Monday, November 19, 2012

3 things Mike Markkula did as a champion of “Apple Computer” idea

“The new idea either finds a champion or dies” goes a saying. Well, let’s test it. Did Steve Jobs, the “God of marketing”, need a champion for his “Apple Computer” idea? He did! In fact, Mike Markkula, the person who first championed the idea, played a significant role as a mentor to Jobs in the initial years. “Mike really took me under his wing,” Jobs has mentioned in his biography. What exactly did Mike do? Let’s look at three things in this article.

By the time Mike visited Steve Jobs and his partner Steve Wozniak in Jobs’ garage in the fall of 1976, the duo had already formed a partnership company named “Apple Computer”, had sold almost a hundred Apple I computers and made a profit and had designed a sleeker and improved version – Apple II. The problem was that Apple needed $200,000 to go into production. They had no credibility to raise the money. Their proposal had been turned down by Bushnell of Atari (Jobs’ ex-employer), Chuck Peddle of Commodore (potential competitor) and Don Valentine (founder of Sequoia Capital). “If you want me to finance you,” Valentine told Steve Jobs, “you need to have one person who understands marketing and distribution and can write a business plan.” Mike Markkula turned out to be that person.

Vision & business plan: At age 33 Mike was a millionaire after selling his stock options at Intel after it went public and was practically retired. He got impressed by seeing Apple II demo. He proposed to Jobs that they write a business plan together. “If it comes out well, I’ll invest,” Markkula said, “and if not, you’ve got a few weeks of my time for free.” Jobs took the offer and spent several evenings and some nights at Markkula’s house. For all practical purposes, it was Markkula who wrote the business plan. Markkula expanded Apple vision to go beyond hobbyist market. He visualized that personal computers will be used by “regular people in regular homes, doing things like keeping track of your favourite recipes or balancing your checkbook.”

Investment: At the end of the business plan exercise, Mike was convinced that Apple is a great idea. In fact, he said, “We are going to be a Fortune 500 company in two years.” It took Apple seven years to get there. But more importantly, Mike offered a line of credit of up to $250,000 in return of being made a one-third equity participant. It is interesting to see what Jobs thought of Mike’s investment at that time. Jobs recalls, “I thought it was unlikely that Mike would ever see that $250,000 again, and I was impressed that he was willing to risk it.”

Marketing philosophy: Markkula wrote a one-pager titled “The Apple Marketing Philosophy”. It had three things. The first was empathy, an intimate connection with the feelings of the customer. “We will truly understand their needs better than any other company.” The second was focus: “In order to do a good job of those things we decide to do, we must eliminate all of the unimportant opportunities.” The third was impute: “People DO judge a book by its cover. We may have the best product, the highest quality, the most useful software etc.; if we present them in a slipshod manner, they will be perceived as slipshod; if we present them in a creative manner, we will impute the desired qualities.”

“When you open the box of an iPhone or iPad, we want that tactile experience to set the tone for how you perceive the product,” Jobs says in the biography, “Mike taught me that.”

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Friday, November 16, 2012

Highlights of “Design Thinking”: A 2-day workshop held on Nov 7-8 at Bangalore

How do you get deep customer insights? And how do you translate the insights into innovative solutions? The 2-day workshop on Design Thinking Raghu Kolli and I facilitated a couple of weeks back aimed to give a glimpse of the process and associated tools & techniques. Participants came from Chennai, Hyderabad, Kolkata and Bangalore. They represented various functions such as Operations, Delivery, Quality and HR. Their designations were Business Analyst, Senior Business Analyst, Manager, Solution Manager, Senior Associate etc. Here are some highlights from the program.

We had selected payment counter queues as a broad study area. Immersive research was one of the key steps in the workshop. Participants formed 4 teams and each team visited one of: Electricity bill payment & Railway reservation counters at BDA complex, St. Johns Hospital, Petrol pump and Taco Bell / KFC near Sony World junction. They observed, interviewed and gathered data both in written and media form (pictures and videos). By the end of the day-1, each team analysed their data and distilled their insights into a few statements. For example, one insight was: People didn’t mind waiting, if queue moved faster, and were treated well at the end of the wait. Day-1 ended with a presentation of observations and insights from each team (For more see the presentation above).

A good insight is a good beginning. However, for it to translate into a good solution, we need to formulate a challenge which we want to solve. That is where we began our day-2. We had a brainstorming session where the entire group refined the challenge statement which was to be worked upon during the day. The final challenge we defined was: How do we make being served a better experience? Note that the word “queue” is missing from the statement. Why? Because participants felt that the solution space should include ideas where you don’t need to wait in a queue (queue-less service).

If formulation of the challenge was the toughest part of workshop, idea generation was perhaps the easiest. We formed 3 new teams and each team brainstormed and came up with 40-50 ideas within half an hour. They selected 3 to 5 ideas and combined them to form a solution. This was followed by preparation of mock-ups, almost like going back to primary school - cardboard, colour-pens, lego, play-dough etc. We could have easily spent a lot more time doing this activity.

The final step was in-field validation and it typically leads to moments of truth. Does the customer really like the experience we are creating? How can we refine the solution further? Each team selected an assumption in their solution that they planned to validate by going to the field. For example, one team went to St. Johns hospital to test if colour coding of sign boards will help visitor find their way to appropriate counters. After talking to the staff and visitors the team realized that colour coding will help but you will still need somebody to help the visitors. After coming back, the teams refined their solutions and prepared their final presentations. This part reinforced the importance of rapid experimentation and iterative refinement. Final presentation also included a 3 minute skit depicting the solution through a role-play.

We were fortunate to have Lakshman Pachineela, Head of Innovation at SAP Global Delivery and visiting faculty School of Design Thinking, Potsdam, Germany join us during the final presentations and the discussion that followed. Lakshman also shared his insights on practicing design thinking in an organizational setting.