The founder of a tech company, departing the scene, hands off to his longtime deputy. Inside and outside the company, observers are relieved. The new boss is not going to screw the place up; he gets the corporate culture. He’s also not as personally difficult and mercurial as his predecessor—an aura of fire doesn’t surround him. And, in fact, for the first couple of years, the company runs like clockwork: It’s still making a fortune, with fewer screeching stops to retool a product based on executive whim. Yet, as time goes on, those same observers start to wonder: What is the next big thing for this company, and why don’t we see it yet? The company has slipped into the habit of refining what it does, vamping on established products and markets and expanding them—refinishing the furniture when it needs to be building a new wing.
Of course I’m talking about Apple, which last week announced a broadened line of iPhones, with much talk of market segments but a limited amount of new technology (though that fingerprint scanner might have caught your eye). One of the two new phones is the iPhone 5C, which is made with a plastic back instead of glass and is meant to scoop up some of the less affluent customers, especially overseas, who now tend toward Android phones. It’ll come in bright colors!
I’m also talking about the company I wrote about in my book Instant: The Story of Polaroid. I am hardly the first to compare Apple and Polaroid; in fact, Steve Jobs himself did. Edwin Land, the inventor of instant photography and founder of Polaroid, was one of Jobs’ first heroes. Apple’s co-founder called him “a national treasure” and said that little kids should aspire to be not astronauts or athletes but creators like Land. But the parallel between the two companies has become more striking than ever in recent days, as Apple revealed that it’s taking its first strides down the same road that ultimately doomed Polaroid.
Here’s the story. Polaroid photography launched in the late 1940s, with tricky-to-use cameras that required a bunch of switch-throwing and tab-pulling and photo-peeling. A relaunch with improvements came along in the early 1960s but still had a variety of inconveniences. In 1972 Land finally realized his dream of one-step photography—point, shoot, see—with a camera called the SX-70. He had thrown himself into its development like a man possessed, just as Jobs later did with his products, driving his staff crazy over everything from the leather covering to the fantastically complicated mechanisms within. (You can see a remarkable little film about the SX-70, directed by Charles and Ray Eames, here.) Creating the whole thing cost, by one insider’s estimate, about $2 billion. (Those are preinflation dollars, and yes, it’s billion, not million.) It really was revolutionary, full of new technologies that worked in uncommon harmony: precision machinery, crazy film chemistry, unique and very fine optics.
That complexity made both film and camera expensive and difficult to make, and in the first year, Polaroid’s factories couldn’t keep up. Wall Street types were saying that Land’s reach had exceeded his grasp—that he’d slung the company right up to the edge of a cliff yet again, and maybe slipped over this time. Polaroid’s stock, hitherto unstoppable, fell from nearly $150 to about $15.
The guy who dug the company out of this ditch was Land’s deputy, Bill McCune. He was an executive vice president, with responsibilities across much of the company’s engineering, although he was not the second-in-command, because Polaroid (as Land once put it), had no number-twos, and a lot of number-threes. (There was no question who was Number One.) McCune had been working at the company since 1939, when he started as a quality-control guy, and was well-liked. He’d also been uneasy about the size and cost of SX-70, and Land had therefore kept him away from his beloved project. But now that it was in trouble, Land called on McCune to help, and he succeeded magnificently—enough that, in 1975, after a power struggle among the number-threes, McCune emerged as Land’s successor and became Polaroid’s second president. The founder stuck around for five more years as chairman, and two more after that in a private lab, but the power shift had finally begun.
One thing McCune really wanted was a cheaper camera—one that would vastly expand Polaroid’s film sales, which is where most of the company’s income lay. (An earlier budget-priced camera, the Swinger, had sold very well but didn’t move enough film to be highly profitable.) Within a couple of years, the line expanded, principally with the OneStep, the boxy, rainbow-striped plastic camera that virtually every American who was around in the late 1970s will recognize. The OneStep made OK photos, though not great ones. In 1977 it cost about $30, compared with the top-of-the-line SX-70 at $233, and it was sold in supermarkets and discount stores by the millions. Land reportedly thought it was schlocky compared with its elegant older sibling, but was persuaded to get behind it. It vastly broadened the reach of Polaroid photography. It also recreated Polaroid’s brand in subtle ways, making instant photography a mass phenomenon rather than an enthusiast’s medium.
With Land trying to imagine the future and McCune running the show, Polaroid for a few years ran more smoothly than ever. Inside the labs, work began on two new technologies: inkjet printing and something called “filmless electronic photography.” Neither of those projects got out the door, mostly because of internal concerns about cannibalizing Polaroid’s film business. Polaroid’s first digital camera wouldn’t hit the market till 1996, by which time the battle had been mostly lost.
McCune was no conservative, and wasn’t afraid of the future. But what indisputably began with him, and sharply accelerated after he passed the presidency off to another insider in 1985, was a backing off from the leading edge. Land, too, began to lose his unerring eye for the new, pushing through an instant-home-movie product called Polavision, a project he’d been husbanding for decades that few people ended up wanting to buy. After Land’s retirement in 1982, the company never introduced a completely new product again. Everything was a refinement or repackaging of what it had figured out already. By the early ’90s, the alarms were clanging away; bankruptcy came in 2001, then again in 2008. Polaroid today is a licensing operation, putting its name on budget-priced tablets and TVs and the like.
So is Tim Cook the Bill McCune of Apple, and is his company headed down Polaroid’s same dreary path? The key, I think, lies in the unknowable black box that is Apple’s development labs. All the tweaking of colors and diversification of markets is fine if it’s an interim, a stopgap, while Apple works out the thing that will define it around 2020, after the mobile phone business has become fully commodified. What clues do we have now? The best one might be found in one of Steve Jobs’ final interviews with his biographer, Walter Isaacson, in which he talked about an entirely new business for Apple: television sets. Jobs claimed that he’d solved the ridiculous situation whereby a snarl of remote controls and cable boxes makes it almost impossible to turn the TV on in an unfamiliar house. He’d worked out the kind of effortless interface at which Apple shines: “I finally cracked it,” he told Isaacson.
If so, that solution could become Apple’s great product of 2015 or 2016. Once again, the company will have found an irritant in your daily life and polished it away, in the process creating an entire business unit from scratch, with a 10-year arc of profits that could put the better part of a trillion dollars in the company’s bank. And here’s what gives me pause: Last week, Tim Cook didn’t mention it.