In a recent interview with Charlie Rose, Apple (NASDAQ:AAPL) Chief Executive Tim Cook talked about one of the company’s core principles drummed into them by Steve Jobs: staying focused on what the company does best. Cook said he could put every product the company makes on the table in front of them.
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Indeed, if you go back seven years to 2008 you’ll come across a rare Steve Jobs interview where he told Fortune, “People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”
Jobs went on to explain that, had the company done a PDA as it was pressured for years to do, “we wouldn’t have had the resources to do the iPod. We probably wouldn’t have seen it coming.” And if Apple had never done the iPod it probably would never have done the iPhone or iPad, either. A sobering thought.
But the company did focus and that strategy seems to be working out quite well, to say the least. Yesterday Apple announced a monster quarter that crushed Wall Street estimates across the board with record earnings of $18 billion on record sales of $75 billion, including record revenue from iPhone, Mac, and App store.
I could argue that Apple became the most valuable company on Earth at least in part by doing less, not more. And if you had to find a company with a diametrically opposed strategy, you wouldn’t have to search very far. Just a few miles from Apple’s Cupertino campus in nearby Mountain View sits Google’s (NASDAQ:GOOGL) headquarters, the Googleplex.
When Co-Founder Larry Page became CEO nearly four years ago I was concerned that Google lacked focus. “Without a clear vision and strategy,” I wrote, “diversification [will be an] expensive free-for-all in highly competitive markets dominated by powerful incumbents.”
Who knew that Page’s wide-ranging interests and penchant for far-flung projects the company calls “moon shots” would, in a few short years, make it seem like the Google of 2011 was laser focused. Today’s Google has so many irons in the fire it’s no wonder that profit margins continue to slide amidst soaring costs.
Which begs the question, is there a method to the madness? Does Page see something the rest of us can’t? And can his wide-eyed vision for Google and Jobs’ principle of narrow focus both be right?
Before we try to answer that, here’s sort of a rundown of some of the things this company has going on. Reader warning: it’s a little nuts, so hold on to your seat:
Obviously there are Google’s core products that generate the vast majority of its revenue and profits: search advertising via AdWords and AdSense and display advertising primarily from YouTube.
Then there’s Chrome, Gmail, Maps, Android, Books, Google+, Wallet, Chromecast, Google Now, Android Wear, and its recent move into home automation by acquiring Nest.
Well, that’s just the tip of the iceberg. Page says he wants Google to be at least 10x bigger than it is now and he wants to do that by tackling big problems of vital importance to the world.
Just last week news broke that Google intends to become a wireless service provider, competing with AT&T and Verizon by providing the best signal from Sprint, T-Mobile and Wi-Fi hot spots. The service will reportedly launch nationwide within a few months.
For the past several years, Google has become a broadband ISP, laying its own fiber in three cities with four more on the way shortly.
We also recently heard about Project Ara, a modular smartphone platform with interchangeable components intended to lower the barrier for entry-level phone makers. Ara’s scheduled to begin pilot testing in Puerto Rico later this year.
And now, Google wants to sell you auto insurance. I’m not sure how that qualifies as being of vital importance to the world, but let’s move on.
Google X is co-founder Sergey Brin’s lab where most of the company’s moon shots begin life. The criteria for Google X projects is they must address a problem that affects millions or billions of people, utilize a radical solution that partially resembles science fiction, and use technologies that are obtainable within the near future.
Here’s what’s going on at Google X:
Google Glass, Google’s infamous self-driving car that’s currently out searching for automakers to partner with, Project Wing for drone deliveries, Project Loon provides Internet service by balloons in the stratosphere, and an artificial neural network for speech recognition and machine vision.
Google acquired Boston Dynamics, a company that designs mobile research robots for the Pentagon, Makani Power for airborne wind power, and product design firm Gecko Design. It recently invested $1 billion in Elon Musk’s SpaceX for satellite based Internet service and led a $542 million round in augmented reality startup Magic Leap.
Google X also has a life sciences division where it’s currently working on a smart contact lens that measures glucose in tears for diabetics, a disease-detecting nanoparticle platform, and a project to collect genetic and molecular information from thousands of people to map a healthy human. It also acquired Lift Labs, which makes tremor-canceling utensils for Parkinson’s patients.
The company has also made investments in DNAnexus, which provides a cloud-based data analysis and management platform for DNA sequence data; Rani Therapeutics, which is researching different drug delivery mechanisms; SynapDx, which works with developmentally disabled children; Transcriptic, which develops automation technology for molecular cloning, genotyping, and biobanks; and One Medical Group, which makes medical appointment scheduling software.
Last but certainly not least, Google X spawned the Calico project to combat aging and outsmart death.
Among the projects the company considered and rejected are a space elevator, a hoverboard, a jetpack, and teleportation, as in “Beam me up Scotty.”
Google also has a philanthropic arm google.org that’s trying to solve the world’s energy and climate problems.
To put this all in perspective, on the one hand you have Steve Jobs preaching focus and saying that, if Apple had done a PDA, it would have missed the iPod, implying the current incarnation of Apple might never have existed. On the other hand you’ve got Page wanting Google to be a million-person company that solves the world’s problems.
You can’t have corporate strategies that are further apart. They can’t both be right. My money’s on Apple.
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