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Apple's success begets success


Last week, Daring Fireball's John Gruber published a great post detailing the myriad of ways in which Apple, under the direction of Tim Cook, is thriving in ways that would have perhaps not been possible with Steve Jobs at the helm.

Gruber articulates that Cook's October 2010 memo (or perhaps manifesto is more apt) did exactly what it set out to do; usher in a new era of collaboration across Apple's hardware, software, and services teams that simply wouldn't have jibed with the secretive silo-oriented product design environment Jobs seemingly preferred.

Consequently, Gruber argues that Cook has improved Apple's "internal operational efficiency." To illustrate this, Gruber cites an interesting example from 2007; the delayed release of OS X Leopard on account of the iPhone team needing to "borrow some key software engineering and QA resources from" the OS X team.

With cross-team collaboration now a key component of Apple's ever evolving DNA, Gruber writes of Cook:

The same maestro who was able to coordinate the procurement, assembly, production, and shipment of 76 million all-new iPhones and iPads in one quarter has brought those operational instincts and unquenchable thirst for efficiency to coordinating a Cupertino that can produce major new releases of both iOS and OS X, with new features requiring cooperation and openness, in one year.

A good point, but the comparison isn't entirely fair because Apple today isn't the same company it was back in mid-2007. Back then, Apple was successful. Today, Apple is successful beyond what anyone back in 2007 could have ever imagined, generating more money in a single quarter than what most companies earn in a year.

To that end, I think Apple's ability to unveil two major OS updates simultaneously has as much to do with increased collaboration as it has to do with Apple simply having more engineering resources at its disposal, thanks of course to the unprecedented success of the iPhone.

In 2007, the year Apple was feverishly working to finish up the original iPhone, the company had 21,600 full-time employees. By 2013, that figure had nearly quadrupled to 80,3000 full-time employees. Now, granted, many of the additional employees are the result of rapid retail growth, but the growth rate of employees even in Cupertino was so steep that Apple was forced to lay plans for an entirely new campus.

So from a broader perspective, I think a key takeaway from WWDC 2014 is that Apple's success has given it the ability to undertake tasks that simply weren't feasible before. Back in 2007, Apple simply didn't have the engineering manpower to roll out a revolutionary new mobile OS while simultaneously finish up the monster release that was OS X Leopard. What's more, the original iPhone team was necessarily small on account of the secretive nature of the product itself.

Tim Cook certainly deserves credit for increasing collaboration across Apple's various teams, but the growth Apple has enjoyed since the launch of the iPhone has put it in a position to implement cross collaborative efforts that simply weren't logistically possible back in 2007.

Success begets success.

Once the iPhone started selling like hotcakes, Apple's revenue really began to skyrocket. In turn, Apple began increasing the rate of its strategic acquisitions ever so slowly. It purchased P.A. Semi, Siri, and a handful of mapping companies just to list a few examples. Not willing to rest on its laurels, Apple began leveraging its past successes to take even more in-house control over its own products, such as the series of Apple designed A-x processors.

In addition to corporate acquisitions, Apple began leveraging its growing stockpile of cash to commit noticeably more money towards Research and Development efforts. If we look at Apple's annual R&D expenditures over the years, we see that Apple has continued to invest within itself as it has grown more successful. From 2010 to 2013 alone, Apple's R&D expenditures more than doubled.

Success and the Brain Drain

Many have opined that Apple's most pressing problem is brain drain, the phenomenon wherein Apple's best and brightest decide to up and leave the company for new adventures and employment opportunities.

This is certainly an ongoing issue as there have been no shortage of talented Apple engineers and designers who, having had their fill of grinding hours and demanding work at a large corporation, decide to retire, leave for new startups or, perhaps, explore new opportunities at other established companies. As a quick illustrative example, the number of Apple employees who left the confines of 1 Infinite Loop to work at Nest and Tesla is high.

To be sure, brain drain is a problem at any tech company. But with Apple, the phenomenon is somewhat lessened on account of the company's tremendous success. With the iPod, iPhone, iPad, and App Store all being released within the last 13 years, Apple's cultural impact and track record of innovation over the past decade is, arguably, unrivaled.

As a direct result, Apple today can attract and bring on-board the best engineering and design talent around. What's more, Apple's position and reputation as an innovative company often results in top tier talent pro-actively seeking employment at Apple. So while Apple can't stop talented employees from leaving, its success helps attract a steady stream of blue-chip talent back into the company.

Contrast this to, say, RIM, where scores of talented employees are leaving but aren't being replaced.

To further illustrate this point, consider this: Apple's success is what enables it to convince people like Paul Deneve and Angela Ahrendts to leave their positions as CEOs and join the Apple team.

When's the last time you heard of a CEO leaving a successful company to take on a different executive role at another company?

Again, Apple's success begets success.

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