Where was Steve Jobs during the eleven year span between being ousted from Apple and his return to brilliantly turn around the company? He was founder and CEO of NeXT computer. I have more than a passing familiarity with NeXT, as the computer store I built at MIT stocked the NexT Cube for purchase by students and faculty. The IT systems group, of which I was one of a handful of directors, had a meeting with Jobs before he went off to his Boston launch. That gave me the opportunity to meet Jobs and see (and hear) his amazing charisma up close. It made me a true believer in his vaunted ‘reality distortion” field.
But despite Jobs’ world leading charisma and marketing savvy and the highly advanced software and hardware developed by NeXT, the machine was a flop. NeXT had everything a startup needed to succeed: a product visionary, a world class team, a mission (create the best computer in the world for education), investment of millions of dollars from Canon ($300 million as I recall), and virtually cost-free marketing due to Jobs’ renown. (For a deep dive into the history of NeXT I recommend you read Steve Jobs & The NeXT Big Thing by Randall Stross.) So why did NeXT fail? I believe it was because its leading edge product was a tweener. What the heck is a tweener you may well ask? As usual, Google has the answer:
a person or thing considered to be between two other recognized categories or types. “Price considered him tweener, too small for a lineman and too big for a linebacker.
This definition is quite fitting as I first came across the term as a football fan. But what brought tweener to mind today was not football but an article in The New York Times:
In Battle With Amazon, Walmart Pushes Deeper Into Entertainment by Michael Corkery and Brooks Barnes. Here’s the gist of the article in a nutshell:
The investment with Eko totals $250 million, according to two people briefed on the matter, who spoke on the condition of anonymity to discuss details of the deal. It is thought to be the largest bet on the interactive entertainment niche, which has long tantalized producers as a potential gold mine but has never gained widespread adoption.
Again, I have far more than a passing experience with interactive products. I produced one of the first interactive business case studies in conjunction with the Harvard Business School’s publishing arm and Professor Christopher Bartlett. Despite the gold plated imprimatur of Harvard this product didn’t sell either. It was a tweener: it was in between the established market of print business cases and the tiny, but established niche of software simulations.
Walmart is chasing the mirage of interactivity in both entertainment and advertising. Talk about being a tweener! No doubt what they produce will be too passive for a videogame audience and too complicated for video advertising.
The authors also point out another problem with interactive content:
Interactive content has also been hindered by a generational divide. Older consumers — and media executives — are accustomed to a passive viewing experience and have a hard time grasping this way of participating in storytelling. Younger viewers are the opposite.
Another way to look at the interactive content as being a tweener is that it sits between the passive Hollywood TV and movies model and the interactivity model of the videogame market.
Untold hundreds of millions of dollars has been lost by established print media publishers, Hollywood studios, and venture capitalists over the past three decades by falling into the great divide between the lean back model of traditional entertainment and the lean forward model of games.
I believe that positioning is 90% of marketing; how you position your product against established products and where your product falls in relation to the products your customer currently is using. Steve Jobs’ positioned NeXT as the computer for higher education. How much he really believed that and how much that was it was just an attempt to avoid a lawsuit from Apple by not directly competing with them I don’t know. But while Jobs built a stellar academic advisory council, upon which MIT had a seat, the NeXT machine was priced like a computer workstation from Sun Microsystems but it had the processing power and other specs of a consumer PC. One thing the advisors had told Jobs was that his price was far too high for students to afford, even with an academic discount- it was priced like a workstation, which had a faster CPU, more memory, and hard disk space, etc. But as Jobs did with most outside criticism, he ignored our advice.
Jobs made a number of other mistakes. He insisted on using a new type of removable storage that was very expensive and hard to get. While the software development tools were outstanding, NeXT couldn’t attract developers as it was caught in the age old chicken and egg problem. Developers won’t create products for machines that don’t have an established customer base and consumers won’t buy machines that lack a wide choice of software applications. He also violated one of the principles I preach to founders: don’t try to innovate across multiple fronts! If you have an amazing authoring system for virtual reality don’t also try to create an accounting system that is so simple anyone in any company could use it. What Jobs learned from NeXT was one thing: focus! He ruthlessly slashed Apple’s product line, including the Newton which had a cult-like following. He brought laser-like focus to everything he did at Apple. He was as product of the many ideas he said no to as the ones he put the company behind.
So whatever product or service you plan to create take a look at the existing markets that serve your target customer and don’t be a tweener, unless you can flip the NeXT model around: the power of a workstation at the cost of a PC!