'The Unwillingness To Foresee The Future' (stratechery.com)

An anonymous reader shares a few excerpts from Ben Thompson's analysis: Back in 2006, when the iPhone was a mere rumor, Palm CEO Ed Colligan was asked if he was worried: "We've learned and struggled for a few years here figuring out how to make a decent phone," he said. "PC guys are not going to just figure this out. They're not going to just walk in." What if Steve Jobs' company did bring an iPod phone to market? Well, it would probably use WiFi technology and could be distributed through the Apple stores and not the carriers like Verizon or Cingular, Colligan theorized." I was reminded of this quote after Amazon announced an agreement to buy Whole Foods for $13.7 billion; after all, it was only two years ago that Whole Foods founder and CEO John Mackey predicted that groceries would be Amazon's Waterloo. And while Colligan's prediction was far worse -- Apple simply left Palm in the dust, unable to compete -- it is Mackey who has to call Amazon founder and CEO Jeff Bezos, the Napoleon of this little morality play, boss. The similarities go deeper, though: both Colligan and Mackey made the same analytical mistakes: they mis-understood their opponents' goals, strategies, and tactics.

Comments

He's right!

[slashdice]

I didn't see the future when Amazon blew all that money on Living Social. I didn't see the future when Amazon blew all that money on the Fire Phone. I didn't see the future when Amazon blew all that money on Drugstore.com.

I know some people like to suck Jeff Bezo's dick but there is plenty of failure too.

Re:He's right!

[vakuona]

The problem with all of those examples is that they were "me too". Perhaps with the exception of Drugstore.com. Even then, that wasn't really taking advantage of what Amazon really is.

If you read the article, Amazon is about scale. Whole Foods gives Amazon scale that is doesn't have in the grocery business and allows it to build out a delivery infrastructure (surely its end game) to support that scale and beyond.

Amazon presents itself as the world's shopping site, but Amazon is really a logistics company. And logistics companies need scale.

Re:He's right!

[jellomizer]

Most of these people take risks. The nature of risks is they can fail. the iPhone could had failed. Enough people may not have liked the onscreen keyboard. Initially not using G3 for data may had been too slow for their usage. The original iPhone, didn't have 3rd party apps, or the response lag on the touch interface was a bit too laggy for them. A number of design tradeoffs could had just as easily caused the iPhone to fail like the Newton.

The thing is we can't predict the future, or judge the reaction of something new before hand.

Re:He's right!

[phantomfive]

btw fruit quality isn't so much about "local" vs "non-local" although that does have an effect. When you pick fruits commercially, you pick them all at once. So you have to pick them at the moment the average fruit is ripe. But you don't want a bunch of overripe fruit, so in fact you pick them before the average fruit is ripe.

Farmers markets can pick them in smaller quantities and thus can focus on only picking the ripe ones at a particular time.

Not a fair comparison

[RobinH]

It's not really fair to compare anything to a Steve Jobs product. He had the ability to create products with fewer compromises. He started from the idea, "this is what a customer would like to buy," rather than, "this is what our company makes." Even Apple can't make a Steve Jobs product anymore.

In that sense, Bezos did a similar thing when he sent his team back to the drawing board to make one-click purchasing actually work, and Amazon does really well in reducing barriers to purchasing because that's what gets customers to buy. The question is, can Amazon be the place where a sizeable chunk of people buy groceries? Sure, if it's more convenient for a large enough number of people, like scan a UPC off the back of a cereal box, and it shows up at the end of the day today at my house, ready for breakfast tomorrow. People say that's impossible. A Steve Jobs *knows* if it's possible, and if it is then won't stop pushing until his company makes it happen.

Re:Not a fair comparison

[im_thatoneguy]

It's not a fair comparison and it's not even a real comparison. Especially this quote from the article:

Appleâ(TM)s goal was not to build a phone but to build an even more personal computer; their strategy was not to add on functionality to a phone but to reduce the phone to an app

Apple's goal was not to build a phone or a more personal computer. Apple's goal was literally to protect their ipod business from being inevitably cannibalized by Palm, BlackBerry, Windows Mobile and whoever else came along.

That's not a theory, that's literally what the team leaders from the iphone project say. 'we were like oh shit, nobody will buy an ipod if their phone is just as good'.

People also forget that the iphone launched without any third party apps. In fact Steve Jobs didn't want there to be apps on the iphone. So Palm was already ahead of them with third party app support.

Palm was ultimately doomed but that's because they weren't innovating fast enough. Not because they fundamentally saw the business wrong. They had a touchscreen dialer just like the iphone. Their touchscreen dialer was just worse. They had a mobile browser just like the iphone, their mobile browser was just worse. Etc...

Re:Not a fair comparison

[nine-times]

I also think it's not fair to single out Palm in the example of the iPhone. I was working in the mobile industry at the time, and the iPhone caught everyone off guard. One day, the Motorola Q and Razr phones were hot shit. Blackberry owned the business smartphone market, but Palm was still in the game. The next day, everyone wanted an iPhone.

One of the big miscalculations was that people hadn't realized how long Apple had been working on the iPhone. They were thinking, "Apple thinks they can just start working on a phone now, and have a working product in the next year?!" Few people had been paying enough attention to realize that the iPhone had been in development for about 10 years.

There was another big miscalculation, but I don't know exactly how to characterize it. Basically, the incumbent vendors thought they were doing a great job. They'd make a new version of the same old device, but it was slightly thinner. They put out the same phone with a slightly higher resolution screen, or a screen that could display more colors. Palm made the glyphs that you had to learn to write with their stylus just a little easier to write. They were tinkering around the edges because it was easy and cheap, and didn't require anyone to be particularly innovative. They thought they were the smartest people around, and because these products were the best they could do, they were the best anyone could do. It's just a thing that happens in entrenched markets, when people get comfortable.

They just weren't agile enough to survive.

[Bruce Perens]

I consulted briefly for Palm, doing an Open Source training that literally nobody who was invited was interested in hearing. I think they mostly invited the wrong folks. People were really angry that I did things like use examples, rather than just stating the point so that they could get out of there. I usually get good feedback on trainings.

One of their largest problems was that they were unwilling to abandon the 250,000 applications that they stated were built for their original Motorola 68000 architecture. So, when they came out with an ARM-based Palm, that ARM ran a 68000 emulator, and their entire operating system ran in the emulator along with all apps. So, it was obvious this company wasn't agile enough to keep up with new technology.

Of course, I suggested that they base on Linux and build their APIs on top of it. But then, I suggested this to Symbian, too, and they listened just as well - which was not at all. All of those folks thought they had some sort of magic in their kernel and invested unspeakable amounts of money in it. In Palm's case, they had a shared memory architecture that they felt would be difficult to implement on Linux.

Eventually, one of their business successors took on Linux, but way to late to salvage the business.

Re:They just weren't agile enough to survive.

[Bruce Perens]

That's the point. It's not about the kernel. User's don't see kernels at all, don't care about them. Blackberry certainly learned that lesson. All they spent on QNX and the customers yawned.

The point of having them build on Linux was that rather than investing in kernel development, they could move all of that money to things that mattered to the user experience.

I think around the time I got to HP they had just done a Billion dollar investment in new development of HP/UX. IBM in contrast de-emphasized AIX in favor of Linux, understanding the economics better than HP did. Not that this was HP's only problem.

Re:I've worked with man in ex-Palm

[Anonymous Coward]

I had to exit at this quote:

Apple’s goal was not to build a phone but to build an even more personal computer; their strategy was not to add on functionality to a phone but to reduce the phone to an app; and their tactics were not to duplicate the carriers but to leverage their connection with customers to gain concessions from them.

I disagree here, this is hindsight and speculative, and the provided link is from 2013. The initial iPhone did not come with a market (the 'iTunes App Store') and AFAIK we don't know for sure if it had been planned from the beginning to pan out the way it did.

I am not trying to play down the success of the iPhone and how it has changed the world. Yes, it was incredibly successful, yes it all panned out nicely. I am just questioning if it was all planned to come out exactly this way from the beginning, or maybe there were some decisions made after initial success and someone came up with even better ideas. Steve Jobs touched junk liberally.

Re:I've worked with man in ex-Palm

[jellomizer]

Big Success in the tech market is usually 75% luck. 20% Hard work, and 5% skill.

Palm had a good product at the time, people seem to accept the risks it took using graffiti interface vs. full handwriting recognition (Like apple did on the Newton). It had the features and was priced and had a brand name that was recognizable. Nearly any of these things could had backfired, and Palm wouldn't never had gotten where it got.

  However these guys though the numbers were reversed, and they got Palm where it was because they thought they had all these skills. However when they had to go to other work, they really failed, because they were trying to get lucky again. While they were in a more standard market where if you are not lucky you better have more hard work and skill not to win big, but to keep things going.

Re:Mail-order catalogs

[CWCheese]

First sentence is very insightful. Amazon has essentially refreshed the Sears Catalog business to a level that Sears itself eschewed when it's clueless managers shutdown catalog operations just at the dawn of the web commerce age. Had their management been a little foreseeing, they might have leveraged the web to combine with their, at that time, peerless consumer distribution network around the country. Instead they blundered along while Jeff Bezos went from being a cheapest books seller to seller of everything imaginable. By the way, Sears Holdings is closing several hundred stores a quarter and likely will not be a corporation by end of 2018, if not sooner.

Alexa's mistake is being spun for the media.

[140Mandak262Jamuna]

Jeff Bezos got up in the morning, was feeling lousy and wanted to make his mom's best comfort food, chicken soup. So he mumbled "Alexa! buy Whole Foods Chicken Stock". That damned machine bought Whole Foods instead. Not willing to concede Alexa is horribly broken he is trying to act as if he always meant to buy the company.

Re:Alexa's mistake is being spun for the media.

[Sir Holo]

It was, "Alexa, buy olives from Whole Foods."

Alexa, "Buying all of the Whole Foods."

Re:Anyone who tells you they can see the future

[Anonymous Coward]

And to quote Steve Jobs, "You can't connect the dots looking forward; you can only connect them looking backwards."
You just need to do your best and hope that it turns out well in the future.

Re:Mod parent DOWN

[Altus]

Yeah, nobody I know has any idea what Amazon is because they don't drive past brick and mortar stores.

I knew what a sears catalog was before I had been to a sears

A market was always planned

[SuperKendall]

The initial iPhone did not come with a market (the 'iTunes App Store') and AFAIK we don't know for sure if it had been planned from the beginning

I had an app in the initial App Store. To me it was obvious this was always planned, because the app store opened almost one year to the day after the iPhone launched, and the thing to remember is that meant you had to be able to let developers build app for that store beforehand... if I remember right it was about 5-6 months before the app store opened that we got the first official SDK from Apple.

So that means if Apple did not plan to have an App Store to begin with, in just around six months they had to prepare all of the documentation and toking for external use, and in around a year had to build the infrastructure and UI for an entire app store...

Come on. Do you honestly think any of that could be done in such a short timeframe? No. The truth is they couldn't launch with an App Store because it was not quite ready, but it had always been planned to have one far in advance or none the significant app signing infrastructure to make that all possible would have been in place at launch.