Great, the enemy of Legacy is based on a lesson from Apple Inc, the most valuable technology company on this planet. Apple Inc is valued at 923 Billion USD as of May 2018. It’s the most valuable company because of many things, one of which is their culture of innovation. The story below gives a clearer picture.
Why didn’t Sony invent the iPod?
The Japanese company had all of the technical elements needed, plus access to a powerful music list through its Sony Music label and every bit of the design cachet Apple now enjoys.
Sony had even “developed a vision of integration of devices and content long before Apple dreamt of going into the music business,” a vision that drove its acquisition of content companies like CBS Records and Columbia Pictures.
So what went wrong?
The most common arguments blame a siloed organizational structure, a vast conglomerate grown too big to change direction, and a culture that stifled innovation.
But all of these factors are only the context that enabled the real failure: Sony simply couldn’t envision the business model that would make the seamless integration of content and device profitable
In other words, Apple’s true innovation with the iPod was not technical or even aesthetic; it was a spectacular reimagining of the business model around music.
Apple did something far smarter than take a good technology and wrap it in a snazzy design. It took a good technology and wrapped it in a great business model.
That model was a simple reversal of the razors-and-blades model: where Gillette made the razors cheap so it could sell blades at a premium.
Apple essentially gave away the ‘blades’ (low-margin iTunes music) to lock in the purchase of the ‘razor’ (the high-margin iPod).
The result was a game-changing innovation.
Indeed, the iPod and iTunes didn’t just make Apple a force to be reckoned with, it changed the world. iTunes reshaped the way we all think about, interact with, and share music. It’s younger sibling, the App Store, did the same thing for software.
Will your business model make you good, great or legendary? Think about this and execute rightly!