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the way I heard it was - Steve Jobs famously had a cash flow problem once regarding hard disk drives, long ago. After that, accumulating cash became a centerpie

the way I heard it was - Steve Jobs famously had a cash flow problem once regarding hard disk drives, long ago. After that, accumulating cash became a centerpiece to Steve Jobs dictatorship. Controlling the supply chain, ruthlessly, as your competitors would do to you, developed over the years as cash enabled that. In the specialized, fast-paced and global electronic components markets, it was not possible to control all the inputs, but by M&A and relentless, years long campaigns, some parts were brought in. There is nothing new about controlling your industrial inputs, it is simply difficult to do it.

pas 5y ago
Yes, and the most important part is .. you need a sufficiently high-margin business that you can scale up, otherwise you'll never be big enough to "control your inputs". I mean sure, you can always work on decreasing risk (from directly hedging financially ... forward contracts, swaps, basically counterparty insurance), to keeping a shitton of inventory, using standardized components, etc.. But of course the accumulation of capital allowed Apple to do this, which is simply [quantity] x [unit economics]. Again "obviously", it's not independent of Steve's (and Apple's as a whole) philosophy. Repositioning themselves into a high-end market immediately helped with the unit economics, even if they sold last year's technology with a simplified (but polished!) UI/UX.
- mistrial9 5y ago
  > to keeping a shitton of inventory no. I do not have industry details, but it was control through contract terms, using harsh negotiating, that prevailed. As oil-backed transportation dropped in price again and again, many industries moved away from holding inventory at all. btw- Dell was harsher than even Steve Jobs, which is hard to do. Tim Cook was literally picked due to his contract "skills" and that he was an obvious work-a-holic.
  - pas 5y ago
    yep, automotive industry turned just-in-time manufacturing into an artform.
agumonkey 5y ago
What about maintain and renew inputs. I assume merged entities can also rot, while new kids are eager to compete.

pas 5y ago

Yes, and the most important part is .. you need a sufficiently high-margin business that you can scale up, otherwise you'll never be big enough to "control your inputs". I mean sure, you can always work on decreasing risk (from directly hedging financially ... forward contracts, swaps, basically counterparty insurance), to keeping a shitton of inventory, using standardized components, etc.. But of course the accumulation of capital allowed Apple to do this, which is simply [quantity] x [unit economics]. Again "obviously", it's not independent of Steve's (and Apple's as a whole) philosophy. Repositioning themselves into a high-end market immediately helped with the unit economics, even if they sold last year's technology with a simplified (but polished!) UI/UX.

mistrial9 5y ago
> to keeping a shitton of inventory no. I do not have industry details, but it was control through contract terms, using harsh negotiating, that prevailed. As oil-backed transportation dropped in price again and again, many industries moved away from holding inventory at all. btw- Dell was harsher than even Steve Jobs, which is hard to do. Tim Cook was literally picked due to his contract "skills" and that he was an obvious work-a-holic.
- pas 5y ago
  yep, automotive industry turned just-in-time manufacturing into an artform.

agumonkey 5y ago

What about maintain and renew inputs. I assume merged entities can also rot, while new kids are eager to compete.