Mike Davidson tells us how to properly apply for a design position.

Fantastic advice, and it’s certainly coming from someone in a position of authority on the subject.

Here’s a video of Steve Jobs talking about branding after he came back to Apple. Brilliant.

In a nut: branding isn’t veneer. It’s the core principles and purpose of a company, and it must be absolutely clear.

Rob Rhyne’s Briefs iPhone application is the perfect example of what’s wrong with the App Store:

At WWDC I was connected with two developer evangelists and eventually the director of the App store to discuss Briefs’ prospects. All three were very encouraging and helpful. This was in addition to several Apple engineers detailing their use of Briefs for company efforts. I left the conference with hope that differences could be resolved and Briefs would be up for sale.

That was until a few weeks later, when I was told (by the director himself) that the review had reached the “executive level.” Considering he reports directly to an Executive Vice President within Apple, I have every reason to believe him. Unfortunately two and half months have transpired since reaching the executive review. (and what a two and a half months it has been for Apple executives!) I have not completely given up hope, but it is time to move on.

So: his (incredible) application has been sitting in review for months, he’s handled the situation with great patience and class, and yet he still has no answer. Out of frustration he’s decided to open source the application.

This is absolutely unacceptable. The iOS platform’s biggest threat isn’t Android—it’s Apple’s own capricious review process. Why should developers put as much effort into building a great application (as Rhyne clearly did) when there’s no way to know whether it will even end up on the App Store?

News to Apple: for whatever dumb reason you think Briefs is a threat to the platform (or a number of other applications), treating developers like this is an exponentially greater threat.

Trader Joes has a very different strategy than most grocery stores:

Trader Joe’s organic creamy unsalted peanut butter will be more satisfying if there are only nine other peanut butters a shopper might have purchased instead of 39. Having a wide selection may help get customers in the store, but it won’t increase the chances they’ll buy. (It also explains why so often people are on their cellphones at the supermarket asking their significant other which detergent to get.) “It takes them out of the purchasing process and puts them into a decision-making process,” explains Stew Leonard Jr., CEO of grocer Stew Leonard’s, which also subscribes to the “less is more” mantra.

Customers accept that Trader Joe’s has only two kinds of pudding or one kind of polenta because they trust that those few items will be very good. “If they’re going to get behind only one jar of Greek olives, then they’re sure as heck going to make sure it’s the most fabulous jar of Greek olives they can find for the price,” explains one former employee.

That’s a powerful strategy in any business: compete on your selections, not your selection.

On July 16th, Apple held a press conference to discuss the iPhone 4′s antenna. On the whole, Apple’s approach was good—they explained what the problem was and how they would resolve it for customers. Providing a free case for anyone experiencing signal attenuation is a sufficient gesture.

Nonetheless, Apple made two errors—one serious, and one slightly less so.

The slightly smaller mistake was made at the press conference itself. Apple not only explained what was causing signal attenuation on the iPhone 4, but did two things: they tried to argue the media was looking for a good story rather than reporting things factually (effectively positioning Apple as the victim) and that this problem isn’t unique to the iPhone 4, but is an industry-wide problem.

While it may be accurate that the media dramatized the story, and it is somewhat unfair that Apple garnered so much criticism over it when most phones exhibit similar issues, they did so because Apple is different than RIM, HTC and Motorola. Consumers expect those companies to put out products with issues, because that’s how most companies work. They put out products with problems, but consumers either don’t notice them or ignore them. But because Apple is so good at what they do, and we buy Apple products not just because they are functional but because Apple puts so much effort into their design. Apple has become a symbol of exceptionality, of making something whose quality and detail is beyond what we expect. Any issues become a lot more glaring in that case.

Apple made a mistake in arguing “hey, everyone else has this problem, too” because they aren’t everyone else, and they shouldn’t want to be. They should accept their unique position, acknowledge there is a real issue (whether it was a conscious trade-off they made or not) and move on. “They did it, too” is never a valid excuse when your entire advantage is your uniqueness.

The second, and more damaging, mistake Apple made was early on. When the iPhone 4 was released and the signal attenuation story was just breaking, Apple put out a response basically saying most phones experience this problem and that users should just avoid holding the bottom-left corner.

Well, first, no, not all phones experience this problem. While all phones do suffer signal degradation if your hand covers the antenna, the iPhone 4′s signal degradation is much worse than comparable phones. Anandtech compared the iPhone 4′s signal degradation to the iPhone 3GS and HTC Nexus One, and the iPhone 4′s signal was reduced much more significantly than the other two. This doesn’t result from some forced, awkward way of holding the phone, either—it results from holding the iPhone 4 so the bottom-left seam touches your hand, and in use it results in more dropped calls. When held like this (the natural way I hold my iPhone), my iPhone 4 will garble or drop calls where my iPhone 3G had no problem holding a connection.

Worse, though, Apple didn’t get out ahead of the problem. By refusing to acknowledge there was a problem at all, Apple allowed this to develop into a full-blown controversy. We’ve all experienced it—over the past few weeks, people who see me using my iPhone 4 don’t ask me how great the screen is but whether I have the antenna issue. Apple chose to allow this to develop by not acknowledging the issue immediately.

That’s the worst mistake a company can make when they have a potential disaster and the impact has been clear. The iPhone 4 has still been a terrific success, but the antenna issue is a black mark on what is Apple’s most successful product launch ever. Sometimes, even Apple needs to show a little humility.

Senator Charles Schumer wrote an open letter to Apple regarding the iPhone 4 antenna issue:

“I ask that Apple provide iPhone 4 customers with a clearly written explanation of the cause of the reception problem and make a public commitment to remedy it free-of-charge,” Schumer writes in the letter, obtained by CNN. “The solutions offered to date by Apple for dealing with the so-called ‘death grip’ malfunction – such as holding the device differently, or buying a cover for it – seem to be insufficient.”

What a wonderful use of our government’s time. This issue certainly ranks up there with the recession, the deficit and the Afghan war. I’m just glad someone finally recognized this is something deserving of response from a senator.

Joel Spolsky:

Smart companies try to commoditize their products’ complements.

The Economist, commenting on Obama’s response to BP:

If he sees any impropriety in politicians ordering executives about, upstaging the courts and threatening confiscation, he has not said so. The collapse in BP’s share price suggests that he has convinced the markets that he is an American version of Vladimir Putin, willing to harry firms into doing his bidding.

First, it should be noted that The Economist endorsed Obama in the 2008 election. And comparing him to Vladimir Putin is *sort of* serious.

Second, however, this nicely summarizes why the administration’s response to BP is so troubling. BP bears responsibility for the oil spill and all damages associated with it—damage to the environment, to affected businesses, and to affected states for lost tourism revenue. Our system is designed to handle this through the court system, so damages are fairly awarded. This is a defined, orderly and understood process.

The Obama administration, however, has decided that this isn’t for the courts to decide, but for the president. By forcing BP to place $20 billion in a separate fund, and to pay $100 million for salaries of workers who lost their jobs due to Obama’s own moratorium on deepwater drilling, Obama has made himself both executive and judge. That’s deeply troubling.

He has done so not because the court system has failed (which still would not justify transferring a judicial responsibility to the executive branch), but for political expediency. Because Obama claimed during his campaign that the federal government’s maligned response to Hurricane Katrina was due to incompetence in the Bush administration, and he would lead an effective response to disasters as president, he has been criticized for not doing much in response to the oil leak. He is making what should be a question for the courts—how much damages to award, decided coolly, without outside influence—into a political question.

That should worry everyone, and schadenfreude for BP shouldn’t cloud just how wrong the administration’s response is.

David Barnard:

Apple is taking back control so that it can decide what is appropriate. And I trust Apple in that regard a hell of a lot more than I trust Google, Facebook, etc. The thing is, Apple is a hardware company, that’s where they have and will continue to make their money. Google, Facebook, and others trade in information. The more detailed and specific, the more valuable that information.

That’s a really nice summation of the AdMob situation.

Tony Hsieh didn’t want to sell Zappos to Amazon, but had little choice because of Sequoia Capital’s investment:

By early 2009, we were at a stalemate. Because of a complicated legal structure, I effectively controlled the majority of the common shares, so that the board couldn’t force a sale of the company. But on the five-person board, only two of us — Alfred Lin, our CFO and COO, and myself — were completely committed to Zappos’s culture. This made it likely that if the economy didn’t improve, the board would fire me and hire a new CEO who was concerned only with maximizing profits.

That is Sequoia’s choice of course (it is their investment), but it does not mean trying to squeeze every last dollar out of one of the best companies in the last decade is the right thing to do.

Shopify has a brilliant revenue sharing system:

The way Unicorn works is that twice a month we deposit money into the Unicorn system as a revenue share with all employees. The system automatically splits it evenly amongst all employees. However, no one can simply take the money out. You can only “invest” it in other employees as a thank you and bonus for accomplishments. This means that bonuses are paid where the company (being the employees) thinks they are due. Sometimes this leads to odd results (I recently got a $13 bonus for successfully nuggeting jesse) but who am I to argue if the company decides that this is worth rewarding?

Isn’t that great? It (1) encourages goodwill between employees (receiving a little gift from someone else would surely brighten up their day), (2) encourages employees to do great work (but whether they are doing so is decided by the company, rather than cold and impersonal standards), and (3) encourages employees to proactively look for others doing great things.

That’s fantastic.

37 Signals has a great interview with Campaign Monitor.

Seth Godin:

Let’s say a marketer has $10,000 to spend. Is it better to acquire new customers at $2,000 each (advertising is expensive) or spend $10 a customer to absolutely delight and overwhelm 1,000 true fans?

Not only is that easier to do, but probably more effective, too. The best promotion you can get is people who really believe in what you’re doing telling friends about it that would be interested. By building on your supporters, rather than casting a huge (and expensive) net through advertising, you can create a much more dedicated and powerful following.

James Fallows’ fabulous look at how Google is helping news organizations evolve:

“Nothing that I see suggests the ‘death of newspapers,’” Eric Schmidt told me. The problem was the high cost and plummeting popularity of their print versions. “Today you have a subscription to a print newspaper,” he said. “In the future model, you’ll have subscriptions to information sources that will have advertisements embedded in them, like a newspaper. You’ll just leave out the print part. I am quite sure that this will happen.” We’ll get to the details in a moment, but the analytical point behind his conviction bears emphasis. “I observe that as print circulation falls, the growth of the online audience is dramatic,” Schmidt said. “Newspapers don’t have a demand problem; they have a business-model problem.”

There is a reason Apple included their new advertising platform, iAd, as one of iPhone OS 4′s seven “tent pole” features. Apple’s future is mobile devices, and iAd is an integral part of their goal to define the mobile market.

Google’s Threat

Apple’s strong response to Google in the past few months isn’t a surprise. Google, like Apple, knows the next big market is mobile devices. Both companies have prioritized their mobile platforms, and are trying to define the market. But while their general goals are the same, their strategies are quite different.

Apple’s strategy is hardware-based. Apple profits primarily by selling iPhone, iPod touch and iPad devices. They do not make much money from content–application–sales. Rather, the iPhone OS and the App Store are the primary reasons people buy iPhone-devices. They make money by selling their own hardware, but the selling feature is the OS. As such, Apple will not license out the OS. Even though this would increase market share substantially with little work, it would commoditize the iPhone’s biggest advantage, the OS, and would thus destroy the platform.

Google’s main source of revenue, though, is through advertisement. Their Android OS is a means. Google allows anyone to use Android because they do want to have a majority of market share, and they want it so everyone will use Google services. If most mobile devices run their OS, and they are using Google’s services, then they are tied to Google and are subject to Google advertisements. This is how they intend to control advertising in the mobile market.

Whereas the iPhone OS is Apple’s central advantage, Android is Google’s loss leader. Android is what gets you in the store, so you use their services and see their ads. For Google, then, commoditizing the OS benefits them. Allowing anyone to use Android for free hurts Apple’s competitive advantage. In fact, this is Google’s general strategy–commoditize their competitors’ main businesses. Chrome OS, Android, Google Docs, Google Maps Navigation–they all commoditize one of their competitors’ businesses.

Google does not want Android to be a mere player in mobile devices, peacefully coexisting with other competitors. Google wants Android to dominate the market, and that threatens Apple’s entire future.

Attacking Back

That is the context for iAd. When Jobs explained why Apple created iAd, he said that on mobile devices, people don’t use search–they use applications. This means, Jobs argues, that advertising must be centered around applications on mobile devices.

This is the weakness Apple sees in Google, and Apple’s advantage. Until Google bought AdMob, Google had very little presence in mobile advertising. But even with AdMob, their mobile advertising is weak. AdMob’s ads are fundamentally poor–they are little more than banner ads displayed in applications.

Jobs emphasized that there will soon be 100 million devices running the iPhone OS because they want mobile to be the platform advertisers focus on. And the reason is that Apple has an advantage over Google in the mobile market.

Through iAd, Apple wants to threaten Google’s main business in the mobile market (and thus their future). Google is the established and untouchable leader of advertising on the web, but on mobile devices, they are weak. Their offering is poor. A convincing advertising platform will make the iPhone much more attractive to advertisers.

Apple plans to do this by reinventing mass-market ads. Rather than just show banner images, Apple wants advertisers to create interactive mini-applications that engage users and provide something useful. At the iPhone OS 4 special event, Jobs showed off a mock Toy Story 3 ad that allows users to look at the characters, download wallpaper, watch clips, purchase a game, and check movie times. This is a very different kind of advertising than Google provides, which creates an advantage for the iPhone. If done well, ads of these sort should be much more engaging than mere text and banner ads. This provides a better return for advertisers, and higher rates for application developers that include these ads in their applications.

If companies choose to advertise on the iPhone in place of competitors, the iPhone will be much more likely to become a market standard, and it will crimp Google’s advertising business in the next largest market. By threatening Google’s main business, Apple can marginalize Android, the main threat to the iPhone.

Apple has little choice but to enter advertising. For the iPhone to define the mobile market, it requires a great way for companies to advertise on it. Even more important, though, is Google has made it their strategy to destroy the iPhone with Android. Because the iPhone is the future of Apple, they must try to strengthen their own platform and hurt Android. The Mac will continue to grow, but the PC market has reached its apogee. Apple will do everything it can to make their future, the iPhone, as strong as possible.