How the DotCom BUST and Recession Re-Made Steve Jobs and Apple Don't Waste A Good Recession

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You may not want to build a Trillion Dollar company like Apple - but that doesn't mean you can't learn about business growth during a recession from Steve "Reality Distortion Field" Jobs.
Steve Jobs’s history with Apple is well known, but I want to focus on a very specific period. Not the mid-1980s when Jobs entered into a power battle and was sacked by his own company; and not the mid-2000s and beyond when the iPhone made Apple the first $1 Trillion dollar company in the world.
Let’s talk about the dot com bubble bursting, which coincided with Apple bringing Jobs back as CEO after the company almost collapsed several times during the 1990s. Jobs was initially the “interim CEO”; he dropped the “interim” and got serious in January of 2001.
What had changed was the bursting of the Dot Com bubble in the year 2000. You may recall. At the turn of the millennium there was a genuine belief that, maybe, the internet meant companies didn’t actually need to be profitable to be valuable. Cold reality kicked in a few months later, as interest rates rose, several large mergers failed to eventuate, and the Microsoft Anti-Trust ruling was handed down holding tech companies to the same rules as the rest of us.
The NASDAQ tech index lost 78% of its value, including 25% in a single week during April 2000. People who say the Coronavirus Recession is unprecedented just have short memories.
So what did Jobs do, to take a company that was struggling even during the boom and help it buck the trend? Well, he bucked the trend.
In May 2001, only a Quarter after taking on the official CEO role, Jobs announced the launch of the Apple Store. To stop Apple being poorly presented and undersold by third parties, he was taking back the retail channel to market directly. That’s like Kellogg’s Cornflakes deciding to take up cold calling at breakfast time.
Then in October 2001, after the events of September 11 sent the whole US economy into a Recession, Jobs launched the product that changed everything: the iPod. ““No wireless. Less [storage] space than a Nomad. Lame,” said Rob “CmdrTaco” Malda on Slashdot in a scathing review.
What Cmdr Taco and others failed to realise was that the iPod wasn’t created to be Apple’s hero product. It was designed to be small – by the standards of the day – and a cost-effective way of putting the Apple brand into more homes … and more pockets.
It was also cool, which helped with profit margins. Year on Year sales for Apple almost doubled; Profits were up almost 600%!
You can’t buy a Classic iPod today. Or some of the variants that followed, like the iPod Mini, Nano, and Shuffle. All discontinued. Apple Computers missed the best of the Dot Com Bubble, but with Steve Jobs they had a head start on the Dot Com Bust and the national recession that followed.
By thinking long term, they were able to launch a gateway product that saved the company and planted a seed for today, with iPhones, MacBooks, and more. In 1998, less than 1% of Americans bought an Apple product. By 2012, 50% of all Americans owned an Apple product – in fact, an average of 1.6 products. By 2017, that had grown even further, two-thirds of Americans and an average of 2.6 Apple products each.
Don’t Waste a Good Recession!