Apple’s PDA device Newton was a little too ambitious. So Jeff Hawkins, did the opposite and removed capabilities to create Palm Pilot.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
[Kooler Garage Doors]
Dave Young:
Welcome back to the Empire Builders Podcast. Dave Young here with Stephen Semple, who’s been out digging up stories about empires, giant empires that took over the world and then somehow lost it.
Stephen Semple:
Well, this one sure did.
Dave Young:
Yeah, they sure did. Stephen made an assumption as he whispered the topic into my ear just as he hit the record button, and that is that at some point in my life I owned a PalmPilot because that’s the topic for today’s is the PalmPilot. Everybody remembers that. And, Stephen, the answer to your question is, no, I didn’t. I did not own a PalmPilot.
Stephen Semple:
You did not?
Dave Young:
No, I was too cheap. I had a cheap Sony knockoff of a PalmPilot.
Stephen Semple:
Wow.
Dave Young:
It had a little camera in it, though.
Stephen Semple:
Oh, the [inaudible 00:02:18].
Dave Young:
That was back before … Cell phones didn’t have … If they did, they were just a little flip phone sort of camera. My little Sony version of a PalmPilot had a cheesy little potato quality camera in it.
Stephen Semple:
Wow.
Dave Young:
In fact, some of the earliest pictures of the Wizard Academy campus that I have were taken on that device. So I have these grainy pictures of Roy Williams in the woods showing me where the tower was going to be-
Stephen Semple:
That’s cool.
Dave Young:
… and standing in the pole barn that got remodeled into Tuscan Hall, all of those things.
Stephen Semple:
Ah, that’s-
Dave Young:
Yeah. I remember it was always fun to play with. I don’t remember much about it, to be honest, other than it had a camera on it.
Stephen Semple:
Wow.
Dave Young:
I don’t think most PalmPilots did.
Stephen Semple:
No, they didn’t. They did not. Because so many of these early technology things you’ve been an adapter of, I thought for sure you would’ve had a … So I guessed wrong. I guessed wrong.
Dave Young:
I just needed … Well, first two things. This is 2004-ish, 2003-ish. They came out a few years earlier than that.
Stephen Semple:
1996 is when they launched.
Dave Young:
Really?
Stephen Semple:
Yes.
Dave Young:
I was just cheap is the problem. I was broke and cheap at that time. So I guarantee you I had PalmPilot envy up until the point that Sony came out with this one that actually had a camera at a low price point, and I’m like, “All right, I’m going to …”
Stephen Semple:
Well-
Dave Young:
Oh, oh, wait a minute. I’m wrong. Now that I think about it, they had a cheap version of a PalmPilot that was colored plastic.
Stephen Semple:
Yeah?
Dave Young:
Yeah. I actually did have that, and the Sony was an upgrade. I’m visualizing … Because I got them for my kids, too. So not only did I have one, but my kids each had one. I don’t think they did anything with them.
Stephen Semple:
Here’s the crazy thing is there could be tons of people listening to this, there’ll be a bunch of people who know what we’re talking about and a bunch of people who won’t know what we’re talking about. One of the things is there was a period there in the early 2000s where Palm OS was 50% to 60% of the PDA, personal digital assistant, operating systems in the world, and there was a point where the value of the business was $50 billion.
Dave Young:
Yeah, that’s really nuts.
Stephen Semple:
They were a big deal and then disappeared.
Dave Young:
Well, then the iPhone came out, so you had your phone, your camera, your PalmPilot all in one.
Stephen Semple:
Yeah, between the BlackBerry and the iPhone, it was a combination of those two. BlackBerry’s now gone as well or diminished. But what’s really interesting is how this piece of technology was developed, and that’s what I want to talk about.
Dave Young:
Awesome.
Stephen Semple:
March 1996 is when Pilot was launched by Jeff Hawkins. The device was actually called Pilot. The company was called Palm, so it was PalmPilot, in Sunnyvale, California. At its peak, Palm was the dominant handheld computing platform in the world. 1996, original Pilot launches, and they sell a million units in the first 18 months. 1999, so three years later, they sell five million units. By year 2000, there’s an installed base of 10 million users, and that’s 70% of the US market. In March 2000, IPO goes, the stock surges, and at a point, the company’s worth $50 billion. 2001, 2002, they’re still very dominant. They’re 50%, 60% of the worldwide market, but of course others are entering. By year 2004, there’s 30 million of these devices out there. Then, as we know, along comes BlackBerry, along comes iPhone. The company really declines. April of 2010, HP purchased it for $1.2 billion and then basically dismantles the company.
Dave Young:
Did they do almost like they were kind of following the Microsoft model, too, where they licensed the Palm OS software to other companies for a while?
Stephen Semple:
They did that a little bit. It was never a big part of the business.
Dave Young:
That’s how I got my Sony. I mean, it worked just like a PalmPilot. It was the Palm operating system.
Stephen Semple:
Yeah, yeah, the Palm OS, yeah.
Dave Young:
Yep, okay. So-
Stephen Semple:
For close to a decade, if you wanted to organize your life electronically, Palm was what you used. PalmPilot was the thing. Ironically, it helped create the market that Apple would eventually dominate. Even more ironically, it was a failed Apple product that inspired Jeff.
Dave Young:
Really? Oh, yeah. Gosh, what was it called?
Stephen Semple:
The Newton.
Dave Young:
The Newton, yeah.
Stephen Semple:
So the Newton inspired Jeff, and then Palm inspired Apple back. So it’s this very roundabout thing. Basically, Jeff was very inspired by Apple’s Newton. Apple’s Newton was ambitious. It promised handwriting recognition, wireless communication, digital notes, calendars, contacts, all of this stuff. The problem, the technology wasn’t ready. The Newton was expensive. It was like $700 back in the early ’90s. It was bulky, it was unreliable, and it was famous for really poor handwriting recognition. Basically, it’s gone down as being one of Apple’s biggest failures. This was one of the first projects done under Sculley, so this was just after Jobs left. Now, Jeff Hawkins is a neuroscientist, and he’s an expert in handwriting recognition.
Dave Young:
I mean, you’re-
Stephen Semple:
Watching the … Sorry, yeah?
Dave Young:
I want to go back. The interesting thing, though, that Sculley actually had right is he knew what we wanted. They had a clear idea of what we wanted-
Stephen Semple:
Yeah.
Dave Young:
… and the technology just wasn’t there to do it. But I think the cool thing about the product as an idea is that it was ahead of its time on the bleeding edge. That means expensive and janky and buggy and all of those things, but that doesn’t mean it wasn’t a good idea.
Stephen Semple:
Jeff’s argument will be a little bit different, and you’ll see why right now. Jeff Hawkins, again, neuroscientist, expert in handwriting recognition, he watches the Newton fail, and he actually believed Apple had solved the wrong problem.
Dave Young:
Oh, okay.
Stephen Semple:
Instead of asking the question of, “How many features can we add?” because that was how Newton approached it, he asked instead, “What do people want to do?” Now, how do you do that? Because we know envisioning brand new things, we can’t use a focus group, so how do you do this? So he starts with a block of wood. Before building the PalmPilot, he carves out a block of wood roughly the size that he thinks the device should be to hold in your hand, and he carries it around for weeks.
Whenever he wished something that a future PDA could do, he pulled out the block of wood and he pretended to do it. You’re on the phone and you need to check your calendar? He would pretend to check the calendar on the block of wood. “Oh, I need a to-do something”? He would pull out the block of wood and pretend to write down a to-do. If there was not an easy way to comfortably use it, he removed that feature. He even had a nickname for that block of wood. He called it Pinocchio, and he carried this chopstick that he pretended used as a stylist. So instead of designing from specifications, he designed it from daily life. Here’s what he noticed. There’s four things that he basically did all the time.
Announcer:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Using Stories To Sell]
Dave Young:
Let’s pick up our story where we left off. Trust me, you haven’t missed a thing.
Stephen Semple:
So instead of designing from specifications, he designed it from daily life. Here’s what he noticed. There’s four things that he basically did all the time: calendar, contacts, to-do, notes. That was it. That was it.
Dave Young:
All right, and I’m trying to find … I’ve actually got a browser open because I know we talked about this at some point. Basically, what he did is he upgraded the children’s toy Log from Ren & Stimpy.
Stephen Semple:
There you go. There you go.
Dave Young:
No longer could you just roll it down the hill. I love that.
Stephen Semple:
Yeah. Basically, what it meant is that he was looking at it from the standpoint of easy use and what are the things that we do, and that’s what he noticed. So there was no feature creep, no trying to impress engineers, just trying to solve the most common problems really well. Now, Jeff recruited Donna Dubinsky away from Apple to become his CEO, and it worked out together really, really well. 1996, PalmPilot is launched at around 300 bucks. It was half the price of the Newton. It was pocket-sized, had long life battery using three AAA batteries. It’s fast, reliable. It was easy to use. Customers loved it. Now, if you think about it, Palm actually went on to accidentally invent the smartphone, because in 2001, they introduced Treo. They took the Palm and put a phone in it. I remember having the Treo. It was awesome because you could pull up a contact, you could tap on the contact, and it would dial the phone. Freaking amazing.
Dave Young:
That is amazing, yeah.
Stephen Semple:
Right? Basically, you took calendar, contact, notes, to-dos, and then added phone into one device. Then what’s even more interesting at that time, Palm released tools to allow outside developers to create software. In other words, Palm was experimenting already with the app ecosystem long before Apple’s App Store came along.
Dave Young:
But if you had a WiFi connection, you were golden.
Stephen Semple:
Yeah, yeah. Now, Microsoft entered the mobile phone business differently. Rather than building phones, it created a Windows mobile, which they licensed to a bunch of people. By mid-2000s, about a quarter of smartphones ran on Microsoft’s operating system. Palm eventually partnered with Microsoft, so you’ve got Treo running Windows mobile. So for a brief moment, it looked like Palm and Microsoft might actually own the future because that was the dominant player. Then along came BlackBerry, which updates the game on email. Because what it did differently was instead of … It did push email, so the emails came to you automatically. On the early Microsoft-Palm devices, you had to request your email.
Dave Young:
Yeah, yeah, download your emails, yeah.
Stephen Semple:
Then the real killer was the iPhone, which added real internet browsing. I call it real internet browsing, because around that time, there was a few phones that had internet browsers. I had one, a Motorola one, and it was not really browsing. So real internet browsing, music, maps, camera, everything that you would want in your pocket.
The interesting thing is Apple actually eventually, instead of improving on the PDA, they actually created a whole new experience. Palm re-imagined the Apple Newton, and then Apple re-imagined the Palm. Palm actually had a lot of advantages. It had a strong brand. It had a big customer base. It was really the first smartphone. Great industrial design. But Apple shifted the definition of what a phone should be. Once customers experienced web, music, email, phone, camera, there was no going back, and within a few years, Palm disappeared. So Palm wasn’t able to make the pivot just like BlackBerry was not able to make the pivot.
But here’s what’s really interesting. This is what inspired me on this and the part that I really wanted to talk about. What Jeff Hawkins did was wonderfully simple: a block a wood and imagined using it. When he’s walking the street, he thought, “Oh, I should remember this.” Pulled out a block, pretended to write it down. When somebody asked for a meeting, pretended to go to his calendar, pretended putting stuff into his calendar. When he needed a phone number, pretended looking it up. Whatever he imagined, he did. What he wasn’t doing is he wasn’t testing technology, he was testing behavior. Most companies start with, “What can we build?” Hawkins started with, “How would this fit into someone’s life?”
Dave Young:
Did he have other people carrying around blocks of wood or just him?
Stephen Semple:
At this time, it was just him in his company.
Dave Young:
Just him, yeah.
Stephen Semple:
It was just him. The other thing is, if something wasn’t easy to do, because he’d imagine something, if he couldn’t figure out an easy way to do it, he was like, “We’re just not going to do that. We’re just going to eliminate that.” His whole thing was, if it could do a bunch of really regular things that we would use it for really simply, we’d use the device.
Dave Young:
Makes sense. The only reason I ask is he may have been the kind of person that didn’t just stop and take pictures of everything-
Stephen Semple:
Correct.
Dave Young:
… as he’s walking around.
Stephen Semple:
Yeah, perhaps.
Dave Young:
Some activities that didn’t make the list or didn’t have the technology to make the list, as you said.
Stephen Semple:
Right. It could even be one of those things where until the camera went into the phone, we didn’t think about wandering around and taking a picture of things the way we do today. So it just may not have entered the psyche. I’m even going to say, when I had my first phone with a camera in it, I hardly used the camera. It was almost one of those things that had to develop over time. I actually think the big thing that made the iPhone successful was not the camera, in my mind. In my mind, it was the internet browser, like a real browser, and music.
Dave Young:
Yeah, I would say that and maps. I mean-
Stephen Semple:
Yeah.
Dave Young:
… throw that in, too, but it had everything, right? That was the amazing thing.
Stephen Semple:
It really did. But Palm paved the way for that, because a lot of people who were like myself, you had a Palm, then you had a Palm Treo, and then you had the iPhone.
Dave Young:
But before you got the Palm, you also had a flip phone or some form of phone in your pocket.
Stephen Semple:
Oh God, I had a little StarTAC flip phone and the whole [inaudible 00:17:22].
Dave Young:
You had little camera that you carried around.
Stephen Semple:
Yeah.
Dave Young:
You had all of the-
Stephen Semple:
And you had your music player you carried around.
Dave Young:
Yeah, you had probably an iPod.
Stephen Semple:
Oh yeah, absolutely, absolutely. But where I want to come back to just to tie this together, because this is where I think the important learning is for folks, is we can apply this to any … When we talk about removing friction, imagine yourself using the product. Imagine yourself calling the call center. The more you can imagine, and then imagine the way you would want it to be. That’s what he was doing. He was imagining the way he wanted things to be, and how would you use it? I think there’s not enough of that imagining things from the life of the consumer’s standpoint being done. That’s what he did, and it built an amazing, amazing business.
Dave Young:
It’s really good advice. I think anybody that’s trying to either invent something new or incorporate new ideas into something that you’re already doing, being curious and putting on your imagination hat is a good way of doing that.
Stephen Semple:
Yeah.
Dave Young:
If you find that you don’t have much of an imagination, find somebody else, right?
Stephen Semple:
Yeah.
Dave Young:
Find someone that can be your eyes and ears and hands and nose and experience your business in a way that you don’t because-
Stephen Semple:
Create your own version of-
Dave Young:
… you become blind to it.
Stephen Semple:
… a block of wood. Yeah, yeah, create your own version of the block of wood.
Dave Young:
Mm-hmm.
Stephen Semple:
Anyway, that’s what I thought was brilliant, that the whole … When I read about the block of wood, I was like, “Wow, that’s cool.”
Dave Young:
Now I want a block of wood. Does it come in veneer? You know what? We could probably sell blocks of wood that have PalmPilot just drawn onto it. We should look into that, Stephen.
Stephen Semple:
Well, you could even take his original name and call it Pinocchio.
Dave Young:
Yeah, the Empire Builders historical artifact. “What do you got there, buddy?” “This is my Empire Builders PalmPilot.” I’m going to take a block of wood to the airport with me next time I go. First, you have to explain that to TSA. It has to be a pretty small block of wood. Can’t be shaped like a bat. All right, thanks for bringing the PalmPilot story back into my consciousness, Stephen. Appreciate it.
Stephen Semple:
All right, thanks, Dave.
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