Skating to where the puck is going to be...

I’m past merely being tired of hearing that comparison. By now, it’s become a cliche. It wasn’t right when it was first quoted, but by now it has gotten ridiculous.

This time, it was prompted by the news that Microsoft had hired a pollster at a high level to help them figure out what customers think of “Metro.” It’s a bit late in the game for this, but better late than never. I’m sure they’ll find out in due time...

Gruber used this story to bring this up again:

The message I take away from this hiring is that Steve Ballmer doesn’t know what to do, and he’s hoping polling will give him the answers. That’s how you wind up skating to where the puck was, not where it’s going to be.

Yes, I know that Steve used it to describe what Apple does, but that doesn’t make it right. He was just being modest. He’s allowed to be humble after all the work he did.

I suppose he left it as an exercise for others to figure it out.

Hockey

One giant problem with the damn hockey metaphor is that it assumes that the game that Apple plays is also being played on a flat, level surface. That’s a big red flag right there. The game that Apple plays is not that simple.

The “hockey” thing is right for simple things like anticipating changes in fashion. Fashion is about variations on a few simple variables. Fashion is one of the things that’s going on now with Microsoft and their Waterloo, “Metro.” Some of those changes are fashion. The Vista/7 generation of Windows chose the fashion statement of “Aero.”

When they got the idea in their heads that they needed to put all of Windows on a tablet once again, they couldn’t go ahead and run a very graphics-intensive fashion statement like Aero! That’s obvious. So they needed to redefine what was “cool” (aka, possible) in a low-power environment. This gave birth to the spare, simple, and flat “Metro” fashion. We’ll see how well it all works as the new cool.

That’s the extent of the meaning of this “skating to where the puck will be” metaphor. The trendsetters at Microsoft have decreed that the graphics-intensive Aero look is “out” and the barren, simple look of “Metro” is “in.” In other words, the puck is sliding around the rink. Microsoft is betting that its new location at the other end of the fashion-rink will work out for them.

Fine.

My point is that Apple actually does something fundamentally different. It’s the only mature tech company that I know of that does not believe that the game is played on a flat surface (aka, a plane). For them, the game is being played in a hyperspace.

The key to winning at this game is to reshape the hyperspace itself and be at the center of the region at which the new galaxy coalesces. Very few companies manage to do this once in a lifetime. Apple is unique in that they can have actually done this more than once.

Let’s replay the last big game in slow motion. This is the game that Apple won by becoming the most valuable company the world. For starters, lets look at a one of Horace’s amazing graphs. This one graph shows income and revenue for Google, Microsoft, and Apple since the iPhone was introduced in 2007. Please note that the Y-axis is the same for all three companies. For that reason, it’s easy to see who is making the most money in this game.

No one else has shown more clearly how Apple’s iOS business has risen from nothing in 2007 to dominance.

World's biggest startup

It isn’t a matter of being at the other end of the rink to receive the puck as it comes to you. What Apple does to is a little more like terraforming a empty region of hyperspace.

Apple saw a gigantic business opportunity that no one else even saw. Before the great adventure, it appeared to everyone else that the computer business was mature and only incremental progress was possible. The common knowledge was that this market was saturated and the enterprise market (controlled by Microsoft) was healthy but stable. Microsoft had won since the business/enterprise market is so much larger than the home market.

What little growth was achieved by creating a lot of minor variations of a few basic themes and hope that one of the variations that you pick will become popular.

Apple looked at the opportunity rather than the limits. To them, the limits were artificial and could be mitigated. One limit is that a conventional PC is actually overbuilt for the needs of the currently unserved population. The operating systems were too general, too configurable, and it required too much learning to do a few basic tasks. The limits to growth were that many people did not accept a hand-me-down that was designed for the enterprise.

Remarkably, they set out to build a product that would cost only half of their cheapest laptop but neophytes would perceive it as superior to conventional computers. That is, they deliberately undercut their own product line!

No one else dared to try this. It’s because the natural inclination of any established company is to protect its core business from all threats — including internal ones. Thus, the laptop vendors offered lower priced laptops (“netbooks”) that were deliberately inferior to their standard models. The hope was that the public would accept the substandard designs in order to save money. Of course, only a few sold.

Instead, Apple deliberately designed a product to sell at half the price of their cheapest laptop and would be superior to their own computers — but at only a few tasks!

It turned out that the mistake other vendors made was to design to a price point rather than to address an unmet need. As Steve said:

...the problem is, netbooks aren’t better at anything. They’re slow, they have low-quality displays, and run clunky old PC Software...

Apple’s low cost solution also had to solve that problem. They were bold enough to risk undercutting their own laptops in order to reach a far more ambitious goal.

Horace’s graphs show how the size of the computer universe suddenly expanded. The graph I showed is the birth of a new universe: Apple’s iOS business now generates more revenue than all of Microsoft. This is not fashion!