Pirates of Silicon Valley

1. How would you describe both Jobs’ and Gates’ innovation process?

a. Internal: An innovation process must have a defined goal, mission, and vision to keep the innovation competitive and successful. A firm should start with internal planning and move on to the execution of their innovation once goals and objectives have been defined. Steve Jobs was a rebel who built illegal blue boxes and spent his youthful energies pulling pranks that repeatedly got him suspended from high school. He wasn’t a technical genius (that was his partner Steve Wozniak) but he had an intuitive sense of design and usability, and an almost improvisational approach to business decisions.

Jobs was, in essence, a jazz musician who relied on his innate creativity, and turned his lack of formal training into a strength rather than a weakness. His vision, to create a computer for ordinary people’s use, seemed wildly far-fetched to most people at the time. Furthermore, IBM laughed at this idea and even questioned why an ordinary person would need a computer.

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Finally, despite being turned down by investors and laughed at for his ideas, Apple was born in his garage, and the Macintosh was born. Jobs believed in closed-systems (or fully-integrated systems), meaning that one company designed the computer, the software and all connected devices and peripherals. This belief is what gives Apple products their unique look, and also why Apple products work so well together. Jobs had a successful internal innovation process because he had the technological expertise, a clear vision guiding him to success, and a supportive team that was prepared to work late nights and long days to make this vision become a reality.

Bill Gates’ internal innovation process began with the help of his friend Paul, writing code for computers. They eventually dropped out of Harvard to pursue their passion of programming and with the invention of BASIC a new vision was born. They got signed by MITS and convinced competitors, IBM, Xerox, and Apple that they needed his expertise to write code for their computers. Once Gates had his foot in the door at Apple, he had access to new code and ideas, which got him thinking he could do it better than Jobs was doing at Apple. He was able to infiltrate and leave unscathed with Apple’s operating system.

Furthermore by pirating his competitors’ operating systems, he gained enough knowledge and expertise to start his own company, Microsoft. It appears Gates was more unorganized than Jobs in the sense that he lacked proper preparation. He had an incomplete operating system until he stole code from other systems like Xerox and Apple. Consequently, Bill Gates’ internal innovation process was largely due to replicating other companies’ code. Although this was a dishonest plan, he succeeded by tricking his competitors and ultimately joined Apples team in the end, keeping his project hidden on the side. b. External: External innovation involves enhancing or adding to something that already exists. In Jobs’ case, he is creating the first personal computer as opposed to creating the first computer. In Gates’ case, he is enhancing the computer with programming and integrating a “language” for computers that already exist. Steve Jobs’ main external pressures in his innovation process were his competitors. While he did not notice it at the time, his biggest competitor, Bill Gates, was pirating his software behind his back. Steve Wozniak also quit at one point because of Jobs’ poor leadership and self-obsession. Jobs demanded too much of his workers and in return his company despised working for him. Ultimately, Jobs succeeded in his external innovation process but at the cost of losing friends, and good employees.

Unlike Steve Jobs, Bill Gates was more successful through his external innovation process. The Microsoft model was a product of imitating his competitors. Bill Gates convinced his competitors that they needed his talents and in return he gained invaluable knowledge. He did not collapse under pressure and stayed humble throughout his success to ultimately take advantage of his competitors and land on top.

2. For both internal and external acquisition of technology, how was implementation handled? What areas were Jobs and Gates Hardware and Software particularly lacking?

Implementation was handled fairly well by both Jobs and Gates. Although they did not have much of a “written plan” they still seemed to have a plan of what they wanted to do with the information they knew, and in what direction, more or less, they wanted to go in. Jobs had a somewhat fairly well thought out plan in the sense that he went around everywhere for loans and eventually changed his image in order to better his chances. Luck also struck Jobs’ when the investor came to his garage and offered him a $250,000 investment to help him with the Apple Computers. Jobs implemented his first innovation, Lisa through Apple. He had reputable tangible assets including capital, technology, office space, and many technicians. While the technicians were vital assets to Jobs, they were being over worked and were under appreciated. Throughout the movie it is clear that there was a negative company culture emerging, which inversely impacted his intangible assets. Jobs’ narcissistic personality got him punched in the face at one point. This displays how Apple workers disliked Jobs as a leader and were constantly on edge from lack of sleep and high expectations. The film portrayed Bill Gates as a superior leader than Jobs because he remained loyal to his team throughout the film.

Beginning in his garage and eventually moving towards a partnership with Apple, Gates was able to continuously motivate his team and keep morale high. He focused on engaging his team and explained to competitors how they needed his expertise to create a programming language. Gates gained all the resources he needed through gaining access to his competitors software and ended with great a implementation process for Microsoft. In both of their implementation processes, they lacked a bit of control and awareness. Gates’ had somewhat better control and awareness in the sense that he saw the flaws in Jobs’ reign. Jobs (once Apple computers became bigger than just two guys in a garage) was not fully aware of what he was becoming and what he was doing to his company internally. He had two different sides in his company competing against each other and he also treated his employees like machines rather than people. Gates (along with Jobs’ friend Wise) was aware of this problem and helped Jobs overcome it.

3. How well did Jobs and Gates understand the environment in which they were trying to compete? What specific areas challenged their chance of success in the environment?

In understanding the environment that Gates and Jobs were competing in, they understood it very well. Both Steve Jobs and Bill Gates had extensive knowledge about building and coding computers. Jobs had a vision of giving the public access to computers. He was very knowledgeable in starting Apple and turning his vision into reality. Similarly, Gates was skilled in computer programming and was able to build Microsoft with the help of his competitors. Steve Jobs’ main challenge was dealing with employees and becoming a true leader. He was forced to grow up very quickly and without the experience, his image as a leader suffered. In one scene of the movie, Jobs walks into an interview barefoot and tells the candidate that he does not belong at Apple and then makes inappropriate personal attacks. This lack of professionalism shows that Jobs did not have managerial skills or leadership experience. On the other hand, it is clear Gates had business experience or had at least studied business topics. Gates knew how much he could get away with. His sneakiness got him the information he needed but at the expense of jeopardizing his integrity. Gates’ understood that he needed to convince people (IBM) that they not only did not have what he was offering and creating, but that they needed what he was offering. The areas that challenged their chance of success in the environment were consumers and IBM. IBM said no one would use personal computers because average everyday people had no use for one. It was key that Gates knew how to sell his ideas and products, even if they hadn’t even been produced or built yet. Finally, while both had extensive computer technology knowledge, Jobs lacked personal business skills and Gates lacked a defined plan of action. They both knew they were on to something bigger than the both of them and this is not always an easy idea to cope with.