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蘋果公司賈伯斯與易經中共同的創新基因 The Common Innovation DNA in Apple’s Steve Jobs and the Book of Changes 蘋果公司賈伯斯與易經中共同的創新基因 The Common Innovation DNA in Apple’s Steve Jobs and the Book of Changes Minder Chen Associate Professor of MIS Martin V. Smith School of Business and Economics California State University Channel Islands Camarillo, CA 93012 Minder. [email protected] edu [email protected] com © Minder Chen, 2011 -2012 - 1 -

Blue Box • “Secrets of the Little Blue Box” • The 1971 article about Blue Box • “Secrets of the Little Blue Box” • The 1971 article about phone hacking that inspired Steve Jobs and Steve Wozniak • Two Steves first venture, 1972…. The parts cost about $40, and Jobs decided they should sell it for $150. http: //www. slate. com/articles/technology/the_spectator/2011/10/the_article_that _inspired_steve_jobs_secrets_of_the_little_blue_. single. html © Minder Chen, 2011 -2012 -

Apple 1 - 1975 天時 人 事 物 地利 © Minder Chen, 2011 -2012 Apple 1 - 1975 天時 人 事 物 地利 © Minder Chen, 2011 -2012 - 3 -

Power of Vision Homebrew Computer Club Apple Computer formed April 1, 1976. Steve Jobs Power of Vision Homebrew Computer Club Apple Computer formed April 1, 1976. Steve Jobs has never underestimated the power of vision to move a brand forward. In 1976, Steve Wozniak was captivated by Jobs’ vision to “put a computer in the hands of everyday people. ” © Minder Chen, 2011 -2012 - 4 -

Taking Risks • In order to raise the money they needed, Wozniak sold his Taking Risks • In order to raise the money they needed, Wozniak sold his HP 65 calculator for $500, though the buyer ended up stiffing him for half of that. For his part, Jobs sold his Volkswagen bus for $1, 500. • Paul Terrell at Byte Shop agreed to order 50 computers. They needed about $15, 000 worth of parts. Allen Baum father agreed to loan 大畜 卦辭 : them $5, 000. 利貞,不家食, • Ron Wayne, the middle-aged engineer at 吉,利涉大川。 Atari who had once started a slot machine company, was the third partner of Apple Computer founded April 1, 1976. Wayne then got cold feet in a week (bought out with$800). If he kept his 10% stake, at the end of 2010 it would have been worth approximately $2. 6 billion. © Minder Chen, 2011 -2012 - 5 -

Packaging the Products Apple I, 1976, Initially conceived by Steve Wozniak (a. k. a. Packaging the Products Apple I, 1976, Initially conceived by Steve Wozniak (a. k. a. "Woz") as a build-ityourself kit computer, Apple I was initially rejected by his bosses at Hewlett. Packard. Undeterred, he offered it to Silicon Valley's Homebrew Computer Club and, together with his friend Steve Jobs, managed to sell 50 pre-built models to The Byte Shop in Mountain View, California. The suggested retail price: $666. Though sales were low, the machine paved the way for the smash success of the Apple II. http: //www. pophistorydig. com/? tag=apple-computer-ipo http: //www. time. com/time/photogallery/0, 29307, 1956593_2029024, 00. html © Minder Chen, 2011 -2012 - 6 -

Apple II © Minder Chen, 2011 -2012 - 7 - Apple II © Minder Chen, 2011 -2012 - 7 -

1977 Apple II • Counter culture met high-tech business © Minder Chen, 2011 -2012 1977 Apple II • Counter culture met high-tech business © Minder Chen, 2011 -2012 - 8 -

Ad for Apple II • Personal Computer, Home Computer © Minder Chen, 2011 -2012 Ad for Apple II • Personal Computer, Home Computer © Minder Chen, 2011 -2012 - 9 -

他山之石,可以攻玉 《 詩經 ·小雅 ·鶴鳴 》 :「他山之石,可以攻玉。」 • Apple II Case Design – While 他山之石,可以攻玉 《 詩經 ·小雅 ·鶴鳴 》 :「他山之石,可以攻玉。」 • Apple II Case Design – While haunting the appliance aisles at Macy’s, he was struck by the Cuisinart food processors and decided that he wanted a sleek case made of light molded plastic. Good artists copy; great artists steal. © Minder Chen, 2011 -2012 - 10 -

Killer App • Visi. Calc: Visual Calculator, The First Killer. App for Apple II Killer App • Visi. Calc: Visual Calculator, The First Killer. App for Apple II • 1979 Software Arts, Inc. released Visi. Calc, the first commercial spreadsheet program for personal computers. http: //video. google. com/videoplay? docid=-2539790754467363791# PBS. Triumph. of. the. Nerds. 1 of 3 around 40 m Visi. Calc (Spreadsheet) © Minder Chen, 2011 -2012 - 11 -

Apple IPO, 1980 • On December 12, 1980, Apple launched the Initial Public Offering Apple IPO, 1980 • On December 12, 1980, Apple launched the Initial Public Offering of its stock to the investing public. When Apple went public, it generated more capital than any IPO since Ford Motor Company in 1956 and instantly created more millionaires (about 300) than any company in history. • Apple went public on December 12, 1980 at $22. 00 per share. It went to $29 the first day. The stock has split three times since the IPO so on a splitadjusted basis the IPO share price was $2. 75. • At age twenty-five, Steve Jobs was worth $256 million. © Minder Chen, 2011 -2012 -

Taking the Risk and Striking It Rich • Monday, Feb. 15, 1982 • A Taking the Risk and Striking It Rich • Monday, Feb. 15, 1982 • A new breed of risk takers is betting on the high-technology future • http: //www. time. com/time/magazine/article/0, 9171, 925279, 00. html#ixzz 1 h. Vk. F 5 y wo © Minder Chen, 2011 -2012 - 13 -

Adult Supervision: Taming the Power of the Great • President of Pepsi. Co John Adult Supervision: Taming the Power of the Great • President of Pepsi. Co John Sculley • CEO of Apple on April 8, 1983, until leaving in 1993. What's the difference between Apple and the Boy Scouts? The Boy Scouts have adult supervision. 大畜卦 六四 童牛之牿,元吉。 http: //www. wired. com/science/discoveries/news/2008/01/dayintech_0124 © Minder Chen, 2011 -2012 - 14 -

Noble Cause 1984 New York Central Park • Great companies must have a noble Noble Cause 1984 New York Central Park • Great companies must have a noble cause. Then it’s the leader’s job to transform that noble cause into such an inspiring vision that it will attract the most talented people in the world to want to join it. • Do you want to sell sugared water for the rest of your life or do you want to come with me and change the world? © Minder Chen, 2011 -2012 - 15 -

Xerox's Palo Alto Research Center (PARC) laser printing, Ethernet, the modern personal computer, graphical Xerox's Palo Alto Research Center (PARC) laser printing, Ethernet, the modern personal computer, graphical user interface (GUI), object-oriented programming, etc. PARC founder Jacob Goldman • In return for the right to buy US$1, 000 of pre-IPO stock, Xerox granted Apple Computer three days access to the PARC facilities. • Jobs had marveled at PARC technology during a visit to the center in 1979. • “You’re sitting on a gold mine. I can’t believe Xerox is not taking advantage of this [the graphical user interface (GUI)]. ” © Minder Chen, 2011 -2012 - 16 -

Xerox Alto: 1973 • ‘Why aren’t you doing anything with this? This is the Xerox Alto: 1973 • ‘Why aren’t you doing anything with this? This is the greatest thing. This is revolutionary!’ ” © Minder Chen, 2011 -2012 - 17 -

Macintosh - 1984 • The Macintosh was the world’s first computer with beautiful fonts Macintosh - 1984 • The Macintosh was the world’s first computer with beautiful fonts and typography. © Minder Chen, 2011 -2012 - 18 -

GUI and Mouse • Doug Engelbart of the Augmentation Research Center in Palo Alto GUI and Mouse • Doug Engelbart of the Augmentation Research Center in Palo Alto developed the computer mouse and graphical user interfaces. http: //www. newyorker. com/reporting/2011/05/16/110516 fa_fact_gladwell © Minder Chen, 2011 -2012 - 19 -

Xerox PARC and Apple Macintosh • Following PARC the first GUI-centric computer operating model Xerox PARC and Apple Macintosh • Following PARC the first GUI-centric computer operating model was the Xerox 8010 Star Information System in 1981, followed by the Apple Lisa (which presented the concept of menu bar as well as window controls) in 1983, the Apple Macintosh 128 K in 1984, and the Atari ST and Commodore Amiga in 1985. © Minder Chen, 2011 -2012 - 20 -

A Mighty Mouse • the Xerox mouse had three buttons, was complicated, cost $300/$400 A Mighty Mouse • the Xerox mouse had three buttons, was complicated, cost $300/$400 apiece, and didn’t roll around smoothly • Jobs went to a local industrial design firm, Hovey-Kelley Design (i. e. , IDEO now), and told one of its founders, Dean Hovey, that he wanted a simple single button model that cost $15, and he want to be able to use it on Formica and his blue jeans. • “take a piece of technology developed by some of Silicon Valley’s greatest minds, dramatically improve its reliability and cut its price by more than 90 percent. ” SRI had licensed the mouse patent to Apple for something like $40, 000. " http: //www. stanfordalumni. org/news/magazine/2002/marapr/features/mouse. html © Minder Chen, 2011 -2012 - 21 -

Design of the Mouse: IDEO • The mouse, Hovey says, “had the right balance Design of the Mouse: IDEO • The mouse, Hovey says, “had the right balance of – – mechanical design, ergonomic design, software design and electronic design • that really mapped well with the generalist, mini-da Vincis that Hovey-Kelley had. Even down to the tactile aspect of the click. ” © Minder Chen, 2011 -2012 - 22 -

Design via Prototyping • Construction play • Thinking with Your Hands • Low-resolution prototype Design via Prototyping • Construction play • Thinking with Your Hands • Low-resolution prototype Hovey estimated their consulting fee at thirty-five dollars an hour; the whole project cost perhaps a hundred thousand dollars. http: //www. stanfordalumni. org/news/magazine/2002/marapr/features/mouse. html © Minder Chen, 2011 -2012 - 23 -

Quick Prototyping • IDEO © Minder Chen, 2011 -2012 - 24 - Quick Prototyping • IDEO © Minder Chen, 2011 -2012 - 24 -

Reed College • In 1972, Steve Jobs dropped out of Reed College in Portland Reed College • In 1972, Steve Jobs dropped out of Reed College in Portland after just one semester. • He stayed another 18 months to “drop in” to those classes he enjoyed, like calligraphy. Calligraphy didn’t have any obvious practical application in his life but it would come back to Jobs when he created the Mac. Lloyd J. Reynolds © Minder Chen, 2011 -2012 - 25 -

晉 王羲之 快雪時晴帖 • 羲之頓首。快雪時晴。 佳想安善。未果為結。 力不次。王羲之頓首。 山陰張侯。 © Minder Chen, 2011 -2012 - 晉 王羲之 快雪時晴帖 • 羲之頓首。快雪時晴。 佳想安善。未果為結。 力不次。王羲之頓首。 山陰張侯。 © Minder Chen, 2011 -2012 - 26 -

Connecting the Dots “Creativity is just connecting things. ” “[Y]ou can't connect the dots Connecting the Dots “Creativity is just connecting things. ” “[Y]ou can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. ” – Obtain dots – Connect dots backward © Minder Chen, 2011 -2012 - 27 -

Usefulness of Giant Gourds 善用大小:善用無用 之用,小兵可立大 功 惠子謂莊子曰: 「 魏王貽我大瓠 之種,我樹之成而實五石,以 盛水漿,其堅不能自舉也。剖 之以為瓢,則瓠落無所容。非 不呺然大也,吾為其無用而掊 Usefulness of Giant Gourds 善用大小:善用無用 之用,小兵可立大 功 惠子謂莊子曰: 「 魏王貽我大瓠 之種,我樹之成而實五石,以 盛水漿,其堅不能自舉也。剖 之以為瓢,則瓠落無所容。非 不呺然大也,吾為其無用而掊 © Minder Chen, 2011 -2012 之。」 - 28 -

Secret Formula for Hand Lotion 惠子謂莊子曰: 「 魏王貽我大瓠之種,我樹之成而實五石,以盛水漿,其堅不能自舉 也。剖之以為瓢,則瓠落無所容。非不呺然大也,吾為其無用而掊之。 」 莊子曰:「 夫子固拙於用大矣。宋人有善為不龜手之藥者,世世以洴澼絖為事。客聞 之,請買其方百金。聚族而謀曰: 『 Secret Formula for Hand Lotion 惠子謂莊子曰: 「 魏王貽我大瓠之種,我樹之成而實五石,以盛水漿,其堅不能自舉 也。剖之以為瓢,則瓠落無所容。非不呺然大也,吾為其無用而掊之。 」 莊子曰:「 夫子固拙於用大矣。宋人有善為不龜手之藥者,世世以洴澼絖為事。客聞 之,請買其方百金。聚族而謀曰: 『 我世世為洴澼絖,不過數金;今一朝而鬻技百金, 請與之。』 客得之以說吳王。越有難,吳王使之將,冬與越人水戰,大敗越人,裂地而 封之。能不龜手,一也;或以封,或不免於洴澼絖,則所用之異也。今子有五石之瓠, 何不慮以為大樽而浮乎江湖,而憂其瓠落無所容?則夫子猶有蓬之心也夫! 」莊 《 子 ‧逍遙遊 》 © Minder Chen, 2011 -2012 - 29 -

Creativity = Humanities & The Sciences + Strong Personality • The creativity that can Creativity = Humanities & The Sciences + Strong Personality • The creativity that can occur when a feel for both the humanities and the sciences combine in one strong personality …it will be a key to creating innovative economies in the twenty-first century. - Walter Issacson http: //www. youtube. com/watch? v=AZe. Ohn. Tuq 2 I © Minder Chen, 2011 -2012 - 30 -

3 Ts Approach • Talent, Technology, and Tolerance • Talented people seek an environment 3 Ts Approach • Talent, Technology, and Tolerance • Talented people seek an environment open to differences. – Richard Florida, Rise of the Creative Class in 2002. It's better to be a pirate than to join the navy. © Minder Chen, 2011 -2012 Steve Jobs with the Macintosh team - 31 -

1982, photographed by Diana Walker At Steve Jobs’ home in Woodside, 1982: He was 1982, photographed by Diana Walker At Steve Jobs’ home in Woodside, 1982: He was such a perfectionist that he had trouble buying furniture. © Minder Chen, 2011 -2012 - 32 -

What is the connection of this picture with “Apple” Robert Friedland was charismatic and What is the connection of this picture with “Apple” Robert Friedland was charismatic and a bit of a con man and could bend situations to his very strong will. He was mercurial, sure of himself, a little dictatorial. © Minder Chen, 2011 -2012 - 33 -

Vision to Execution • …those who did make the future happen deserve double and Vision to Execution • …those who did make the future happen deserve double and triple credit. They not only saw the future, but also trusted their vision to follow through, and translated vision to execution. • 乾知大始 • 坤作成物 © Minder Chen, 2011 -2012 - 34 -

Why? The Ouster of Steve Jobs from Apple • “The ancient Greeks had a Why? The Ouster of Steve Jobs from Apple • “The ancient Greeks had a word for Steve's behavior. They called it hubris, the insolent pride that humans exhibited when they thought they could challenge the gods. The gods' response was always the same: to strike down the arrogant human with a bolt from the heavens. ” • Customers disliked the idea that it was not expandable, that it had a small screen, and that there was no color. • Without useful software products for Mac, the Mac was seen as a toy, a flaky machine that you could love, but you wouldn't buy. No Lotus 123…. • “Steve did his market research by looking into the mirror every morning. ” • Floppy disk swapping problem. 亢龍有悔 • Did not sell well to office usage. 物極必反 © Minder Chen, 2011 -2012 - 35 -

Pixzar • 1955 Fall Steve Jobs left Apple. • 1986 Lucas. Film computer division Pixzar • 1955 Fall Steve Jobs left Apple. • 1986 Lucas. Film computer division owned by George Lucas: – Hardware: Pixar Image Computer – Software: Render. Man – Animated Contents: Short films 彖曰 : 大畜, 剛健篤實輝光,日新其德, 剛上而尚賢。 © Minder Chen, 2011 -2012 - 36 -

Tin Toy • He offered to pay Lucas $5 million plus invest another $5 Tin Toy • He offered to pay Lucas $5 million plus invest another $5 million to capitalize the division as a stand-alone company. Own 80% of the company. • 1988 Tin Toy, ($300, 000 personal check from Steve) http: //www. youtube. com/watch? v=se 3_3 GYEQM&feature=related – “All I ask of you, John, is to make it great!” to Lasseter – 1988 Academy Award for animated short films, the first computer-generated film to do so. • n April 1990 Jobs sold Pixar's hardware division, including all proprietary hardware technology and imaging software, to Vicom Systems © Minder Chen, 2011 -2012 - 37 -

唯變所適 • 1991 another round of investment by Steve Jobs, total $50 millions. (Half 唯變所適 • 1991 another round of investment by Steve Jobs, total $50 millions. (Half of money of Apple stock sold by Steve Jobs. ) 42 employees only. • Looking back, Jobs said that, had he known more, he would have focused on animation sooner and not worried about pushing the company’s hardware or software applications. • On the other hand, had he known the hardware and software would never be profitable, he would not have taken over Pixar. “Life kind of snookered me into doing that, and perhaps it was for the better. ” 窮則變,變則通,通則久。 © Minder Chen, 2011 -2012 - 38 -

Selling Pixar? 功虧一簣 • Jobs contemplated selling Pixar. • Pixar made a $26 million Selling Pixar? 功虧一簣 • Jobs contemplated selling Pixar. • Pixar made a $26 million deal with Disney to produce three computer-animated feature films, the first of which was Toy Story. • Only after confirming that Disney would distribute Toy Story for the 1995 holiday season did he decide to give it another chance. • 為山九仞,功虧一簣。 --《 尚書 ·旅獒 》 • 子曰:「譬如為山,未成一簣,止,吾止也; 譬如平地,雖覆一簣,進,吾往也。」 《 -論語 ·子罕 》 © Minder Chen, 2011 -2012 - 39 -

The Story of “Toy Story” • Nov. 19, 1995 Toy Story premium and Nov. The Story of “Toy Story” • Nov. 19, 1995 Toy Story premium and Nov. 22 formal release. • “Everyone has had the traumatic childhood experience of losing a toy. Our story takes the toy’s point of view as he loses and tries to regain the single thing most important to him: to be played with by children. This is the reason for the existence of all toys. It is the emotional foundation of their existence. ” 漢 樂 府民歌。又稱 《 古怨歌 》 縈縈白兔,東走西顧。 衣不如新,人不如故。 © Minder Chen, 2011 -2012 - 40 -

Not for the Money? ? ? • Pixar held its initial public offering on Not for the Money? ? ? • Pixar held its initial public offering on November 29, 1995, and the company's stock was priced at US$22 per share. 22 49 $39 at the end of the day. • Steve Bobs, owned 80% and which worth 1. 2 billions (50 times ROI, and 5 times Steve earned from Apple’s IPO) • “There’s no yacht in my future, ” • “I’ve never done this for the money. ” © Minder Chen, 2011 -2012 - 41 -

Ne. XT Sculley referred to Job as Catshire Cat © Minder Chen, 2011 -2012 Ne. XT Sculley referred to Job as Catshire Cat © Minder Chen, 2011 -2012 - 42 -

Apple Bought Ne. XT • Apple bought Ne. Xt for $400 millions or so. Apple Bought Ne. XT • Apple bought Ne. Xt for $400 millions or so. Mac OS Beta 2000. • December 20, 1996—in front of 250 cheering employees at Apple headquarters. Amelio did as Jobs had requested and described his new role as merely that of a part-time advisor. Apple were less than 90 days from being insolvent when Jobs became i. CEO. (9/1997) © Minder Chen, 2011 -2012 - 43 -

Focus • Jobs said. “I couldn’t figure it out. ” He finally began asking Focus • Jobs said. “I couldn’t figure it out. ” He finally began asking simple questions, like, “Which ones do I tell my friends to buy? ” Apple would drop its 20+ product lines and had 4 left. http: //www. youtube. com/watch? v=0 BHPto. Tct. DY&feature=player_embedded © Minder Chen, 2011 -2012 - 44 -

Focus • Steve Jobs had the power to focus like a laser beam. • Focus • Steve Jobs had the power to focus like a laser beam. • “Deciding what not to do is as important as deciding what to do. …. That’s true for companies, and it’s true for products. ” • His [Steve Jobs] job had been to prune the apple trees so that they would stay strong, and that became a metaphor for his pruning at Apple. © Minder Chen, 2011 -2012 - 45 -

我專而敵分 孫子兵法 虛實篇 我專而敵分 故形人而我無形,則我專而敵分, 我專為一,敵分為十,是以十攻其一也。 則我眾而敵寡,能以眾擊寡, 則我之所與戰者,約矣。 © Minder Chen, 2011 -2012 - 我專而敵分 孫子兵法 虛實篇 我專而敵分 故形人而我無形,則我專而敵分, 我專為一,敵分為十,是以十攻其一也。 則我眾而敵寡,能以眾擊寡, 則我之所與戰者,約矣。 © Minder Chen, 2011 -2012 - 46 -

忍辱 • 1997年 Mac World會場上 Microsoft Bill Gates 透過衛 星轉播與 Steve Job宣佈投資合作計劃 尺蠖之屈,以求信也; 龍蛇之蟄,以存身也 忍辱 • 1997年 Mac World會場上 Microsoft Bill Gates 透過衛 星轉播與 Steve Job宣佈投資合作計劃 尺蠖之屈,以求信也; 龍蛇之蟄,以存身也 。 信 , 伸也 。 © Minder Chen, 2011 -2012 - 47 -

Think Different Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The Think Different 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.   • Steve Jobs 原音所唸的廣告詞 (不是 1997年在電視上用的版本 ) http: //www. youtube. com/watch? v=8 rwsu. XHA 7 RA  • http: //v. youku. com/v_show/id_XMz. Ex. Mz. Ix. ODA 0. html - 48 © Minder Chen, 2011 -2012

i. Mac Case Ives & his team studied how to make translucent colors look i. Mac Case Ives & his team studied how to make translucent colors look enticing in a jelly bean factory © Minder Chen, 2011 -2012 - 49 -

The First i. Mac Introduction • Around the back, we have a great handle The First i. Mac Introduction • Around the back, we have a great handle here. • The back of this thing looks better than the front of the another guy by the way. - Steve Jobs Head of Design Jony Ive and head of Hardware Jon Rubistein with the lifesavers i. Macs © Minder Chen, 2011 -2012 - 50 -

乾卦 九三 君子終日乾乾,夕惕若厲,无咎。 • It was rough, really rough, the worst time in my 乾卦 九三 君子終日乾乾,夕惕若厲,无咎。 • It was rough, really rough, the worst time in my life. I had a young family. I had Pixar. I would go to work at 7 a. m. and I’d get back at 9 at night, and the kids would be in bed. And I couldn’t speak, I literally couldn’t, I was so exhausted. I couldn’t speak to Laurene. • All I could do was watch a half hour of TV and vegetate. It got close to killing me. I was driving up to Pixar and down to Apple in a black Porsche convertible, and I started to get kidney stones. I would rush to the hospital and the hospital would give me a shot of Demerol in the butt and eventually I would pass it. © Minder Chen, 2011 -2012 - 51 -

Why Apple Stores? • Other computers were pretty generic, but Apple’s had innovative features Why Apple Stores? • Other computers were pretty generic, but Apple’s had innovative features and a higher price tag. • Mega-chains and big box stores, where most clerks had neither the knowledge nor the incentive to explain the distinctive nature of Apple products. • Control the experience of buying Apple products. An awesome store where people can try things will help that. • But, Gateway has tried this and failed, while Dell is selling direct to consumers without stores and succeeding. © Minder Chen, 2011 -2012 - 52 -

虞 - 嚮導 • Hired Ron Johnson, VP for merchandising at Target in 2000 虞 - 嚮導 • Hired Ron Johnson, VP for merchandising at Target in 2000 as SVP of Retail at Apple. • 屯卦 【 爻辭 】 六三,即鹿无虞,惟入于林中,君子幾 不如舍,往吝。 • Nov. 1, 2011 left apple to become CEO of JC Penney © Minder Chen, 2011 -2012 - 53 -

 • • • Sell Dreams (Life Styles), Not Products Apple stores should be • • • Sell Dreams (Life Styles), Not Products Apple stores should be in malls and on Main Streets—in areas with a lot of foot traffic, no matter how expensive. A good company must “impute”—it must convey its values and importance in everything it does, from packaging to marketing. The store will become the most powerful physical expression of the brand. Staff isn't focused on selling stuff, it's focused on building relationships and trying to make people's lives better. “The success of Apple’s retail stores comes from adding value beyond selling the goods. ” © Minder Chen, 2011 -2012 - 54 -

Genius Bar • Best service experiences: Four Seasons or Ritz. Carlton Hotel. • Johnson Genius Bar • Best service experiences: Four Seasons or Ritz. Carlton Hotel. • Johnson sent his first five store managers through the Ritz-Carlton training program. • Genius Bar: Replicating something between a concierge desk and a bar in a hotel. © Minder Chen, 2011 -2012 - 55 -

Inside an Apple Store Applestore, Soho, New York, 20 Sep 2005 http: //www. ifoapplestore. Inside an Apple Store Applestore, Soho, New York, 20 Sep 2005 http: //www. ifoapplestore. com/the_stores. html © Minder Chen, 2011 -2012 - 56 -

Apple Store • Apple’s 326 stores generate more visitors in a quarter than Disney’s Apple Store • Apple’s 326 stores generate more visitors in a quarter than Disney’s top four parks get in a year. • • Shopping Specialist Consultant Runner Genius © Minder Chen, 2011 -2012 - 57 -

i. Pod Shuffle, i. Pod Nano, i. Pod Classic, and i. Pod Touch © i. Pod Shuffle, i. Pod Nano, i. Pod Classic, and i. Pod Touch © Minder Chen, 2011 -2012 - 58 -

The Beginning • Jeff Robbin and Dave Heller, former Apple software engineers. Their product, The Beginning • Jeff Robbin and Dave Heller, former Apple software engineers. Their product, known as Sound. Jam, offered Mac users an interface for the Rio and software for managing the songs on their computer. i. Tunes • Tony Fadell began his show-and-tell by taking the various parts they were using out of a box and spreading them on the table. There were the 1. 8 -inch drive, LCD screen, boards, and batteries, all labeled with their cost and weight. i. Pod • If Steve wanted a song or a function, he should be able to get there in three clicks. And the click should be intuitive. © Minder Chen, 2011 -2012 - 59 -

i. Pod Storage • February 2001 • Toshiba, the engineers mentioned a new product i. Pod Storage • February 2001 • Toshiba, the engineers mentioned a new product they had in the lab that would be ready by that June. It was a tiny, 1. 8 -inch drive (the size of a silver dollar) that would hold five gigabytes of storage (about a thousand songs), and they were not sure what to do with it. • Apple negotiating with Toshiba to have exclusive rights to every one of the disks it could make. • "1, 000 songs in your pocket. " (2001) • http: //en. wikipedia. org/wiki/List_of_Apple_Inc. _slogans © Minder Chen, 2011 -2012 - 60 -

Simplicity: Design Principle #1 • Simplicity: Design Principle #1 • "Simplicity is the ultimate sophistication. " Leonardo da Vinci • Simplicity: The Elimination of Clutter “He made devices simpler by eliminating buttons, software simpler by eliminating features, and interfaces simpler by eliminating options. ” 乾以易知,坤以簡能。 易則易知,簡則易從。 易知則有親,易從則有功 。 有親則可久,有功則可大。 可久則賢人之德,可大則賢人之業。 易簡而天下之理得矣。天下之理得而成位乎其中矣。 © Minder Chen, 2011 -2012 - 61 -

i. Pod and i. Tunes Apple - i. Pod + i. Tunes, http: //www. i. Pod and i. Tunes Apple - i. Pod + i. Tunes, http: //www. apple. com/itunes/, Screen clipping taken: 2007/3/6, 08: 02 © Minder Chen, 2011 -2012 - 62 -

i. Tunes Music Store i. Tunes Store i. Tune Store sells digital songs for i. Tunes Music Store i. Tunes Store i. Tune Store sells digital songs for 99 cents—a simple and impulsive purchase. The record companies would get 70 cents of that. Steve Jobs introducing the i. Tunes Music Store on Apr. 28, 2003 © Minder Chen, 2011 -2012 - 63 -

Invention vs. Innovation • The i. Pod wasn't the first portable music device (Sony Invention vs. Innovation • The i. Pod wasn't the first portable music device (Sony popularized the "music anywhere, anytime" concept 22 years earlier with the Walkman) • What made Apple innovative was that it combined all of these elements -- design, ergonomics and ease of use -- in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music. • Apple invented nothing. Its innovation was creating an easy-to-use ecosystem that unified music discovery, delivery and device. And, in the process, they revolutionized the music industry. Source: http: //www. pbs. org/idealab/2012/03/the-difference-between-invention-and-innovation 086. html © Minder Chen, 2011 -2012 - 64 -

古者包羲氏之王天下也, 仰則觀象於天,俯則觀法於 地 ,觀鳥獸之文,與地之宜, 近取諸身,遠取諸物, 於是始作八卦 。 © Minder Chen, 2011 -2012 - 65 古者包羲氏之王天下也, 仰則觀象於天,俯則觀法於 地 ,觀鳥獸之文,與地之宜, 近取諸身,遠取諸物, 於是始作八卦 。 © Minder Chen, 2011 -2012 - 65 -

http: //strategicorganizationdesign. com/the-innovator%E 2%80%99 s-dna-disruptive-research-disruptive-writing © Minder Chen, 2011 -2012 - 66 - http: //strategicorganizationdesign. com/the-innovator%E 2%80%99 s-dna-disruptive-research-disruptive-writing © Minder Chen, 2011 -2012 - 66 -

From Chinese Classics • Networking: 利建侯 – 乾卦 九二 見龍再田,利見大人。 – 乾卦 九五 飛龍在天,利見大人。 From Chinese Classics • Networking: 利建侯 – 乾卦 九二 見龍再田,利見大人。 – 乾卦 九五 飛龍在天,利見大人。 • Questioning: 《 中庸 》 好問 ,而好察邇言 ; 每事問 。 博 學之,審問之,慎思之,明辨之,篤行之。 • Observing: 仰以觀於天文,俯以察於地理 ; 咸卦 聖 人感人心而天下和平 • Experimenting: – 乾卦九四 或躍在淵,无咎。或躍在淵,進无咎也。 • Associative Thinking: making connections across “seemingly unrelated questions, problems, or ideas. ” – 觸類旁通 : 〈 繫辭傳 〉 觀其會通 … 引而伸之,觸類而長之, 天下之能事畢矣。 © Minder Chen, 2011 -2012 - 67 -

The Birth of i. Phone: Three Revolutionary Products in One • By 2005 i. The Birth of i. Phone: Three Revolutionary Products in One • By 2005 i. Pod sold 20 million, 400% increase over previous year, accounting for 45% of Apple’s revenue that year It was also burnishing the hipness of the company’s image in a way that drove sales of Macs. • Steve Jobs was always obsessing about what could mess us up. 作《 》 易 者,其有憂患乎? 百物不廢,懼以終始,其要無咎。此之謂 《 》 易 之道也。 • The device that can eat our lunch is the cell phone. ” As he explained to the board, the digital camera market was being decimated now that phones were equipped with cameras. The same could happen to the i. Pod, if phone manufacturers started to build music players into them. “Everyone carries a phone, so that could render the i. Pod unnecessary. ” © Minder Chen, 2011 -2012 - 68 -

Cannibalize Yourself 自相殘殺 • One of Jobs’s business rules was to never be afraid Cannibalize Yourself 自相殘殺 • One of Jobs’s business rules was to never be afraid of cannibalizing yourself. “If you don’t cannibalize yourself, someone else will. ” 危者,安其位者也; 亡者,保其存者也。 Entry threat/ Entry barriers Emerging technologies © Minder Chen, 2011 -2012 - 69 -

Virtual Keyboard • i. Phone should have been all about the display, but in Virtual Keyboard • i. Phone should have been all about the display, but in their current design the case competed with the display instead of getting out of the way. The whole device felt too masculine, task-driven, efficient. • Apple “pressed the reset button and started over. ” • i. Phone was tightly sealed (desire to control) • Thin is beautiful. • No keyboard • Gorilla Glass from Corning Glass Materials (translucent & colored plastic Titanium aluminum) © Minder Chen, 2011 -2012 - 70 -

Open Innovation Model (Henry W. Chesbrough) g Licensin Other Firm’s Market Technology Spin-Offs © Open Innovation Model (Henry W. Chesbrough) g Licensin Other Firm’s Market Technology Spin-Offs © Minder Chen, 2011 -2012 New Products/ Services - 71 -

Ecosystem • i. Pod + i. Tune Music Store • i. Phone + i. Ecosystem • i. Pod + i. Tune Music Store • i. Phone + i. Phone Apps + i. Tunes Store • i. Pad + i. Pad Apps • Third-party as well as Apple application software is available from the App i. Tunes Store, which launched in mid -2008 and now has over 500, 000 "apps" approved by Apple. © Minder Chen, 2011 -2012 - 72 -

四字心法 • 直指本性 • 惟精惟一 • 我專敵分 • 化繁為簡 • 以簡御繁 (Insight, Intuition) (Focus) 四字心法 • 直指本性 • 惟精惟一 • 我專敵分 • 化繁為簡 • 以簡御繁 (Insight, Intuition) (Focus) (Relative superiority) (Simplify) (Simplicity is the optimal sophistication) • 用減去加 (Subtracting instead of adding) • 不失初心 (Be curious and keep asking why) • 跳出窠臼 (Think out of the box) • 思想奇異 (Think different) • 靜思頓悟 (From meditation to epiphany) © Minder Chen, 2011 -2012 - 73 -

Apple University: Cloning Steve Jobs? • Apple University: Steve Jobs hired Joel Podolny, dean Apple University: Cloning Steve Jobs? • Apple University: Steve Jobs hired Joel Podolny, dean of the Yale School of Management, to compile a series of case studies analyzing important decisions the company had made, including the switch to the Intel microprocessor and the decision to open the Apple Stores. Top executives spent time teaching the cases to new employees, so that the Apple style of decision making would be embedded in the culture. “Never ask what I would do. Just do what's right. ” -- Steve Jobs to Tim Cook, the last advice. 不可為典要,唯變所適。 張忠謀:創意難複製 別硬要學賈伯斯 © Minder Chen, 2011 -2012 - 74 -