Netscape and Apple's Suicidal Mindset

Tim Byars (
Sat, 22 Aug 1998 08:19:49 -0700

(A follow up to the SJ Merc article)

by: Conrad Gempf

The San Jose Mercury is a widely respected source of news on technology,
and articles from its
online version frequently show up in online headline news summaries. In
the first week of August,
they ran a column which displays something of the troubles within the
computer industry. The
columnist, one Chris Nolan, was sympathetic to the idea that one of
Netscape's biggest problems
was its own employees. Specifically, some of those employees used to work
for Apple, and had
brought a dangerous mindset with them.

Nolan claims to have heard this analysis from a cross-section of sources
--- both allies and
competitors of the company. There are some key folks near the top of the
Netscape corporate
hierarchy who used to be in the Apple corporate hierarchy and they have
allegedly brought with
them "the Apple mentality" which is running and ruining Netscape.

What is this lethal mindset? Let me quote from the article: "The belief in
the inevitable triumph of
engineering over every other part of the business, particularly
marketing." By "engineering," of
course, is meant more than than chips and transistors, for Apple
engineering has always been
marked by an emphasis on design as well as function.

Essentially, then, the problem with Netscape, and by implication, the
problem with Apple, is that
they believe that the way to get ahead is to build a better product.
Naively, they persist in the idea
that the most important thing is to get the product right, and the
accounting and marketing will

That's just not the way our society works. In our culture, whatever you
do, you don't rise to the
top by being the best, but by attending to publicity. From the music
industry to hardware stores,
you don't succeed by being better, but by having better publicity. And no
one knows that better
than Netscape's and Apple's competitors. Where a company like Apple uses
its resources to try and
build a better product, others know that it's easier and cheaper to
improve the public's perception of
a product than to improve the product itself. And if a product works
properly when released, if it
includes sound, networking and year 2000 compliance from the start, you
miss out on free
publicity when someone finds a way to add sound or networking or year 2000
fixes -- you miss
free publicity and lucrative upgrade charges.

There is a terrible confusion between judging a computer company and
judging its products. People
are always being told not to buy Apple because their profit line was low
or the marketshare (as
much a measure of the need to upgrade other machines as anything else) was
down. But surely it's
daft to base any decision on who to do business with solely by evaluating
who derives the most
profit by doing business with us?! Bill Gates didn't get to the top of the
financial ladder by creating
or innovating. While Apple was busy creating machines like the eMate and
the 20th Anniversary
Mac, which won places in permanent displays in museums around the world,
Bill was also dealing
with those museums: buying up the exclusive rights to electronic
redistribution of all their works
before anyone realized what that might be worth. He got to the top by
cutting deals (with the CP/M
people, with the IBM people, with the museum people, with you and me) that
benefited him more
than they benefited anyone else.

The *reason* that Apple and Netscape aren't winning may be their
simple-minded belief in
engineering, but it's going too far to say that that's the *problem*.
Clearly the problem is us and
our system. The problem is that we as a society seem unable to judge the
quality of products apart
from their marketing, and therefore penalize those who concentrate on
quality at the expense of
hype. That's not Netscape or Apple's failure -- it's ours.

Meanwhile, if your main goal is to make money investing in a computer
company, choose the ones
that emphasize marketing over product. But if you want to buy a product to
*use* every day, think


who amongst us hasn't run a large billion dollar a year monopoly? ...Tom Whore

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