4 ms·

GE capital was a mistake IMO. I worry Apple might make the same mistake with Apple Card or whatever. Easy money in the short run, attracts the wrong kind of zer

by breck 4y ago

GE capital was a mistake IMO. I worry Apple might make the same mistake with Apple Card or whatever. Easy money in the short run, attracts the wrong kind of zero sum people in the long run (and takes away focus from engineering and building things of positive sum value)

PaulWaldman 4y ago
Apple is continuing to invest and do well in their core business though. GE had a policy during Jack's tenure that if GE were not number 1 or 2 in a business segment, they'd get out it. This caused GE to shed many of their traditional capabilities.
- breck 4y ago
  Ah I vaguely remember this from reading his autobio a long time ago. Seems like a non-sensical rule.
  - kamaal 4y ago
    In hind sight, yes. While aiming to be at the top 1 - 2 of the stack is always a nice thing to do. Shutting down established revenue streams to achieve it is equally bad. In many ways it is also lazy. If you won't work on a business to make it the top 1 - 2, you just shut it down. That says better people need to be CEO, especially for a conglomerate like GE. You are supposed to make money by expanding existing businesses, not by tuning the knobs and dials of the existing ones.
  - PaulWaldman 4y ago
    I read the book too and thought it was ironic that both businesses and employees were subjected to stack ranking within GE, yet Welch was praised while failing to maximize long-term shareholder value.
    - tkk23 4y ago
      From that book I vaguely remember that he negotiated a deal with his wife that he was proud to break while she maintained her part. It was something like he visits art installations with her if she plays golf with him. He didn't seem to realize that he most likely killed his marriage with that attitude. He was winning while losing.
  - Spooky23 4y ago
    I don’t like Jack Welch but you need to consider that policy in context. GE was a weird company with a professional management class that were sort of like military officers. They were lifers and would travel around the country to run factories or whatever. You lived in your little GE town, and the location and size of your house was based in your corporate stature. You may be a plant manager building turbines in upstate ny, and then be promoted to some new role making washing machines in Kentucky. The problem, like the military, it that it creates an insular and sort of incestuous culture that is hard to control centrally. It was similar to IBM in some ways. Alot of the “genius” of Jack Welch was reverse engineered as some visionary nonsense but was really about killing the old GE hierarchy.
    - datavirtue 4y ago
      If that was the goal then he completely failed. That company's manager class mindset is burned in and they will passively ignore the CEO or whatever manager is above them. This mindset trickles down through the hierarchy and makes the place immovable. It's passive aggressive power play all the way down.
- ksherlock 4y ago
  Shed businesses and narrowly define their business segment, eg #1 in servicing GE nuclear reactors vs #3 in servicing all nuclear reactors
bredren 4y ago
I see the opposite. Apple has no choice but to tackle some aspects of finance because existing banking is so predatory. So far each component they’ve taken on has set new expectations unseen in consumer banking. Notably privacy of purchase history and shared credit history between couples who share a credit card.
- breck 4y ago
  It's dangerous though. If you hit a problem you leave Apple world and are routed to GS. I was loving the card then went through the worst customer support experience of my life (literally almost cost us our mortgage b/c they ended up filing a mark against our perfect credit, for a $4.99 WaPost charge I disputed, until finally an email to the big man Timmy himself landed and some deputy called us and got it settled—god bless her). So maybe they've fixed all of that, but it was a year long customer service nightmare
  - voakbasda 4y ago
    Were you in the process of closing? I can’t imagine a scenario where a $5 dispute would cause problems with an established loan.
    - breck 4y ago
      Yes. I mean it was the first time I had been in that situation, so maybe the mortgage was never in jeopardy. I just remember coming home to a message from our banker asking about a negative report from an Apple card and freaking out until Apple/Goldman withdrew it.
  - bredren 4y ago
    Thanks for sharing this. I'd say its a lot of responsibility to get right, but not necessarily dangerous. And fwiw, I've seen old, established banks make reports that are objectively incorrect but then do everything possible to avoid fixing it. On something like this, though, I'm glad you were able to get an email routed down from TC. I had multiple instances of this with matters addressed to Bezos but never with Apple.
lotsofpulp 4y ago
Apple is not the lender with Apple (credit) Card.
scarface74 4y ago
Cobranded cards are always managed by the bank. The bank takes the risks not the partner
HWR_14 4y ago
The Apple Card is a partnership with GoldmanSachs, IIRC. That is, they outsourced the zero-sum thinking to Wall Street.

by breck 4y ago

PaulWaldman 4y ago

Apple is continuing to invest and do well in their core business though. GE had a policy during Jack's tenure that if GE were not number 1 or 2 in a business segment, they'd get out it. This caused GE to shed many of their traditional capabilities.

breck 4y ago
Ah I vaguely remember this from reading his autobio a long time ago. Seems like a non-sensical rule.
- kamaal 4y ago
  In hind sight, yes. While aiming to be at the top 1 - 2 of the stack is always a nice thing to do. Shutting down established revenue streams to achieve it is equally bad. In many ways it is also lazy. If you won't work on a business to make it the top 1 - 2, you just shut it down. That says better people need to be CEO, especially for a conglomerate like GE. You are supposed to make money by expanding existing businesses, not by tuning the knobs and dials of the existing ones.
- PaulWaldman 4y ago
  I read the book too and thought it was ironic that both businesses and employees were subjected to stack ranking within GE, yet Welch was praised while failing to maximize long-term shareholder value.
  - tkk23 4y ago
    From that book I vaguely remember that he negotiated a deal with his wife that he was proud to break while she maintained her part. It was something like he visits art installations with her if she plays golf with him. He didn't seem to realize that he most likely killed his marriage with that attitude. He was winning while losing.
- Spooky23 4y ago
  I don’t like Jack Welch but you need to consider that policy in context. GE was a weird company with a professional management class that were sort of like military officers. They were lifers and would travel around the country to run factories or whatever. You lived in your little GE town, and the location and size of your house was based in your corporate stature. You may be a plant manager building turbines in upstate ny, and then be promoted to some new role making washing machines in Kentucky. The problem, like the military, it that it creates an insular and sort of incestuous culture that is hard to control centrally. It was similar to IBM in some ways. Alot of the “genius” of Jack Welch was reverse engineered as some visionary nonsense but was really about killing the old GE hierarchy.
  - datavirtue 4y ago
    If that was the goal then he completely failed. That company's manager class mindset is burned in and they will passively ignore the CEO or whatever manager is above them. This mindset trickles down through the hierarchy and makes the place immovable. It's passive aggressive power play all the way down.
ksherlock 4y ago
Shed businesses and narrowly define their business segment, eg #1 in servicing GE nuclear reactors vs #3 in servicing all nuclear reactors

bredren 4y ago

I see the opposite. Apple has no choice but to tackle some aspects of finance because existing banking is so predatory. So far each component they’ve taken on has set new expectations unseen in consumer banking. Notably privacy of purchase history and shared credit history between couples who share a credit card.

breck 4y ago
It's dangerous though. If you hit a problem you leave Apple world and are routed to GS. I was loving the card then went through the worst customer support experience of my life (literally almost cost us our mortgage b/c they ended up filing a mark against our perfect credit, for a $4.99 WaPost charge I disputed, until finally an email to the big man Timmy himself landed and some deputy called us and got it settled—god bless her). So maybe they've fixed all of that, but it was a year long customer service nightmare
- voakbasda 4y ago
  Were you in the process of closing? I can’t imagine a scenario where a $5 dispute would cause problems with an established loan.
  - breck 4y ago
    Yes. I mean it was the first time I had been in that situation, so maybe the mortgage was never in jeopardy. I just remember coming home to a message from our banker asking about a negative report from an Apple card and freaking out until Apple/Goldman withdrew it.
- bredren 4y ago
  Thanks for sharing this. I'd say its a lot of responsibility to get right, but not necessarily dangerous. And fwiw, I've seen old, established banks make reports that are objectively incorrect but then do everything possible to avoid fixing it. On something like this, though, I'm glad you were able to get an email routed down from TC. I had multiple instances of this with matters addressed to Bezos but never with Apple.

lotsofpulp 4y ago

Apple is not the lender with Apple (credit) Card.

scarface74 4y ago

Cobranded cards are always managed by the bank. The bank takes the risks not the partner

HWR_14 4y ago

The Apple Card is a partnership with GoldmanSachs, IIRC. That is, they outsourced the zero-sum thinking to Wall Street.