What Startups Can Learn from Apple’s Antennagate

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


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