Above Avalon: the Secret to Apple's Ecosystem is Experience

Post by
Scott Francis

Neil Cybart of Above Avalon has written a really great post about Apple's ecosystem, and how it creates a virtuous cycle. He consistently spends more time thinking about how Apple's "machine" works than just about anyone else who's writing I have access to. And this particular post is well worth the read.  I can't endorse the stock at any particular value as some years (like 2020) it seems to be priced for perfection (but perhaps just priced as a safe harbor in a storm), and other years (2009) it is priced for failure. If you keep reading to the end, I'll explain why we should look at Apple's business for inspiration, even when we run businesses that look nothing like Apple's. Use this article as an opportunity to think about creating experiences for your customer... like Apple does.  

But what we can all appreciate is a company with a strategy and an unrelenting focus on making great products. An example of how Neil's analysis differs:

With 1.6 billion devices in use, it may be natural to conclude that devices are the source of Apple’s ecosystem power. This has led some to position the iPhone as the sun in Apple’s ecosystem with other products being the planets revolving around the sun. However, this is a misread of the role Apple devices are actually playing in the ecosystem. Just because the iPhone is used by more people than any other Apple device, it is incorrect to assume that will always be the case, or more importantly, that other devices are in some way inferior to the iPhone when it comes to handling workflows. There is something much larger at play here than just a billion users enjoying Apple hardware.

This is the setup to turn to a discussion of services:

With a $55 billion revenue annual run rate and 518 million paid subscriptions across its platforms, there is no longer a debate as to Apple’s ability to succeed with services. However, there is still a lack of consensus as to what role services play in Apple’s ecosystem. Decisions like bringing Apple Music to third-party speakers and the Apple TV app to third-party TV sets have confused many with some going so far as to conclude that Apple’s future is one of a services company.

As Neil points out, this can lead to some misunderstanding the future role of Apple hardware. And then he points out that some will interpret a successful services as a failure - a kind of rent-seeking behavior.

But Neil charts a third path, experiences: 

The secret to Apple’s ecosystem is that instead of selling products or services, Apple ends up selling experiences made possible by controlling hardware, software, and services.

Instead of thinking of Apple’s ecosystem in terms of the number of people or devices, a different approach is to consider the number of experiences Apple is offering. This is where Apple’s true ambitions become visible. By using an iPhone, a customer doesn’t just receive one experience per day. Instead, nearly everything that is consumed on the device has the potential of leading to a good (or bad) experience.

Stop a minute and think about your own business. Are you selling a product? a service? Or an experience? Apple isn't the only example of course.  You could look at Disney. Or, take a moment to read about a restaurant in Austin - the Peached Tortilla - that is thinking of what they do as creating experiences, rather than selling food or selling a meal. Successful businesses in the current era are often finding traction by creating experiences that drive their business.

For BP3, we try to think about how we can create experiences for our clients, and their teams, and their customers. For example, at Keller Williams, it is creating an experience for their agents - who in turn, create experiences for their customers - via Smart Plans. We think about how to create work management solutions with Brazos Task Manager, that allow for all kinds of customized ways to organize work. We challenge how to design solutions with design sprints for the enterprise. We have reinvented how to sustain solutions we build for our clients. We've reinvented how to support our own teams out in the field to make sure that our clients always get the best advice from BP3, not just the best advice from a single member of our team.

We don't read about Apple purely because we like using their products, or because we like their stock price.  We read about Apple to find inspiration for our own business, for our own ideas.

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