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The Brilliance of Steve Jobs
10.10.11

I joined the Electronics group at amazon.com in the summer of 2000. The group was (at the time) responsible for selling the products that were in the Electronics stores -- so DVD players, PC accessories, MP3 players, handheld devices, etc. -- basically most things that you would find in a Best Buy. (over time, they would add actual PCs and cell phones.) People don't mention it so much now, but MP3 players were a large and growing category. Napster had made its debut in 1999 (and there were a few other file sharing platforms before then) -- so especially among college campuses, the ability to get and download free music was rampant. However, and I want to stress this -- there was no obvious paid (and legal) alternative. One could buy CDs and then rip them -- but that was both expensive (because you had to buy a full album; I'm not even sure if they ever made CD singles, or at least those weren't nearly as popular as tape singles) and a pain in the neck (because you then had to rip the CD to convert the songs to a digital format.) 

However, even though there was relative ease in getting digital music -- even playing back digital music wasn't ideal. Most of my friends used a fairly rudimentary program called WinAmp -- maybe one step above what was then called shareware. (Basically software created by independent programmers which often was a step or two below things you could buy in a store.)

So let's recap -- ease of digital downloading (but no legal / paid version), no good music playing software for your computer, and high demand for some form of portable music player.

The two big category sellers in the Electronics store when I arrived were handheld devices (Handspring was particularly hot at the time) and MP3 players. Some of the big names back then were Rio, Archos, and Creative Labs. I would hazard to say that their MP3 players were not all the dissimilar from most of the electronics industry -- they came in all sorts of shapes, sizes, and configurations. A large one to carry lots of tunes? Archos. A small, more stylish one? Rio. They looked and felt ok. Some were fairly atrocious while others were acceptable. There were easily dozens of models.

One other thing -- music management was a mess. Getting your songs onto these devices was a real pain if you could figure it out at all. I have some technical proficiency and it would take me time and effort to be able to do so (and updating would be a pain.) There's no way my Mom could've gotten the songs onto these players -- these devices were clearly designed for the technically proficient and probably <30 crowd. 

The music industry was also in complete disarray. Frightened by Napster but still trying to cling to the vestiges of their previous business model -- they created services that were, frankly, ridiculous. The biggest attributes I can remember were that the online music services were typically tied to a specific label (e.g. only Sony artists) and were a subscription. This is a non-starter for all sorts of reasons. The first is that customers have no idea what label their artists are on -- or at least what label most of the music they have is associated with. Even if they know, who in the world wants to go to 3 or 4 different services just so they can find a song? Imagine jumping from service to service just because you don't know what service carries Lady Gaga? The second is something that I still see being pushed from time to time -- subscription based music models. People want to own their music. I know no other way to describe this. It's something inherent but also something that we've gotten used to over time because of CDs and tapes. We physically own it. We then do what we want with it. To have that music disappear over time? Or feel like this is a quasi gym membership? It's ridiculous. No surprise that none of these services ever gained any traction.

This was the world in the summer of 2000 -- 6 months before iTunes launched and over a year before the iPod launched.

  • No services to be able to pay and download any song you want (or even most songs you want.)
  • No easy way to manage and play your music.
  • No easy way to get your music onto a portable device.
  • Ok portable music devices.

This is just conjecture -- but I feel like Steve Jobs saw a much simpler world in terms of music. The ability to buy (individual) songs you wanted digitally and then easily be able to listen to them on your computer or portable music device. That's it. No subscriptions. No CDs (or forced bundling). No high degree of technical proficiency just to get your songs onto your MP3 player.

The work to get there was huge though. Think about it. The record industry was so unable to work with each other that they were launching competing, stand-alone, subscription services. Sites like Rhapsody. Perhaps this was a good thing because perhaps only through failure was it self-evident that they should open their libraries to a company like Apple. The record industry was also suing customers (or future customers) and not offering a viable alternative. There were few good software services out there for managing and playing your music. And the portable MP3 player market was small but growing rapidly.

This is one of the things I want to push on. The MP3 player market was big -- not as big as it is now -- but certainly big enough that many companies noticed it, marketed it, and built good businesses around it. But it wasn't great, yet.

So to get to where we are now -- Jobs had to first launch iTunes. iTunes before iPod. Maybe there were some time / technical challenges to get there (i.e. launching concurrently) -- but I suspect a big reason is that Jobs needed to prove to the music industry that he wasn't intending to make his money off the back of illegal downloads. That he was creating a legal alternative that would dramaticlaly improve the user experience of music downloading such that people would take to it -- which they obviously have. iTunes is a massive undertaking. As a store -- it's complex, but doable. But to get all the contracts done with each label? Awful. I'm sure that thought alone stopped other companies before. He not only had to get each label to play ball, he had to get them to play ball on his terms. This is key. Most tech companies have launched lots of services that failed mainly because they let the supplier dictate terms. A supplier has its own motivations -- which while often totally reasonable and logical -- basically would kill off a nascent business. Jobs had to get them to allow individual digital downloads. He had to get them for $0.99 each (talk about the psychological power of pricing / marketing.) That deal probably wasn't possible without Napster since they understood that the current alternative was individual digital downloads for free -- but still, to get labels to agree to this arrangement was a tremendous win in and of itself.

iTunes now exists -- and begins to thrive. More and more labels make their music available and the sheer volume of songs downloaded tics up exponentially. What next? The iPod. There is something truly great about the iPod. It's taking an existing industry -- one which was around for a number of years, had many reasonable and worthy competitors (who, frankly, constantly iterated on their product) -- and completely upended it. The iTunes / iPod ecosystem then was complete. A customer would have an end to end solution -- easy way to get their music and listen to it -- wherever they might be. My mom could then buy an iPod, download iTunes, and start listening to music within minutes. Absolutely unheard of in the previous world. The record labels / artists would get paid, and Apple would make a small amount of money on the song purchases and a lot of money on the iPod. Win / Win / Win. A product that not only delivers high consumer value but also creates a tremendous business -- a multi-billion dollar business.

I often talk about the iPod with startups. I think it's a great example of patience, iteration, and just plain old work / getting out there. As I've hammered home in this article, the MP3 market was a real market / industry in 2000. The iPod was late -- very late -- to the game. Yet they dominated almost instantly. Why? The iPod itself is significantly better than existing MP3 players. Its integration with iTunes is almost untouchable. But it's also something that got better in every way possible. Jobs' appreciation for detail is almost unmatched and this was a great example of the benefit of that. If it's hard to get music onto your Rio -- then you're going to move to the iPod. If the iPod looks cooler than the Archos -- then you're going to move to the iPod. If you simply want a legal way to download and enjoy music -- then you're going to the iPod. Jobs did every aspect of this correct because he spent the time to think it through. More importantly, the iPod was not great out of the box. The first version had a few extra buttons and was much thicker than it was now and the menus weren't quite as streamlined -- but it was still darn good and really beautiful. So much better than what was on the market. Orders of magnitude better. Each successive version built on this. They didn't create competing MP3 products -- they just built on the iPod foundation. They had similar extensions to it -- but they didn't have 18 different MP3 players. They had 1 -- some had different colors, some were different sizes, but they were all part of the iPod family.

I never had the chance to meet or even see Steve Jobs in person. However, I study Jobs' work more than anyone else's. Even though I don't spend most of my time in tech nowadays -- I think about his work all the time. The attention to detail. The beauty. The simplicity. When I work with startups, I often ask myself questions like, "How can this be simpler?" or "How would Apple approach this?" or "Have we thought of every step of this process?" For someone that I had never met, I was surprised at how affected I was by Jobs' death. I think one of the things that I loved about Jobs was that I always imagined that they way he worked would be that he would imagine a world that he would like to see. The iTunes / iPod world for music. And then he would make it happen. He would move every boulder where most companies, huge companies, would be unwilling to move even one. It's brilliant in a completely different way we think of brilliant. Thank you Steve Jobs. I will miss you.

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