The success story of the iPod has a few lessons for us to learn. The first relates to entrepreneurship. The basis of entrepreneurship is risk taking and creativity, traits that Tony Fadell, the individual behind this innovation, had. When he had come up with the concept of the iPod, he left his work place at Philips to become an independent contractor (Kahney). This may have been in a bid to get better bargaining power for his innovation. He was turned down by several companies before being accepted by Apple (Kahney). This shows that without risk, there can be no reward. For an entrepreneur to be successful, he or she needs to step out and persist, even when you are rejected as Fadell was. Had he given up when he was first rejected he would have not been successful. He believed in his concept, correctly estimated its potential and stuck to it despite the initial rejections.
Additionally, intrapreneurship plays a big role in this success story. When Fadell approached Apple, they recognized his potential, took him on and gave him a team that would allow him to develop his idea (Kahney). One of the lessons I see here is that the employee may not necessarily come from within the organization originally. Fadell was a freelance contractor who was taken in by Apple and allowed to be creative within the company. Sourcing for talented individuals who can intrapreneur should be a constant process and not just vacancy related.
Another lesson for intrapreneurship regards resource allocation. The question of the amount of resources that should be allocated is dependent on the amount of potential seen. In the initial set up, he was given 30 people to work with (Kahney, 2004). As the project continued and the potential began to unfold, more and more resources were allocated to this project by Apple. Knowing when and how to allocate resources is a skill necessary for good productivity. On the one hand, you need to allocate enough resources to allow for creativity, on the other hand, you need to allocate only to where returns are most highly probable. Therefore, good intrapreneurship management requires that you evaluate the projects and ideas put forward by your employees and allocate enough resources based on potential.
The case also allows us to draw lessons on corporate venture. The biggest lesson drawn from this case is that corporate venture allows the creation of synergy and creativity. Smaller firms tend to have a multitude of talent and creative ideas while larger firms have the much needed finance to make this a reality. This synergy is mutually beneficial to both firms. Apple, lead by Fadell, had a good idea. However, the specialist knowledge of how to develop the idea lay with a much smaller company, PortalPlayer (Kahney). They had been in the business of making portable players much longer, and therefore had more experience and talent in this area. Therefore, after the venture happened, future partnerships with this company would result in better quality of the product.
We notice, however, that the buying into the firm did not happen until later when the iPod was just about to be launched. Apple waited until the project was almost complete before it made its move (Kahney). My opinion is that they did this in order to secure a financial advantage by buying into the firm that was to share in the revenue of the project. Additionally, they may also have bought it in order to use the manpower that developed the iPod to improve on the design in future. What I clearly see here is tact and timing, a major consideration that should be made when thinking of a corporate venture. The fact that they did not purchase it at the beginning may show that they were waiting to assess the productivity of the project and company before making a move. Strategy is clearly important.
Works Cited
Kahney, Leander. “Inside Look at Birth of the IPod.”Wired News. 2004. Web.