Inside Apple: How America's Most Admired--and Secretive--Company Really Works (21 page)

Elon Musk, for example, a founder of PayPal as well as the space-exploration start-up SpaceX, paid homage to Apple by hiring one of its top retail executives, George Blankenship, to oversee the nascent sales efforts of Tesla Motors, Musk’s fledgling electric-car venture. Blankenship, who worked at the Gap for the first twenty years of his career, is vice president for “worldwide sales and ownership experience” for Tesla. What “sales and ownership experience” means to a new company like Tesla is the location and design of its retail showrooms, as distinctly different from a traditional auto dealership as Apple’s retail boutiques were from a big-box Circuit City store.

Blankenship, a trim, goateed fifty-eight-year-old, is ideally suited for the Tesla assignment. He ran real estate operations for Gap, the multibrand retailing behemoth, and then signed on with Apple in 2000 to be its site-selection guru for the nascent Apple stores. “I sit here today and look at Tesla, and I see Apple ten or eleven years ago, when I joined,” he said. As we chatted, we were sitting in a lounge area of the Tesla “showroom” in San Jose. Tesla showrooms aren’t dealerships—a legal distinction in certain states. But they’re also not meant to evoke the dealership vibe. Salesmen with short-sleeved dress shirts and ugly ties are nowhere to be found on the premises. Tesla’s site selection itself is unusual: The San Jose showroom sits in the middle of the high-end Santana Row shopping center, located between BCBG Max Azria and Franco Uomo clothing stores. It is nowhere near a freeway off-ramp. The walls are painted in an arresting dark red, with giant Apple monitors displaying Tesla promotional videos. An interactive touch screen on one wall allows prospective car buyers to design the interior of their dream electric car.

His mission at Tesla, said Blankenship, is the same as Apple’s goal was back when its stores opened: get uninformed customers familiar with a new product they otherwise wouldn’t have been inclined to even consider. “I sort of look at the iPod as a big step forward for Apple because up until then it was trying to build confidence and get people comfortable coming into the store,” he said. “And then comes the iPod. It cost $400. Most of the music players at that time were $149. What’s the difference? Well, the difference is this one is ‘a thousand songs in your pocket.’ ” Whether or not other players held a thousand
songs was beside the point. Apple came up with the easily repeatable marketing line that perfectly captured the iPod’s capability. Blankenship described Tesla’s version, an obvious homage to Apple marketing, regarding how to sell its $150,000-plus Roadster. “Zero to sixty in 3.7 seconds,” he said. “Well, that’s impossible. Nope. Get in the car and ride it and you’ll see, it’s zero to sixty in 3.7 seconds. Two hundred forty-five miles on a charge. That’s impossible. Nope, not in our cars. So what happens is you begin developing a customer who wants your car. It’s not about price, it’s about wanting the car.”

The comparisons between Apple and Tesla don’t stop with the stores or the marketing message for its first, expensive product. Just as Apple followed the original iPod with a far less pricey iPod Mini, Tesla plans to unveil a $57,000 sedan called the Model S. “We have people waiting in line to be able to buy a Model S, because they want the car,” he said, not needing to add that many of these people admired but couldn’t necessarily afford the Roadster. (Celebrity owners such as actors George Clooney and Dustin Hoffman and superagent Ari Emanuel clearly could afford one.)

Blankenship is hard-pressed to find any differences between how Apple approached retail and how Tesla hopes to sell cars: “They were trying to get into the buying decision, we’re in the buying decision. They were trying to overcome a preconceived idea. We’re trying to overcome a new technology that we’re trying to introduce. They didn’t want to focus on price. We’re not focused on price. They wanted to have a great experience. We want to have a great experience.”

There’s one thing at Apple Tesla doesn’t plan to emulate
just yet. “Elon actually asked me… ‘Do you think we should do a Top 100?’ I said, ‘Not yet. There’s really no need for that yet.’ ” Apple, Blankenship explained, was broadening its portfolio from computers to music to phones. Such things called for senior-level coordination. Tesla, for the time being, sells one model.

T
esla executives admire Apple’s messaging and approach to retail, while other entrepreneurs at Web 2.0 companies including Facebook, Twitter, and Inkling have studied Apple in the hope of appropriating other elements of its success. Whereas Apple was barely part of the conversation a decade ago, especially among Internet companies, today it is Topic A. “We look at Apple as an extraordinary model,” said Sheryl Sandberg, the chief operating officer of Facebook and a veteran of Google. “We study its approach to everything from the consistency of its messaging to how it structures its business.”

Facebook has created a “closed” (that is, non-Web-based) platform while encouraging others to build applications within Facebook, on Facebook’s terms. (Sound familiar?) Facebook’s young founder and CEO, Mark Zuckberberg, frequently walked in Palo Alto with Steve Jobs, seeking the older man’s advice. Sandberg, who served on the Disney board with Jobs, said the Apple example also is valuable for managing her relationship with Zuckerberg. “I work for a founder-driven company,” she said. “Seeing how Jobs channeled his passion and intensity helped me appreciate how I can help Mark realize his vision for Facebook.”

One acclaimed Silicon Valley entrepreneur is said to
have been so enamored with Jobs that he is modeling himself after him. Jack Dorsey, the inventor of Twitter, emulated Jobs by taking on an operating role at Twitter while also serving as CEO of Square, a mobile-payments processing start-up he founded. (Jobs gave less of his time to Pixar but was heavily involved, for instance, in Pixar’s sale to Disney while he was CEO of Apple.) Square’s elegant white credit card reader easily could be mistaken for having come out of Apple’s industrial design lab.

Meanwhile, a handful of former Apple employees are starting their own companies, taking with them the lessons they learned at Apple. “Culture is the sum of things that we encourage and discourage,” said Matt MacInnis, a former Apple education marketing executive who founded a digital publishing company called Inkling that initially produced textbooks solely for the iPad. MacInnis listed some of Inkling’s founding values, all borrowed from his experiences at Apple: “Don’t talk about product until it’s done. Have high expectations. Don’t talk about the road map with the entire company.”

Even entrepreneurs who had success before Apple’s resurgence are studying its ways. Mike McCue was a young executive at Netscape and later founded Tellme Networks, which he sold to Microsoft for nearly $1 billion. His latest start-up is Flipboard, a publishing platform chinater found that aims to upend the magazine industry by aggregating content on the iPad. McCue said he’s been studying Apple since its earliest days. As an entrepreneur, he embraces Apple’s notion of “building technology not for technology’s sake, but to change the world, to make a ‘dent in the universe,’ as they used to say.” He overtly thinks about the simplicity of Apple’s design and attention to detail. “We are pri
marily about building a really pure user experience that is heavily thought through,” said McCue. “We will spend hours and hours and hours talking about a ‘close’ button in the corner of the screen and mocking it up, and going through hundreds of different design iterations on that before we settle on one that we like. That kind of attention to detail means that as a result you really can’t do a lot of things. You have to just do a few things really, really well.”

N
ot every company and not every executive will be able to copy Apple. Some companies are too complicated for one P&L. (It’s conceivable Apple may one day also be too complicated for one P&L.) Some industries demand market research. An oil giant, for example, is not going to drill for oil without first forming an opinion about demand.

But it’s hard to imagine that the basic tenets of the Apple way can’t be imitated. Who would argue for not focusing, or for not holding employees accountable? What maker of products or deliverer of services wouldn’t benefit from asking the question: Are we basing that decision on what’s best for the product, and therefore for the customer? Is there a company that couldn’t benefit from a critical examination of its messaging, to at least ask the questions: Are we simplifying the message enough? Is our point clear? How many companies allow their PR departments to serve multiple masters and purposes, including CEO ego gratification, as opposed to pushing product? Is there something to consider in discouraging employees from being distracted by pursuits that may help them but not the company? Is career development always best for the shareholders?

As an unabashed admirer of start-ups, Jobs fought like crazy to have Apple retain some of a start-up’s characteristics. In fact, though medium-sized and large companies will want to study Apple’s ways, its best lessons may be for start-ups. Because Apple was so sick when Jobs returned, he was able to treat it as a reboot, what the rest of the world would call a turnaround project. Yet the Apple of the late 1990s was very much an upstart. It had little to lose and everything to
gain from casting aside the industry’s ways of doing things. The management and operational characteristics of the reborn Apple are a treasure trove of guideposts for all business; they are a veritable handbook for entrepreneurs.

The biggest pitfall in trying to be like Apple, however, is that Apple’s culture is thirty-five years in the making and bears the stamp of one extraordinary entrepreneur who turned into a shrewd chief executive of a sixty-thousand-person corporation. It won’t be a snap for any company to create its own version of the Apple culture. As well, Apple itself will find out how strong its culture really is—and how much of its success was directly attributable to Steve Jobs.