Under the Influence with Terry O'Reilly - S1E07 - The Marketing Genius of Steve Jobs, Part 1

Episode Date: February 19, 2012

This special two-part episode is about the late Steve Jobs. When you look at his vast technical accomplishments, it's easy to forget he was a great marketer. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. From the Under the Influence digital box set, this episode is from Season 1, 2012. You're soaking in it. You're loving it in style. Your teeth look whiter than noon, noon, noon. You're not you when you're hungry.

You're in good hands with us. You're under the influence with Terry O'Reilly. This is the story of one of the greatest innovators of our time. He had the ability to envision new products consumers didn't even know they wanted. He would go on to build a multi-billion dollar technology company fueled by innovation. He was domineering, he drove his employees hard, and he rarely listened to other people's opinions.

He was known to wear the same clothes every day. He was obsessed by design, and his products were beautiful, sleek and iconic. He was not only a great innovator, he was a great marketer. He would turn new product demonstrations into dramatic showcases that attracted endless publicity. He believed that a successful company should be composed of managers and dreamers, and it was the responsibility of the former to protect the latter. He wasn't afraid to fail. But his board of directors wasn't as forgiving, and in a palace coup, eventually ousted him from the company he founded. His name was Edwin Land. He invented the instant camera and founded the Polaroid Corporation.

And he was Steve Jobs' hero. Jobs considered Land one of America's greatest innovators. He once made a pilgrimage to meet Land at his lab in Cambridge, Massachusetts. There, Land told Jobs that technology should reside at the intersection of art and science. That philosophy made a deep impact on Jobs, and years later he would have two street signs saying art and science on the stage when he gave his dazzling new product demonstrations. Like Land, Jobs felt he could see the product as if it was sitting right there in the center of the table and that it was his job to materialize it and bring it to life. Like Land, he pushed his employees to the limit, but he had an eye for dreamers.

He, too, would build a multi-billion dollar invention factory that would change the world. And, like Land, he would eventually be ousted from the company he founded. And above all, like Edwin Land, when you stack up Jobs' accomplishments, it is so easy to overlook his influence as a marketer. He was as obsessive about the craft of advertising as he was about technology. And when you analyze the decisions he made at each of the pivotal points in Apple's history, it is a profound lesson in marketing. In just 56 short years on this planet,

Steve Jobs managed to revolutionize six industries. Personal computers, animated movies, music, phones, computing, and digital publishing. As his biographer Walter Isaacson notes, he even reimagined a seventh industry, retailing. For my money, Steve Jobs was the best marketer of our generation. It all started on April Fool's Day, 1976, when Steve Jobs and Steve Wozniak started Apple Computers in the Jobs family garage.

Their incorporation paper stated that the company was worth $5,309. Four years later, it would be valued at $1.79 billion. When they launched the Apple I in 1976, then the highly successful Apple II in 1977, the era of the personal computer was born. It was one of those rare times in history when individuals could suddenly do things that only large groups with lots of money could do before. It was nothing short of a revolution. In 1981, when IBM entered the personal computer market,

a plucky Steve Jobs ran a full-page ad in the Wall Street Journal. It would be the first glimpse of the bold marketer Jobs would become. The headline said, Welcome, IBM. Seriously. It was a savvy ad, because it clearly implied Apple's position as the originator of the personal computer. But more importantly,

it created the impression it was a two-horse race between Apple and IBM, essentially ignoring all the other computer companies like Commodore, Tandy and Osborne who, by the way, were all doing as well as Apple at the time. Hot Shop Shy Day was Apple's advertising agency. In the early days of their relationship, Jobs turned everything down they presented to him. In frustration, the agency told Jobs they needed to know what he thought was good. They had given up trying to read his mind. They needed a clue. Jobs paused and said, the Beatles. That was the only clue they were ever given. Three years later, when Jobs asked Shia Day to come up with a commercial to launch the Macintosh,

he asked for an idea that was, quote, a thunderclap. He wanted a TV commercial that would revolutionize advertising the way the Mac was about to revolutionize the computing world. It was a tall order. But the mighty Shiat Day answered the call and came back with a commercial that played off George Orwell's cryptic novel that predicted thought control.

It positioned Apple as the computer of the individual and would call out IBM as the machine of the corporate overlords. The ad borrowed the title of the book, 1984. When the Apple board saw a preview of 1984, they hated it. But Steve Jobs loved it. It was as arrogant, flamboyant, and outrageous as Jobs himself. But here's where Jobs' unwillingness to compromise showed itself, even in his 20s. When the board demanded that Chiatte sell

the Super Bowl ad time, Jobs objected and offered to pay the $1.6 million out of his own pocket. Because of his unstoppable conviction, the Apple board relented and the commercial ran in the third quarter of Super Bowl XVIII. Here is a rare video of Steve Jobs previewing the commercial to an audience of shareholders just before its Super Bowl launch. IBM wants it all and is aiming its guns on its last obstacle to industry control, Apple.

Will Big Blue dominate the entire computer industry? The entire information age. Was George Orwell Wright about 1984. You have to watch this video of Jobs introducing that commercial, which you can see on our website. On January 24th, Apple Computer will introduce Macintosh, and you'll see why 1984 won't be like 1984. You can hear the crowd wildly cheering behind me, but what you can't see now is Jobs' face.

It just may be the biggest smile ever displayed by a human being. That commercial would not only launch the Mac into the stratosphere, but it would also change the advertising industry forever. 1984 has been consistently voted as the best commercial of all time. It showed us that a TV ad could have production values on the scale of a motion picture. It showed us that a commercial could be news. While over 77 million people saw it on the Super Bowl,

all three major networks and 50 local stations did stories about it later that evening, where it's estimated that an additional 43 million people saw it. The press gave it a viral life unprecedented in the pre-YouTube era. 1984 also single-handedly ushered in the age of Super Bowl event commercials that continues to this day. But above all, it was a perfect expression of Steve Jobs' mission. He wanted to create products that changed the world.

That notion, that idea, that quest is what has drawn people to Apple ever since. In a recent survey that measures the emotional attachment of consumers to the top 100 brands in the world, the iPod and the iPhone ranked numbers 1 and 2. And Apple occupied a full one-third of the top 12 rankings on the list. And that is why Steve Jobs pressed so hard to make sure 1984 aired. Because it would establish a platform that would resonate for over 30 years. But not long after that triumph,

Jobs was fired from Apple in May of 1985. He wouldn't return for another 12 years. And we'll be right back. If you're enjoying this episode, why not dip into our archives, available wherever you download your pods. Go to terryoreilly.ca for a master episode list. When Jobs was fired from Apple, ad agency Shiet Day was fired too. When that happened, Steve Jobs took out a full-page newspaper ad the next day

with the headline, Congratulations, Shiet Day. Seriously. It praised the agency on seven years of consistently outstanding work. Then, Jobs took a jab at the people who had fired them both, saying the personal computer industry was now being handed over from the builders to the caretakers, who were destined to achieve, quote, marginal future growth. The ad also gave a hint at what was to come. It said, quote,

I'm expecting some new insanely great advertising from you soon, because I can guarantee you there is life after Apple. Even though Steve Jobs was 30 and fired, life after Apple would turn out to be the best thing that happened to him. In 1988, Jobs started another computer company called Next. It was to build computers for the educational market. But while Next never did take off, it did have one major claim to fame.

Tim Berners-Lee invented a little thing called the World Wide Web on a Next computer. During that time, Jobs also bought another company. It was the Lucasfilm Computer Division and was owned by George Lucas, who was going through a nasty divorce and needed to free up some cash. So Jobs bought it from him for $10 million. The reason Jobs bought the company was because it owned a piece of proprietary equipment called the Pixar Image Computer.

But as Jobs stepped in to run the company, he discovered that it had another piece of proprietary equipment, an animator named John Lasseter. Lasseter wanted to try something that had never been done before. He wanted to direct the first animated movie created completely on computers. And that suited Jobs right down to the ground. But before the newly renamed Pixar

could begin bankrolling feature films, it needed a cushion of cash. So the company generated revenue by producing close to 80 animated commercials for a long list of companies like McDonald's, Lifesavers, and Listerine. This is no ordinary mint mouthwash. This is cool mint Listerine.

It kills the germs that cause bad breath. It fights plaque above the gum line. It protects you against the early threat of the gum infection. Ginger vitamins. It's more than a mint mouthwash. This is great-tasting Cool Mint Listerine. Not only did the commercial work give Pixar needed income, it helped the Pixar staff hone their skills

and create a production team for films. From that experience came their first feature-length movie, Toy Story. It would not only become the top-grossing film of the year, but it would be hailed as one of the greatest and most revolutionary films in the history of animation. I've always thought Toy Story revealed more about Steve Jobs than it did John Lasseter. At the core of the film was the notion that inanimate objects have a soul, a personality, an essence.

When you look at the product Steve Jobs created, you realize that was a huge part of Apple's magic. It started with the original Mac. Jobs insisted that it look friendly, which puzzled his designers. He demanded that the shape be taller and narrower than most computers, suggesting a head. The slight curve at the base looked like a chin. And Jobs narrowed the strip of plastic at the top of the Mac so it didn't have a Neanderthal

forehead. When you turned it on, it didn't ask for a command. It simply said, hello, in small type on the screen. Apple laptops don't power down. They go to sleep. Ever look at a Mac laptop while it's asleep in the dark? A tiny white light throbs on and off, like a heartbeat, or like the quiet, rhythmic breathing of someone mid-dream.

The iPad would eventually offer the ultimate intimacy, only working if you touched, stroked, and pinched the screen. Toy Story was a clear expression of Jobs' belief that technology could exist at the intersection of science and art. All of these elements weren't just interesting design decisions. They were marketing decisions. They influenced people who were wary of technology to buy an Apple product. Apple didn't just win over their minds.

It won their hearts. Bet MGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with the sportsbook born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love about BetMGM. Download the app today and discover why BetMGM is your basketball home for the season. Raise your game to the next level this year with BetMGM, a sportsbook worth a slam dunk and authorized gaming partner of the

NBA. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. But back in 1997, Apple was in deep trouble. It was on track to lose over $1 billion that year

and desperately needed to find new software for its latest line of computers. So, in a somewhat surprising decision, the company decided to buy Next for $400 million. latest line of computers. So, in a somewhat surprising decision, the company decided to buy Next for $400 million. The innovative Next software gave Apple a much-needed edge. And that software would go on to become the basis for every Apple product that followed. But Apple didn't just get Next in the deal. It got Steve Jobs, too.

It didn't take him long to get his hands back on the steering wheel at Apple. And when he did, he realized the company was in dire need of two things. A refocused product line and an advertising campaign to tell people the company still had a pulse. One of the first things he did was rehire Shia Day. When legendary creative director Lee Clow and his team met with Jobs again in 1997, Jobs told them that Apple was hemorrhaging and that the company was in worse shape than he had imagined. He wasn't kidding.

What most people don't know is that Apple was just weeks away from bankruptcy. Jobs was under tremendous pressure. But as he said at the time, the way we're going to survive is to innovate our way out of this. So the ad agency went back to L.A. to begin generating ideas. One thing was certain. Apple had to find itself again. To quote Walter Isaacson,

one of the best ways to remember who you are is to remember who your heroes are. One week later, Chiat Day came up with a campaign that featured dramatic black and white photographs of people like Einstein, Thomas Edison, and John Lennon, each one a hero of Steve Jobs. All that accompanied the photos was the rainbow-colored Apple logo and the words,

Think Different. It wasn't only an idea that reignited Apple's mission. It was a calculated attack on another campaign. IBM had been running ads for their ThinkPads with the tagline Think IBM. When you trace a direct line back to the famous

1984 TV commercial and you take the DNA from that idea, which was to position Apple as the creative rebel and IBM as big brother, you can see why Think Different was perfectly on strategy. When the agency presented the Think Different campaign to Jobs, he was quiet throughout

the pitch. At the end of the presentation, Jobs said, this is really great, but I can't do it. He felt that people already thought of him as an egotist, and putting the Apple logo up there with all those geniuses would get him skewered by the press. With that, the room went silent. Think Different was the only idea the agency had brought. Then, Steve Jobs paused, looked around the room, and said, What am I doing? Screw it. It's the right thing. It's great.

And with that, the idea was approved. In that moment, Jobs' conviction showed itself again. He did what he uniquely always did. He completely ignored what the outside world would say and didn't let that noise drown out his inner voice. You have to put the decision to run the Think Different campaign into context. To suggest that Apple could be put next to people like Lennon and Einstein in Edison in an advertising campaign at that point in their corporate history, was outrageous.

Apple was in a death spiral. The industry knew it, the public knew it, and the press knew it. Even when the campaign finally broke, a journalist for the LA Times said, It's perfect that Apple is doing a campaign with a bunch of dead guys, because the brand will be dead soon too. He couldn't have been more wrong. Chiat Day had wanted Robin Williams to narrate the commercial, because copywriter Siltanen had been inspired

by certain scenes from the movie Dead Poets Society. Steve Jobs was a personal friend of Robin Williams, so he called him. But Williams' wife wouldn't let him speak to Robin. Robin didn't do commercials, and she knew Jobs was too persuasive. So, actor Richard Dreyfuss was recruited instead. But I don't want to play you that version. I want to play you a different one that never went to air.

One that Steve Jobs narrated himself. Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules, and they have no respect for the status quo.

You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world

are the ones who do. In the end, Jobs thought if he did the narration, people would think the ad was about him, not Apple. So Dreyfus got the nod. The campaign got everybody's attention. As writer Rob Siltanen said, it got the Apple faithful stirred up, it got the fence-sitters back on board, and it got an audience that was lukewarm on Apple to think about the brand in a whole new way now all Apple had to do was put out a product that

proved they could think different as jobs began his remarkable turnaround at Apple, he reviewed every top-level executive and laid off over 3,000 employees. Deep in a dusty basement across from Apple's main building, a talented designer named Jonathan Ive was languishing. Jobs had wandered over there one day when no one was around and spotted a teardrop-shaped computer prototype Ive had created that nobody had taken notice of. When Jobs summoned him to his office,

Ive had a resignation letter tucked in his back pocket. He was sure he was next in line to be fired and wanted to be able to resign to save face. But instead, Jobs said to him, we're going to work side by side and we're going to do great things together. As Fast Company Magazine said of that moment, he saw in Ives' teardrop design what middle managers did not, the future. It was yet another example of what made jobs one of

the most influential innovators of our time it was his ability to see the company from the outside his ability to think first and foremost as someone who lives with technology rather than someone who produces it. Jobs would give Ive enormous freedom and cleared the way for Ive to excel. He protected the dreamer. And that pairing of Jobs and Jonathan Ive was to be the start of what Fortune magazine would call the Decade of Steve.

And so ends part one of our Steve Jobs story. The prodigal son has returned, but his biggest successes are yet to come. His singular ability to see through the mist to the next great thing was about to kick into high gear. And he would do it all without conducting a single focus group. Not that Jobs didn't think like a consumer. As Fast Company noted,

he just thought like one standing in the near future. But beyond his capacity to envision products was his astounding ability to market them. As Apple co-founder Wozniak said, marketing was his greatest strength. Jobs had the fortitude, or maybe it was just the audacity, to tune out everyone else's opinion,

without ever once folding or giving in. His unwavering conviction is what separated him from most other marketers today. It is said that to be spectacularly right over and over again you first have to be wrong time and time again Steve Jobs personified that philosophy he made great strides made great mistakes he was fired from the company he co-founded and while wandering in the desert for 12 years

learned from his missteps and came back a stronger man. But at the heart of it all, he was a great marketer. As Fortune magazine said, it's hard to imagine that his influence would have run so deep in our society if he hadn't been able to consistently communicate his vision to employees, to customers, and to Wall Street. And that is the glowing core of every great marketer in a world that's under the influence. I'm Terry O'Reilly. Hello, this is Siri calling.

Hey, I see that the under theluence is engineered by Keith Ullman. His iPhone was over at my iPad last night. Small world. Under the Influence was produced by Pirate Toronto and New York.