by Jason Snell
Apple, paint and gunpowder
Tremendously good free essay from Ben Thompson at Stratechery today:
The entire reason Dupont started making paint was that the manufacturing process was very similar to gunpowder; the problem is that gunpowder sold on a tonnage basis to huge buyers (like the army), while paint was sold to individual customers in stores. The product may have been very similar but the business model was entirely different. The end result was that Dupont was using a sales and marketing organization that was built around selling to large customers to get their paint into retail stores, and it was massively inefficient; the more paint Dupont sold, the more money they lost.
Thompson’s point is that “iPhones may be gunpowder” but “services are paint.” And if Apple is truly committed to embracing the services portion of its business, it may need to dramatically change its organizational and product-development approaches.