the influence that Steve Jobs has had over the years on the technology industry, in many ways the book is a history of technology entrepreneurship over the last 40 years in Silicon Valley and globally. A few of the major themes in the book that I believe are rich food for thought.

• The Entrepreneurial Leader. I am a big believer in Jim Collins’s (author of Good to Great) view that the successful leader is confident but humble, tireless, a team player, maybe/maybe not charismatic, and often comes from inside the organization rather than outside it. Does this same model of leadership apply in entrepreneurship? I believe that it does with some caveats. It would be difficult to argue that Steve Jobs, even at the end of his career, was a “Level 5” leader as defined by Jim Collins in his classic Good to Great. The Jobs case-study is challenging to this archetype on many levels. Jobs’s biting remarks, selfishness, ego, willingness to spin the truth or even lie and overall lack of self-control are the stuff of legend and are well-documented in this book. However the results are difficult to dismiss — since Jobs return to Apple in 1997, the company has out-performed the NASDAQ by 10X ROIC. Also given Jobs’ dominant results in probably the most competitive industries in the world including, film, personal computers, music, cell phones, and now the tablet category — it can’t be written off as market timing or historical accident. I think this is illustrative of when management science meets reality. My take is that Job’s maniacal focus on product quality and long-term commitment to the Apple brand and consumer (both strong Level 5 leader characteristics) were enough of a strength to overcome his significant weaknesses (ego, selfishness etc…) Implication for Kickstart. Evaluations and judgments of people are the most difficult and the most important decisions that we make at Kickstart. The balance for us to strike is to invest in people that we believe in and can work with while recognizing in seeking for results a few standard deviations from the norm means working with entrepreneurs with strong personalities.
• Integrated vs. Horizontal approach. This is the classic tension between Job’s philosophy of owning the entire value chain (hardware, software, applications, packaging) vs. Gate’s horizontal approach to license software to all the hardware makers in the industry. It is interesting that this exact debate is now re-occuring between Apple’s IOS/ iphone approach to smartphones vs. Google’s Android. Clearly both approaches offer important advantages/ trade-offs. Android’s openness has lead to adoption by multiple hardware manufacturers and a proliferation of apps on the Android store — a this point it is out-pacing Apple in terms of volume on both fronts. While Apple has faced heat for its “closed” approach the fluidity and simplicity of its user experience has defined the industry. With the benefit of historical look-back it seems that the integrated approach gives distinct advantages in terms of controlling the consumer experience — being able to deliver products of the highest quality. My sense is that in the smartphone/tablet industry particularly, this gives Apple a long-term advantage product advantage in terms of allowing them to deliver a relatively seemless user experience compared to other platforms. Implications for Kickstart. At Kickstart, we have companies that are pursuing both integrated and horizontal strategies. The key consideration is mapping the product strategy to the demands of the consumer experience and the channels that service that experience.
• The role of market research. Jobs was famously skeptical of market research, in general he made decisions quickly and with little time for discussion. He believed in rigorous debate but was very autocratic. Jobs quotes Henry Ford on market research: Ford says that if he had asked consumers about what they wanted in automobiles they would have answered a “faster horse.” Implications for Kickstart. So how was it that arguably the most famous “product guy” in history had no regard for the iterative product development processes such as lean startup that are so pervasive today? Clearly there is a need for intuition in any product development process and the process of building hardware/ integrated devices is different than building a software product. It is probably true that the nature of the software-development process lends itself better to fast-cycle integration and rapid-prototyping and low-cost testing of important assumptions.
• The Power of Storytelling. Jobs was a genius storyteller. His ability to communicate his vision to customers, employees and investors was a powerful motivating force for all stakeholders. Nothing exemplifies this communication better than his epic product announcements at Macworld and other major conferences. What the book made obvious is that Jobs’ applied the same rigorous production values to these announcements as he would the design of his products e.g., taking hours or even days on such small details such as menus or lighting. The success of these product launches was no accident with each detail thought-through. Implications for Kickstart: Recognize that communications with the outside world help determine and create the perception of our companies. It is worth the effort to work through the details of the narrative until it inspires.