Listen to your music on an iPod? Read news on an iPad? Cherish your beautifully minimalist iMac? Then you’ve benefited from the genius of Apple Inc.’s Steve Jobs.
With the news this week of his decision to step down as CEO of the company, many have lauded his incredible successes in changing the way the world uses computers, consumes entertainment, and uses the Internet. But less has been said about the importance of his failures, the lessons Jobs learned, and what that can teach us about the free market.
Nick Schulz of the American Enterprise Institute explains:
Jobs failed better than anyone else in Silicon Valley, maybe better than anyone in corporate America. By that I mean Jobs did what only the greatest entrepreneurs can do: learn from their failures. I don’t mean learn from their mistakes. I mean learn from their abject, humiliating, bonehead, epic fails.
Jobs (along with Steve Wozniak) brought us the Apple I and Apple II computers, early iterations of which sold in the mere hundreds and were complete failures. Not until the floppy disk was introduced and sufficient RAM added did the Apple II take off as a successful product.
Jobs was the architect of Lisa, introduced in the early 1980s. You remember Lisa, don’t you? Of course you don’t. But this computer — which cost tens of millions of dollars to develop — was another epic fail. Shortly after Lisa, Apple had a success with its Macintosh computer. But Jobs was out of a job by then, having been tossed aside thanks to the Lisa fiasco.
Later, Jobs rejoined Apple Computers and went to work making the incredible products that have changed the way the world works today. Schulz explains that it was only by failing that Jobs learned how to create the products that the world didn’t even know it wanted—and then make billions from it.
But for all the things Jobs invented, he doesn’t hold the patent on failure. Henry Ford‘s first automobile company went bankrupt because of high prices and low quality, he left his second company after a falling out with a consultant, and the Ford Motor Co. we know today almost didn’t make it off the ground. Walt Disney‘s first foray into cartooning ended up in defeat—he couldn’t get work as an artist at a newspaper—and his early “Laugh-O-Gram” cartoon studio wound up bankrupt. It took Disney’s losing the rights to his character “Oswald the Lucky Rabbit” (along with most of his animation staff) for Mickey Mouse to be born, and the rest is history.
The list of entrepreneurs who took risks, suffered failures, and picked themselves up again is long and distinguished. Their names include the likes of Thomas Edison and R.H. Macy, Bill Gates and the Wright Brothers. It was from their failures that success was born—and it was in the free market that they made it big. Unfortunately, today that system is under assault. David Newton, a professor of entrepreneurial finance, and Andrew Puzder, CEO of CKE Restaurants, write in their book Job Creation that the growth of government is constraining the type of entrepreneurship that our free-market system should otherwise promote:
Virtually every large business enterprise, including McDonalds, Coca Cola, Microsoft, Apple, Ford, and Wal-Mart started with an idea or a product under the most humble of circumstances driven by individuals unrestrained by either an oppressive class structure or pervasive government control.
Ironically, in recent years the greatest threat to this phenomenally successful system for generating economic growth and prosperity has become the very government the framers created to facilitate free enterprise and to regulate attempts to make it less free.
Amid today’s high unemployment, many are turning to expanded government spending as the answer for creating more jobs. And they’re looking for government support to prop up industries and create new ones. But Jobs and others like him found great success only after taking great risks in a free market where they have been allowed to thrive—or fail—without too much government interference. If America wants more entrepreneurs to emerge, more people to take risks, and more jobs to be created, then the government should stand back and let the brightest minds get to work.