Why Has Apple Spawned So Few Startups?

http://www.mercurynews.com/business/ci_28266341/why-has-apple-spawned-so-few-startups

by JrobertsHstaff • 11 years ago

155 151 11 years ago

mercurynews.com

josep2• 11 years ago

Curious

marvel_boy• 11 years ago

Summing up: Apple's good pay, benefits and soaring stock.

dataker• 11 years ago

If anything, an employee could just move to a company with better perks.

Instead, their ambition and motivation appears to be large enough to accept smaller salaries and benefits to start their own company.

vilmosi3• 11 years ago

That's not really an answer. Many companies offer just that and more.

larrys2• 11 years ago

But with Apple there is the "aunt and your friends and family factor". Everybody has heard of Apple and a large swath of people would tend to be impressed by the fact that you worked there. It would also tend to be the type of place that obviously looks good on your resume if you need to get another job in the future so it offers that as additional security.

Techies might care that you worked at Tesla, much of the rest of the world does not.

larrys2• 11 years ago

Further summing up: It's a great career "statisfice".

ianamartin2• 11 years ago

Few compared to what? Microsoft? Google? Facebook?

Oh, the article doesn't quantify what it means by "few." It just throws that idea out there for no reason and then pretends it's a thing.

Illniyar• 11 years ago

"Although firm figures are hard to come by, Ganesan estimates Apple's tally of startups is about 50 percent smaller than companies such as Google, Yahoo and PayPal. (Coincidentally, smart thermostat maker Nest, the most prominent startup hatched by Apple alums, was acquired by Google last year.) "

They did. Wheather that data is accurate is another matter.

Retric3• 11 years ago

I would argue Pixar is a far more well known example outside of SV.

ubernostrum• 11 years ago

I'd be interested to know what percentage of ex-Apple startups eventually produce actual goods or services which people pay money for, vs. what percentage of ex-Google/Facebook/etc. startups are just buzzword-bingo crap piles that collapse within the year due to not actually having any product or service.

agumonkey• 11 years ago

Seems like these guys were more focused on buying rather than fork new businesses.

sliverstorm2• 11 years ago

IBM perhaps? Of course most everybody pales in comparison to IBM when it comes to startup children.

pvg• 11 years ago

Article doesn't seem to give any evidence of this. Apple's been around forever and former Apple (and NeXT, if you stick to the logic it's some sort of Jobsian startup-suppression field) employees have been involved in zillions of startups over the years. EA, Danger/Android, Nest, Flipboard come to mind.

trimbo• 11 years ago

Exactly. Though technically, NeXT is "a startup that Apple spawned", I think?

Also: Be Inc., Palm/Handspring (Donna Dubinsky), General Magic, Eazel.

cromulent• 11 years ago

Claris? (FileMaker)

http://en.wikipedia.org/wiki/Claris

steveax• 11 years ago

Also JLG's Be Inc (BeOS)

meej• 11 years ago

While reading the article I thought to myself, "I guess OQO is ancient history by now." I know at least two founders were Apple alums.

VLM• 11 years ago

A non-techies idea of innovative might not match startup ideas of innovation. Or rephrased apple-scale innovation might not scale down to startup-scale innovation.

Total amount of innovation (for the sake of argument, big) divided by number of employees (staggering) equals not innovative on average and even the outliers will also suffer.

Its a mindcrime to say it in public, but if some successful companies are innovative, and apple is successful, that doesn't logically follow that Apple is innovative. Rolex has a good reputation, makes nice watches that are very expensive; however they don't sell many cesium atomic clocks which are technologically far more innovative than a mechanical or quartz movement. A timekeeping startup could sell a GPSDO that sells for less than 50 cents, that would be impressive and innovative but not very Rolex-like. Perhaps Apple is the same.

philwelch4• 11 years ago

Innovation in the context of big companies is a far different and more subtle thing than innovation in a startup context. A lot of the innovation large companies do is never really seen--not even in the sense that it isn't customer impacting, but rather in the sense that you never see the innovation that goes into simple functions that you take for granted.

For instance, Apple is immensely innovative in terms of designing manufacturing processes. Do you see the results? You might notice that Apple products have more fit and finish, but the results are measured in millimeters at most. The end result is not as earthshaking as a whole new product category would be.

Even more striking is any large web property. Any idiot could write a working version of Twitter, Amazon, StackExchange, or maybe even YouTube in a week. Scaling these to actually work at scale takes immense levels of innovation. But if you use these sites every week since they have been launched, you might not see any of that.

alayne• 11 years ago

Like others, I'm not sure that Apple has spawned few startups. The evidence here is weak.

Apple's innovations have been primarily about hardware design. I would think there are many fewer hardware startups than software startups due to the amount of capital required to build hardware. It might be more apropos to compare the number of startups from other hardware companies (Intel, Nvidia, TI, HP, Sun).

oblio• 11 years ago

Still, don't they employ something like 100k software engineers?

vilmosi3• 11 years ago

Not really, most of their workforce are "geniuses" and the like

Alphasite_• 11 years ago

Last I checked they had 50k total staff and a big chunk of that would be in sales.

pbreit• 11 years ago

Because no one ever leaves!

fitshipit• 11 years ago

UpThere?

reagency3• 11 years ago

Because Apple is not a webapp company, and webapps are the easiest and most common kind of startup.

hayksaakian• 11 years ago

Mobile app startups are a big #2 at the very least, and what with apple being a manufacturer of a very popular phone I'd expect more from there.

akhilcacharya• 11 years ago

Apple doesn't have very many people working in software compared to hardware, sales, design, etc.

Eric_WVGG3• 11 years ago

(I really hope I don’t offend any Apple people saying this)

My impression, which comes from meeting a handful of Apple employees and several friends who took jobs and later left, is that the culture of Apple is that of “show up, do good work, cash the paycheck, and go home to your family.”

It is not one of “Let’s conquer the world and become bazillionairres while we’re at it” — the Google culture — which is more prone to eventually jumping ship and creating a startup.

I could be totally wrong about this.

hoare• 11 years ago

both attitudes have their ups and downs i guess:)

Apocryphon• 11 years ago

In some ways it can be thought of, "This company is the apotheosis of tech. You can get the full experience of a startup, with the stability of a giant corporation. Why would you want to go anywhere else?"

QuercusMax• 11 years ago

Which company any are you referring to, Apple or Google? I am starting at Google[x] in two weeks for exactly that reason.

I just spent the first 11 years of my career helping build a solid software organization (I was employee #14-ish, and I'm the most senior engineer whose job is primarily code-related) in Cleveland. It's now a well-oiled machine, but it's lost some of the spark and excitement of the first years I was there.

I decided to go with Google[x] because I'm looking for an organization where they are all about doing exciting and innovative things, with the stability and perks of a big corporation.

bomanbot2• 11 years ago

I guess it could very well be that the mentality of Apple and Google employees could lean somewhat into those philosophies.

On the other hand, your described Apple culture sounds to me a heck of a lot more sustainable in the long run (I mean, Apple has now been around nearly 40 years now), especially since the "become a bazillionaire" part from Google really only works for founders and early employees with enough stock and only for very few selected unicorn companies.

benihana• 11 years ago

Interesting, I only know one person who works at Apple. She's a copywriter and she says that it's definitely a 60 hour a week job.

rhizome• 11 years ago

At least.

Aloisius• 11 years ago

the Google culture — which is more prone to eventually jumping ship and creating a startup.

That's funny because I've always considered Google a place where great people disappear and never come out except for a small number who start a company only to be aquihired by Google.

I could be wrong about that as well.

_delirium• 11 years ago

That's sort of Google's reputation in machine learning: if you're tired of the lower salaries and grant-chasing of academia (or just don't like teaching), or have had enough of the uncertainty of a startup, Google is a comfortable place to go, with a large and stable salary, good access to data & compute time, good benefits, etc. Seems more common for people to try out academia and/or startups first and then go to Google later, rather than the other way around. I haven't done any kind of proper count or survey, though.

rifung2• 11 years ago

Apparently that's not true as their average tenure is only 1.1 years, at least according to

http://www.geekwire.com/2013/amazon-google-employees-ranked-...

bane• 11 years ago

I know or have met a ton of ex-Googlers, only a few ended up on the startup path.

Any workplace can get old after a while for all kinds of reasons. Or perhaps they just couldn't figure out how to navigate the internal politics to end up on teams doing world-changing stuff (let's be honest, the vast majority of engineering going on at google is pretty boring maintenance and bug fixing like anywhere else).

jsjohnst4• 11 years ago

I've a number of friends on various teams, from WebKit, to iOS, to datacenter folks, to various app teams, and hardware teams and not one has ever consistently worked a 40hr work week. Most are easily averaging 50-60, with spurts close to or over 100 before launches. Consistently the message I've heard is people are expected to "work till its ready", so I'm not sure where you'd have heard this about Apple.

beambot4• 11 years ago

show up, do good work...
work 50-60 hrs per week

Those aren't incompatible. In fact, based on current and former Apple employees I know, you're both right. It's also worth pointing out the extreme compartmentalization at Apple. I imagine that makes it more difficult to get a handle on systems-level considerations that are so key for lean startup teams.

javier2• 11 years ago

How do people do that? I'm fairly new in the game, but right after Christmas I had to work 3 weeks, about 70 hours each in a row. I was _exhausted_ after that. By the end of the third week, my head was just spinning and I went on a low morale and creative drought for 3 months... I could barely code deserialisation functions without losing focus..

So basically, how do you do it and keep sane?!

gumby7• 11 years ago

My impression, which comes from meeting a handful of Apple employees and several friends who took jobs and later left, is that the culture of Apple is that of “show up, do good work, cash the paycheck, and go home to your family.”

I have a lot of friends and former colleagues who are at Apple and you're wrong about the 'go home to your family.' At least the friends I have (mostly nerds admittedly) are routinely in the 60-70 hours mark (have only one exception and he's worked at Apple since the 1980s). But they seem to like it.

It is not one of “Let’s conquer the world and become bazillionairres while we’re at it” — the Google culture — which is more prone to eventually jumping ship and creating a startup.

This feels more like Google propaganda. My impression is that google folks seem to work a lot less (long hours its true, but less) than the Apple folks. Unlike Apple I only know nerds at google -- no marketing or business folks, so it could be different.

But of my google friends there are two groups: the übernerds who get to work on whatever they like (basically research) and they seem to have a lot of fun. A bunch of them are former colleagues from PARC and MIT, so they are doing the same kind of work we did years ago -- probably Microsoft research is the same.

The rest are doing product work of some sort of another and none of them seem particularly happy. A lot of them are on the market (I have hired a couple). It feels like Google has reached the microsoft phase: they have two real cash cows and are struggling to find more. Product managers have a lot of sway. They aren't really organized like an effective business.

Apple went through that mode and was within a few weeks of dying. Luckily they debugged themselves. My Apple friends, even those deep in the bowels of tools or drivers, amazingly are still super excited by the Apple products (I guess they would have given up by now if not).

foobarqux• 11 years ago

Product managers have a lot of sway

Can you elaborate on what you mean to say here? Is it that PMs have a lot of influence compared to engineers?

marcell• 11 years ago

I recently left Google and I think your characterization of those two groups is accurate. There is a large group of engineers at lower levels working on mundane products who are not especially excited or empowered. I wouldn't recommend working there unless you are on a researchy project (eg. Brain), or you are focusing on things aside rom your career (eg. Many employees with families tolerate working there because of the good pay and benefits)

cromwellian2• 11 years ago

Working backbreaking hours with bad work/life balance is considered unGoogley. There are sometimes when people burn the midnight oil, but in general Googlers don't work 60hr weeks.

I think the primary difference may come down to a culture of secrecy. Openness breeds cross fertilization, couple that with very few restrictions on Googlers in working on side projects, open source，and collaborating outside Google and it it's easy to see why so many Googlers are lured away by the allure of startups.

As for Googlers being unhappy with their projects, there's two answers. One, google culture permits challenging your management and product vision even as far as calling out VPs, so people here are constantly voicing their criticisms instead of falling in line. That can breed dissatisfaction especially if your criticisms are later proven right.

The other is that Googlers switch products often when they get bored. It's easy for people to get unhappy when you switch from development to maintenance. I think this is very healthy，enduring people working on a product are enthusiastic. If your jet collecting a paycheck while dreaming of more interesting stuff better to go do interesting stuff.

The level of secrecy and compartmentalization in Apple sounds like hell to me.

ddorian43• 11 years ago

which is the second cash cow?

zak_mc_kracken2• 11 years ago

Apple went through that mode and was within a few weeks of dying. Luckily they debugged themselves.

Not really, Bill Gates rescued them.

arrrg• 11 years ago

The first one sounds like a very healthy attitude, or at least inoffensive. I’m not sure why you would think you would offend anyone with that?

That said, people actually working for Apple do seem to put in a lot of (and consequently inevitably) unhealthy and unproductive hours.

santaclaus• 11 years ago

Maybe Microsoft or Amazon, but talking with and listening to interviews with former Apple employees, that definitely doesn't seem to be the case. Nitin Ganatra (who I think was head of iPhone apps) had some super interesting interviews on the Debug podcast about the early software development of the iPhone, and those cats were clocking eighty hour weeks and certainly believed they were going to upend the technology industry. Don Melton also had some super interesting info on life at Apple.

If you have a few train rides to blow, these are some super interesting looks into the internals of Apple: http://www.imore.com/debug-47-melton-ganatra-episode-i-demoi... http://www.imore.com/debug-48-melton-ganatra-episode-ii-unde... http://www.imore.com/60-melton-ganatra-episode-iii-shipping-... http://www.imore.com/debug-39-nitin-ganatra-episode-i-system... http://www.imore.com/debug-40-nitin-ganatra-episode-ii-os-x-... http://www.imore.com/debug-41-nitin-ganatra-episode-iii-ipho...

Sideloader• 11 years ago

Please...stop the madness! The trend of prefacing every criticism or, indeed, observation with an apology to the fanbois or a cheery positive "Apple is awesome, but.." statement has gone too far. It's actually quite amazing how many articles and comments follow this template. And it has to stop. The Cupertino Thought Police is not going to kick your door in and drag you to the Infinite Loop basement for a Think Different session. The Internet won't grind to a halt, you won't be named and shamed...everything will be okay!

Sure some fanbois with advanced symptoms might possibly berate you publicly or even downvote your post/article and that's it. It really is okay to not love Apple. Or point out that Apple isn't perfect. It's even okay to not own any Apple products whatsoever. Full disclosure...I do own Apple products and OS X is my daily driver of choice. But I have no emotional attachment to Apple's products, I don't buy Apple products exclusively and I do not worship at the iAlter or have a man crush on Steve Jobs.

The over-the-top reverence for Apple even by people who are far from being fanatical iCult members really is extraordinary. If you find some of their products useful, great, if their products aren't a good fit for you, that's great too. Apple is not the mafia (yet) and you owe the company nothing.

kzhahou• 11 years ago

Chill, dude. His preface was to not insult fellow HNers who work at Apple.

Eric_WVGG3• 11 years ago

Jesus dude I just didn't want to offend anyone

BJBBB• 11 years ago

Interviewed Apple EE last year-> BSEE from caltech and MSEE from UCB, so educated enough, but a rather narrow range of experience for a Sr Engr position. In fact, too narrow to be of any use to our small-potato company. So perhaps their organization is big and anonymous enough to find places that are well-hidden; that is, they find a comfortable niche, then just park it for a while.

bomanbot2• 11 years ago

Maybe another reason why Apple spawned comparatively few startups might be that some of the areas of expertise for Apple and their employees are harder to do in startup-sized companies; namely hardware engineering and mass manufacturing innovation.

Apple does a lot of work in hardware and hardware manufacturing, both areas which are pretty capital-intensive and might not lead themselves as easily to the startup world.

Say, you are an Apple engineer working on the Ax chips for the next iPhone and have an idea for something great in CPU design, you cannot exactly rent a scalable 14nm chip fab from AWS to try to build it on your own and sell it market.

Eric_WVGG3• 11 years ago

True, and it’s telling that maybe the biggest break-out startup from Apple was Nest. And for that very reason, I’m surprised that there aren’t more creatively stifled Apple hardware engineers pursuing IoT startups.

derefr• 11 years ago

rent out a scalable 14nm chip fab from AWS

I was pondering the viability of almost exactly this. Could one invest in a hardware pipeline that efficiently combines e.g. 3D printing with FPGAs to create the consumer-electronics equivalent of Lulu.com's just-in-time small-batch book printing + drop-shipping.

Or, in other words: you can do pretty much anything with the sensors in a modern smartphone. All most manufacturers probably need is smartphone boards (with maybe some options of extra sensors) in custom cases with fancy buttons and displays, maybe custom remotes, and a cute little 4-colour double-walled box. That describes everything from Nest to Roku to some drone controllers.

beambot4• 11 years ago

You're probably better off using something like Samsung's Artik (https://www.artik.io/) that is basically cellphone-grade integration using existing high-density components.

sliverstorm2• 11 years ago

There's a risk/flaw/gap with that plan. Modern consumer electronics depend on humongous volume discounts- 10x or even 100x- on parts, plus tremendous economies of scale on design & assembly.

JIT small-batch assembly seems roughly analogous to other low-volume electronics, which are obscenely expensive. For example, specialty bench equipment like spectrometers can cost as much as a house.. There are many factors at play there, but you can bet one of them is very low volumes.

This is why, at least so far, the kind of play you describe is accomplished with large batches of a generalizable platform that can be sold into many different devices.

tdicola• 11 years ago

Wattage tried something similar but just recently shut down: https://medium.com/inside-wattage/well-we-failed-77e795e16ec...

nickpinkston2• 11 years ago

At Plethora, we're building the mechanical pieces of this - starting with full-auto, on-demand CNC milling as fast as LuLu or similar, then adding more capabilities.

Happy to make some free parts for anyone's ideas on here!

http://plethora.com

nick@plethora.com

gumby7• 11 years ago

...harder to do in startup-sized companies; namely hardware engineering and mass manufacturing innovation.

Don't forget all the hardware companies you know today were once startups. Yes there's a current fashion to call companies that are basically small businesses "startups", but the term encompasses a far more profound class of enterprise.

And Apple itself was founded by an engineer (Woz) who first got his start at a big company, HP, which is celebrated as a hardware startup that grew.

I think the article and your comment do get to an important point, which is that Apple is big enough to have solid (and at the moment very successful) processes and infrastructure so that you only get experience in that matrix, and don't have to spend any time learning stuff outside your own area. You can, of course, and plenty of companies have come from Apple alums.

morgante3• 11 years ago

Don't forget all the hardware companies you know today were once startups.

Unfortunately the winds of VC have changed a lot since then. Originally, VCs were willing and eager to invest millions in a promising innovation. Now they expect you to demonstrate traction before any large investments—which is infinitely harder with hardware startups.

rifung2• 11 years ago

While true that hardware companies were also once start ups, they were also startups at a different time. Please correct me if I'm wrong, but weren't they start ups when there were no existing hardware companies that operate at the same scale the current big hardware companies do?

rhino369• 11 years ago

Clearly hardware start ups aren't impossible, but we are talking about relative difficulty. The article is only comparing them to software companies (Google, Yahoo, Paypal).

I also think its right to compare now with the 1980s when F500 companies didn't know how to compete in the new tech hardware space. Companies like Samsung rush into new product spaces very early in the adoption cycle.

CamperBob22• 11 years ago

you cannot exactly rent a scalable 14nm chip fab from AWS to try to build it on your own and sell it market.

To Amazon's credit, I can imagine Bezos reading your comment, frowning, and muttering, "Why the hell not?"

philippnagel• 11 years ago

I am obviously not Jeff Bezos but I asked myself the same question.

Could such an extreme outsourcing service (not necessarily only fabricating chips) paired with the accessibility of AWS be viable? Does such a company exist?

seanmcdirmid• 11 years ago

Taiwan? I mean, Motorola and even AMD have sold their FABs out to companies who then provide capacity out to the highest bidder. Now they do trail in process, so 14mm might not be available for a couple of years.

_yosefk• 11 years ago

Erm... you can "rent" it from TSMC, you could before AWS existed, and in fact some of Apple chips are manufactured by TSMC (http://en.wikipedia.org/wiki/Apple_system_on_a_chip#Apple_A8...)

Now "an idea for something great in CPU design" is unlikely to result in a marketable chip these days, but chip startups exist, and some are very small. Adapteva for instance is a 5-people company.

mbell• 11 years ago

Apple does a lot of work in hardware and hardware manufacturing, both areas which are pretty capital-intensive and might not lead themselves as easily to the startup world.

There is some truth to that but it's not the custom chip manufacturing that drives it. It's not even what I guess I would call 'excellence in material design' that drives it. Really it's a combination of the choice to not cut corners on hardware combined with the scale and market position to support the cost.

As an example a lot of has been made in the past about Apple's charges, both laptop and iDevices, they are small, sleek and powerful for their size. There isn't anything special going on there from an electronics perspective, they didn't invent new types of power conversion, they just didn't cut every possible corner to reduce cost and they had the budget to allow custom parts when off the shelf didn't fit. I don't mean custom IC's here I mean custom metal fab, maybe custom caps that are 'normal' other than being shaped a bit differently, etc. Apple has the volume and price point to let them do this when the vast majority of companies don't.

tlogan• 11 years ago

Not sure if this is true - I would like to see some stats.

I think the problem is that the press will not write about some founder as "ex Apple engineer", "ex Oracle engineer", etc. It is not cool. The story will sell if founder are "ex-Google", "ex-Facebook", "ex-Dropbox", "Y-combinator", etc.

For example, if you are ex-Oracle, then you need to have significant revenue in order to be mentioned in the press as ex-Oracle fonder (PeopleSoft, Salesforce, Sibel, etc.). If you are ex-Google, you need to raise 100K seed and press will say ex-Google.

seizethecheese• 11 years ago

I disagree entirely. Many of the Nest articles that I read were heavy on the "ex Apple" rhetoric.

rimantas• 11 years ago

Maybe because it was founded by former Senior VP and the "father" of iPod, not just some random Apple engineer?

analog31• 11 years ago

Perhaps people with an innovative or entrepreneurial bent don't gravitate to Apple in the first place, even if they love Apple products.

shiggerino• 11 years ago

For some reason the only Apple-spawned startups that come to my mind are the ones that ultimately failed, like Be, Inc.

opinionated1• 11 years ago

Maybe it's because the company DNA attracts less entrepreneurial minded employees in the first place than for example Google. I think that people working for Apple:

- like to have a strong leader in front of them (or at least used to when Jobs was around).

- are engineers comfortable to be less at the center of product development than at other big tech companies.

Whereas an entrepreneurial-minded person is famously rather reluctant to subordination. Exceptions confirm the rule.

sgustard• 11 years ago

Here's one minute of methodology to throw at this question.

Search LinkedIn for title keyword "founder", past company Apple. I get 7668 hits.

Same search for Google, 7277 hits. For Yahoo, 4268.

robotresearcher• 11 years ago

To add a bit of context: Apple is 39 years old. Google is 17 years old.

paulsutter• 11 years ago

Younger companies spawn more startups because they have many employees who just experienced the hypergrowth phase of going from startup to known company. These employees have not only the right experience to start a company, they want to recreate the experience.

Why Has Apple Spawned So Few Startups?

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