A Tale of Two Steve’s: The Importance of Predictability
Once upon a time, there were two guys called Steve.
On 29th June 2007 the first Steve, Steve Jobs—the then CEO of Apple—was on stage at MacWorld. He opened his keynote speech by saying that “Every once in a while, a revolutionary product comes along that changes everything.” He then went on to predict that Apple was going to “reinvent the phone” with the (then) brand new iPhone.
Back then, this was a bold claim. The market was dominated by Nokia and Blackberry and Apple had precisely zero market share.
When asked for a reaction to the MacWorld declaration, Steve Ballmer (the second Steve in our little story, and the then CEO of Microsoft) predicted that Apple would not dominate the mobile phone market. He was adamant about that, and was quoted as saying:
“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item.”
Two very different Steve’s. Two very different predictions. And we all know how it turned out. Fast forward ten years to 2017 and Microsoft was giving up on the smartphone market after grabbing less than 1% market share. At the same time (2017) Apple was helping themselves to a staggering 86% of smartphone profits globally.
The problem Steve number two (Microsoft) had was he failed to predict a business model where mobile operators such as Vodafone, O2, and others subsidized the cost of the phone and recouped the money back from the consumer through their monthly subscription fees. That model didn’t exist before, but Steve Jobs correctly predicted it. And that prediction banked Apple billions of dollars and enabled them to dominate the smartphone market.
This story is a great illustration of the power of predictability in business and how even the best can get it very wrong because most of the time we are working from limited information and bias. This is certainly what happened in Steve Ballmer’s case.
But why is predictability so important? Well, as a rule of thumb, predictable businesses are more valuable than unpredictable ones. A ten-year study by Guru Focus found that companies who enjoyed predictable earnings consistently outperformed their competitors over time. In fact, they found a consistent and direct correlation between predictability and performance.
Now, I am not saying SugarCRM can help you predict the next super trend in your market, but with our unique predictive AI technology, we can help organizations predict the behavior of their customers without human bias and help them deliver customer solutions almost before the customer themselves realize they need them.
Send me a message if you want to find out more or visit https://www.sugarcrm.com/why-sugar/