As we went to press with the current issue of CEO Middle East, the opening paragraph of the article you are now reading had to be erased, rewritten and redesigned.
Our cover star John Sculley is a marketing guru, who used the famous Pepsi Challenge campaign to outrun its rival Coca-Cola and helmed Apple for ten years during the height of the Steve Jobs golden era, when sales rose tenfold from $800 million to $8 billion under his leadership.
He is a well-known name to countless bosses and business students around the world and his latest big adventure in technology saw him arrive in the Middle East as part of the global roll-out of Obi Mobiles, the new aspirational smartphone which aims to target young users in developing markets to want what Apple can offer but at budget prices.
But even marketing gurus can’t predict everything.
After the buzz of the initial launch, it was revealed last month – right as we were about to approve our final cover design – that Ajay Sharma, the Indian chief executive of Obi Mobiles, had suddenly resigned.
India was where the handset was first unveiled in April 2014 and Sharma had claimed enthusiastically at the time that the company aimed to back it up by investing up to $8 million in a slick TV, print and social media marketing campaign aimed at tapping into the youth market.
In the midst of Sharma’s shock exit, The Economic Times reported that the executive had left due to operational issues and flagging sales, while Indian tech site BGR Media claimed Obi had “so far fallen flat and failed to create any brand recognition” and the phones “haven’t set the market on fire either” as they “had no differentiation whatsoever.”
Harsh words, but Sculley is used to dealing with internal boardroom dramas as he was let go by Apple after a bad quarter and he is famously, even to this day, unfairly labelled as the man who sacked Steve Jobs.
“I never did fire Steve Jobs but the headline has been written enough times people believe it, but the truth is he was never fired, he resigned. He was pushed out of the Macintosh division that is true,” Sculley says.
Unfortunately, despite his clarification, many of the headlines after his visit carried headlines still describing him as ‘the man who fired Steve Jobs’.
“I wish the [Apple] board had done more to try to keep me and Steve together because we had been positioned to be partners. I didn’t know anything about building computers and he knew a lot about building computers. I knew a lot about how to market those products, and I think it is a breakup that never had to happen. But those things happen.”
With Jobs having died in 2011, had the two once inseparable work colleagues, and later rivals, returned to being friends?
“Neither one of us have ever talked about our private lives after that,” he says, indicating the twosome didn’t manage to patch things up before Jobs’ untimely death from pancreatic cancer.
Sculley and Jobs certainly started out well. Sculley started his career at Pepsi Cola in 1967 as a trainee in a bottling plant in Pittsburgh. By the age of 30 he became the company’s youngest marketing vice-president and invented by the famous Pepsi Challenge, which saw consumers in malls blind tasting different colas, with Pepsi winning out as the dominant favourite.
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The concept for disruptive marketing was born. Soon Pepsi was overtaking rival Coca-Cola in the Cola Wars and by 1977 Sculley was named Pepsi’s youngest ever president. Ironically legend tells that when Sculley took the taste test he chose Coke over Pepsi, showing you don’t need to like something to be able to sell it.
“Pepsi was outsold 10 to 1 when I started and became marketing VP and we eventually surpassed Coca-Cola in the US as the largest selling packaged goods. Steve loved what we were doing with the Pepsi Challenge and we took the same philosophy of experience marketing to the high tech industry and no one had seen anything like it before. We launched the Apple Mac that way and it has followed the philosophy ever since.”
The story goes that Jobs used a persuasive pitch to persuade Sculley to jump ship and be the Watson to his Sherlock at Apple: “Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?”
The two made a formidable partnership and sales rocked on the back of Sculley’s day-to-day management and disruptive marketing techniques and Jobs’ genius for tapping into what consumers wanted.
“With Obi you will see the exactly same methodology of not talking about the technology but talking about the phone as part of your life and you can celebrate the expression of who you want to be and it is very edgy advertising positioned to young people and speaking in their language… Then bringing brand ambassadors to talk to other young people. Other low cost price products are just competing on technology.”
The lack of focus on technology is something Sculley learnt from Jobs, who believed it was what the product represented to the consumer that should be the focus. With the kind of cult following Apple has generated in fans, with sell-out queues around the block ahead of launches, this is certainly something Jobs achieved.
“We sell our products as if they were fashion products. Steve Jobs had a philosophy that technology should be beautiful or it should be invisible. Our goal is to follow exactly that idea, which is to emphasis the relationship and specialness.
“You see in our advertisements there is never any talk about technology we don’t even bring up technology it is all about focusing on the individual and the aspirations. No one else at this price point is doing it like that. Apple does it at the high price point but no one at this lower price point.”
The Obi is priced from around $26 and comes in comes in a range of funky names, such as the Obi Octopus S520, the Obi Falcon S451, the Obi Wolverine S501, the Obi Boa S503, the Obi Leopard S502, the Obi Alligator S454, the Obi Fox S453 and the Obi Racoon S401.
The range is sold in the UAE, Oman, Bahrain, Kuwait, Qatar and Iraq markets through Jumbo Electronics. While Scully may have had teething problems with his Indian head, his Middle Eastern managing director, Amit Rupchandani, is certainly confident.
“We are looking to make Obi a brand to reckon with in 2015, by bringing out a strong portfolio of products that are available to consumers at disruptive price points. The new devices from Obi offer young consumers best-in-class technology from a team that includes some of the best-known names in Silicon Valley.”
So how does the Obi compare to the iPhone? While Sculley flashes a new iPhone 6, he says the two products are completely different. “An iPhone can be $600 – $800 and we are in the $100 – $200 price point. It is substantially lower than those products but still aspirational. I think [the iPhone] is terrific and, as long as you have the high dollars to buy it, go ahead. But not a lot of people have them to be able to buy it.
“Our aspiration is to get to a five percent of the market share worldwide and we are only focused on the emerging markets so we are not interested in going into North America or most of Europe.
“We are rapidly rolling out across India, we are coming to the UAE, we are going into the Gulf GCC markets, into North Africa and East Africa. We will be moving into Latin America and we are launching in Vietnam. By the middle of 2015 we should be in almost every emerging market in the world.”
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In fact some of those he has brought on board include some of those from his Apple days, including Robert Brunner, the former director of industrial design at Apple and chief designer behind Beats Electronics, which was founded with Dr Dre and sold to Apple for a massive $3 billion in August last year.
Before Obi came along, Sculley could easily have been linked to another big smartphone name: the BlackBerry. “I tried to buy the company and they pulled the auction. I have a lot of respect for [CEO] John Chen who was brought in to try and turn it around and he is doing a good job. It is a pity they didn’t bring him in two or three years earlier it would have been an easier task.
“They seem to be moving away from selling devices and moving towards security and backend systems. I have been mobile for the last 20 years, so I have a number of mobile device companies, so I think it is doing the right things but it is a pity they didn’t have that type of leadership a few years ago,” he says of the beleaguered Canadian phone-maker which reported a net loss of $148 million in the last quarter of 2014, which was only slightly up on its loss of $4.4 billion the previous year.
Would Sculley be able to turnaround the company, which seems to be stuck in a black cloud of negativity in recent months, despite the launch of its latest BlackBerry Passport smartphone?
“It is pretty darn tough,” says Sculley.
“I like the BlackBerry product and the keyboard is a good idea… There were so many mistakes made a few years ago. We would have sold off the device business and just focused on the enterprise services side.”
In a 1987 interview, Sculley was asked what he saw as the big future developments over the next 20 years. He famously predicted handheld, iPad-like, devices, believed a Russian would land on the moon and advocated the Knowledge Navigator, which many have likened to the present day Internet. So what does he see in his crystal ball for the next 20 years?
“I think I am an optimist… [But] the middle class consumption economy we have in the west is not sustainable. At the high-end income range people are doing great but at the lower end it is not sustainable. In the developing economies a new affordable middle class economy is emerging.
“There are two billion people coming up who are aspiring. The new middle class will come from the developing world and come back to the west, while before it was the west and went in the other direction. That is what I would predict… It is going to change, which is why it is time to build new businesses as there are better ways to do things.”
After striking gold with Pepsi-Cola and Apple, Sculley went on to do consultancy work for Kodak and currently invests in a number of high-tech start-ups in the US through his family firm, Sculley Brothers, with his brothers Arthur and David.
While Obi is his current big focus, he will eternally be linked to the genius that is Steve Jobs, who rose from the executive board to pop culture icon status.
Having recently written a book – ‘Moonshot! Game-Changing Strategies To Build Billion-Dollar Businesses’, does Sculley think another Jobs is likely and he can strike gold a third time?
“If you have a genius like Steve Jobs, and he was a genius, then the opportunity is there. You don’t need Steve Jobs’ genius, you could be what I call an adaptive innovator and take advantage of the resources available. You can build a billion dollar business, you don’t have to be a genius like Steve Jobs.”
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