Steve Jobs, who died on Wednesday, was a singular figure in American business history. He will go in the pantheon of great American entrepreneurs, inventors, and innovators, alongside John D. Rockefeller, Henry Ford, and Sam Walton.
Jobs didn’t invent computer technology, or the cell phone, or the notion of digitising music. But he invented methods, business models, and devices that turned each into significantly larger cultural and economic phenomena.
To a degree, one might look back on the arc of Jobs’ career and conclude that he simply rode a series of technological waves. But Jobs, and the company he led, rode the waves while pushing back against them.
In an industry frequently hostile to design, Jobs’ Apple banked on it. In an industry in which products simply got cheaper every year and everything tends toward a commodity, Apple’s products were able to command a premium. And in an age of pinched consumer spending, millions of people were eager — even desperate — to shell out for the latest version of the iPod, the iPad, or the iPhone.
In an era frequently characterised by executive greed and massive pay for significant underperformance, Jobs worked for a dollar a year. At a time when many founding CEOs step down when they hit their late 40s and early 50s to chase other pursuits (a la Bill Gates), Jobs stuck with it. In an era in which many experts fretted about the ability of America’s economy to thrive and innovate, Apple grew into a major exporter. Apple now represents American brands, the way McDonald’s and IBM and Coca-Cola once did.
In an era in which equity values stagnated, Apple’s stock thrived. The performance of the company’s stock, which is now worth $322 billion, up from a few billion in 2003, is one of the great examples of value creation in modern history.
It’s difficult to put a tag on what it is precisely that Jobs did. He didn’t create a fundamentally new business structure, the way John D. Rockefeller did with the vertical integration of Standard Oil. He didn’t democratise a product that had only been available to the very rich, as Henry Ford did with the Model T. And he didn’t fundamentally alter the distribution, logistics, and production systems the way that Sam Walton did with Wal-Mart.
Under Jobs, Apple simply created a bunch of really cool products that people decided they needed to have. And have again. While Apple had brilliant ads, and while Jobs was an excellent salesperson, Apple’s rabid, evangelising fans have been the most effective marketing tool. When it comes to clothes, or shoes, or cars, my kids, 13 and nine, are largely indifferent to brands. When it was time for them to get their own computer, it had to be a Mac.
There are three basic business stories: the rise, the fall, and then the comeback. Jobs provided a vivid example of each. He started Apple Computer in the 1970s out of the proverbial garage with Steve Wozniak, only to be pushed after the company had gained scale. Returning to helm the company in 1997, he led a comeback that was, in many ways, far more impressive than the original rise.
Yes, Steve Jobs got rich in the past decade. But he didn’t so at the expense of his shareholders. In fact, they grew rich along with him. And Apple didn’t prosper at the expense of partners. The walled-garden approach of iTunes and the Apps store goes went against the grain of the notion that everything online should be free. But it was, at root, a courageous act. And it served as a kind of affirmation for content producers. And perhaps that’s why he got such good press.
Several industries in the past decade found themselves essentially powerless in the face of the internet and the advent of digital technology. But Jobs and Apple invented devices and business models that encouraged people to pay: for music, for television shows and movies, for books, and for applications. By continuing to roll out new products, Apple has really expanded the playing field for content creators. It’s much more compelling to watch a movie on an iPad than it is on an iPod.
The highest form of charity is helping somebody find a job or a means to support themselves. Just so, one might argue that the highest form of business is creating a profitable enterprise that allows and encourages other people to innovate and find means to support themselves. Apple has done that time and again. Yes, the publishing and music industries have griped over payment terms. But Apple is allowing individuals and companies to reach truly massive audiences at a relatively low cost. It has rescued some markets, revived others, and created entirely new ones. This century is only a decade old. But it’s a safe bet that in 2099, when analysts and historians are looking back, Steve Jobs will be remembered as one of the giants of 21st century business.
(The writer is Economics Editor at Yahoo! Finance)