Mao in the Boardroom
PART ONE
Guerrilla Companies
The Chairman speaks:
CHAPTER 1
Guerrilla Warfare Defined Changing the Rules
The Chairman speaks:
Guerrilla Warfare Defined
"What is basic guerrilla strategy? Guerrilla strategy must be based primarily on alertness, mobility, and attack. It must be adjusted to the enemy situation, the terrain, the existing lines of communication, the relative strengths, the weather and the situation of the people.
As to the matter of ... responsibilities, those of the guerrillas are to exterminate small forces of the enemy; to harass and weaken large forces; to attack enemy lines of communications; to establish bases capable of supporting independent operations ... to force the enemy to disperse his strength ..."
--Mao Tse-tung
Guerrilla Warfare Defined
Only the strongest survive, right?
Wrong.
Guerrillas don't play by those rules. In guerrilla warfare, only the smartest survive.
Guerrillas acknowledge the existence of the old rules--of "their" rules--and then break them.
Guerrillas look at the competitive landscape with a beginner's mind.
• Skyy demands that we evaluate vodka on its purity.
• Apple mandates that everyone Think Different.
• And Swatch orders us to look at watches as anything but timepieces. Get ready, the guerrillas are coming. If you're waging a conventional war, beware, lest you be left in the dust.
Their Rules: Only the strongest survive.
Our Rules: Only the smartest survive.
Skyy: "Clean Vodka" Is Not an Oxymoron
Maurice Kanbar spent his entire life changing the game. Before starting Skyy Vodka, Kanbar, who says he's "rather inquisitive,"2 brought the world the "D-fuzz-it" --a device that removes fluff balls from wool sweaters. He invented a piece of equipment to hold incisions open during operations. He invented a gadget that gets rid of varicose veins. He even invented a device that removes cataracts from eyes. And in case that wasn't enough, Kanbar is also credited with inventing the first-ever multiplex movie theater.3
All told, Kanbar holds patents on more than 30 products. Skyy Vodka is among them.
Changing the Rules
Skyy Vodka is unique not only because of its cobalt-blue bottle. It is unique because it is a product that succeeded in changing the rules even after the rules had already been changed.
Absolut Vodka was the first to change the rules. It was the first vodka that refused to compete over the level of "Russianness" it contained. Absolut was Swedish and proud of it. Absolut refused to play the Russian-vodka game.
Kanbar and Skyy changed the rules again by insistingthat vodka be about purity and quality. At the time, Skyy's introduction of purity into how vodkas should be evaluated was groundbreaking. Vodka, after all, was the drink of Siberia. It was about boldness and punch. It had the purity of an automobile crankshaft. And that was okay.
Skyy's introduction of purity into how vodkas should be evaluated was groundbreaking. Vodka, after all, had the purity of an automobile crankshaft. And that was okay.
It was okay until Maurice Kanbar had a headache one morning. "It may sound obvious, but things are only ever invented because they're needed, and I needed something that wouldn't give me a headache." Kanbar and a physician friend quickly went to work and discovered that headaches were caused by a sensitivity to "congeners"--the natural impurities formed in alcohol during the fermentation process.4
After a year of tinkering, Kanbar developed Skyy--"the smoothest, cleanest, purest vodka imaginable."
Mao was there.
He finally found a manufacturer in Germany that would attempt his complicated quadruple distillation and triple filtration processes--and then put it all together in striking blue bottles.
Hangover-free (for a while at least)
Initially, Skyy staked its claim as a vodka so pure that it was "hangover-free." Following pressure from the U.S. Bureau of Alcohol, Tobacco and Firearms, Skyy decided to drop its claim.5 "It's not our intention to deceive anyone in any way," Kanbar said at the time. "There's no question that some may feel this is just a marketing gimmick. These are the same guys that can drink kerosene and not get a headache."6
But despite having to back down from its original positioning, Skyy had already won. Skyy had changed the rules--even before the rule-makers had a chance to intervene. "Congener" may not have become a permanent entry in the drinking lexicon. But the word sky with an extra y definitely has.
Apple: Computers for People Who Can't Program Their VCRs
"Most of the people running the companies don't love PCs. Does [Microsoft CEO] Steve Ballmer love PCs? Does [Intel CEO] Craig Barrett love PCs? Does Michael Dell love PCs? If he wasn't selling PCs he'd be selling something else! We have this incredible, unshakable belief that if we make the coolest computers, make them more affordable, more powerful, then we're going to be successful."7
Such are the musings of one of the original guerrillas of Silicon Valley: Apple's Steve Jobs.
Apple and Orwell
Jobs was responsible for one of the loudest guerrilla "shots" heard around the world. On January 22, 1984, during the third quarter of the Super Bowl, Apple aired a sixty-second commercial. The spotwas directed by Ridley Scott, and reportedly cost $400,000--an astronomical figure at the time. It aired only once.8
The commercial depicted an Orwellian scene where a heroic woman donning a Macintosh tank top hurls a hammer into the big brother of IBM, interrupting his dictatorial speech: "A garden of pure ideology where each worker may bloom, secure from the pests ... . We are one people with one whim, one resolve ... . We shall prevail!" The ad concludes with, "On January twenty-fourth Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like 1984."
At the time, Jobs described the Macintosh as "the last force for freedom" in the marketplace.9
In the years that followed, Apple experienced tremendous turbulence--at one point leading to Jobs being ousted in a coup by then-CEO/"corporate antihero" John Sculley.10 But Jobs and Apple both came back--literacy and figuratively.
Comrade Jobs Returns
By 1996, Jobs had returned to Apple's trenches. His mission was to once again make a difference--"and not just for his own gratification, but for the sake of 'the rest of us,' as he put it."11 By "the rest ofus," Jobs meant those individuals who could not--and would not--tolerate technological devices any more complicated than a standard AM/FM car radio. "The rest of us" didn't know how to program a VCR. "The rest of us" did not know what a RAM or a CPU was. "The rest of us" did not enjoy using computers.
jobs'mission was to make a difference for "the rest of us" -- those individuals who would not program a VCR and did not know what a RAM or a CPU was. "The rest of us" did not enjoy using computers.
In May of 1998, Apple released the iMac--the company's gift to "the rest of us." The iMac featured a stylish new case design, with translucent plastics in new trailblazing colors--"Bondi Blue," "Strawberry," "Blueberry," "Tangerine," "Lime," and "Grape." Ithad a simple pocket-sized user's manual. And it came with a mandate from the company: "Think different."
"Here's to the crazy ones," Apple said in its original "Think different" commercial. "We make tools for these kinds of people. While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do." Apple had done it again. Guerrilla resurrection.
For Every Season: Swatch, Swatch, Swatch
The Swiss call him the "Uhrenkonig" or "Watch King."12 His name is Nicolas Hayek, and nearly two decades ago, he had a truly radical idea for revolutionizing the watch industry.
Watches are for status. Wrong. Watches are heirlooms. Nope. Watches are for timekeeping. Not so.
Watches, Hayek decreed, are for fashion.
Enter Swatch.
"When Swatch came with the idea of having a very high-quality Swiss watch that was a provocation and had a joyful approach, we changed the way people used watches," says Hayek.
"In the past, people would keep a watch for twenty years or so," Hayek remembers. "And then Swatch came and nobody says, 'When I get the watch I'll keep it for my life.' You keep it, you like it. You see another one, you buy it; you have another one for sport, you change it. Today it is totally normal."13
Watches are for status. Wrong. Watches are heirlooms. Nope. Watches are for timekeeping. Not so. Watches, Swatch's Nicolas Hayek decreed, are for fashion.
A Watch for Every Limb
To emphasize Swatch's fashion-watch paradigm, Hayek wears two watches, "one set at Swiss time, the other set for local time. Both, naturally, are Swatches." He explains, "It's a tradition in the house that most of the Swatch people are wearing two watches. It's like working in a chocolate company, you eat chocolate."14
With its reliable, high-quality, slim, plastic-bodied, battery-powered, fifty-one-component, quartz-movement watches--many of which priced at a highly affordable $40 or less--Swatch has single-handedly taken the Swiss share of the world watch market from 15 percent in 1983 to more than 50 percent today.15 "My whole life has been spent swimming against the tide," Hayek says."When we launched the Swatch everybody said we would never sell more than a hundred thousand."16 Today, over 250 million units later, it is the most successful wristwatch of all time.17
A key gear in Swatch's successful business machine has been its ability to stay fresh and original.Swatch launches almost three hundred new designs every year, with special models for every season ... and every reason.18 Since 1983, nearly four thousand different designs have been created--including butterfly and zebra Swatches, Yoko Ono and Keith Haring Swatches, Che Guevara and James Bond Swatches, and on and on.
"Always new, always different," pronounces Swatch's motto.19 It is a philosophy Swatch has carried from the start--ever since it stopped time and started fashion--an in one fell swoop. Tick-tock chic.
MAO IN THE BOARDROOM: MARKETING GENIUS FROM THE MIND OF THE MASTER GUERRILLA. Copyright © 2003 by Gabriel Stricker. All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. For information, address St. Martin's Press, 175 Fifth Avenue, New York, N.Y. 10010.
