It’s a famous story for Silicon Valley and Steve Jobs fans. But I had never seen it told by the founder of Apple himself. It shows not only what an entrepreneur is but also the openness of the region at the time and probably still today… It’s nice and short… Watch it.
“I never found anybody that did not want to help me if I asked them for help”
How is possible I never used this great quote when I talk about what is needed in innovation and entrepreneurship. What a moron, I am (sometimes…)
Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
Of course it’s very likely that you know what this is. And if not, no worry either. Here is the video:
And if you want to know more, check Think_different on Wikipedia.
The reason why this is interesting is that it reminds me an old book I read in my Index years. The Gorilla Game by the famous Geoffrey Moore. Moore explains why in high-tech high-growth markets, there is usually space for only one major player. Apple and Google in the mobile world might be a historical aberration. Read why below…
“Jobs said he never saw the similarity between his fight with Android and his fight with Bill Gates and Microsoft in the 1980s. But just about everyone else inside and out of Apple did. Android and iPhone were in a platform war, and platform wars tend to be winner-take-all contests. The winner ends up with more than 75 percent of the market share and profits — and the loser ends up scrambling to stay in business.
In the Microsoft/Apple fight, Microsoft won by more widely distributing its software, which created a bigger selection of applications to buy, which attracted more customers. Once customers had spent hundreds of dollars on applications that ran on only one platform, it was much harder to get them to switch. Ultimately, everyone started using computers running Microsoft DOS and then Windows because everyone else was doing it. This wasn’t lemming-like behavior, but completely rational. Computers were only useful if work performed on one machine could be used on another machine.
This was almost precisely the Android strategy. In 2010, the Android ecosystem was still far from robust. The Android app store was badly organized, and developers had a tough time making money there. Apple’s three-year head start had allowed it to sell nearly 60 million iPhones, create a store with more than 200,000 applications, and establish a developer ecosystem that had been paid more than $1 billion over two years. But because any phone manufacturer could make an Android phone, the size of the Android platform was exploding. By the end of 2010, it was as big as the iPhone’s. And it seemed like only a matter of time before Google fixed the problems with its app store.
More worrisome to Apple was that Rubin could succeed without having to convince many iPhone customers to switch. The number of people worldwide switching from cell phones to smartphones in the coming years was going to be so enormous that he just needed to focus on that group — not necessarily on iPhone customers — to get a dominant smartphone market share. It seemed unfathomable that Jobs would lose two battles the same way a generation apart. But with so many similarities between the two dogfights, it was hard not to think about it.
There have always been good reasons to believe that the Apple/Google fight might not play out like Apple versus Microsoft: Developers seem more capable of writing software for two platforms than they were in the 1980s. The platform-switching costs are much smaller, too. Back then, PCs cost more than $3,000 and each software title cost more than $50. Now the costs are less than a tenth of those. A new phone with a carrier subsidy costs $200, and each app costs less than $3 and is often free. Also, third parties — the carriers — continue to have a vested interest in making sure consumers have as many ways to connect to their network, and pay them money, as possible.
But what Google and Apple executives have always understood is that if the battle turns out that way — if somehow their mobile platforms can harmoniously coexist — it will be a historical aberration. Because of the press coverage surrounding the Microsoft antitrust trial 14 years ago, a huge amount of analysis has been devoted to how Microsoft built its Windows monopoly in the PC business: If you get enough people using your technology platform, eventually it creates a vortex that forces almost everyone to use it. But these economic forces have not been unique to Microsoft. Every major technology company since then has tried to create the same kind of vortex for its business.
It was how Jobs had dominated the music-player business with the iPod. It was also how Google in 2004 started to embarrass and challenge Microsoft for dominance in high tech and pushed Yahoo! to the brink of implosion. Google’s top-quality search secured the most search traffic. That gave it the best data about user interests. That data made its search advertisements appearing alongside the search results the most effective. That virtuous circle encouraged more search traffic, more data, and even better search ads. No matter how much Microsoft and Yahoo! tried to attract traffic with lower ad rates and improved search results, Google was always able to offer a better deal.
eBay did the same thing to the roughly two dozen other online auction companies, such as OnSale and uBid. By allowing buyers and sellers to easily communicate and rate one another, it built a self-policing community. That fueled a rapid growth in bidders. The more bidders eBay acquired, the more reliable its prices became. The more reliable eBay’s prices became, the more new bidders wanted to use it. The more bidders wanted to use eBay, the less they wanted to use competitors’ sites. Facebook’s social media platform is the most recent example of the power of platform economics. Its superior technology allowed it to offer users better features than competitor MySpace. Better features made Facebook more useful. The more useful it was, the more data users shared. The more data users shared, the more features Facebook could offer. Soon people were joining Facebook just because everyone else was joining Facebook.
As the mobile platform wars go forward, Google’s and Apple’s ecosystems might be able to coexist long term and generate big profits and innovation for both companies. But given recent history, they will have to fight it out as if it won’t happen that way. “It’s like the battle for the monopolies that the cable guys and the phone guys got 30 to 40 years ago,” said Jon Rubinstein, the longtime top Apple executive and former CEO of Palm. “This is the next generation of it all. Everyone — Apple, Google, Amazon, and Microsoft — is trying to build their walled garden and control access to content and all that. It’s a really big deal.” And it’s not the kind of thing Apple or Google can afford to be wrong about.” [Pages 142-145]
While reading Dogfight: How Apple and Google Went to War and Started a Revolution in the public transportation, this morning, I just took a short pause and looked at the two young people in front of me. They were both using their iPhone and I thought about the revolution which occurred in less than 10 years. Not many ebooks yet, no more newspapers and a few older guys like me still reading books. But most were using their smart phone…
Dogfight describes the behind-the-scene history of a giant battle (I am not sure it is a war) between Google’s Android and Apple’s iPhone. No need to give a complete a account, but just a few points. For example Fred Vogelstein writes (page 13): “One of the things that I didn’t expect when I took on this project was how hard it is to conceive and build the products that Steve Jobs liked to casually pull out of his pocket onstage. Whether you are an Apple engineer, a Google engineer, or any engineer, building products that change the world isn’t just work. It’s a quest. It leaves its participants not only tired the way all jobs sometimes do but mentally and physically exhausted – even traumatized – at the end. Part of Jobs appeal as a leader and a celebrity was that he successfully hid all this from public view. He made innovation look easy. […] Before there could be smartphones and tablets we all now buy and take for granted, there was yelling, screaming, backstabbing, dejection, panic, and fear over what it would take to get these projects off the ground.”
And Vogelstein shows also the dirty politics and huge internal fights such as the one between Tony Fadell and Scott Forstall.
On the shoulders of giants…
The politics also exist at Google and there was similar tension between the iPhone team led by Vic Gundotra and the Android team led by Andy Rubin. The fight was really at its highest between Apple and Google, between Jobs and the triumvirat Schmidt, Page & Brin.
Andy Rubin, head of Android, Vic Gundotra, head of social, Sundar Pichai, head of Chrome in 2011.
It seems Google was embarrased by Jobs’ attitude (page 102): “They believe that there are very few firsts in Silicon Valley – that all innovation are built on the shoulders of others […] One piece of evidence the Googlers used to make their point in their negotiations with Jobs was a 1992 video of James Gosling, a famous Sun Microsystems engineer and inventor of the Java programming language, showing off the Star7. This crude-looking handheld device had a 200KB radio; a four-inch, LCD, color TV screen; and speakers from a Nintendo Game Boy. Even then, before anyone but the richest executives had a mobile phone or had seen a Newton handheld, Gosling was showing off a machine not only with a touchscreen but with inertial scrolling. The harder you flicked the screen, the faster it scrolled through items.”
… Jobs and God
Most Silicon Valley people were (and still are) fascinated by Jobs. Vic Gundotra belongs to that group (page 98): “One Sunday morning, January 6th, 2008 I was attending religious services when my cell phone vibrated. As discreetly as possible, I checked the phone and noticed that my phone said “Caller ID unknown”. I choose to ignore. After services, as I was walking to my car with my family, I checked my cell phone messages. The message left was from Steve Jobs. “Vic, can you call me at home? I have something urgent to discuss” it said. Before I even reached my car, I called Steve Jobs back. I was responsible for all mobile applications at Google, and in that role, had regular dealings with Steve. It was one of the perks of the job. “Hey Steve – this is Vic”, I said. “I’m sorry I didn’t answer your call earlier. I was in religious services, and the caller ID said unknown, so I didn’t pick up”. Steve laughed. He said, “Vic, unless the Caller ID said ‘GOD’, you should never pick up during services”. I laughed nervously. After all, while it was customary for Steve to call during the week upset about something, it was unusual for him to call me on Sunday and ask me to call his home. I wondered what was so important? “So Vic, we have an urgent issue, one that I need addressed right away. I’ve already assigned someone from my team to help you, and I hope you can fix this tomorrow” said Steve. “I’ve been looking at the Google logo on the iPhone and I’m not happy with the icon. The second O in Google doesn’t have the right yellow gradient. It’s just wrong and I’m going to have Greg fix it tomorrow. Is that okay with you?” Of course this was okay with me. A few minutes later on that Sunday I received an email from Steve with the subject “Icon Ambulance”. The email directed me to work with Greg Christie to fix the icon. Since I was 11 years old and fell in love with an Apple II, I have dozens of stories to tell about Apple products. They have been a part of my life for decades. Even when I worked for 15 years for Bill Gates at Microsoft, I had a huge admiration for Steve and what Apple had produced. But in the end, when I think about leadership, passion and attention to detail, I think back to the call I received from Steve Jobs on a Sunday morning in January. It was a lesson I’ll never forget. CEOs should care about details. Even shades of yellow. On a Sunday. To one of the greatest leaders I’ve ever met, my prayers and hopes are with you Steve.”
More to come maybe when I am finished with Dogfight…
No, it’s not another number trick after my 7 x 7 = (7-1) x (7+1) + 1, it’s just noticing today’s special date. I quickly did some search and found an interesting coincidence (just to show you there is no magic, just facts!)
This kind (on the right), then 12-year old, was born on December 12, 1927
It might be that Apple went public on December 12, 1980 to celebrate his birthday. But who would know?
Why on earth do I make the link? Well, because as the next picture shows, Robert Noyce, the kid, better known as a co-founder of Intel and Fairchild, was a mentor for Steve Jobs…
After reading The Apple Revolution, I discovered Return to the Little Kingdom, subtitled How Apple and Steve Jobs Changed the World. It’s not just another book about Apple for 2 reasons: it was written in 1984 so when Apple, Inc was still Apple Computer, Inc and it was written by Michael Moritz, then a journalist at Time Magazine, but today one of the most famous venture capitalists, with investments in Yahoo and Google, just to mention two, although I must add that he has “a rare medical condition which can be managed but is incurable” and a result, he stepped back as managing director of Sequoia Capital.
It’s not that it adds a lot to the Apple Revolution, so no need to read both. Now, there are (very) interesting lessons, the best for me was probably in the Epilogue: “In 1984, faced with the challenge of managing a fast growing company in an increasingly competitive business, the board of directors were faced with the most important task that confronts any board: selecting a person to run the company. […] Only in retrospect have I come to understand the immense risk associated with hiring an outsider. […] It is not an accident that most of the great companies of yesterday and today have, during their heydays, been run or controlled by the people who gave them life. […] The founder, acting with an owner’s instincts, will have the confidence, authority and skills to lead. […] Experience is of little use in a young, fast-growing company in a new business that has a different pulse and unfamiliar rhythm. Experience is the safe choice, but often the wrong one.”
Now I could also refine my Apple cap. table as Moritz gave some nice details about employee shares. I also went back to the Apple S-1 document and slightly changed the content.
Here are the things I learnt: Both Jobs and Wozniak initally had 8’320’000 shares which they paid $2’654.48 so a price per share of $0.00032 in March 1977. Then Markkula bought the same 8’320’000 shares but for an amount of $91’000 so a price per share of $0.01094 in November 1977. The three of them were called the Promoters of the company. Then shares were sold to employees 1’280’000 to Michael Scott at a price per share of $0.01 in November 1977 and again 1’920’000 at $0.09 in August 1978. 800’000 to Frederick Holt at $0.01 in November 1977 and again 960’000 at $0.09 in August 1978. Same with Gene Carter, 160’000 to Gene Carter at $0.09 in June 1978 and 160’000 to at $0.09 in January 1979.
It should be noticed that employees were ranked as
#1 Stephen Wozniak
#2 Steven Jobs
#3 Mike Markkula
#4 Bill Fernandez had no share
#5 Frederick Holt
#6 Randy Wiggington (no info on his shares)
#7 Mike Scott – CEO
#8 Chris Espinosa had no share
#9 Sherry Livingston, first assistant, had shares
#10 Gary Martin – Accounting
#11 Don Bruener had no share
#12 Dan Kottke had no share
#13 John Draper
#14 Mike Wagner
#15 Donna Whitner
#16 Wendell Sander
Unknown Gene Carter had 320’000 shares
Unknown Jim Martindale
#34 Elmer Baum had no share
Jobs was so competitive, he did not like to be #2, so he asked to be #0! Buit Scott refused. Scott gave himself his number as a reference to 007!
Wozniak sold some stock to Fayez Sorfim, Richard Kramlich and Ann Bowers (Noyce’s wife). In the summer of 1979, Apple sold a total of $7M if existing shares are counted. Markkula and Jobs sold about $1M each. The “Wozplan” enabled some people including employees who had no shares so buy some of his.
Dormehl, the author, is convincing when he explains that Silicon Valley is the result of the counter-culture as much as the Midwest engineers coming to SV. Noyce might have agreed! “This ideological divide is not uncommon. Silicon Valley has long been defined by the innate tension between the technologist’s urge to share information and the industrialist’s incentive to profit. […] There were aspects of the counterculture that were staunchly anti-capitalists in their views. […] One of them was definitely Marxist and the other was largely apolitical.[..] “Do you own thing” easily translated into “Start your own business”. [Pages 61-63] “Only in Silicon Valley could starting a business be read as an act of rebellion.” [Page 169]
There are so many (unknown-to-me) anecdotes that I will only mention a few. For example, I did not know about Ron English, the guerrilla street artist who circumvented Apple’s billboards using murderer Charles Manson.
“The people who built Silicon Valley were engineers.” Jobs told wired in 1996. “They learned business, they learned a lot of different things, but they had a real belief that humans – if they worked hard with other creative, smart people,- could solve most of the humankind’s problems. I believe that very much.” [Pages 7-8]
At the same time, the counter-culture, the hacker culture has been critical [page 17]: – Access to computers – and anything which might teach you something about the way the world works – should be unlimited and total;
– All information should be free;
– Mistrust authority – promote decentralization;
– Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race, or position;
– You can create art and beauty on a computer;
– Computers can change your life for the better.
A funny anecdote is a woman going to the Homebrew Computer Club because nearly all the attendees were male. Her verdict: “the odds were good, but the goods were odd”. (Page 25)
You will learn about the history of the Apple logo [pages 85-90] and the first killer apps (word processing and spreadsheets). I did not know Paul Lutus and John Draper. And what about Apple first ad campaigns!
You will obviously read about the mouse, about interactions with Xeroc PARC and also learn about the early days of the MacIntosh concept and its father, Jef Raskin who yanked sharply in the arm of a young developer when he saw his face and guessed his thinking, labeling as “wet-behind-the-ears marketing puke, dressed in a ridiculous chalk-pinstripe, complete with banker’s vest, shoes off, stinky feet up […] an abrasive punk in need of a slap” a Steve Jobs he had not recognized! [Page 189]
“The Macintosh project represented the first time – outside the Garage in which the Apple II had been built – that Apple would put together the kind of small, dedicated team that would produce some of the company’s greatest products in later years. Jobs referred to this company-within-a-company approach as returning to the “metaphorical garage”. The Macintosh team still had all the piss and vinegar of a start-up. “Innovation has nothing to do with how many R&D dollars you have” Jobs said. “When Apple came up with the Mac, IBM was spending at least one hundred times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” [Page 202]
You will also read about the legal issued Apple faced in the music field and the funny origin of the Sosumi. It’s not only about Apple, you will read about Next early team, Dan’l Lewin, Rich Page, George Crow, Bud Tribble Susan Barnes an Susan Care as well as Pixar’s founding team, Alvy Ray Smith, Edwin Earl Catmull and John Lasseter ; “Pundits even came up with a tongue-in-cheek name for the unlikely convergence of Silicon Valley technology and Hollywood moviemaking. They called it Sillywood.“ [Page 303] So you can comment my tentative cap. table of NeXT (see below) when acquired by Apple.
Another piece of video is Pixar first work, The adventures of Andre and Wally B. If Jobs did OK with Next, what about with Pixar. He got 70% for $10M then Smith and Catmull each had 4%. But jobs got 100% after putting $50M. [Pages 335-336] There is also the funny anecdote that the iMac could have been called the MacMan, sounding “like a cross between the video game Pac-Man and Sony’s handheld music player, the Walkman.” [Page 413]. There is also an analysis of intellectual property [Pages 430-431] “Whether or not a breakdown i traditional copyright laws odes, in fact, lead to a similar decline in creativity and innovation remains a hotly contested debate” adding that “Gates, typically referred as imaginative”, and having “never invented anything” is wrong. “Gates had invented the notion that Software (be it entire operating systems or simple files) could be sold. Jobs merely reframed the idea as a necessary protective measure for creativity.” Apparently Dormehl advises to read Lawrence Lessig’s The Future of Ideas.
In the final chapters, Dormehl addresses the Apple paradox of the counterculture becoming mainstream. He quotes Norman Mailer [Page 384] “One is Hip or one is Square” and he adds [Page 408] that “no one better summarized the new ruling creative class of boomer bobos (that’s bourgeois bohemians) than Steve Jobs. […] They are prosperous without seeming greedy; they pleased their elders without seeming conformist; they have risen towards the top without too obviously looking down on those below; thy have achieved success without committing certain socially sanctioned affronts to the ideal of social equality; they have constructed a prosperous lifestyle while avoiding the old clichés of conspicuous consumption.” Then [Page 456] Paul Lutus describes the App Store as a “classic marketer’s dream, with too many programmers with too many programs chasing too few buyer dollars, and the marketer in the middle the only really cashing in.” (Perfect capitalism, long if ever lost counterculture…) “Apple turning its back on its founding libertarian ideals.” […] “With the suggestion made that high-tech libertarianism apparently leans heavily towards the puritanical.” Still Jobs did not forget some elements of the start-up culture. “Jobs wanted the department to have only one hundred people, since that was the number of names he could remember.” “Apple was able to avoid unnecessary levels of bureaucracy. We’re the biggest start-up ion the planet Jobs proudly noted in 2010.” [Pages 462-463.] About innovation, “Gladwell’s suggestion (via economists Ralf Meisenzahl and Joel Mokyr) is that it is history’s tweakers – more so even than its inventors – who truly define the age: The visionary starts with a clean sheet of paper, and re-imagines the world. The tweaker inherits things as they are, and has to push and pull them toward some more nearly perfect solution. that is not a lesser task. [Page 474] And as a near final quote from Norman Mailer again “One is a rebel or one conforms, one is a frontiersman in the Wild West of American night life, or else a Square cell, trapped in the totalitarian tissues of American society, doomed willy-nilly to conform if one is to succeed.” “It is for this reason that musicians like Jim Morrison and Jimi Hendrix who passed away at the age of twenty-seven, will forever be seen as young, idealistic rebels.” “The sheer scale of the current Apple makes it difficult to consider it any kind of rebel.” [Page 502] “Despite being declared moribund 59 times since 1995” [Page 495] , Apple is a formidable capitalist story as the next graph shows.
As a conclusion, let me quote Jobs again, and I discovered this on the Wikipedia page for Think Different: “When you grow up you tend to get told the world is the way it is and your life is just to live your life inside the world. Try not to bash into the walls too much. Try to have a nice family life, have fun, save a little money.
That’s a very limited life. Life can be much broader once you discover one simple fact, and that is – everything around you that you call life, was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use.
The minute that you understand that you can poke life and actually something will, you know if you push in, something will pop out the other side, that you can change it, you can mold it. That’s maybe the most important thing. It’s to shake off this erroneous notion that life is there and you’re just gonna live in it, versus embrace it, change it, improve it, make your mark upon it.
I think that’s very important and however you learn that, once you learn it, you’ll want to change life and make it better, cause it’s kind of messed up, in a lot of ways. Once you learn that, you’ll never be the same again.”
This morning, I got up at 4am for an unusual event, a talk by Andy Bechtolsheim back at Stanford University. And it was great! I took a couple of screenshots and notes. For those who would not know Andy, here is more below. And I should also add that Bechtoslheim is from Germany, I had mentioned him in a past article: Europeans and Silicon Valley. There should be the full video on Stanford Youtube in a few days…
More than 30 years ago as a Stanford graduate student, Andreas “Andy” Bechtolsheim designed a simple but powerful computer workstation that would help define the modern technology era and launch Sun Microsystems. He’s since founded three more startups, including cloud-networking company Arista Networks, where he is now chairman. His investing foresight is legendary. Not only was he the first major backer for Google, but he’s also been an early-stage investor in VMware, Brocade and others. Bechtolsheim will discuss the process of innovation and describe its importance to Silicon Valley.
Bechtolsheim began his talk with some historical background on innovation. If you want to only read about the lessons, jump to the end! (I am aware some of the screenshots are low-res…). Recent (I mean in the last 50 years) innovations have their roots in semiconductors, networking and the Internet and (Open-source) software as well as in an acceleration in technology development (including Moore’s law and a faster adoption cycle of products.) These are two slides about the semiconductor roadmap:
Then he showed how the Internet from Arpanet, to the browser and finally to social networking has accelerated the innovation cycle.
More importantly, he gave some clues about what innovation is about, and why start-ups have an advantage here. Innovation is not about R&D not even about marketing. It is about bringing a needed product to customers:
And he illustrated his arguments with the Apple case:
– Apple does not make a lot of R&D
– Apple does not really study customers
So how does innovation work. Here are some clues:
And very importantly, he finishes with the innovation culture at Apple, Google, Amazon and the lessons learnt:
In conclusion, Andy had great lessons:
– Innovation is not about R&D or customers, it is about products.
– Timing is critical, so focus.
– Big companies are about evolution not revolution.
– Be the expert in your field and understand the market, both gives you (self-)confidence (to attract people.)
– Failure is not an issue in SV but fail fast. However outside of SV, you may have to hide for 30 years when you fail. In SV, not trying is the risk, not failing.
– He also discussed patenting, “a sore topic”.
– Following another question, he considered a major threat to innovation is the current weakness of venture capital (there is money, but the returns are not good and a lot of money goes in narrow fields – cleantech a few years ago, web2.0, etc)
Well the title was misleading. Innovation is not a process, it is a culture! If you like this, you have to watch the video…
If you read the Englsih version of my blog, you probably do not know the excellent, brilliant Philippe Meyer and his Chronicles on France Culture. He is usually funny, but when he talked last Friday about innovation (which does not happen often), it was tough to smile. You can listen to his mp3 file here.
Philippe Meyer is in fact refering to an article from the New York Times: How the U.S. Lost Out on iPhone Work. Meyer mentions the famous Titan Diner, where President Obama invited some of the Silicon Valley personalities. He talks about the price we pay to have our electronic gadgets, the price paid by the Chinese workers at Foxconn or by the American middle-class and its high level of unemployment.
I do not have any (good) answer to the question. But it is sometimes good to think about the dark side of innovation and economy in general. I am currently reading a biography of Schumpeter. Already, more than a hundred years ago, the problem was addressed by Keynes, Marx and the free-market economists. Have we make any progress? Is the situation worse?
Andy Grove had the same concern in 2010 when he wrote How America Can Create Jobs for Business Week. The Americans are nationalistic, Intel was known to produce almost exclusively in the USA and now Grove is worried. Again I do not have an answer.