The world’s largest PC company just launched a “media tablet“. Conflating the iPod Touch and iPad brands into “TouchPad” HP joins RIM in announcing an integrated OS/device product to compete as a platform vs. iOS and Android (and to some degree even against Windows).
There are others waiting in the wings. Presumably, Microsoft is hard at work to release a tablet-compatible Windows sometime near the middle of this decade. MeeGo is also going through its gestation period targeting Atom-based tablets. John Gruber notes the excitement around tablet platforms in his article about this post-PC renaissance in computing alternatives. I also noted that the end of the PC era was marked by the end of WinTel at CES.
“Focus is about saying no.” This quote is perhaps apocryphal but it’s credited to Steve Jobs. It’s not a novel idea. Many companies chant this mantra but do they really understand what focus implies?
Focus is the antithesis of portfolio theory. Portfolio theory is a great concept. Every pedestrian in New York City has experienced it. While the weather is fine, street vendors sell their regular wares, but when a rainstorm appears it seems everyone is selling umbrellas.
The idea that you keep umbrellas in stock seems very prudent. It’s a hedge that people will need a different product under different circumstances. Maintaining a product portfolio is a way of selecting a collection of products that has collectively lower risk than any individual product. The formulation of this even earned its creators the Nobel prize.
But “focus” is the willful rejection of this theory. By saying no to alternatives you increase risk disproportionally to the reward. If you have the means to maintain a portfolio it certainly seems imprudent not to do so.
So why would someone want to focus?
The answer is that too much diversification is dangerous. It’s dilutive to everything the company uses to create value: its resources, its processes and its priorities. It dulls the mind and tarnishes the brand.
So focus is not just saying no. It’s being supremely confident in what you say yes to. It’s having the ability to call the winners and the losers. A company that lives and breathes product gains this confidence. A company that puts markets or profit formulas first never obtains the confidence to focus, inflates its portfolio and thus risks everything.
The best way to get to the essence of any company is by evaluating its priorities. These priorities are like an unwritten constitution. The analog in theology is dogma which when codified becomes doctrine. In law it’s common or case law. In business, priorities are hard to discern and are usually only anecdotally observed.
At Apple the top priority is the product.
Sounds trivial, but very few companies place product first. Those who do tend to be producing creative works (e.g. movie or advertising studios, companies built around a creative process). Most companies place either production or distribution first.
Placing product first forces the bizarre behavior that Apple is well known for: being innovative and quixotic. It makes them foolish and hungry. Sometimes it even makes them catastrophically destructive to competitors.