7 Questions for Steve Jobs and Big Data
Liz is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Suspend reality for a moment and picture "Big Data" as an actual person. That's right, the ever-expanding, infinitely enlarging, complex mass of rapidly accumulating data has manifested as a walking, talking entity. Now let's imagine that this entity/person named "Big Data" sits down for a question and answer session with Steve Jobs (before he passed.) This is my vision for how the discussion would go:
Question 1: Mr. Jobs and Mr. Data, how important do you think data is when it comes to product development?
Steve Jobs: I don't believe much in data. I don't even believe in focus groups. You may recall a famous quote of mine when I was talking about the Mac in the '80's: “We think the Mac will sell zillions, but we didn’t build the Mac for anybody else. We built it for ourselves. We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research. We just wanted to build the best thing we could build."
Big Data: With all due respect Mr. Jobs, I have so much data that I can utilize predictive analytics, algorithms, and Hadoop (derived from Google's MapReduce and Google File System, Hadoop is an open-source software framework that supports Big Data distributed applications), all of which will drive innovation, enable us to understand consumers, and to make the best products for tomorrow.
Question 2. Product development is one aspect, but how does a company innovate and where does this innovation come from?
Steve Jobs: I completely disagree with Big Data and he should know that given all the Apple data which points to this. Innovation results from human vision, whether singular or collective, and it's that vision which drives the genius in product development. You can't get to genius from data. One of my favorite quotes that I'm known for is "You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new. Further, “innovation has nothing to do with how many R&D dollars you have. It’s about the people you have, how you’re led, and how much you get it.”
Big Data: Well, my predictive algorithms will know what they want before they know what they want. The petabytes and exabytes of data that I aggregate, analyze, repurpose, and project can do that and so much more.
Steve Jobs: Fair enough Big Data - but what you're missing is that you are taking data as it accumulates, and so it's all happened in the past. It may be the recent past, but it's the past nonetheless. However, I can look forward based on my experience, my intuition, and most importantly, my wisdom. And this wisdom has data included in it, but it also has human gut feel and heart. Sometimes a unique vision takes years of rumination and sometimes it's instantaneous. And the process in getting there is often very different. “It’s not a faith in technology. It’s faith in people.” Also, as I've said in reference to Microsoft "Our friends up north spend over five billion dollars on research and development and all they seem to do is copy Google and Apple.”
Question 3. How important is it to share Data with others?
Big Data: Most of my devotees outsource their Big Data analytic requirements, since it's cost prohibitive for them to do in-house.
Steve Jobs: No way! We keep our creativity and data in-house and under wraps. Plus, "Why join the Navy when you can be a pirate?"
Apple stock of course, just look at our products, financial metrics, and cash. Whole foods because we have to eat and John Mackey (Whole Foods CEO) has introduced a more compassionate, healthy, and vegetarian way of eating to lots of people. As a vegetarian, I appreciate the ethics and philosophy behind the company and I think many compassionate shoppers do as well. Further, in the grocery class of trade, Whole Foods has the most delectable metrics. WFM outweighs competitors Kroger and Safeway (NYSE: SWY) with a market cap of $18B versus $12.4B and $3.9B respectively. Granted these two competitors have higher annualized dividend yields (KY 2.55%, SWY 4.34%) than WFM (0.57%) but as you probably recall, I'm not a big dividend guy. Rather, I look at the 52-wk price performance at 45.22%, obliterating KY at a 2.55% increase in stock price and SWY at a -5.30%. It's all good for WFM and talk about giving back to the planet - John Mackey has made his "ding" the universe of how people consume, view, and connect via healthy eating.
Big Data: IBM (NYSE: IBM) and FaceBook (NASDAQ: FB). My rationale is that my data suggests that I follow Warren Buffett and IBM is his third largest holding. Further, IBM has made a $100M commitment specifically to me, with a focus on four of my Big Data attributes: Volume, Velocity, Variety, and Veracity. IBM with a market cap of $237.1B, and 52-week price performance of +15.78%, has exceeded analysts earnings estimates every quarter for the past two years. And further, average 5-year dividend growth is 16.27% and should be sustainable.
My second stock pick of FaceBook is not based on financial metrics, but on the simple fact that FaceBook feeds me. As of June 2012, there were 955M active users on the site, and 20 million applications installed from FB on a daily basis. Also, more than half of all users access their account utilizing a mobile device, and more than a million websites are integrated into FB. And also in June, FB announced that they had the largest Hadoop cluster of data in the world at a size of 100 PB.
Question 5. What is your goal in life?
Steve Jobs: "I want to put a ding in the universe."
Big Data: I'll quote from my favorite movie "2001 Space Odyssey" and my favorite character and role model The Hal 2000 Computer who said "I am putting myself to the fullest possible use, which is all I think that any conscious entity can ever hope to do."
Question 6. How about mistakes? Are they different with Big Data versus human innovation?
Steve Jobs: “Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.”
Big Data: Once again, I am going to quote my idol The Hal 2000: "It can only be attributable to human error."
Question 7. Do you have any important advice for our readers?
Steve Jobs: "Stay hungry, stay Foolish."
Big Data: "Don't forget to update your Facebook page. I'm depending on it."
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CoachLizzy is long Apple and Whole Foods Market. The Motley Fool owns shares of Apple, Facebook, International Business Machines, and Whole Foods Market and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Apple, Facebook, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.