A very cool, innovative recruiting effort with a personal touch by Red 5.
A very cool, innovative recruiting effort with a personal touch by Red 5.
Our last class in Entrepreneurship & VC featured all three of the instructors - Andy Rachleff (co-founder of Benchmark Capital), Peter Wendell (founder of Sierra Ventures), and Eric Schmidt (CEO of Google) - individually talking for 45 minutes, giving us parting advice. It was one of the best single classes I've ever had. I thought I would share here some of my key take-aways.
- Successful people listen. You have two ears and one mouth. Use them in that ratio. You learn more when you listen than when you talk.
- Putting on "the cloak" of leadership. A large part of your role is to inspire and motivate your employees, and people will look to you for confidence. If you were on a plane with engine problems, you don't want the pilot to say "I am exploring a number of options and hope that...", you want him to say, "I will do whatever it takes to land this plane."
- The importance of passion. When Warren Buffet finds people to run his business, his key criteria is to find somebody who would do the job whether they would get paid or not.
- Just when you think you've got it 100% right, you can be taken down. Look no further than what happened to JetBlue in February. In January, a mistake like this by JetBlue was almost unthinkable.
- People who are lucky make their own luck. And you only make your own luck by staying in the game.
- You will only be as good as the people you will recruit. Media & culture celebrate individuals, but teams succeed.
- The best scientists can explain complex issues in simple terms. Pretty good scientists can explain complex issues in complex terms.
- A's hire A's. B's hire C's. Always strive to hire people better than you are.
- Be a clear, fair manager. For example, when speaking to a business unit leader that isn't succeeding, say: "I want a strategy to win in 1-page and the objectives we need to hit each quarter to reach them."
- When considering a business:
- Look for change. What inflection point are you taking advantage of? Without change, there is rarely opportunity.
- Always look for the 80/20. 80 percent of the value is delivered by 20 percent of the product/service. Focus on that 20 percent.
- Does is answer a real pain? Who is the user and what is their pain point?
- Just keep selling. Not a bad default strategy to communicate to your team.
- Be humble. The markets are brutal to those who are arrogant.
- Understand what you don't do well. Surround yourself with people and resources that can do these things well.
- Practice self-discipline. Set targets, have timetables, have clear unambiguous goals. Life passes quickly - days, weeks, months, years, a lifetime.
- Be yourself. In group settings, you usually serve the group best by thoughtfully expressing exactly what you are thinking. Not necessarily what the group wants to hear.
- You've got to give trust to get trust. Treat people as you would want to be treated. Sometimes people take advantage of you. That's fine, don't do business with them again.
- Shoot for the moon.To be successful, don't follow the pack. If you want to win, don't hedge.
Today's guest in our Entrepreneurship and VC class was eBay CEO, Meg Whitman. We get a fair share of CEOs visit us at Stanford, but I found Meg to be especially sharp and eloquent.
In class, I asked Meg the following question: "In strategy class we learn that companies are typically either great at executing or great at innovating. When I compare what the eBay's site does now to what it did five years ago, it's not much different. How do you think about innovation at eBay and, indeed, is eBay an innovative company?"
Essentially, she said sort of. In her mind there are three types of innovation: evolutionary, synergistic, and revolutionary.
Evolutionary innovation: These are incremental changes a company makes to its core business. eBay is constantly doing stuff like this, often behind the scenes, which is why the general experience is much different now than in 2002. eBay, like many big, well managed companies, does this well.
Synergistic innovation: These are innovations formed by bringing different companies and services together. How eBay has done this is by letting sites speak with eBay, Skype and Paypal. So eBay has allowed other sites to access its product listings, Skype may be integrating with other services such as Yahoo IM, and Paypal can be used by smaller commerce sites. Meg feels that eBay has been a leader in enabling others to leverage its services.
Revolutionary innovation: These are major disruptive companies which change markets, like Skype, YouTube, Paypal, and, indeed, eBay. Meg's belief is that these types of companies do not emerge from within larger companies like eBay and should therefore be acquired.
Sorry for the long post, but I don't have time to write a shorter one.
In my Infotech Industry Seminar today, intel co-founder Andy Grove introduced a new concept that he has coined "the Creosote Conundrum."
The creosote bush is a bush which dominates the landscape of North America's hot deserts. It is one of the best examples of a plant that tolerates dry conditions simply by its toughness. It is typically the largest plant in its environment as it competes aggressively with other plants for water.
The Creosote Conundrum says that a company's major successful product line will compete aggressively for resources with any other product lines which emerge. Therefore, the when there is a "creosote"-type product line in your organization, it will kill out any products that try to grow near it. The generalized message is that:
"The more successful you are, the more difficult it is to generate an alternate strategy."
We have seen this with companies such as Western Union, Xerox , AT&T and Microsoft.
There are many causes that lead to Creosote Conundrum. Notably there are limits to management attention. The opportunity cost of new research is, at the margin, very high, as successful companies typically have better opportunities within existing product lines and industries.
Recently we saw that at Microsoft, a singular focus on existing technologies caused it to initially "miss" the browser and then search opportunities. It is interesting to think whether Google's Adword will be their eventual creosote.
We get some great speakers at Stanford, but this event line-up I'm currently at is ridiculous! Check out the list of speakers below. Man, sometimes I really love this school... Starts in 30 minutes.
2006 TechNet Innovation Summit at Stanford University
America's top leaders in technology will discuss emerging industry trends as well as the public policies that will shape the future of our nation. Moderated by award-winning journalist Charlie Rose, this event will be taped for broadcast and will feature:
* Brian Halla, CEO, National Semiconductor
* Reed Hastings, Founder and CEO, Netflix
* Jerry Yang, Founder, Yahoo!
* John Doerr, Partner, Kleiner Perkins Caufield & Byers
* Scott McNealy, Chairman, Sun Microsystems
* Bill Gates, Chairman, Microsoft
Winston Churchill's definition of success:
"The ability to move from one failure to another, without losing enthusiasm."
It certainly resonates with the lives of many of the leaders whom I've studied this year.
[Via my Dad]
Last week Diego Rodriguez of Metacool/IDEO dropped by the d.school to give a presentation. It was typically engrossing and the discussion focused on whether companies are designed around innovation (Business by Design) or optimization (Business as Usual).
We all love innovative firms, but some businesses function much better in the "Business as Usual" mode. Diego pointed out that he would prefer that his pilot not get overly creative about his approach to JFK. Heart Surgeons and Firemen face similar constraints. Alternatively, some firms live or die based on their ability to continually innovate. Many car and electronics makers would fit in this category. A firm that has been able to do both? Apple is a rare example.