Living Principles: What Steve Jobs Learned, and Left Behind.
Steve Jobs is one of the greatest business visionaries the world has ever known. His ability to create products people obsess over, acquire top talent, and reinvent industries is second to none. Jobs saw major success during his life-time, gaining a cult like following for his leadership at Apple. Even after his death, Apple continues to be a company with a stellar tack record of innovation, brand loyalty, and perfectionism dedicated to the overall user experience. Apple became a trillion dollar company in 2018, and is an undeniable giant of our time. Job’s principles and ideas not only worked at his company, but also work in any area of thinking and creating. Let’s take a look at some of his most applicable quotes in regards to investing in public equities.
“Simple can be harder than complex” – Steve Jobs
“That’s been one of my mantras—focus and simplicity. Simple can be harder than complex; you have to work hard to get your thinking clean to make it simple.” – Steve Jobs
Let’s see if this trend continues…
“Everything should be made as simple as possible, but no simpler.” – Albert Einstein.
“We have a passion for keeping things simple.” – Charlie Munger
“Truth is ever to be found in the simplicity, and not in the multiplicity and confusion of things.” – Isaac Newton
Simplicity is an undeniable theme that pops up whenever studying the brightest minds of the past and present. You can argue as to why, but in my opinion if you are able to find truth, it doesn’t need a lot of explaining or Power Point presentations. It is simply what it is, and that is powerful. Jobs knew this all too well. When complexity hides truth behind a thin veneer of fog, the truth teller gains for importance than truth itself. The brain has a strange association between complexity and what is valuable. People seem to be under the impression that if something requires high level mathematics, or a complex model, than it must be valuable. However, that isn’t the reality of the word we live in. When something is boiled down to its purest form, it is easily understood. In order for an idea to be accepted on a global scale, it must be simple to be widely adopted. If you romanticize complexity, the focal point of what you are trying get at will have more ways of evading application.
“We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.” – Steve Jobs
This one is especially pertinent when it comes to investing in public companies. You are constantly being bombarded by the “next best thing.” Thousands of companies, constant news, politics, and financial reports can become overwhelming. The only way to gain clarity is to say no. You have to focus on what truly matters, and what you know you are good at. Some opportunities will arise, and you have to be okay missing them. Part of the game is watching a stock rise 1,000% and being okay with it. Stick to your lane, and you wont get lost in traffic.
“Innovation distinguishes between a leader and a follower.” – Steve Jobs
You might have heard that in today’s market, value is determined by the pace of innovation. And to a large extent, that is true. Innovation creates the new, and the new is generally more valuable than the old. If you have a company that is continually at the cutting edge, and pushing the limits to provide the absolute best products, chances are they are more valuable. Fortune favors the bold, so make sure the companies you own are reaping that reward.
“Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” – Steve Jobs
Excellence should be the standard for your portfolio. If you see something that is a nine out of ten you should quickly discard it. However, something that is a ten out out ten should be given some thought, and elevens should be put in the portfolio. You can buy anything you want, so does it make sense to purchase anything but the very best?
“You’ve got to start with the customer experience and work backwards to the technology” – Steve Jobs
This is a finance specific problem investors have. We often view ourselves somewhat outside the business world, when in reality, we are right at the center. Your thinking should be aligned with management when it comes to understanding the vision of the business. Only then can you make good judgement calls on a company’s value and prospects. As important as a company is, I would argue a company’s customers have a great deal of valuable information that should be looked at just as closely as a financial statement. The greatest companies such as Costco, Southwest Airlines, and Apple, have extremely loyal customers who make a deliberate decision to spend money with these businesses. Look for satisfied customers, then work backwards to ascertain what it is they like so much about the service or product. This is the philosophy Jeff Bezos has tirelessly pursued at Amazon, with a bit of success I might add.
There is a lot to be learned when it comes to Steve Jobs way of thinking. In the investment world, I would argue we have quietly overlooked Jobs due to his CEO title, and put too much emphasis on fund managers opinions. Thinking outside the box is how you generate outsized returns. You have to be extremely self-aware of the world around you, and how it operates. I believe Jobs has that clarity of vision. What do you think his opinion on Bitcoin would be? Do you think he would have been a bear on or bull on Tesla? I find it interesting to try to view these things threw his lens, and I hope some of his wisdom will help you form some thought-provoking and profitable ideas.
Thanks Nick, very interesting!