There’s an old joke about Larry Ellison, the famously self-satisfied CEO of Oracle, that goes like this: What’s the difference between God and Larry Ellison? God doesn’t think he’s Larry Ellison. (Har har.)
You can tell the joke is more than a decade old because nobody thinks Larry Ellison is godlike anymore, not even Larry. These days all the angels sing for Steve Jobs. And a whole new round of hosannas will commence later this month when Apple reports its third-quarter results, which are universally expected to be jaw-dropping.
To put the company’s astonishing rebirth into context, consider that analysts are expecting the company to report quarterly revenue of US$14.5 billion. That means that Apple is currently generating almost as much sales in a single month as the company had in all of 2001.
Performance like that has catapulted Jobs from respected to beloved to mythologized to deified in the span of less than a decade. All of that adoration can go to a guy’s head — especially for a guy like Jobs, who wasn’t exactly crippled by self-doubt even when his career seemed at a dead end in the mid-’90s.
It is dangerous to bet against Steve Jobs, and perhaps that’s why 45 of the 48 analysts surveyed by Bloomberg recommend clients buy the stock, even though it has surged more than 210% since the beginning of 2009. But as any student of history can tell you, the catbird seat is the most dangerous of all — it has been known to engender an overconfidence that has toppled more than one great empire.
Perhaps that explains why large institutional investors have been quietly selling off some of their Apple shares in recent weeks, according to data collected by Investors Business Daily. Maybe they’re just locking in some profits after a huge payday. Or maybe a few see danger in Jobs’s character.
Apple’s CEO is an extremely rare breed of business leader — a true visionary in a world that overuses the term. Where most try to assess the way the world is and act accordingly, Jobs takes the opposite approach, seeking to bend the world to his ideas. He’s not interested in following consumer trends because he doesn’t think the world knows what good technology is until he shows it to them.
This may sound arrogant, and it is. But when Jobs gets it right, as he usually does, he creates revolutions. How many people knew they wanted an iPod before Jobs showed it to them? The entire computer industry had basically abandoned the idea of tablet computing until the iPad came out. And when he ran Pixar, most of the world thought Disney was producing pretty good kids movies until they saw Toy Story.
But visionary leaders come with an autocratic side that is worth watching out for. When Jobs unilaterally refused to allow Adobe’s Flash products on the iPad, critics screamed about heavy-handed tactics. Of course, if Jobs believes Flash makes the device work poorly and that there’s a better way to deliver video, then he’s acting as an advocate for his customers who want greater speed and security, and less battery use. This is Jobs the benevolent dictator.
Similarly, when Jobs refuses to allow explicit sexual material into Apple’s iTunes and App stores, he is imposing his own moral judgment on his customers. But if a corner store owner decides not to stock porn magazines or booze or cigarettes, that’s his right. There is a business risk there, and Apple shareholders might disagree with it, but they can sell the stock. This is Jobs the principled proprietor.
However, when customers began to complain about spotty reception on the new iPhone4, we got a glimpse of another Jobs: the condescending jerk.
Soon after the new iPhone was released, thousands of customers noticed that when they hold the phone in their left hand and cover part of the antenna that wraps around the handset, the signal can be lost. Jobs has issued a series of blithe responses, insisting the glitch is overblown and telling customers to hold the phone differently or buy a case for it. You don’t have to be a genius to realize that when somebody buys a mobile phone and holding it in their hand can render it inoperable, it’s not the customer’s fault.
His tone perfectly echoed his blunt refusal a few years ago to provide shareholders with timely updates on his health problems. It was clearly a pressing material issue for the market, but he simply stonewalled, insisting it was nobody’s business. In his world, the word of Jobs is the law.
Millions have benefited by following Jobs’s vision of the future in recent years. He’s entitled to a little arrogance. But history is littered with genius visionaries who came to see themselves as invulnerable and were dumb enough to show it. Their stories almost always end badly.