Chaos Business Theory and the Apple iPod Shuffle

A lot of people dream about finding that One_Big_Idea. You
know the one, the one that will make them unbelievably rich.
The one that will put them in the top tax bracket, and be so
rich as to not care about it. That one idea that will make
them as big as Bill Gates, Robert Scoble
or Doc Searls (just kidding
there guys). Some actually do (find that idea).

But if they do, the secret they probably won’t tell you is
that it took going through 100 or even 1,000 ideas that
didn’t work to find the one that did. When that one idea does
hit, everyone slaps their forehead and says “Of course.
Anyone could see that would be popular.” But you know, the
even bigger secret is that no one could have predicted which
idea was going to be the one that millions of people, making
individual decisions independent of others (more or less)
would sell. Because if they could, they wouldn’t need to sift
through the 999 that wouldn’t work.

This is what I call the chaos theory of business. Even if
you do all the things that the business schools teach. Even
if you excel at management and can motivate your employees to
do great things. Even if you are the most innovative person
on the planet. No one can predict that one idea that will
move the world. And anyone who says they can is either lying
or trying to get you to buy his or her new management book
(or both).

If this theory is correct, then it follows that there is
no shame in trying a lot of different things and seeing if
they sell or not. It kind of reminds me of the stock market.
“Stock market?” you ask, shaking your head in
bewilderment.

Think of it this way. Buying stocks is a form of legalized
gambling. All other things being equal, you have no guarantee
that any stock you buy will make a profit. Hence, you have no
better than a 50/50 chance of making money on any individual
stock. If this is true, then the smart play is to buy many
stocks in many different areas (or not play at all – ed.).
This is called diversification. It works, over the long run
if it works at all, because while most stocks won’t make
money, a few will. It’s these few that may cover the loses of
the others and hopefully, make you better off than you were
before. But since no one, including that ace Wall Street
stock picker, can predict which ones will make money and
which won’t, you have to diversify. Note, insert disclaimer
here, I am not giving stock advice nor making any kind of
recommendations to buy, or not buy, any stocks, bonds, or
other instruments.

So what’s my point? I was reminded of all of this when I
saw Apple’s new iPod Shuffle. A
lot of people are making fun of it and saying you could just
put a yellow sticky note over the display of your old iPod
and you would have the same thing. Perhaps. But I don’t think
so. While many people who already have an iPod or iPod mini
may decide to pass, many others who couldn’t see paying three
or four hundred dollars for one of these players may, without
or perhaps in spite of the help of such pundits, decide to
buy one.

I wouldn’t be surprised if it does well. But even if it
doesn’t, so what? Apple will come up with something else that
will catch the fancy of millions of people. And as long as
Apple has the confidence (and money) to continue to innovate
they will prosper (and I have to eat a lot of crow because I
was one of those, several years ago, who predicted Apple was
going down the tubes).

Programming Note: I will be taking
tomorrow off so that I have a long weekend (including Monday’s
US holiday for Dr. Martin Luther King). As usual, there won’t
be a post tomorrow and possibly none for Monday (although I
may get round2it).

Have a Great Weekend,
EveryoneAloha!

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One response to “Chaos Business Theory and the Apple iPod Shuffle

  1. “… to continue to innovate they will …”
    I am not implying it’s a bad product, rather just another solidstate MP3 player. The only innovation I see is that it works with iTuneswhile the others don’t. Because they are not allowed to.