Listening to Apple’s earnings call 2 days ago, I wondered how to compare Apple’s CEO, Tim Cook, to Steve Jobs. Citing Apple’s plunging stock price (see below), some analysts are saying that entrepreneurs like Steve Jobs are irreplaceable.
Under Steve Jobs, Tim Cook was Apple’s COO (chief operating officer) and its temporary and then actual CEO. An Apple employee since 1998, Cook spent 12 years at IBM and was briefly at Compaq.
Explaining the Jobs approach, Silicon Valley veteran Marc Andreessen said that Steve Jobs started new product categories and targeted premium consumers. ”The Apple playbook under Steve Jobs was a single playbook. He would invent a new product category, start with 100% market share, and then every day that goes by, lose market share until some terminal outcome.” Jobs once said, “It’s not the consumers’ job to know what they want, ” and proved it with the iPod in 2001, the iPhone in 2007 and the iPad in 2010,
By contrast, naming the iPhone 5 and the iPad mini, an Atlantic journalist says Tim Cook is responding to the market rather than shaping it. It makes sense, though, as a Slate writer points out, that if Apple had introduced a new product now, it would have been developed when Jobs was alive. Slate suggests we wait and see.
So yes, we cannot recreate entrepreneurs like Steve Jobs. But then again, as firms become more mature, won’t they need new management skills?
Sources and Resources: My favorite Jobs/Cook article was from Slate but I would also recommend looking at this CNET post. For the analyst perspective, Business Insider is always a handy resource because of the Wall Street background of its head, Henry Blodgett. Here is how Blodgett feels about Apple now and the euphoria he expressed during 2011.
During dinner this evening, my friend said that she loves her local post office. A very small branch in a teeny building, they know her name, her needs, and are a neighborhood institution.
But, is it worth $1 billion a month?
During the first 3 months of 2012, the USPS lost $3.2 billion. First class mail volume is down and their retiree expenses are massive.
Changes have been proposed and opposed in Congress. Close 252 mailprocessing facilities? Lose jobs and still 235 remain. Stop Saturday deliveries? Let’s gradually do it during several years. Close my friend’s post office and hundreds of others in rural communities? Just let them remain open for fewer hours. Change the rules for prepaid pensions and maintain pension benefits? Attrition might work.
My bottom line: I keep returning to the Congressional oversight that makes innovative leadership impossible. Maybe we should just say that the USPS is such a valuable institution that we are willing to accept the huge expense and mediocre business model.
After all, I really would hate to lose the small and friendly post office near my home.
The Washington Post’s “Federal Insider” is a perfect source of information on the USPS as the issues evolve.
Our story begins with 3 Greek entrepreneurs who want to create an e-commerce business selling olive products. It ends as Oliveshop.com begins to flourish with orders from the U.S., Australia, Japan, Mongolia and beyond.
The middle of the story, though, is the problem.
Occupying 10 months, these entrepreneurs filled out an avalanche of forms, satisfied tomes of regulations, stood for hours on lines, and endured multiple inspections. The pension office needed proof that that their pension contributions were up-to-date. The Health Department required lung x-rays and stool samples. Greek banks would only process payments if they switched the language of the website from their clients’ languages to Greek. And, there was much more.
Our bottom line: Procedures ranging from forms to lines to inspections are called transaction costs. The higher the transaction cost, the less likely the activity.
The Economic Lesson
During 2011, the Greek GDP contracted by 6.9% while its debt climbed to 165% of GDP. Meanwhile, its unemployment rate is close to 20%. Greek statistics provide tangible evidence of how excessively high transaction costs can retard economic activity.
In a Teaching Company Course, “America and the New Global Economy,” economist Timothy Taylor tells us the nations with considerable regulation tend to have more corruption. Correspondingly, Transparency.org’s Corruption Perception Index 2011 gives Greece a low grade for 2011.
In the World Bank’s Doing Business Index 2012, for the “starting a business” category, Greece ranks 135 out of 183 countries. (The U.S. was #13 and New Zealand, #1.)
This 2012 McKinsey Report looks at Greece’s problems and its potential.
An Economic Question: How does one new business affect the 4 GDP components (business, consumer, government purchases and exports minus imports)?
By Mira Korber, guest blogger.
The U.S. economy added 227,000 jobs in February. That’s more than the 210,000 jobs economists forecast for the month, though the current unemployment rate is still high: 8.3%. (For a different take on the issue, read here.)
This analysis of the jobs report determines that with sustained growth of 250,000 jobs/month by November, election time employment will clock in at 8%.
Sunny news, right? Yes, but maintaining this growth rate would only bring employment back to pre-recession rates after a whopping eight years, according Michael Greenstone and Adam Looney of the Hamilton Project. Find their study on the “jobs gap,” including demographics, immigration, and generational variables, here.
Though slightly dated, this study shows why the average American may not “feel” as though things are getting better. The higher the GDP, the more quickly employment will increase, but the gap between what the US could produce and what it actually produces is ever broadening. Until the actual production catches up with potential production, employment cannot fully recover. Unfortunately, if growth hovers around 2%, employment won’t catch up at all.
And with a growing labor force, that proves a challenge.
The Economic Lesson
In the past decade we’ve experienced “jobless recoveries.” By contrast, we’re adding jobs right now, but can it last with a sluggish GDP? Read here for financial journalist David Leonhardt’s opinion.
An Economic Question: Do you think high unemployment is a positive incentive for young people to start their own business ventures, as this TIME article suggests?
Posted by: adminEcon
Tags: economic unemployment, employment, entrepreneurs, GDP, growth free recovery, growthless recovery, hunter-gatherer recovery, jobful recovery, jobless recovery, joblessness, jobs report, the hamilton project, unemployment, unemployment and gdp, unemployment rate
During the dot.com bubble, investors gave Boo.com $188 million, Geocities was purchased for 3.57 billion, and pets.com introduced us to sock puppet. None exist today.
Startup.com is an excellent documentary about the rise and demise of a similar dot.com.
GovWorks.com was supposed to let you pay your parking tickets online. Convincing some investors that it was a good idea, the firm raised and lost close to $60 million.
The story of govWorks.com illustrates perfectly the “air” that inflated the dot.com bubble.
The Economic Lesson
In this econtalk podcast, as Duke’s Mike Munger and George Mason’s Russell Roberts discuss profits, they also look at the role of entrepreneurs. Munger explains that being a successful entrepreneur is all about earning profits because you are able to allocate resources more effectively. As a result, an entrepreneur’s profits are ethical.
GovWorks.com never figured out how to implement their concept successfully.
An economic question: When are profits ethical? Unethical?