Netscape and Apple's Suicidal Mindset

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 follow.

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 different.

Dr Conrad Gempf lectures in London and has had articles and product reviews published in such print magazines as *MacUser UK,* *MacTimes* and *Program Now*. He is webmaster of and regular contributor to the online webzine 'Pages for You' at http://www.londonbiblecollege.ac.uk/

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February 09, 2010