There’s no denying the outsized influence Apple and its decisions have on the global economy. As the largest firm by market capitalization, and one of the undisputed leaders in the technology sector, there are few moves the company makes that don’t resonate throughout the industry ecosystem. One such move, taken recently, has gone under the radar in a lot of regards, but delivers an important lesson/reminder for many mature-stage businesses. The move? Dramatically downsizing Project Titan. The lesson? Sometimes, it pays to be humble.
Let me explain.
Project Titan was Apple’s not-so-secret internal division tasked with building an Apple automobile sometime in the not-too-distant future. Much like Tesla, Apple saw the market inefficiencies in the automotive industry and sought to fill some of them (for instance, cars ought to drive themselves given computers are much better drivers than humans; a car spends the majority of your ownership thereof sitting idle waiting for you to need it — why not allow others to rent it when you’re not using it?; etc.). But, as of this week(ish), Apple has significantly downgraded its ambitions in the automotive space — a seemingly rare defeat for a company that has done little-to-no wrong in the last decade (save for maybe the Apple Watch depending on how you look at it).
Pretty much every space Apple has sought to enter was subsequently conquered by the tech giant. And, a string of smashing successes has a way of convincing people — and companies — they can disrupt any industry they set their mind(s) to.
In the case of the automotive industry, that’s just not the case.
There’s a reason there are so few new car companies — it’s really freaking difficult to build a car! They’re massively capital intensive. The margins are never all that good. Vehicles are expected to last for a decade or more, surviving harsh-at-best conditions, with little-to-no maintenance or upkeep. Distribution networks are entrenched. And, it requires massive scale for manufacturers to really turn solid profits.
Even unicorn upstarts like the media-darling Tesla have experienced big roadblocks along its path to profitability. It’s taken Tesla more than a decade to get to a point where it can even remotely compete with traditional automakers, and that competition has ended up looking more like a kid brother trying to elbow into the big-boy table.
None of this is to say companies shouldn’t innovate and try new things. Apple has taken on new industries and completely changed the paradigm of our lives in the process. But, there’s also virtue in understanding what makes your company special and what your true value proposition to the world actually is.
For Apple, it’s not abandoning the automotive industry altogether. Rather, it’s paring down its ambitions to focus on autonomous navigation and in-car entertainment — two things that make perfect sense for the market space as well as Apple’s existing expertise. This strikes me as prudent yet moderately adventurous, which is a pretty smart place for Apple to be.
Sometimes it pays to be arrogant — to innovate and grow and take on huge or impossible odds to disrupt an industry. But, just as often, it pays to be humble. To know your core strengths and judiciously apply them to problems you’re well suited to solving. Apple wasn’t wrong to go into cars, it just probably should have considered all the hurdles building its own car would present long term and figured out a better way to bring its might and intellect to bear on an industry ripe for incremental upheaval.
So while mobile advancements and apps and new technologies might seem like they’re encroaching on every aspect of your business, it always pays to keep in mind who you are, what you do well, and stay humble, yet aggressive, when planning for the future.