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***A New Infrastructure
I wrote about Guy Kawasaki's return to Apple in "Evangelism as God Intended", 7/29/95. I was interviewed for a Business Week piece on Apple just before I left on my trip. They asked if Kawasaki coming back to Apple meant that Apple "gets it".
I said no.
Evangelism should be a positive force, but lots of Guy's energy is negative. Instead of stressing the great stuff that's happening on the Macintosh platform, he's showing us the holes in Microsoft's strategies. I guess he's trying to drive the competition crazy. I also guess it isn't working.
Why all this emphasis on pain? Apple is hurting, and instead of feeling the pain and learning from it, then letting go, the healthy approach to grieving, they're trying to give the pain to someone else. They've chosen Microsoft. In fact I think Microsoft's strategic problems are very similar to Apple's. They already share the pain, without any help from Apple.
Apple, as usual, got there first. Mired in employee departures, and no high-growth direction for their technology, they're struggling to find ways to gather developer energy behind them given that the Internet has already happened, and proven them to be more or less clueless.
The real race between Microsoft and Apple is how quickly they can retool to be developers and marketers of Internet servers and clients and authoring systems. Yes, ease of use matters a lot, so Apple has something to offer. (But the Macintosh isn't really that easy to use.) And the Macintosh is the platform of choice for content developers. So there's a base to build on.
But Apple is playing too fair, is still heavily invested in wrong ideas, and incorrectly perceiving the faceoff and not reorganizing their business quickly enough to be effective.
The shareholders of both companies, especially Apple, could be participating in the Internet boom (Netscape opened today at 140) but both companies missed the play. Microsoft is actually in worse shape than Apple, for ironic reasons, because to get into this loop, the company has to be acquired. Details follow. Apple is much more acquirable than Microsoft because Bill Gates won't give up control of Microsoft as easily as Mike Spindler and Mike Markkula will.
Check out "Bill Gates vs The Internet", 10/18/94. I'm really proud of that piece. Bill Gates looks more and more like the old generation's Ken Olson. Yes, the Internet will push sales of related technologies like Encarta and Flight Simulator. As if that were all that mattered. Windows is a Chinese Household too, now. All their developers left to do Internet software. Why? The usual reason -- they left for love.
A lot of the new software runs on Windows. But the developers are looking elsewhere for leadership on what standards to support. The Indigo Girls said it best, Bill and Guy, stop trying to pretend there's more than love that really matters. Love. That's all that matters. Read that again. It's all that matters. That's all.
Bill will take care of himself. Guy doesn't have to worry so much about delivering him. Ken Olson didn't need Bill Gates, specifically. The PC business didn't fight fair, ignoring the economies of the minicomputer business, just like the Internet development boom isn't paying any attention to the limits of the boxes-and-shelves system. The interesting stuff on the web doesn't go thru Merisel or advertise in PC Week. A new infrastructure is developing.
***Pure PE-ratio
Someday there will be a company that's 100 percent PE ratio, offering no products, making no profits, but delivering infinite growth to their shareholders. The Ice Nine of technology. So cooool that it just grabs all the value in the universe, instantly. Whew! What was that? The supersonic bullet-train of a stock. On its way to the stars.
Netscape is the next approximation of the pure-PE ratio company. I haven't looked at their balance sheet, and I don't need to. As a developer I see it much more clearly. They've soaked up lots of the available love in the high tech world. But there's lots more to give, and he or she who bathes in that love will be the next approximation.
Here's what it will look like -- a love castle for developers. The ultimate playground, attracting the most talented and ambitious software and content developers. If you just shipped a hot net tool, we want you to be part of the club. Lots of parties and lots of goodies. New hardware and all the latest betas. The best net connections. We want to empower you, not limit you. No waiting. Go for it! We'll be there to pick up the pieces, write your docs and specs, man the tradeshow booth, talk to your users. Put the curtains on your cave. You have the fun, we do the work.
Platform management is a make-the-trains-run type business. The art happens outside. That's the diseconomy of Apple and Microsoft. They've bet heavily on art happening inside. Wrong!
Here's what you have to watch for -- the developers will own this platform company. That's where the infinite PE ratio comes from. They will have the support of developers because it's owned by the developers. It's safe for users and content developers and investors to buy into the platform because it's going to have developer support. Guaranteed. They can't screw it up, like most platforms do, because art will own the platform.
Don't look to Netscape to be this platform. They're spreading too thin and too broadly and hiring from the general talent pool of Silicon Valley. Their alliance with Sun seems pretty fractured. And Sun doesn't get it, any more than Guy Kawasaki does. And the developers certainly don't own Netscape. And their stock is so strong on its own, so it's not likely to happen.
On the other hand, it seems that Apple could be profitably be bought out by its developers. Apple stock is hovering around 40 and not going anywhere. With an organized net strategy, built from software components that are already shipping, the stock could get a Netscape-like lift. Even half of a Netscape lift is something worth thinking about. Even one quarter of the lift.
Platforms are about making the trains run on time. Curtains on the cave. Today's platforms come with too much face. The first one to get out of the way and stop trying to force their view of the world on the world is going to have infinite PE ratio.
A day I hope to see.
Soooooon.
Dave
PS: I subscribe to Guy Kawasaki's mailing list. You can too. Several highly opinionated messages per day often with quotes from other people, including press releases from Apple and others. Send email to macway-request@abs.apple.com for info on subscribing.