March 26, 2006

"This Is How I Do Business"

Interesting music-industry anecdote deep within an Andy Hertzfeld interview recorded as part of a 30th Anniv restrospective of Apple COmputer by the San Francisco Chronicle.

The podcast can be heard here. The Chronicle story is here.

The music industry anecdote comes late in the interview when Andy's talking about the iPod and Apple's successful music business. Here's Andy, about 18 minutes into the recording:

This was in March of 1998, and I was so excited about the MP3s that I could make a single CD that had every single song the Beatles ever recorded, or, you know, that was commercially released, that could fit on a single CD. Steve was a big Beatles fan, and I knew he would be interested in that. I talked to him about how excited I was about MP3s and he just completely pooh-poohed it. He kinda said, "ugh, MP3s, the quality is awful, you know, jitter is . . . digital music isn't listenable!" That's what he said at that time.

Uh, and in fact... so, he missed it, Apple and Steve Jobs missed the digital music revolution in its early stages. But, to their credit, Apple realized, to their credit, sometime in 2000, that, hey, this is a big thing, we're behind, put a big effort in, and caught up.

I would say, one of my theories is, one of the reasons that the iPod was so successful was that Apple was a little late with it, compared to how they usually were. You put a product out ahead of the market, and it struggles as the market catches up. Apple comes out with the iPod which was exquisitely designed, just as the market was starting its big climb up, not when it was building. But the single thing that made it really really take off -- two things -- you have to say, but they're related. One thing was, making it available for the PCs. If they hadn't had done that, the iPods couldn't have taken off.

Uh, but then the real thing was solving the content problem. How, you know, just like a personal computer needs software, an iPod needs music, and by doing such a great job on the music store, which is a really hard problem to solve, by using all of the Steve Jobs skills of inspiration and persuasion on those music executives.

He told me an incredible story about meeting with the music executives where he -- I'll just tell this really briefly, but he went to a meeting in New York, with I don't know which one the music companies it was but the executive, the main guy, the CEO, he was meeting with, started the meeting by taking a gun out of his pocket, laying it on the table, and saying, "This is how I do business."

Hell of a story, right?

Reminds me of the days we had armed undercover goons roaming the halls and lobby of MP3.com.

Also reminds me of the day back in 1999 when Apple was rolling out a new version of QuickTime, and I was chatting with MP3's VP of Engineering and we got to talking about QuickTime and I encouraged him to email Steve directly at Apple and persuade him to include MP3 file format support in the next version of QuickTime. In 1999, MP3.com was the hottest company on the Net, and we had a lot of clout. Companies like Microsoft, Netscape, AOL, and Apple would listen to what we had to say. So we sat down and composed an email to Steve. He actually replied a few hours later, and that led to some calls and meetings with Apple Quicktime people, and the MP3 format made it into QuickTime.

And then Napster shipped, and nobody remembers MP3.com anymore. Which reminds me of one final anecdote: the Great Forgetting of MP3.com was so bad that one time in 2000, after I'd moved to Silicon Valley to work with none other than Andy Hertzfeld, I was driving in Los Altos, CA, in the heart of Silicon Valley, with my Boxster with the "MP3COM" license plate. This older guy in a fancy Jaguar rolls up alongside me at a red light and waves excitedly and says, "I saw your license plate! 3COM! 3COM! So you're a fan too? I'm a big investor in 3COM!" I smiled and thought, um, wrong. Before I could say anything, he added, "By the way, what does the MP stand for?"

Posted by brian at March 26, 2006 08:45 PM

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