Strategy Rules

Are you reading this text on your laptop, your Mac, or your iPhone? If it’s one of those three then you are benefiting from the abilities and methods of the three most impactful and successful businessmen in today’s modern age. They are Apple’s Steve Jobs, Microsoft’s Bill Gates, and Intel\’s Andy Grove.

It wouldn’t be an overstatement to claim that those are the three men who altered the world by offering impressive computers and digital gadgets at a reasonable price that way anyone was able to use it. Those gadgets are what is at heart of the digital revolution in today’s modern society.

How were they able to do it? What can you learn from them? These paragraphs will outline the methods and skills that let them make a few of the largest companies in the world.

You will be taught:

How come Steve Jobs could have become a great judo master
How come Microsoft marketed a service that they didn’t even have
How come Intel’s first conference calling system was just way too advanced for its time

Strategize by creating a vision, setting priorities and anticipating customer needs.

It would be nice to know how the leading companies such as Apple, Microsoft, and Intel were able to become the leading forces in their industries.

The answer is actually quite simple.

Each one of them share vision, which is the common key to success. To put concisely, they’re at the top since they all began with a clear image of where they wanted to head.

However, understanding where you want to go isn’t useful if you don’t know how to get there, which these businesses understood. Therefore, as soon as they set their visions, they created the strategies that would help them bring their visions to life.

How did they do it?

Begin bringing your vision to life by setting your priorities.

Take, for instance, Gordon Moore, the co-founder of Intel. Back in 1964, Moore had made the prediction that computing power would increase two-fold each 18-24 months. Intel’s CEO, Andy Grove, had taken that information in order to predict an industry shift from a horizontal structure, where businesses created and sold entire systems to a vertical structure that paid more attention on smaller product groups in order to increase efficiency.

Therefore, Grove moved the company’s main goal of producing entire computers with the hardware and software to microprocessors, or specific components. As a result, Intel was able to become the leading force in their field.

However, Moore’s discovery went a lot further than at Intel. Bill Gates had utilized his own interpretation of it in order to outline Microsoft’s priorities.

This is how he did it.

Gates understood that should computing power be boosted exponentially, with time, it would basically become free. Therefore, instead of selling hardware such as processors, which would drop in value with time, Gates paid attention to the software in order to really take full advantage of that computing power.

Priorities are crucial when you’re trying to bring your vision to life, however, predicting the needs of your customers is also very important as it will help you stay on track.

For example, back in 1979, Steve Jobs had went to see Xerox’s research center and he got to see the first graphical user interface, or GUI. Up until that point, operating systems had only ever reacted to typed command lines, which made them complex to use. Jobs understood that in order to gain the attention of customers, personal computers would need to be much more user-friendly. When looking at the future of computers in GUI technology, he decided to use it in order to make a ready-to-use user interface that would make computers a regular occurence.

It’s obvious that having a vision, prioritizing things to bring it to life, and predicting your customer’s needs are all crucial parts in moving your business forward. However, what are your goals as you move forward, too?

Ensure your product’s success by honestly evaluating market conditions and deterring competitors.

Suppose you have a vision for your business. You’ve set some priorities in order to bring it to life and you know exactly what your customers want. This seems as if everything's set in order to create a great company. However, prior to creating your store, it’s crucial that you figure out whether your market is right and if you’ll be able to win against your competition.

Take a look at the limits within your market and the technology surrounding it that way you can properly evaluate your item.

For example, back in the 90s, way before Skype, Intel had put in hundreds of millions of dollars into ProShare, which was a conference calling service. However, they made the mistake of disregarding the limits of the era that they were in; the hardware that they needed was costly and the technology necessary in order to transfer data was slow and not reliable. As a result, their pioneering idea was had the sad fate of failing.

Apple had an experience like it in the beginning of the 2000s, but they had come clean about the situations. Their business had been playing around with iPad prototypes in 2002 or 2003. The items were working great, however, there was an issue: WiFi just became a bit more available to a larger number of customers, therefore they wouldn’t be able to understand them item’s complete potential. When Apple had figured that out, they waited until that important infrastructure had become more developed.

As a result, it’s very important to understand when you should bring your grand idea to life. However, as soon as your item has been put out there, your job’s is still not complete. You will need to manage your rivals by creating barriers at the entrance.

How do you do that.

One way that you can do it is by setting your item as the industry standard. Let’s take a look at how Microsoft did it.

When IBM had asked Gates to create an operating system for their computers, he said he’d only agree to it if he was able to sell that operating system to various other manufacturers. IBM had agreed, so Gates went to create the infamous Disk Operating System, or DOS. Gates could have made so much money from the licensing fees by making that software exclusive to IBM, however, he had other, greater ideas.

His goal was to sell DOS at a low cost, but at a high capacity to a lot of computer manufacturers that way it would become the industry standard.

That’s exactly what happened, therefore, his low prices didn’t let the competition get in!

Staying competitive requires taking risks, just don’t bet the whole company.

If you’re a CEO, then you need to take large risks if you want to remain a leader. However, every good CEO understands that although big alterations are required if you want to stay competitive, it is imperative that you don’t bet your shirt on them.

Take, for instance, Apple’s notorious shift from IBM’s PowerPC hardware to Intel’s microchips.

Back in the early 2000s, Mac’s PowerPC design had been lacking for a bit now, so Jobs understood that it was time to change things up. Indeed, Intel’s microprocessors were better, therefore, they were the obvious choice, however, altering out the hardware would require an entire rewrite of Mac’s operating system as well as applications. In addition, there would be an increased liability of sales decreasing prior to the new release or even worse, their loyal customers would leave the business instead of getting the old software replaced.

To summarize, the situation seemed quite risky. An analyst had even predicted that the shift would cause Apple to completely dissolve as they’d lost both customers and developers. With those kinds of high stakes, it seemed as if Jobs would be betting on the entire company. However, that’s actually not true.

How come?

Jobs understand that the extra income from Apple’s unique and well-selling iPod, which was actually able to sell more than 10 million units in the two quarters that had foreshadowed the announcement, would provide the business with a financial cushion. Therefore, he was able to take the risk as the pressure to make sure that Apple would survive was lifted courtesy of Mac sales.

Taking a look back, the decision was perfectly timed and couldn’t have been done differently. In fact, Macintosh computers’ market share had increased two-fold in the next five years that had followed.

At times, taking some risks in order to remain competitive will mean that you’ll have to eat into the sales of your other items. As the CEO, it’s imperative that you understand when to salvage your cash cow company in order to create new items.

Do you remember when Apple had launched the iPod Nano? The iPod Minis were still being bought rapidly. The company had done the same thing when they had launched the iPad, therefore, salvaging their laptop sales. However, the lost laptop revenue isn’t even comparable to every single Windows users that had been converted thanks to the iPad.

Instead of developing a great product, develop a strong platform - the key to exponential growth.

A great item may seem like it’ll be your ticket to success, however, what will happen should there be no demand for it? The top CEOs in the business understand that success means that you need to create platforms that will get people to latch onto it, making it a standard in the industry.

When Steve Jobs had first started out, he didn’t quite figure out how come platforms were a big deal. He was very focused on controlling the user experience, therefore, he wouldn’t license Apple’s operating system to other manufacturers.

Therefore, he took the road opposite that of Gates, who had sold the DOS as well as Windows to anyone that he could. Instead, Jobs paid attention to is own niche with only a bit of success. Keep in mind that back in the 90s, Mac’s market share was in the low single digits!

What had changed?

Jobs made a return after he had matured as a strategist and he gained a better understanding of platforms. He created a Windows version of iTunes, which was the iPod’s supporting software. This greater usability quickly made iTunes the platform which allowed Apple to entirely control both the music and the digital media market. In addition, then the iPod became compatible with any type of computer, thus being the leading force in its field.

Andy Grove had a good understanding of platforms as well. He understood that Intel would only be able to sell more microprocessors if more computers would be sold as well as if the consumer value of computers was slowed down by conflicting hardware standards. Equipped with information, he had opened up a research lab which, even though it was outside of his own area of expertise, he found out many different things that today’s consumers look for in a computer. One thing that he figured out was that there was a need for a universal connector such as a USB. Up to that point in time, each manufacturer had their own specifications, therefore doing something menial such as connecting to a printer could be quite a headache.

Grove had patented the lab’s findings, however, he made it available to anyone. Computer manufacturers had taken advantage of that information in order to make computers that we easier to use, therefore, they sold much better. Inside of every computer was an Intel microprocessor, therefore, the company’s sales had soared through the roof.

Grove’s secret was to acknowledge that the computer industry in its entirety was Intel’s platform. By boosting that platform, he was able to boost his own item’s sales.

Strategize with cunning and strength but know when each tactic is appropriate.

In the business world, there are many different types of competition. A few CEOs utilize their deviousness in order to crawl around just as judo players do while the other ones act with power and aggression just as sumo wrestlers do.

Both of those strategies are crucial and the top CEOs understand when they should use each one. When you use judo tactics, it means that you are nimble, quiet, and are able to make sly moves. In order to succeed in judo, the key is to make yourself look as harmless as you can, therefore, your main rivals will underestimate you.

For example, when Jobs had put iTunes into motion, he had utilized the puppy dog scheme of pretending to be harmless.

Initially, he was planning on purchasing Universal that way he could sell their music on his platform. However, instead of using that method, which would have put him in direct competition some of the major record labels, he decided to play the part of a calling outsider. How terrifying would a computer company be with only a two percent market share to a major record label?

It had worked perfectly; those labels had underestimated how much Apple weighed, therefore, they game them very good terms in contract negotiations.

Judo tactics are really good for putting blinds on top of your rival’s eyes, however, at times, you’ll have to bring out the big guns which in other words, means the sumo.

Sumo tactics are about both power and size. Here, you need to think about buying out your competition as well as heartless undercutting. For example, in the typical Fear, Uncertainty, Doubt, or FUD, method, the market leader declares an item way before it’s actually ready to be released. The potential of that item that’s not available has users waiting and waiting, keeping them from purchasing rivals’ items.

Back in 1982, VisiCorp had provided a preview of a GUI operating system. This instance is a good example of FUD put to use. Gates, who was only in the initial stages of creating his GUI, was prompted to act and began promoting Microsoft’s item, even claiming that it would be released prior to VisiCorp’s. Microsoft’s reputation had customers waiting for a whole two years prior to when the item was finally released.

Imbue your company with your unique skills but consult experts for the rest.

At this point, we understand both the methods and the techniques that had assisted Jobs, Grove, as well as Gates with creating powerful businesses that became leaders in their respective markets. However, what about their own personalities and leadership styles, which had helped make both the men themselves as well as their companies the best?

For one, they understood how to implant into the roots of their businesses.

Every single one have them had created the momentum and the longing that had pushed to succeed, both the part and parcel of their business. Job’s passion for design had caused Apple to drive forward the standards of both product design as well as user experience. For Grove, he utilized his control in order to create an understandable, system process in order for Intel to handle the noise from both engineering and manufacturing. Gates, who had a love for hacking, had been so implicated that rewrote his developers’ code on his own as he “just didn’t like the way they coded.”

When sharing what you have with the rest of your company, however, you are only able to go so far. Those businessmen were also aware of the fact that the success of their businesses depended on recruiting experts that would go nicely, hand-in-hand, with their own strengths.

This is due to the fact that had they depend solely on their skills, the would not have gotten the wide knowledge base that is needed in order to be an effective leader. As a result, all of them kept on learning and often time, asked experts for help. Both Jobs and Gates also found partners that went well with their skills and their personalities.

For example, Jobs couldn’t care less about either finances or operations. However, Tim Cook, his partner and successor, became his collaborator who had had the same vision for the business as Jobs did and was able to deal with parts in the business that Jobs wasn’t able to. Therefore, Jobs was able to pay attention to the area that he was actually good at.

Gates, an introvert and a sarcastic nerd, found the perfect partner in Steve Ballmer, who was a salesman with lots of energy and who enjoyed competition.

Now that we are aware of the strategies that had created Gates, Jobs, and Grove into the leaders of their industries, now it’s time to learn how other people have gained inspiration from their legacies.

How the new generation of tech all-stars adopted the strategies of the past.

Google’s Larry Page, Tencent’s Pony Ma, Amazon’s Jeff Bezos, and Facebook’s Mark Zuckerberg are the tech geniuses of today’s day and age as they’ve created businesses that have altered how we live, talk to one another, and buy. However, their ideas were only able to have been brought to life thanks to the hard work of the giants Gates, Grove, and Jobs.

For example, Zuckerberg had offered Facebook to third parties which is a typical instance of utilizing the synergy of platforms in order to grow rapidly.

When Zuckerberg had released the site, it had only been available to Harvard students. Afterward, he had increased the user base to various other colleges and then with time, to the entire public. However, the real change came in 2007, when MySpace had still had more than four times the users as Facebook had. Zuckerberg had finally let outside developers in on his project, which allowed them the tools necessary to create Facebook applications.

The website’s attraction to users, advertisers, as well as developers increased immensely. By the time it was 2014, Facebook had 1.3 billion users as well as 20 million running applications, while MySpace faded away with its 50 million users.

However, Zuckerberg isn’t the only one who had learned from the past generation.

It’s easy to say that we’re a generation that has taken Google for granted. This business had begun dreaming big. The letter that had gone along with Google’s IPO had claimed that they’d continue to go after high-risk activities, even if it meant that they’d face some short-term losses throughout.

It’s safe to say that all their gambling had paid off.

For instance, in 2006, their decision to purchase YouTube for $1.6 billion lost them a lot of money in the years to come. However, in the long term, they overcame it, making YouTube into the top video hosting site on the web.

Take, for instance, 2005, when Google had taken over Android for $50 million. Larry Page had made its operating system free, which you’d think is a terrible idea.

However, that risk caused them to have major returns when Android’s market share had gotten up to 80% in 2014. As a result, at this time, Google had been taking in lots of advertising profits from that system while having an impressive market value of almost $400 billion.

Final Summary

Those who had founded Microsoft, Intel, as well as Apple had all created their tech empires by utilizing the exact strategies; they understood that they need to make a vision, create a plan in order to bring it to life, and then take risks, but making sure that they aren’t harming the whole company while they’re at it. As soon as their companies were doing well, they boosted their positioning way to a level much higher than their competition by sharing what they had with other businesses and then created platforms that set their items as the industry standards.

Practical advice;

Bring your vision to life by going through the steps:

If you don’t know how to bring your vision to reality then try to imagine what the road to success would be like. Begin by seeing yourself bringing your vision to life and then watch yourself move a step backward, one step each time, to see how you were able to get there in the first place.