Wednesday, June 11, 2008

Openness and Transparency is Nice, But...

Steven Hodson wrote about what happens when cool trumps openness and transparency. He essentially lashes out at buzzword loving "Web 2.0" and "social media" crowd singing the praises of openness and transparency and then mostly using MacBooks, a product according to Mr. Hodson from "one of the most closed and anti-community companies around."

Captialism is about many things, but openness and transparency only play in when it will net more money! Should Apple be completely open and transparent about how many iPhones will be available for purchase on Friday July, 11? Not if such transparency would cause short-term hit to the stock price it shouldn't.

For the last few years what Apple has been in a lot of ways, is a company that sells the best MP3 player that just happened to sell computers and other stuff. For a lot of reasons, including Apple’s impressive retail strategy, that’s actually helped Apple greatly in terms of selling more computers to home users, and I expect that will continue for years to come.

I’ve been a hardcore Windows guy since the late 1980s, and initially stayed away from Apple due to price and because new software wasn’t usually developed for Apple computers nearly as soon as it was for Windows-based PCs. That’s starting to level out and I’m pretty sure my next desktop purchase will be an iMac.

Apple’s products are impressively designed and built and perhaps even more importantly, very impressively marketed. Overall, at least right now, the notion that Apple is only for the cool kids is not bad for Apple (or its shareholders) at all.

Openness and transparency may have their virtues, but if you have a crappy product or business model no amount of openness and transparency on the Internet will make a real difference. When you get right down to it, great product design and great marketing trump Web 2.0 and social media in spades. If you’re a start-up company or someone like Gary Vaynerchuk, I think “social media” to build your brand makes a ton of sense.

But if you’re Apple, already having spent a gazillion dollars on product design and marketing, openness and transparency aren't you're priority. While Web 2.0 has been all the rage on the nets, not participating on Twitter or FriendFeed hasn’t hurt Apple’s topline revenue, earnings or stock price at all. The stock has risen from $57.56 on June 16, 2006 to $180.81 on June 11, 2008.

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