March 22, 2005

fred wilson is a genius

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Fred Wilson wrote the best thing I've read in weeks:

Apple Becomes a "They" Company

There is this concept of "we companies" and "they companies". I don't know where it comes from. If you do, I'd love to know.

Anyway, "We" companies are built by and for a community of users. Everything (including profits) flows from this core value of serving the users. We companies and their profitability are incredibly sustainable.

"They" companies are traditional companies that seek to optimize profitability at the expense of everything else. These businsses are not sustainable and they tend to overreach and ultimately end up in a long and steady decline.

Microsoft is the poster child for a "they" company.

Craigs List is the poster child for a "we" company.

Apple used to be a "we" company. I love Apple as I've blogged about many times. I still do. But Apple is not a "we" company any more.

We vs They. You got it. Understand this, and then maybe you start understanding why The Cluetrain is so important.

As Tony Goodson so wonderfully wrote, some months back:

Cluetrain feels like ours. LoveMarks feels like theirs.

Why are the battle lines being drawn for Cluetrain v LoveMarks?
Isn't LoveMarks trying to say the same thing?
What is it about LoveMarks that's winding some of us up so much?
Is it Kevin's voice in the book and on the website?
Is it that there's an inconsistency and contradiction in parts of the book?
Why does our gut feel tell us that there's something missing or wrong?

The "Cluetrain-Lovemarks Deathmatch" is really the "We-They Deathmatch". Exactly.

Posted by hugh macleod at March 22, 2005 10:47 PM | TrackBack
Comments

I was not familiar with LoveMarks.

Wow, so shiny ; >

The problem with LoveMarks is one of authenticity.

Authenticity is THE paramount marketing value today.

It is what originally drove the blog revolution.

It explains why Scoble's blog, despite seeming so right, is so icky in the end. His voice and stance are totally inauthentic.

LoveMarks is equally icky.

Authenticity drove urban marketing, and is driving the backlash against it.

Authenticity drove the iPod, but now would make me buy a 60 gig Creative Nomad at half the price of a 60 gig iPod in a flash. What am I, stupid?

Cluetrain is authentic. All of the ideas and tactics it espouses were/are authentic.

That said, they are now often used in truly inauthentic ways.

Posted by: anonymous fan at March 22, 2005 11:46 PM

Here's something that just hit me about Cluetrain vs. Lovemarks, and maybe it's been said before... I don't know.

ClueTrain product passion is created by the USERS themselves.

Lovemarks are created by Marketing people who scare us, and other people who want you buy their shit, and keep their jobs.

As terrifying as this is - great companies with great products could theoretically ditch their marketing schmucks, but there are PLENTY of shit companies with shit products who need marketing to stay alive as long as they can.

Hey, think about all the money a company could save on marketing just by letting their products and customers speak for and about them?

Posted by: Jon at March 23, 2005 12:38 AM

Sorry Hugh - Apple's still a "we" company. The "we" just changed...

Posted by: Chris at March 23, 2005 4:46 AM

Chris, I think I understand what you mean. Seth Godin mentioned something once about how if a company wishes to grow quickly, it has to alienate its core customer base. Or something.

Posted by: hugh macleod at March 23, 2005 9:50 AM

Hugh
"the we just changed" sounds like a religious schism. No we don't like the new way, the old way was handed down from on high by the gods....

Anyway I reakon you need another category. CluedIn for those on the ClueTrain; SexedUp for the LoveMarks cause they're selling sex not love; and ScrewYou for the very large bunch of companies who really don't give a rats arse about their customers.

Cheers

Dermot

Posted by: dermot at March 23, 2005 10:06 AM

As a long time user of Apple desktops, I do get the impression that Apple has become a "they" company. The amazing thing, though, is that Apple has convinced a huge group of new and current users that Apple is a "they-are-gods" company. It seems many are in need of a new iBrain.

Posted by: mulefly at March 23, 2005 5:21 PM

Classic example of a "we" company that had to alienate their true believers to grow: BMW. There were MANY people who were totally bummed when they became a stupid status symbol.
Yet, their products are still dam_ good (if stunningly ugly). Are you claiming Apple will stop making dam_ good products now that they see a road to bigger profits?
Is the iPod all about making bad products?

Posted by: mark thompson at March 23, 2005 5:35 PM

The 'we' effect starts when companies get larger. It's has less to do with how many consumers a company has, than with how many employees it boasts.

Apple has been reasonably large for years, but due to the lack of Internet it had no efficient way of battling the IBM and MS goliaths. The only technique that really worked was to tap into the feeling of brotherhood that lived among it's costumers. In the corporate sphere, what worked was focusing on specific qualities other popular market players lacked. In Apple's case, this was mainly VGA and processor power.

More recently Flickr and Google utilised the brotherhood effect too. Same goes for many open source applications like DebianGNU or Redhead. Like people driving MiniCoopers, you're sure to recognised and respected by others. It's a human trait to want to belong to a group.

IBM - another perfect example of a 'they' company - used to manage a distorted but similar effect with their impeccable consumer service and their perfect corporate image. People didn't want to try another company than IBM, because IBM represented quality of service. When you belonged to IBM, business partners knew you could be relied on.

But the world is getting smaller and more and more people learn about alternatives. Smaller companies get better chances this way.

Apple has been very succesful in recent times. More and more, Apple depends less on it's brotherhood, instead it thrives by clever marketing. Apple is growing. The downside is that, the more people a company has in it's service, the more blinded the management becomes. Not so much by greed or arrogance, but by struggling to remain in power.

What killed IBM's near-monopoly in the 90s was that they chose to ignore the rise of open architectures. The management was afraid to do something new, because familiar is safe. New is dangerous. It wasn't the marketing department that made this decision, nor was it anyone else inside the company. It were the bigwigs.
Blinded by decades-long safety, IBM's management had stopped seeing costumers as humans with expandable budgets and started seeing them as "units".

That's what happening to Apple as well, now. And who knows, maybe MS is underestimating Apple and the open-source communities and maybe like IBM they will crash. Just don't expect to find a "we" company to rise out of the ashes.

bram

Posted by: bram at March 24, 2005 11:27 AM

Very good topic... Danny Miller wrote a book "Icarus Paradox: How Exceptional Companies Bring About Their Own Downfall" (http://www.amazon.com/exec/obidos/tg/detail/-/0887305245/qid=1111706512/sr=8-1/ref=sr_8_xs_ap_i1_xgl14/102-2020673-3350515?v=glance&s=books&n=507846)

(Summary article: http://www.findarticles.com/p/articles/mi_m1038/is_n1_v35/ai_11874512)

If I remember correctly, he profiles 4 "trajectories" firms take in going down the toilet... *one* trajectory was about firms that stay "We" focused (on a set of customers) and are blinded by changes to both that customer group and the broader market... they basically followed their customers closely... into oblivion. I'm not postive, but I'm pretty sure DEC was one of them.

The hazard of staying too tightly "we" focused...? (perhaps as Seth Godin pointed out?)...

Good readin' if you've got the time.

Posted by: Terry Rock at March 24, 2005 11:25 PM

I think this Apple bashing is an over-reaction. Apple has never been a "we" company in the sense of Craigslist or something like that. Apple is Pixar for personal computers and electronics. Is Pixar a "we" company? Apple is trying to protect its announcements the same way Pixar would try to stop pirated copies of movie from being widely available before a debut. Apple is trying to get a royalty/license stream from companion iPod products the same way Pixar gets licensing money for Nemo toys.

I love Apple because it is run by artists who want to make beautiful elegant things. Buying a Nomad because it's a bit cheaper? Yuck. How can you live with yourself? Of course a knock-off is going to be cheaper. I have some beautiful velvet Elvis paintings that I'd like to show you as well.

I think that Apple is in the beginning of what will be a long and spectacular run of success. Why? Because they have a great (still) young leader in Steve Jobs, and they now have a position of power in the music industry. The stock price accurately reflects this situation.

Will they continue like this forever? Almost certainly not. Steve will be gone someday, and then all bets are off.

The recent episodes with suing bloggers show the dark side of Steve's personality, which anyone who's been watching him these many years is no doubt aware of. But you have to take the bad with the good with Steve, I think, and you move on because there is no credible alternative. Steve rules Apple with his own authentic "sovereignty", to borrow a term from the Hughtrain. But it's his world, not ours. I can live with that, because the products rock.

Posted by: Charlie Evett at March 25, 2005 4:43 PM