Lessons from Apple's dark years.

Apple Used to Be a Pretty Horribly Run Company. Here Are Five Reasons Why.

Apple Used to Be a Pretty Horribly Run Company. Here Are Five Reasons Why.

Business Insider
Analyzing the top news stories across the web
Sept. 9 2013 12:25 PM

Apple Used to Be a Pretty Horribly Run Company—Here Are Some of Its Worst Mistakes

Past CEOs ran into pitfalls before Apple became the ubiquitous brand it is today.

Photo by Spencer Platt/Getty Images

This post originally appeared in Business Insider.

By Nicholas Carlson


Max Chafkin and a bunch of other reporters from Fast Company wrote an ebook called Design Crazy. It's a history of Apple, composed entirely of strung-together quotes from former Apple employees and other insider sources. You can buy the book from iTunes or get a subscription to Byliner and read it there. If you're as into the history of tech companies as we are, it's worth the money and the couple hours it'll take you to read it.

One part of the book especially worth reading is the part about the dark period in Apple's history—the time after Steve Jobs was fired and before he came back. Chafkin's sources describe a company that made a series of mistakes. Here are some of them, and quotes from sources explaining why those mistakes were made, and how they were costly:

Apple would show off products before they were actually finished. "[Then Apple CEO John] Sculley did a demo at CES [the Consumer Electronics Show] with the Newton tethered to a IIfx, which was this monster Mac the size of a suitcase. That was the way Apple would do things. Be kind of secret, but the minute they got something working, barely working, they showed it to everybody. Then for two years you’d listen to people ask about where it is."
Apple would try to make too many different kinds of products. "We were a little company trying to take on the world, and so the result was we tried to participate everywhere we could. We had three lines of desktops, two lines of notebooks, three lines of printers. Displays. Keyboards. We couldn’t develop all of those to a level where they were great products. There was so much pressure to cut costs, and to cut time to market. It just became this huge battle."
Management favored cost-cutting at the expense of good product design. "We worked on a lot of cool concepts. But still, under [then CEO] Gil Amelio, design didn’t mean anything. You’d design a product, and marketing would say, “Well, we only gave you$15 to do this and it’s gonna cost us$20, so we’re gonna badge a Dell computer or Canon printer.” We were a marketing-driven company that wasn’t focused on design or even delivering a product. We became just another PC manufacturer."
Apple couldn't ship big products. "There was a project code-named Copland, which was supposed to be Apple’s next-generation operating system. It was probably one of the worst-managed projects ever at Apple. The schedule just kept getting pushed out. After a couple of years of this, it was clear that it was never going to ship."
It let inferior partners dilute its brand. Chafkin writes: "Things were even worse in the software division. Microsoft Windows, once seen as an inferior copycat, had taken over the PC market. Rather than focus on building a next-generation operating system—and addressing the root of the company’s woes—Apple executives tried to improve market share (and keep software developers from defecting) by licensing the Mac OS to several hardware companies. One of the licensees, Power Computing CEO Stephen Kahng, promised to “squeeze a nickel out of every dime.” These lower-cost clone computers, marketed under brands like SuperMac, Genesis, and Power Computing, may have slightly helped Apple’s operating-system market share, but they further eroded the company’s brand. Mac sales declined."