Twelve South and the risks and rewards of relying on a bigger company

“We’re not just Mac-friendly. We’re Mac only.”

That was the slogan when Twelve South launched in 2009. More than just a slogan, though, it was also a succinct summation of a bold business philosophy: Basing an entire company on the back of a larger company. A larger company that could, in one random, capricious moment, pull the rug out from underneath you and, potentially, destroy your entire business.

Twelve South founders Andrew and Leigh Ann Green were willing to take that risk. And now, a decade later, it continues to pay off. Twelve South has become a thriving, high-profile creator of Apple accessories and one of the small handful of companies whose accessories are sold in Apple Stores and on Apple.com.

BookBook. Via: Twelve South.

You’ve almost certainly encountered some of Twelve South’s products. Whether it’s their sleek MacBook stands that helped launch the company, their BookBook iPhone and iPad cases (which made Oprah’s list of her favorite things), or their viral line of candles that somehow smell just like Macs, Twelve South’s products have become go-to accessories for millions of owners of Apple products.

Just owners of Apple products. A decade later, Twelve South still makes Apple accessories and only Apple accessories. Any thought of finally branching out?

“We’re not interested in that,” Andrew told Engadget. And, it seems, they never will be.


In the early- and mid-2000s, Andrew worked for a handful of small gadget and accessories companies. After one was acquired in 2007, he missed the startup environment. He craved the quickness, lack of bureaucracy, and willingness to take risks inherent in the startup DNA.

So in 2009, he and his wife, Leigh Ann, decided to venture out on their own. Between Andrew’s product and marketing experience and Leigh Ann’s career in wholesaling and merchandise design, the Greens had the background and the skills to stake out a spot in the lucrative, but saturated, world of electronics accessories.

They instinctively gravitated toward the Mac market, as Andrew felt Mac owners weren’t being served. There were countless accessories for iPods and iPhones, but few accessories specifically designed for the Mac. “Every time I’d walk into an Apple Store,” Andrew told Engadget, “I’d see heaps of ‘Mac-compatible’ accessories. Mac users don’t want compatible. They want exclusive.”

Plus, they really liked the idea of making the Mac accessories they desired, because it matched their passion for the platform as a whole. “If we were making refrigerators,” Andrew told us, “We wouldn’t be nearly as inspired.”

So Andrew and Leigh Ann took their shot. They set up shop out of their Charleston, South Carolina, home and worked to construct some rough prototypes. They used their industry contacts to land a meeting with Apple’s retail buyers and, in a testament to the quality of their ideas and, as they readily admit, right-place-at-the-right-time magic, Apple gave them a surprise “yes.” Apple wanted two products in their stores: the BookArc, a stand for MacBooks; and the BackPack, a shelf that attached to the back of an iMac to hold a hard drive.

The Greens cashed out their kids’ college funds and took a second mortgage to scrape together enough money to fulfill Apple’s order, then got on a plane to China to find someone to actually manufacture everything Apple was expecting.

The gamble paid off. Their products were a hit, and revenues passed $1 million after less than a year. Today, they have more than a dozen employees, several dozen products, and, crucially, a solid relationship with Apple.

Twelve South has been approached several times to make accessories for other major brands, but they haven’t changed their single-brand focus. (Although they did make the switch from Mac-exclusive to Apple-exclusive when they began creating accessories for iPhones, iPads, and now the Apple Pencil, Apple Watch, and AirPods.)

It’s a high-wire act to base your entire business off one larger company, but one that Twelve South continues to navigate.

How? In this article, we’ll explore some of the risks of relying on a larger business and some cases where it has gone very wrong—and examine what Twelve South is doing right to mitigate the risk, avoid those pitfalls, and thrive.

BookArc. Via: Twelve South.

Risk #1: The bigger company could change the rules on you

In late 2012, seemingly overnight, our Facebook feeds were overrun by a new type of content. Ultra-sharable, saccharin, feel-good blog posts boasting vague-but-tantalizing headlines that looked nothing like any other headlines in the history of journalism. You know the type: “This amazing kid got to enjoy 19 awesome years on this planet. What he left behind is wondtacular.” “21 pictures that will renew your faith in humanity. #5 had me in tears.”

The content came from Upworthy, a site that Fast Company identified as the fastest-growing media site of all time in 2013. The bulk of their growth came from Facebook, as its algorithm rewarded clickable and shareable content—which was what Upworthy was indisputably producing. Clickbait was their business strategy.

Then, in November 2013, Upworthy’s fortunes changed drastically. As endless sites began replicating Upworthy’s style and headline spam overtook Facebook, the site changed its algorithm. It began focusing on video, pictures, and “high quality content”—things that would either keep people on Facebook or make them want to come back to Facebook. As a result of that change, Upworthy and its many, many clones suffered an instant crash. Upworthy had been getting close to 90 million unique visitors to its website a month; in December 2013, that dropped to 68 million. In January 2014, it was down to 49 million. By November 2014, just 20 million people visited the site. That led to a round of layoffs in 2015, then another in 2016, one more when it was acquired in 2017, and still more in 2018.

Jen Golbeck, a computer scientist and social network expert at the University of Maryland, summed up Upworthy’s rise thanks to Facebook—and its fall thanks to Facebook as a “devil’s bargain.” Facebook helped the company grow faster than any media company before it—then suddenly pulled out the rug, not outright killing, but mortally wounding Upworthy’s entire operation.

Upworthy traffic. Via: Business Insider.

Upworthy’s story isn’t unique. There are tales of hundreds of other businesses that thrived on social media, then died after an algorithm change, from the social gaming company Zynga to all the creators who were affected by the YouTube “adpocalypse.”

These stories highlight one of the biggest dangers of building a business in the shadow of a larger company: Their sandbox, their rules.

Twelve South, while not dependent on an algorithm, is reliant on Apple. Every one of their products is specifically tailored not just to Apple’s hardware, but also to complementing Apple’s aesthetic. Apple is one of their only retail partners, and their coveted real estate in Apple Stores and on Apple.com adds not just sales, but enhanced credibility as a go-to Apple accessories brand.

To mitigate the risk of ever-evolving rules and form factor changes, Twelve South maintains a close relationship with Apple. “We enjoy a great relationship with Apple at many levels and departments,” Andrew told us, “[and] of course we are still fans, shareholders, and customers too.”

While the specifics of Twelve South’s relationship with Apple are private, the company does disclose that Apple offers advice and, of course, continues to stock and promote Twelve South’s products.

Twelve South, in turn, demonstrates a commitment to Apple by turning down offers to make accessories for other companies—a commitment that Apple certainly notices.

When you build a business that’s focused on a larger business, it’s essential to stay in good standing with the larger business. After all, your best bet on avoiding business-crushing surprises is to have a relationship with the company that wields that power.

Risk #2: The bigger company could decide to replicate your product

The talk of South by Southwest in March 2015 was an app called Meerkat. It gave everyone the ability to livestream video to their Twitter followers.

By October 2016, Meerkat was dead.

What happened? Shortly after Meerkat’s breakout at SXSW, Twitter launched its own, native livestreaming app called Periscope, after acquiring the app from its developers before launch. They promoted their own service, cut some of Meerkat’s access, and, in the process, transformed Meerkat from a buzzworthy app to a doomed one.

Meerkat isn’t alone. When Apple added its new augmented reality Measure app in iOS12, it was a significant blow to around 80 companies that had their own AR measuring apps in the App Store. TiVo essentially pioneered the concept of digital video recording—then saw its market share collapse as every cable company began pushing its own DVR. Developers integrated multiple screensharing apps to the Slack platform, then Slack bought Screenhero and launched its own native option, overshadowing all of the others in its ecosystem.

When you build something that’s entirely reliant on a larger company, there’s a perpetual risk of the larger company simply replicating what you do. After all, they have endless money, prime access to top talent, and, ultimately, control over the user base. You know if they really wanted to, they could more or less reproduce whatever you do in a weekend. How can a small business defend and compete?

Twelve South has two strategies.

The first is to use its small size as an asset, allowing them to do things larger companies simply can’t. By staying small, Twelve South can make quick decisions. They can experiment with a small run of products. Trying something new isn’t a multimillion-dollar endeavor like it would be for a larger company.

“We truly think,” Andrew told The Post and Courier, “that, given the space we operate in… being small and nimble is the best way to stay competitive and profitable.”

The other strategy: Make a product, not a feature.

The line between a product and feature can be blurry, but, by the simplest definition, a product is something that customers would buy on its own; a feature is something that customers wouldn’t. That gives a product enough power to stand on its own, to coexist with the larger company, and to add value. Twelve South’s products fit in with Apple’s aesthetic, but also add a proprietary twist. If suddenly the worst case scenario happened and Apple cut off Twelve South, they could survive by pivoting their products to work with other brands—and people would keep on buying them.

In that way, Twelve South doesn’t simply derive its value from being in Apple’s orbit; the relationship is more symbiotic than that. Twelve South needs Apple, but also adds value to Apple. Forbes once said Twelve South’s commitment to premium accessories is increasing Apple’s net worth. And Twelve South has even had customers regularly email to say Twelve South’s accessories are what drove them to buy Apple products.

PlugBug. Via: Twelve South.

Risk #3: The bigger company can cut off your access

PeopleLinx launched in 2009. It was created by two former LinkedIn employees as a social media hub for brands—one that could do everything from training and educating employees on how to use social media to managing and analyzing the company’s social engagement. It relied heavily on API access to the big social networks, primarily LinkedIn. That is, until 2014, when LinkedIn decided to block PeopleLinx’s access to that API. PeopleLinx tried to negotiate with LinkedIn, but they wouldn’t change their mind.

PeopleLinx suddenly found itself needing to make drastic changes to countless aspects of the business. The shake ups were severe. One founder wound up leaving, the other was removed as CEO, and the company changed its primary focus to “social selling.” The company survived, but it was a pyrrhic survival; when PeopleLinx was acquired in 2017, the company was down from 30 employees at its peak in 2014 to just 10.

Access is always an issue when a smaller company relies on a larger one. Twitter’s API changes over the years have claimed many victims, killing features on popular apps like Tweetbot and Twitterific, and even completely shuttering a tweet-reading hardware product called TwitterPeek. Ceton Corp. based its home entertainment center products on Windows Media Center—which Microsoft officially discontinued in 2015. Ceton now exists, seemingly, in name only; with no new product launches nor even social media posts since the day of Microsoft’s announcement four years ago.

AirFly. Via: Twelve South.

Twelve South approaches the access problem by following Apple’s rules as best they can as to not jeopardize the relationship. That means they don’t design around leaked prototypes nor do anything else that could potentially damage their well-earned relationship with Apple.

They don’t have to build around leaks in large part thanks to their commitment to their niche. They aren’t rushing to have a case available the day a new iPhone with a new form factor is announced. They take their time to develop the products their customers want — what you buy from TwelveSouth is the cool iPhone case to replace the one you bought that first day.

That commitment to innovation and to serving their customers also helps them mitigate risk. Twelve South has established its brand on its own eCommerce site. They have their own fan base, their own email marketing list, their own customers. They aren’t completely reliant on people going to Apple Stores to buy their products; their brick-and-mortar retail sales channels are certainly important, but not everything.

To Andrew, that’s the key. “Our business and partner relationships are important, of course,” he told us, “But we spend most of our time thinking about our end-user: the person taking our products out of the box, experiencing the product, and working better and more efficiently because of our products.”

So Twelve South is able to stay successful by following Apple’s rules, making high-quality products that don’t require any level of special access, and establishing their own brand’s foothold and loyal customer base.

Takeaways

Twelve South started making products for the Mac market to fill a need. They stuck with that niche, in spite of the risks of building within another company’s ecosystem, because it served the business they wanted to have and the customers they wanted to serve. By focusing just on Apple, Twelve South is able to stay small, which allows them to keep innovating, experimenting, and creating the high-end, exclusive accessories that their fans have come to expect from them.

The lessons from their approach apply to any company building add-ons or accessories for another company’s products, even if that’s not your whole business.

► Stay small, nimble, and focused

By staying small, you can experiment and take risks larger companies can’t. And by focusing on just one niche (in Twelve South’s case, Apple) you’ll spend less time worrying about managing a ton of SKUs, shipping, and logistics, and have more time to focus on making the best possible products.

► Build a strong relationship with the bigger company

It stands to reason that the better your position with the larger company, the less likely they are to suddenly pull the rug out from under you. Cultivate relationships at the company, follow their rules, and aim to work with them as much as possible.

► Add value to the bigger company

Big companies benefit from cultivating an ecosystem of smaller companies working to add value. But doing so isn’t easy; your products have to match or exceed the quality of the larger company’s products to attract their users.

► Make a product, not a feature

Selling a product and not a feature helps insure your future. If the worst case scenario comes and the big company cuts off your access, you’ll be in a better position to pivot and survive.

► Build your own brand and independent fan base

Develop your own relationship with your customers and make sure you always serve their needs. That helps you establish your own identity to grow as an independent business.

Sam Greenspan
Sam Greenspan is a Content Creator at Jilt. He is based out of El Segundo, California, where he has great views of both the Pacific Ocean and Chevron refinery. He's a veteran blogger as well as a board game inventor, t-shirt collector, and guy that random people instinctively stop on the street for help fixing their phones and computers.

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