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> I fought with him over stores as did virtually everyone on the board of Apple, and it turned out he was right.

He actually goes into depth about why Apple stores were necessary in a talk he did at MIT in 1992 [0][1]. Was it that he was not nearly as articulate in person with his team, as he was in this video?

EDIT: Luckily, the transcript is available. The money quote is:

" ... current distribution channels for the computer industry over the last several years have lost their ability to create demand. They can fulfill demand, but they can't create it. If a new product comes out, you're lucky if you can find somebody at the computer store that even knows how to demo it. So the more innovative the product is, the more revolutionary it is and not just an incremental improvement, the more you're stuck [in getting people to try learn about it enough to try it out]."

Here's a fuller quote:

There are some things I can't talk about here. In addition to that, if you look at how we sell our computers right now, we have a sales force in the US of about 130 professionals in the field out selling NeXT computers. They spend 90% of their time selling NeXTSTEP software, and then 10% of their time selling the hardware.

In other words, if they can get the customer to buy into NeXTSTEP, then they're going to sell the hardware, because right now we have the only hardware it runs on. So they are out there selling NeXTSTEP right now. And this is what is required to launch a new innovative product. The current distribution channels for the computer industry over the last several years have lost their ability to create demand.

They can fulfill demand, but they can't create it. If a new product comes out, you're lucky if you can find somebody at the computer store that even knows how to demo it. So the more innovative the product is, the more revolutionary it is and not just an incremental improvement, the more you're stuck. Because the existing channel is only fulfilling demand. Matter of fact, it's getting so bad, that it's getting wiped out, because there are more efficient channels to fulfill demand, like the telephone and Federal Express. So we're seeing the channel become condensed on its way to I think just telebusiness.

So how does one bring innovation to the marketplace? We believe the only way we know how to do it right now is with the direct sales force, out there in front of customers showing them the products in the environment of their own problems, and discussing how those problems can be mated with these solutions.

[0] https://infinitehistory.mit.edu/video/steve-jobs-next-comput...

[1] https://youtu.be/Gk-9Fd2mEnI

That's a great find. I hadn't seen that. I didn't even remember him saying this. We did try to sell through VARs who were supposedly a higher-end channel. Sun had a lot of luck with VARs, I understand.

Thanks for this perspective. I wish I could save comments the way I can favorite posts, so I'm replying as a workaround.

It gives me new perspective on the value and purpose of the Apple Stores, which I previously viewed as just a luxury shopping experience as window dressing on the usual consumer electronics buying experience. That's still a big part of it, but your quote explains the deeper value.

It also explains to me why Microsoft chose to follow suite with their own Microsoft Stores, although I still wonder why theirs aren't as successful. It's always amusing and a bit sad to go to the Valley Fair Mall in Santa Clara, where the Microsoft Store is literally right across from the Apple Store, but Apple is packed where Microsoft is a ghost town. What secret sauce are they missing? My thought is that the Microsoft brand is still poison to the average consumer.

The thing to remember about the Apple store is that it made world class computers accessible to the masses.

In the old days, a Thinkpad or Toshiba Tecra were only seen by commercial accounts and college kids. Your only way to see and touch an expensive ($2k in 98-2000) purchase was some awful bolted down display at CompUSA or BestBuy. And you only saw shitty consumer product, and were stuck dealing with a salesman of questionable knowledge looking for a warranty spiff.

The Microsoft vs Apple store thing is easy — they are selling the same dreck, spiffed up with a few first party products.

Given that the average salary in many countries is way below 1000 € per month, I would disagree with "world class computers accessible to the masses".

You actually can save comments. Click the time stamp in the comment header to present the comment in isolation, then click “favorite”.

Microsoft has never been great at marketing.

Steve put so much effort into giving Apple products life, figuratively. For example, he would call the iphone, "iphone", not "an iphone" and was adamant about it. Almost giving existence to it. Also, the way he introduced products was brilliant. He was a master at teasing the public and peaking interest prior to product launch.

Where Microsoft would release products akin to the Zune..in brown, or products with unmemorable names like 'Surface Pro x', with very little marketing. I've always thought MS has interesting products and they have been first to market many times. However, due to lack of marketing, they didn't gain traction.

> What secret sauce are they missing?

I remember someone on ESPN segment which had been sponsored by Microsoft and the people on the screen were using MS Surface but the commentator said we are using an Ipad like device.

I guess MS needs some innovate ads which will tell people what MS does in the consumer space.

It's even worse than that! MS spent $400 million to sponsor the NFL and provided many Microsoft Surface Pro devices, and the week they debuted, all the announcers called them "iPads." So MS threw a fit, and rightly so, and the next week all the announcers called them "iPad-like devices" instead.

I mean: "iPad" is two syllables, short and sweet, and MS wanted people to call the devices the "Microsoft Surface Pro," six syllables that don't exactly roll off the tongue.

That's not even getting into how they packaged all of those Surface Pros in gigantic blue padded cases, giving the impression that Microsoft's version of the iPad was big and clunky. Necessary for use on the sidelines, I'm sure, but not well thought out.

That MS Store used to be a ghost town. It's pretty crowded on weekends now with people playing with Surface Book, Surface Studio.

If you click on the time stamp of a comment you can then save/ fav it.

I just found this out recently too, not a new member either!

> So we're seeing the channel become condensed on its way to I think just telebusiness.

Stealth prediction of Amazon. If you know what you want, you order it online (until Amazon kills itself with counterfeits.) If you don't know what you want, you go to a store.

Amazon should figure this out soon. They just need to improve the way to get after counterfeits by having a clear and concise way for attorneys and manufacturers to report what fake stuff is being hocked. Right now Amazon is too segregated internally to get the guilty parties off their platform (quickly). Consider how many of those there might be. Meanwhile the manufacturers are too paranoid to sell on Amazon because they view them as competition. Once walmat and microsoft team up for some bar lifting you will only see a better version of Amazon with respect to counterfeits.

-3rd party Amazon seller.

That's a great quote and the argument sounds convincing but worth remembering that, in terms of sales numbers, NeXT was a wart on the arse of other manufacturers selling workstation computers, like Sun Microsystems, which suggests they weren't doing an amazing job of mating "those problems with these solutions" on the software front.

The software was fantastic, and thankfully Apple acquired NeXT, but let's be honest: if NeXT hadn't been acquired (by somebody) their days were numbered.

Sales numbers over what time period? NeXT reverse-acquired Apple and sold hundreds of millions of units. Sun not so much. The vision of UNIX for everyone, under a best-in-class UI, was very powerful.

Umm, sorry, where are you getting "hundreds of millions of units" from?

Official figures are hard to come by but estimates suggest that NeXT sold about 50,000 units over its entire lifetime. The company had to stop manufacturing hardware and was very much dying.

You could classify the deal with Apple as a merger in that both companies were in a certain amount of trouble by that point and needed eachother (or some other merger partner) for survival, but Apple had a lot more runway. They did, after all, hand over $429 million in cash for NeXT, plus some quantity of shares.

It was literally a merger on paper, for what that’s worth. NeXT were also close to an IPO and their dev tools were second to none. WebObjects and EOF were first rate products easily worth hundreds of millions to the right people in their own right.

That distortion field is very powerful, I see. NeXT failed as an enterprise. It was close to going the way of the Lisp Machines.

Oh yeah. I have no doubt they were failing. But those two pieces of tech were very smart for their time.

Yes, I, too, saw that demo from the 80's. But the best tech doesn't always win :)

I don’t think EOF is from the 80s. WebObjects certainly isn’t.

I mean it was going to be NeXT or BeOS right? Seems like they couldn't have gone wrong with either.

I dunno. BeOS would have helped overcome some of their technical debt, but that alone would have not fundamentally changed Apple's 1996 market position. And don't forget, Be technology was not battle-tested, it was not multi-platform, it wasn't even multi-user.

NeXT technology didn't just overcome technical debt, it became a solid foundation for over two decades worth of cutting-edge software, hardware and product development by Apple. It remains one of Apple's greatest technical assets. But again, the technology alone would not have fundamentally changed Apple's 1996 market position.

Apple's market position was turned around by Steve Jobs, the "freebie" included in the NeXT acquisition.

That money quote is great. It strikes me that that's exactly where the toy market is today, as well. There is a reason Toys R Us crashed: you can go into a toy store and buy a toy, but you can do that just as well on Amazon. Current toy stores offer no way to discover and learn about toys you don't already know about. (Exception: gaming stores. Weekly collectible-card-game nights are a great way to discover said card game.)

I am amazed how much truth there is in these paragraphs, esp for B2B cos.

Great video. Thanks!

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