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Fri 02 May 2003

A Gestalt Strategy

Category : Commentary/gestaltstrategy.txt

That's a strategy, coined by some business guru, where you are able to deliver something whose whole is so much greater than the sum of its parts and where the parts are melded in such a unique way that it makes it hard for other competitors to duplicate.

Let's see how the following fits into the definition (again from the Time interview with Steve jobs) :

TIME: Can you say anything about [Music Store's] development costs or Apple's investment?

Jobs: I had somebody comment today, "Now that you have introduced your store, do you expect a lot others?" And I guess our answer is no. This is really hard. Over the last several years we've created an infrastructure to pump oceans of bits out in the world for movie trailers and stuff, and that's tens of millions of dollars for server farms and networking farms - it's huge - and we've already got that in place. And to have millions of transactions, and to get our online store all tied into SAP and have the auditors bless it, that's tens of millions of dollars. We have one-click shopping, only us and Amazon have that, and then to make a jukebox - how much does it cost to make iTunes and make it popular? A lot! But we've got that. And then iPod, if you want to make an iPod, what does that cost? Well, nobody has done it but us, people have tried, but they haven't even come close. That's a lot of money. So we've already made these investments and we can leverage them. And then we've invested more on top of that to make a store. But to recreate this, it's tens of millions of dollars and years. That's why I don't think this is going to be so easy to copy.

Did you notice the : "... And to have millions of transactions, and to get our online store all tied into SAP and have the auditors bless it..."? A lot of companies (that I've helped built systems for) don't seem to grasp the importance of this part of the process. Most people just slap together a system and think, "That's it." They don't realise that you could have figures produced at the accounting end that bear only a fictitious relationship with the reality. You've got to build an ability to verify the figures deep into the system. And that, I feel, can only happen if you come to the job knowing you're there to work with the information rather than computers.

When I read business books, I feel that there is an amazing disconnect. The gurus will start describing how to do things right and start quoting from Microsoft and slam Apple. A lot of the time I can argue the other way round. It's like, "I am rich therefore I must be doing right. Or, might is right." If you're struggling to establish a business, not just any business but a business that can also "make a dent in the Universe", you can learn a lot from studying Apple and immersing yourself in its travails.

Posted at 9:39AM UTC | permalink


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