Steve Jobs: Apple Almost Went Bankrupt Because It Failed to Innovate

In 1996, just before Steve Jobs returned to Apple and made it the business-school case-study success story it is today, the biggest thing in Jobs' life was Pixar, which had recently launched Toy Story. He also had NeXT, which wasn't the world-changing computer company Jobs wished it would be.

Jobs appeared on PBS' Wall $treet Week program with Louis Rukeyser who first asked him about Pixar and then asked Jobs what went wrong at Apple.

Oh gosh. You know I haven't been there in a long time. My perception may not be complete. But from the way I see it, Apple was a company that was based on innovation. When I left Apple ten years ago, we were ten years ahead of anybody else. It took Microsoft ten years to copy Windows.

The problem was that Apple stood still. Even though it invested cumulatively billions in R&D, the output has not been there. People have caught up with it, and its differentiation has eroded, in particular with respect to Microsoft.

And so the way out for Apple -- and I think Apple still has a future; there are some awfully good people there and there is tremendous brand loyalty to that company -- I think the way out is not to slash and burn, it's to innovate. That's how Apple got to its glory, and that's how Apple could return to it.

In the interview, Steve Jobs, always the marketer, talks up Pixar's Toy Story CD-ROMs as "dynamite" and says they will "set a new benchmark" for what CD-ROMs could be.

Jobs' performance speaks for itself. Disney bought Pixar for $7.4 billion in stock, which made Jobs the largest shareholder in Disney and gave him a spot on the Disney board.

Apple is now the most valuable company in the world, and its stock price just today hit an all-time high of $411.50, valuing the company at more than $380 billion.

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*LTD*

45 months ago

@ 1:37

"Differentiation has eroded."

This is such an important concept.

Rating: 11 Votes

DrMotownMac

45 months ago

Wow. It's amazing how prophetic that was. In 1996, Steve Jobs was basically saying that Apple COULD still be saved if they would only innovate. He was iCEO the next year, and released the iMac the year after that. Then the iPod. Then the iPhone. Then the iPad. And, of course, Mac OS X, iTunes, iLife, iWork, the Apple Retail Stores, and now iCloud. The man THRIVES on innovation. He is the Thomas Edison of the modern age. He recognizes what the people want, and figures out a way to produce it.

Who is John Galt? Answer: He's Steve Jobs.

Rating: 8 Votes

Peace

45 months ago

All I can say is God bless that man.

Rating: 7 Votes

rsshelas

45 months ago

Amazing guy..

Rating: 7 Votes

EiriasEmrys

45 months ago

I'm not in the path to become a CEO, nor do I ever hope to be one, however, I am film director and I take a lot of inspiration from Steve's philosophies on creative project management.

The problem with leadership is that we need leaders, and the best leaders are visionaries, but most leaders do not have clear vision. I see it all the time in the film world, where all of us thrive off of the creative vision of directors and producers above us, but so often they lack in vision and inspiration that what comes out is not innovation, is not creative storytelling, but a copy of something else.

"Put a ding in the universe." -SJ

Rating: 5 Votes

jbennardo

45 months ago

Having said that, I must also say that the interviewer's diction is absolutely terrible for a TV show...what a train wreck.

I enjoyed him throwing around the term "computer nerds" a few times. Old geezer :p

Rating: 5 Votes

mdriftmeyer

45 months ago

In 1996 I was playing the DOS games on a 286 or 486...

In 1996 I was demoing NeXTStep/Openstep in the University IT Department/Store, selling Apple's entire product line, DEC PCs, Gateway PCs, IBM PCs, HP PCs/Routers/Switches/Printers, and much more.

Then I left to work at NeXT during the tail end of my second engineering degree.

We had just released a slew of WOF/EOF/Openstep updates when he gave that interview.

Around 6 months later the merger happened.

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If you are interested in how this all went down with Pixar and how generous Steve Jobs was to keep them running, you should watch The Pixar Story (2007) (http://www.imdb.com/title/tt1059955/). It shows that the apple concept is basically a Steve Jobs concept - or - Steve copied it very well from Pixar. Either way, Steve proved that he has a nose for where innovation happens and where you can make a load of money with it. The movie was on Netflix, might as well still be available through their streaming service.

For all the ones which want to have the main scope: The people who founded Pixar were thrown out by Disney for trying new things and Disney almost had to close doors for their animation studios and the share switch with SJ basically rescued the Disney animation branch by being incorporated into the new subsidy Pixar. It is a very enjoying documentary.

How does one copy from PIXAR when it's one's own creation? Steve Jobs handled and modeled every business transaction at PIXAR. Catmull did all the technical management of R&D along with Lassetter running the Movie Creation.

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@ 1:37

"Differentiation has eroded."

This is such an important concept.

How about they play this 24/7 to the Business leaders of today about Innovation instead of Slash n' Burn? That sounds like a plan.

Rating: 5 Votes

DrMotownMac

45 months ago

He will probably die from Pancreatic cancer in the not too distant future, at still a relatively young age. Money, success and fame aren't everything.

I remember, I used to talk to friends in college about this very question: If given the chance, would you have traded your life for John Lennon's? If you were John Lennon, you'd get to be the lead singer of The Beatles, have zillions of dollars, have a crazy rock and roll lifestyle complete with all of the sex, drugs and fame, but you'd have to be dead at 40. On the other hand, as yourself, you may live to be in your 80s, get to see your kids and grandchildren grow up, and lead a fruitful life, but probably not a very exciting or significant one (and by significant, I mean in terms of world impact...like John Lennon or Steve Jobs, I do not mean significant to those close to you).

As my username implies, I am now a doctor -- primary care doctor, to be more precise. And I will tell you, there is something to seeing some of these older patients who have 6 children, 15 grandchildren and 12 great grandchildren. They are patriarchs and matriarchs in their families, and those families are all that matter to most of them when they're older. On the other hand, they have a lot of ailments, they're in and out of hospitals frequently, and most of them say the "golden years" is a myth and I should enjoy my life while I'm young.

The bottom line is that while most of us strive to live longer and healthier lives, NONE of us succeed indefinitely in doing that. We all die, just some sooner than others. So, what makes for a blessed life? I believe it's reaching congruence between what our goals are and what we actually achieve. If my goal is to live to be the patriarch at the Thanksgiving table when I'm 85, then I wouldn't consider Steve Jobs' life a blessing. But, if his goal was to "change the world," than I think Steve Jobs has been blessed.

Think about his quotes in the past. "Do you want to sell sugar water the rest of your life or do you want to change the world?" Or, think about Apple's marketing and advertising, like the "Think Different" campaign. Or, just think about what he says in the interview in the top of this thread. He considers INNOVATION a blessing, and while I'm sure he'd give almost anything to cure his cancer right now, I don't think he has regrets about the way his life has turned out, unlike MANY people I know and see every day.

Rating: 5 Votes

rdowns

45 months ago

OK, let me ask you right here, right now. I Googled but I couldn't find nothing.

Does anyone know THE REAL reason why Steve Jobs wore the same clothes after 1997?

That's when he started on his $1 annual salary.

Rating: 5 Votes

slrandall

45 months ago

The more I learn about Steve, the more I admire him. Such a brilliant guy.

Rating: 5 Votes

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