Bill Gates, Andy Groves, and Steve Jobs’ 3rd Strategy: “Build Platforms and Ecosystems—Not Just Products”
By Zulfiqar Ashraf Chaudhry
Roseville, CA
Most people have heard this worn out African proverb: “It takes a village to raise a child.” If what is true to raise a child can also be true to “raise” a successful product (say an iPhone) or a healthy society (say a Pakistani society), GGJ have already answered the first question in affirmative; as for the second question, we will have to wait and see.
To build a successful company (or a society), one must develop stable platforms and eco-systems (culture of safety, Justice, meritocracy), where others (villagers) can participate freely to enhance the product (child). For example, iphone’s success was initially linear, but eventually became exponential when Jobs allowed third party developer to make Apps for it. He provided them with the strict standards, in the form of platform and the Eco-system, to enhance his own child: iphone. (Is having “Justice” as your Party’s last name enough to bring about success?).
Yoffie and Cusumano in their book, Strategy Rules, explain: "Platforms bring individuals or groups together for a common purpose, usually with access to some shared resource. This definition also applies to the platforms that Bill Gates, Andy Grove, and Steve Jobs championed. Microsoft, Intel, and Apple establish industrial platforms that bring together users and companies creating complementary products and services. Such complements can make a platform more useful and valuable–sometimes exponentially so."
Building platforms is not a new phenomenon. Railroads, Telephone, and power grid companies have been benefitting from this phenomenon for a long time. “A railroad network that went only from, say, New to Philadelphia became much more valuable when it could link to other railroad networks. To their credit, Gates, Grove, and Jobs all realized, at different times and to different degrees, that cultivating outside partners was better than trying to do all the potential innovation themselves—surely an impossible task (p 96-97).” Many times, GGJ made “complements” to their products. For example, Gates made “technologies … that made it easier to reuse large pieces of code"; Groves made USB that made connecting various peripherals to computers easier; and Jobs came up with the App Store, that provided the ‘digital rights management system’ and solved the piracy problem for Music and Book publishers. It was like the symbiotic relationship that flowers have with bees: flowers provide nectar, while bees carry their pollen to other flowers, hence, ensuring their gene-propagation and survival. (Surely, an interconnected Pakistan, that takes a lead in opening its borders and ports to facilitate trade of her neighbors, and other countries, is a much safer and prosperous country, than an isolated Pakistan that lives like a hermit-- only interested in his own survival and bliss.)
What’s true of companies and countries, is also true of individuals. Iqbal relates a quote from the mystic Abdul Quddus of Gangoh, in his book, The Reconstruction of Religious Thought in Islam, “Mohammad of Arabia ascended the highest Heaven and returned. I swear by God that if I had reached that point, I should never have returned." Iqbal explains, “For the mystic the repose of ‘unitary experience’ is something final; for the Prophet it is the awakening within him of forward-shaking psychological forces, calculated to completely transform the human world.” In other words, be like the Prophet (PBUH), not like the selfish mystic.
Companies that did not recognize the importance of platforms, interconnectedness, and eco-systems simply perished. Lotus 1-2-3 provides one such example. “CEO of Lotus (Jim Manzi) proclaimed that he would not rush out Lotus 1-2-3 for Windows because Microsoft was the enemy. This proved to be a disastrous mistake, and Lotus ended up being acquired by IBM in 1995 (p 115). (Can Pakistan afford to think of her neighbors as enemies?
Even arch-enemies need to cooperate with each other. After-all, we all live in an eco-system. Microsoft and Apple were (are) arch-enemies. Jobs and Gates had deep seated hatred for each other. Apple had sued Microsoft for “copying the Macintosh interface”. But “at Macworld (conference) in August 1997, (Jobs) explained; "Apple lives in an ecosystem. It needs help from other partners; it needs to help other partners. And relationships that are destructive don’t help anybody in this industry (p 109).” In August of 1997, Gates invested $150 million in Apple and saved it from the brink of bankruptcy. Jobs told Gates, "Bill, thank you. The world's a better place." (Surely, Pakistan and India have many reasons to cooperate with each other.)
But making platforms and then ecosystems takes time, effort, and resources. Not every relationship is symbiotic. There are parasites that only ‘take’ and never ‘give’. These parasites threaten the overall health of the organism. What to do about these parasites? How to kill these parasites, without killing the organism (company or country)? Can one simply take the medication, like albendazole, and hope the worms will die? In most cases, the answer is “yes”! Treatment to kill parasites is as simple as taking the medication. But ‘knowing’ and ‘doing’, ‘intention’ (niayat) and ‘deed’ (amal) are not the same thing. At some level, we all know what to do, or have competent doctors to guide us, how to kill our parasites, how to overcome our demons, how to win heaven, how to drain the swamp, how to end corruption, how to build dams, how to pay off IMF loans. But it takes a rare individual (Mo’min) who does the necessary work to achieve the desired results!
Amal Se Zindagi Banti Hai Jannat Bhi, Jahanum Bhi
Ye Khaki Apni Fitrat Mein Na Noori Hai Na Naari Hai
By action life may become both paradise and hell;
This creature of dust in its nature is neither of light nor of fire.
GGJ also knew what to do, but they missed important opportunities. “Both Gates in Grove fell short, particularly in comparison to Jobs, when it came to seizing the opportunity offered by the rapid growth of new non–PC platforms. Both men recognized the potential explosion in Internet appliances and hand-held consumer devices. Groves, for example, bought ARM microprocessor license from DEC in 1988, and started Intel down the path of low-powered CPUs for smart devices. (But) awareness is not the same as commitment. Intel was never fully devoted to ARM and sold off its ARM business after Grove retired in 2006. At Microsoft, engineers tried to force-fit a version of Windows ("Windows CE") onto small devices rather than build a new operating system from scratch. Gates failed to marshal the resources to act effectively on his realization that new platforms were on the horizon." Jobs, on the other hand, seized the non-PC platforms, and invested heavily in developing iPod and iPhone and iPad. However, when Jobs made the iWatch incompatible with Androids, he allowed Google and its Android to benefit from the platform strategy that he, Gates, and Grove had championed for so long.
In the final analysis, we are all interconnected in an ecosystem. Chief Seatle said it best, “This we know: The earth does not belong to man, man belongs to the earth. All things are connected like the blood that unites us all. Man did not weave the web of life; he is merely a strand of it. Whatever he does to the web, he does to himself.”
Next we will discuss GGJ 4th strategy: “Exploit Leverage and Power—Play Judo and Sumo
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