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Summary:

Flaws in software and hardware design are only natural in the tech industry. But what is not commonplace is knowing how to effectively deal with the fallout when engineering flaws become known. Apple’s “Antennagate” offers startups a how-to in triumphing in the face of failure.

Engineers aren’t perfect. Flaws in software and hardware design are only natural in the tech industry. But what is not commonplace is knowing how to effectively deal with the fallout when engineering flaws become known.

Apple’s “Antennagate” is the most recent high-profile product flaw at a tech company, and one that, so far, has left Apple (mostly) unscathed. Their example offers startups a prime example on how to adroitly handle a product-flaw crisis.

Eric Dezenhall, a highly regarded Washington, D.C.-based crisis management expert, begins his analyses by reviewing three questions the public asks when high-profile mistakes are made:

  • Was the sin episodic or chronic?
  • Has there been sufficient repentance?
  • Do we like you?

The public will weigh the responses to the above questions and then render a judgment as to whether the mistake is forgivable. When it comes to Antennagate, it’s instructive to analyze how Apple was able to frame their response around these questions. The result offers three lessons for smaller tech startups that don’t have the resources Apple does to address a product flaw.

Lesson No. 1: Tell people that the problem is bigger than just you (it’s chronic!). Tech companies pride themselves on being data driven. So, when confronting a flaw, ask yourself: Is there data to back up the problem to indicate that it is chronic or episodic? Preferably, you’re aiming to find a chronic problem not specific to your company. Apple’s response team effectively said, “it’s not just us.” They proceeded to note how the antenna-reception issue is industry-wide by showing actual demonstrations on the Android, Blackberry and Windows Mobile phones. This demonstration helped Apple CEO Steve Jobs reinforce his message that “the heart of the problem is smartphones have weaknesses…This is life in the smartphone world…Phones aren’t perfect…we haven’t figured out the laws of physics yet.”

Jobs was also quick to note that there are no standards when it comes to antenna signal strength. In a wild-west world without standards, mistakes are bound to happen, and they can be devastating and demoralizing to your fanboys and employees. And as Jonathan Mann (www.youtube.com/therockcookiebottom ) noted in his Antennagate lyrics, “the media loves a failure in a string of successes.”

An extension of the “episodic or chronic” question, then, is also being able to accurately answer, “how much hype surrounds the issue?” Apple addressed this by indicating the low number of complaints filed with AppleCare, (.55%) and a return rate lower than the industry average (1.7%).

Lesson No. 2: Tell people what you are doing to solve the problem (we’re repenting!). This means indicating that you are doing everything possible to find a solution for future customers, while mitigating pain for existing customers.

A geeky problem requires a geeky answer, which is why Jobs demonstrated the complexity of the problem by talking about the money Apple spent on R&D, the 18 Ph.D. scientists it has on staff and the 17 advanced testing rooms it has to help diagnose the problem. It even allowed reporters to tour the testing rooms for the first time ever.

Apple is also mitigating the users suffering by releasing iOS 4.0.1 and offering a coupon to anyone who wants or has bought a case, which they claim helps solve the problem. And, if you don’t know where to get a case, they are going to make it easy for you to order it online. And if that STILL doesn’t solve the problem, Apple says, just return it. Imagine if Microsoft said that about Windows Vista?

Lesson No. 3: Demonstrate likability (you still love us, right? ‘cause we love you!). Jobs was emphatic about noting that they take this issue personally; they do love their customers because “at the end of the day, all we know how to do is make you happy.” While it PAINS Apple that this happened in light of the Consumer reports review, they did emphasize that people still like them.

Over 3 million iPhone 4’s have been sold and they have received validation from the people that matter, including 5,000 emails from customers personally to Jobs, validation from trade publications like Wired, PC World, etc. Another key to likability during crisis time is having a swift response. Apple noted that they didn’t say more earlier is because it didn’t know enough and it has ONLY been 22 days since the problem first surfaced. Heck, it took Nixon a year and five months to say that he wasn’t a crook.

So, tech product flaws are inevitable. Just don’t get caught covering them up, be transparent about it and leave the solution to engineers, not PR flacks. Startups should study the 33-minute Apple press conference for years to come as a best practice. I have yet to meet a successful Silicon Valley entrepreneur who hasn’t failed. But a key lesson for startups is that Silicon Valley tries harder, and that’s why it remains the innovation capital of the world.

David W. Kralik is Chief Marketing Officer for CitySourced.com

  1. The only “flaw” exposed by antanna-gate is the lack of integrity of propular pundits such as yourself.

    The iPhone 4 has better cellular reception than previous models and most other models on the market.

    However, like all microwave frequency radio devices, it is affected by the absorption of microwave energy by muscle and fat. This is the method by which microwave ovens work.

    This has left it susceptible to attack by dishonest apple bashers who are eager to take any excuse to try and portray apple as evil or incompetent.

    The lesson for startups is this: You will have enemies if you have any success. And your enemies will find fertile ground in the brainless writers of so many “tech” blogs such as this one.

    Seriously, at this point in the game you have no justification for continuing to spread such dishonesty, and you really should be ashamed of yourself.

    It is bad enough that most of the world is completely ignorant of anything having to do with technology. It is simply inexcusable for those who purport to cover technology to spread perpetuate that ignorance.

    Frankly, Om should fire you.

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    1. hey now…no need for such harsh words. I’m in the Apple camp and love my Mac.

      What dishonesty am I spreading? What integrity do I lack?

      I made your point exactly in the article when you noted, “You will have enemies if you have any success.”

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    2. gweedo come on now dont hold back tell us how you really feel, your comment reads like a personal attack on the stories author (actually from my standpoint a very well written and informative piece on crises management best practices), so to David Kralik good job for an excellent article.

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      1. SteveK,

        Thanks for your comment.

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    3. GWeedo,

      Thanks for your comment.

      First of all, I would like to state, David is a guest columnist and well, I cannot fire him. :-)

      Second of all, I am not sure you and David are actually very far off in terms of the outlook.

      What he is saying is that when you do have a situation like Antennagate — rightfully or wrongfully — there are ways to deal with it and some lessons you can take from the Apple example.

      I think it is a situation that arises and will continue to arise more often as media becomes more instantaneous.

      Cheers

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  2. EOD all that matters is how much you like apple & its products. The iphone4 is a terrific product despite the alleged antenna pbms. Though apple went on damage control mode I feel they have left themselves kinda susceptible when they started comparing their arguably superior product with FEW phones of their rivals.

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    1. Rajesh

      that is a great summary of events and are now on a weaker footing and essentially have lost the high ground. I am pretty sure they are going to make a lot more effort to get it right in their next version of device.

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    2. david kralik Sunday, August 1, 2010

      —EOD all that matters is how much you like apple & its products.
      +++agree. point #3, do we still like you?

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  3. I was simply going to point out that your direct quote of Steve Jobs is incorrect, and misleading, but also wish to second the sentiments of the commentor above.

    Steve Jobs quote at the press conference was not that Apple hadn’t figured out the laws of physics, but instead he joked that Apple had not found a way around the laws of physics… Yet. There is a distinct difference, both in meaning and tone.

    Yes, you need to populate your site with content. In this case you did yourself and this site a disservice.

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    1. Scott

      I was actually in attendance at the press conference and here is what he said (give or take a words): “We haven’t figured out a way around the laws of physics. Yet.” I think he joked.

      That said, I am not sure what David is indicating is misrepresenting Steve Jobs.

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      1. Thanks Om.

        —That said, I am not sure what David is indicating is misrepresenting Steve Jobs.

        Not a deliberate misrepresentation, I just accidentally left out a word. I watched the press conference as well, and maybe did not do a thorough enough job of transcribing that exact quote. I did mean to quote him exactly. If you can change that one line in the article, that would be great.

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    2. Scott just to be clear, I will update the quote with the missing word. As always your comments and feedback are appreciated.

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  4. Om,
    Should entrepreneurs also take basic physics lessons?

    Jokes apart, why are the articles on your blog always so sycophantic towards apple? Holding every other phone is controlled environments to show some marginal drop of signal when their own phone totally looses reception when help by a left hand, do you call that good?

    No, seriously

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    1. Rajesh,
      For these guys, Apple is like a religion, and Steve is like God’s messenger. For them, nothing can be wrong with these two.
      I also follow Apple products, and even without owning one, I know Apple produces best of the breed products. And I love Steve’s speeches as well. However, I was totally disappointed with the way the antenna issue was handled by Steve and team.
      First, I still cannot digest that Apple did not know about the flaw before releasing the phone. They just thought that it would not get caught by their customers, thinking that they are the smartest of the lot. I admit that they indeed are smart, but they now understand that there are smarter people outside Apple as well (AnandTech) who can dissect their product and bring out the facts.
      Second, once you realize that the flaw is known, accept it gracefully. Not by first demeaning everyone else and then saying you too have the same problem. I think that was real mean. Steve could have simply accepted the problem and given away the cover, as he did. It would have been won him more admirers.
      By the way, other mobiles do not attenuate the signal just by shorting two points outside the phone which has much larger probability than others.
      That said, I know Apple would come out with even more interesting products in future. I am betting on AppleTV. To change the way we interact with TV. But I am sure they must be working on even more interesting things.
      An advice to Om and his team, please do not get carried away with your emotions, and be impartial. We come back to your site to read your quality technical articles and analysis. Don’t make us think that you are also run-of-the-mill technical site.
      God bless.

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  5. I actually disagree with the notion that Antennagate was a well handled response to a crisis. It is first off important to note that Apple has an incredibly loyal following that is willing to tolerate the companies oversights. Over the years Apple has proven that their products are far from the highest quality but people ignore this because they love the usability and design of the products. Your business may not be in the enviable position that Apple was in when the crisis hit, and as a result, the response that Apple issued may not suffice.

    Secondly, the actual response actually made me dislike Apple more and I feel that it was poorly executed. Jobs showed little empathy, appeared robotic, and never truly apologized for the blunder. The strategy of blaming other cellular makers was a poor excuse at best and a trait more tantamount to a grade school student, not a fortune 500 CEO. Somehow no other phone has been so heavily scrutinized for reception issues. Having personally tried to reduce the signal on three of the phones that Apple has compared to (including the iPhone 3GS, I was never able to attenuate the signal to the extent or the ease that you can on the iPhone 4.

    The successful outcome following the scandal is in my opinion due primarily to the iPhone4’s remaining merits and the path dependency that Apple has developed over the last few years.

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  6. Is there really a flaw with the design or the AT&T network, the hits whores and haters trying very hard to get a piece of the action.

    Do you hear of the complain from other parts of the world?

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  7. I am surprised to see such biased article on GigaOm. I thought GigaOm is different than techchrunch and not under “aura” of google and Apple.

    Do you really think that Apple didn’t hurt itself by antenagate. I have many friends who are less vocal about how superior Apple products are after antenagate.

    Yes agree that if you are successful you have enemies but if you are successful, you also have blind followers and many of them wake up in cases like this.

    Just because you like your mac…does not mean that Apple is know all and it handled the situation in a way that startup should learn from it. If any startup had done what Apple did result could be different.

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  8. I disagree that Apple handled antennagate correctly, and it starts long before the press conference behind the points made in this article.

    Problem was reported and Apple told people they mistaken or that were holding the phone wrong – problem here is that you do not call your users wrong. Most companies put the antenna on the top where people’s hands will not cover it, so telling people that they are holding it wrong makes no sense.

    Lesson No. 1: blaming everyone else or trying to spread the blame did not work. Yes every phone has problems if you cover the antenna, but most of them presume that you are not covering the top not the bottom (or if you will thumb vs palm). So pointing fingers at others does not change the design flaw.

    Lesson No. 2: The we are trying to understand it and to find a fix did not work here as at no time did Apple say it was working to move the antenna, and as reported here in GiaOM they are not even working on fixing it for the much delayed white version. The providing the free bumper here was the saving grace, as it says there is a problem, there is a fix and we are giving it to you free because we made a mistake.

    Lesson No. 3: Likability, Apple has achieved cult status and is almost a religion so it is not surprising that 4 million people bought the iPhone 4 even with the known problem – because Apple is no longer a tech company it is a status symbol.

    Apple is a great innovator and like many has hit its pitfalls, but if you are going to use them as an example for start-ups try looking at the way they first tried to cover the problem up as a user problem. That they can not figure out how to block the light in the white version so the screen can be seen.

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  9. You all miss the point.
    The point is: Apple’s image is “they build superior like, nearly flawless and amazing products”.
    And then Steve excuses the antenna problem basically with “our products are just average”.
    Yes, thats what he said when he compared it with other products.
    The one and only response would have been to excuse for it (and it does not matter whether Apple/Steve agrees with it or not)
    and to announce that they will look into the problem and fix it possibly with a free case exchange program.
    Apples response instead, was just cheap. Not Superior at all.

    By the way. Putting the antenna on the top is no good. And I doubt any company puts the antenna there any more.
    To close to the head/brain.

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