Steve Jobs Earned His Place in the American Business Pantheon

Oct. 4, 2011— -- Steve Jobs, who died on Wednesday, was a singular figure in American business history. He will go in the pantheon of great American entrepreneurs, inventors, and innovators, alongside John D. Rockefeller, Henry Ford, and Sam Walton.

Jobs didn't invent computer technology, or the cell phone, or the notion of digitizing music. But he invented methods, business models, and devices that turned each into significantly larger cultural and economic phenomena.

To a degree, one might look back on the arc of Jobs's career and conclude that he simply rode a series of technological waves. But Jobs, and the company he led, rode the waves while pushing back against them.

In an industry frequently hostile to design, Jobs's Apple banked on it. In an industry in which products simply got cheaper every year and everything tends toward a commodity, Apple's products were able to command a premium. And in an age of pinched consumer spending, millions of people were eager — even desperate — to shell out for the latest version of the iPod, the iPad, or the iPhone.

In an era frequently characterized by executive greed and massive pay for significant underperformance, Jobs worked for a dollar a year. At a time when many founding CEOs step down when they hit their late 40s and early 50s to chase other pursuits (a la Bill Gates), Jobs stuck with it. In an era in which many experts fretted about the ability of America's economy to thrive and innovate, Apple grew into a major exporter. Apple now represents American brands, the way McDonald's and IBM and Coca-Cola once did.

In an era in which equity values stagnated, Apple's stock thrived. The performance of the company's stock, which is now worth $322 billion, up from a few billion in 2003, is one of the great examples of value creation in modern history.

It's difficult to put a tag on what it is precisely that Jobs did. He didn't create a fundamentally new business structure, the way John D. Rockefeller did with the vertical integration of Standard Oil. He didn't democratize a product that had only been available to the very rich, as Henry Ford did with the Model T. And he didn't fundamentally alter the distribution, logistics, and production systems the way that Sam Walton did with Wal-Mart. Under Jobs, Apple simply created a bunch of really cool products that people decided they needed to have. And have again. While Apple had brilliant ads, and while Jobs was an excellent salesperson, Apple's rabid, evangelizing fans have been the most effective marketing tool. When it comes to clothes, or shoes, or cars, my kids, 13 and 9, are largely indifferent to brands. When it was time for them to get their own computer, it had to be a Mac.

There are three basic business stories: the rise, the fall, and then the comeback. Jobs provided a vivid example of each. He started Apple Computer in the 1970s out of the proverbial garage with Steve Wozniak, only to be pushed after the company had gained scale. Returning to helm the company in 1997, he led a comeback that was, in many ways, far more impressive than the original rise.