Apple, Innovation & Changing A Company’s DNA

Following its announcement of Apple as the most innovative company in the world, Fast Company has a great interview with Apple CEO Tim Cook.

For 30 years I have seen people struggle to understand Apple and their approach to everything from products to revenue. It has always been right here out in the open, its just very different from how most large tech companies approach customers and product.

As Cook himself says:

It’s always products and people. The question at the end of every year, or every month or every week or every day, is, Did we make progress on that front?

Granted this can sound simplistic or like marketing fluff or both, but the proof is in both the consistency of the message by all Apple exes over the years as well as the product line itself.

The reality is that companies have a DNA that is typically set early on. It can be hard to maintain as you grow and is frequently lost, but it is even harder to change the DNA of a company into something like Apple’s if it has never had it in the first place. Few companies have ever managed it. One notable exception in the last few years has been Microsoft under Satya Nadella, which has undergone a tectonic shift in its approach to customers, developers and its products. It can be done. Its just really hard.

Working With Co-Founders

Fred Wilson has a post up on the investor perspective of working with co-founders and the risks to the people and business when things take a turn for the worse in the relationship:

The co-founder dysfunction impacts everyone in and around the company, but mostly the team underneath the founders. It is like being in a family where mom and dad aren’t getting along. There is stress and strain, messed up decision making, and everyone is walking on eggshells.

There is tremendous opportunity for things to go badly wrong, especially for first-time founders. A common area of disagreement can be where the original idea was born from the group but as it becomes a start-up not everyone is willing or able to move forward with it.

While that is totally fair (everyone’s personal and professional circumstances will be different), inexperienced founders can end up with unrealistic expectations of how equity should be divided and vested.

Ultimately that can lead to both an unfair distribution of equity (which should be based on ongoing participation, responsibility and investment, not share of original idea) and resentment. Its very easy to end up in a situation where everyone is unhappy and the whole concern collapses or is at least thrown into chaos (which Fred alludes to.)

I have been very fortunate to work with 3 co-founders across 2 companies where we each understood and respected the area of strength of each other. In these situations you can build very powerful complimentary teams of co-founders. And all 3 are still very close friends to this day.