Book Marketing Makeover: The Importance of Trust, A Steve Jobs Story

Guest post by Stephen M.R. Covey and Greg Link

In 2007, Ted Morgan, the CEO of an unknown location-finding technology company called Skyhook, had been trying for months to get major companies to use his technology. Then one day when Morgan checked his voice mail, he found that a caller had left the following message: “Ted, this is Steve Jobs from Apple. I’d like to talk to you about Skyhook. Call me at . . .”

Thinking the message was a joke played by someone on his team, Morgan deleted it. Later that day, he told Mike Shean, Skyhook’s cofounder, “Good try, but you gave it away by pretending to be Steve Jobs. You should have said you were Scott or one of the other managers we just met at Apple.”

Shean said he knew nothing about the message. When Morgan realized the call had actually been from Steve Jobs, the CEO of Apple asking to meet with him, he sat up in a hurry. Morgan returned the call and met with Jobs, and things started happening quickly. It looked as though a great deal was in the making.

Then one day, Jobs called Morgan and said that Apple had a big Macworld event coming up, that it was close to doing a deal with Skyhook, and that he wanted to model Skyhook’s technology at the event—but he couldn’t do it without Skyhook’s code. So Jobs asked Morgan to give him the code.

While still on the phone, Morgan turned to his management team and whispered, “He’s wanting our code.”

The immediate response of the team was “No! No! No!”

Morgan said to Jobs, “Steve, as you might imagine, we’ve never given out our code. That code is our intellectual property. It’s everything we have.”

Jobs replied, “I know that. You’re just going to have to trust me.”

Against the advice of his team, Morgan gave Jobs the code.

We later asked Morgan, “What do you think would have happened if you had said, ‘Steve, I just can’t?”

He replied, “You never know. But personally, I don’t think he would have done the deal. I think Steve would have moved on.”

Instead, Jobs rewarded Morgan by personally demonstrating Skyhook’s technology at Macworld in January 2008, giving an animated explanation of how the technology worked and adding, “Isn’t that cool? It’s really cool.”

Morgan called Jobs’s spotlight on Skyhook “the biggest publicity event any company can have.”

Skyhook’s WPS became the primary location engine for Google Maps and other applications used by both the iPhone and iPod Touch until April 2010, and the company continues to provide location-based services for Apple as well as other technology giants such as Samsung, Motorola, Dell, Qualcomm, and Texas Instruments. Its software powers thousands of mobile applications and is being used on tens of millions of devices around the globe.

Morgan’s leap of trust turned out to be a huge positive game changer for Skyhook. It also affirms that although there is risk in trusting, there is often greater risk in not trusting.

About the Authors

Stephen M.R. Covey is the New York Times bestselling author of The Speed of Trust. Greg Link is co-founder of The Covey Leadership Center. The two orchestrated the strategy that led Stephen R. Covey's The 7 Habits of Highly Effective People to be one of the bestselling business books of the 20th Century.

The above story is excerpted from their new book, Smart Trust: Creating Prosperity, Energy, and Joy in a Low-Trust World. Great book!

I've arranged access to Covey’s upcoming private 60-minute broadcast for free if you buy the book at Amazon this week (January 9 to 13): http://goo.gl/AV2Gi.
And you can sign up for the live interactive telecast on January 12th here: http://goo.gl/HXLQr.

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"John Kremer's 1001 Ways to Market Your Books was instrumental to our success in making The 7 Habits of Highly Effective People one of the two most influential business books of the 20th century." - Stephen M. R. Covey and Greg Link, authors of Smart Trust

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"Thanks to you, Smart Trust is #1 in all books on Amazon & B&N. What can we say?? Thanks seems so insufficient. How's this: You rocked the free world, you extraordinary enlightened earthling you. Well, you rocked our world anyway!

"Please, please keep advocating trust. Together we can trigger a global renaissance of trust and shift the trajectory of life and leadership for generations to come." - In gratitude, Greg Link and Stephen M. R. Covey, co-authors of Smart Trust

How to Keep People Happy

In a blog post on Saturday (How to Spend $20 Million), Seth Godin noted that Steve Jobs should NOT have given early adopters of the iPhone a $100 store credit when Apple lowered the price of the iPhone by $200 last week. Giving early adopters pseudo price protection is not the way to run a profitable business.

First, giving that store credit will cost Apple some $20 million. Second, the $100 store credit feels like a weak effort (it's only half of the price cut). Third, no matter how it is phrased, a half store credit feels like the early adopters were taken advantage of.

The key, Seth noted, was not pretending to guarantee price protection but making the early adopters feel more exclusive rather than less. To accomplish that, Seth suggested one of the following three options:

1. Free exclusive ringtones, commissioned from Bob Dylan and U2, only available to the people who already had a phone. (This is my favorite because it announces to your friends--every time the phone rings--that you got in early).

2. Free pass to get to the head of the line next time a new hot product comes out.

3. Ability to buy a specially colored iPod, or an iPod with limited edition music that no one else can buy.

I think the first option is the best, because it really does offer something exclusive. It would have continued to signal to latecomers who the hot people (early adopters) were. Plus, of course, the cost would have been minimal.

The second option is too vague. What if, as an early adopter, you have no interest in the next hot product. The free pass, then, becomes an empty promise. While most Apple lovers would never think that Apple would create an unwanted product, the reality is that Apple has done that more than once.

The third option, like the first, offers a sense of exclusivity. But why would anyone want another iPod when the iPhone already functions as a great iPod? With the suggestion of some limited edition music, though, the offer might work. But the price would also have to be right. Otherwise, you not only paid $200 extra to get the iPhone first, but you have to pay more for the exclusive iPod.

I believe most early adopters did not feel abused by the price cut. They had the early adopter prestige for more than two months plus the use of a great phone. If I had been able to buy the iPhone, I would not have cared what happened later. In the world of technology, prices always go down.

Alas, for me, I didn't get a chance to be "abused" because Apple chose to work with ATT which has a huge gaping hole of coverage in the Rocky Mountain area. Once you are off any of the interstate highways, you have no coverage via ATT. Now, of course, I have a chance to buy the new iPod Touch. Neat!

Now, back to the theme of this post. How do you keep people happy? Simple, give them a good deal. Or give them exclusivity. During its lifetime, Apple has rarely offered a great deal, but they have always offered wonderfully designed products that always offer an air of exclusivity.

The Apple iPhone Challenge

Note: This blog post, of course, is now out of date. Finally. The iPhone is available now on other phone networks. A long wait for a great phone.

The Apple iPhone is gorgeous but it doesn't work in most of the Rocky Mountain states if you live more than a few miles from a major Interstate. The iPhone is great, desirable, fantastic. The network Apple chose to use is crippled, inadequate, sadly lacking in coverage.

I would have stood in line for the iPhone, but I won't stand in line for the inadequate ATT network. I can wait.

I'm sure Jobs had his reasons for choosing the cut-rate ATT network, but it doesn't serve his image for excellence. It's possible that the early implementation of the iPhone required a disabled network.