Category Archives: Must watch or read

Guy Kawasaki – Make Meaning in Your Company

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This morning I was participating to a workshop when a debate started about why making a startup. The best answer I know is from Guy kawasaki:


A presentation by Guy Kawasaki for the Stanford Technology Ventures Program Educators Corner in the School of Engineering at Stanford University. October 20, 2004.

Guy Kawasaki is among other things the author of a great book, the Art of Start

An example of his greate advice below is how to make a 10-slide great presentation of a company pitch:
Art of Start – Kawasaki

The Microchip Revolution by Bauer and Wilder (part I)

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I felt a but of nostalgia when I received the following email : “The idea of doing a book on semiconductor startup had been teasing me for a while, I finally found a longtime buddy who has been okay with doing this book over the past 2 years. We were greatly assisted in this mission by the Computer History Museum (CHM) in Mountain View, CA. The book focuses on the period from the late 1950s to the late 1990s, about the development history of MOS and CMOS industrial processes mainly but not only from the point of view of managers, but also workers in fab and fab managers that we were at the time. We describe the development of 9 companies that we knew well and that had developed original technologies: Fairchild, Hughes, Intersil, Eurosil, Intel, AMD, IDT, Cypress, and Micron. The title is The Microchip Revolution – A Brief History.” [1]

I met Luc Bauer in the early 2000s when investing in a startup he was a business angel in and a mentor. I remember how he lectured me saying that Kleiner Perkins was much more professional than we were! Luc is a gentleman which does not mean he cannot be tough when he is frustrated; when people have been working hard in Silicon valley like he did, they can be really tough! But we stayed in touch and I was so happy to begin reading his book a few days ago.

SiliconValleyGenealogy-All

This is a poster about the Silicon Valley Genealogy of semiconductor startups from the mid 50s to the mid 80s. This is what Luc is writing about through 9 companies which I am pretty sure are on this poster. By the way, Luc is there too.

His book begins with Fairchild and the Traitorous Eight and it makes sense as it is at the beginning of the genealogy. By the way the book is dedicated to one of the eight traitors, Jean Hoerni, A Swiss national and one of the rare people I have heard about with 2 PhDs. Luc has the same double culture and double education (BS, EPFL Lausanne and MS, PhD Caltech)

So here are a few excerpts: “A good part of our motivation [for writing the book] was to relive the intensity in our lives when we started in this industry: the endless and stressful hours of looking for yield crash factors, the great excitement and shouts of joy when you see a brand new integrated circuit product coming alive and functioning perfectly when the “hot out of the furnace” processed wafer is put for the first time on the electrical test prober. Another great motivator for us was to propagate an important story to younger generations, that working in high technology fields is hard and exhausting, but also a source of joy and pride as it is easy to see the impact of your hard work on the company you work for and possibly on the workd you live in.”

Let me put this again below, in bold this time:

Another great motivator for us was to propagate an important story to younger generations, that working in high technology fields is hard and exhausting, but also a source of joy and pride as it is easy to see the impact of your hard work on the company you work for and possibly on the workd you live in.

More to come I am sure!

[1] The real email was in French: “L’idée de faire un livre sur le démarrage des semi-conducteurs me taquinait depuis un moment, j’ai finalement trouvé un copain de longue date qui a été d’accord de faire ce livre avec mois ces 2 dernières années. On été beaucoup aidé dans cette mission par le Computer History Museum (CHM) de Mountain View, CA. Le livre se concentre sur la période entre la fin des années 50 jusqu’à la fin des années 90, sur l’histoire de développement des processus industriels MOS et CMOS principalement mais pas seulement du point de vue des chefs, mais aussi des travailleurs de fab et managers de fab que nous étions à ce moment. On décrit le développement de 9 compagnies que nous connaissions bien et qui avaient développé des technologies originales: Fairchild, Hughes, Intersil, Eurosil, Intel, AMD, IDT, Cypress, et Micron. Le titre est The Microchip Revolution – A Brief History.”

Grothendieck, a genius

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I’ve written about Grothendieck here before, through two books about this mathematical genius published shortly after his death: Alexandre Grothendieck, 1928 – 2014. Summer is an opportunity for listening to radio broadcasts and I had the pleasure to rediscover this extraordinary character, first of all through Alexandre Grothendieck : un mathématicien qui prit la tangente initially broadcasted in La conversation scientifique in 2016 on French radio, France Culture,

and then by listening (while writing this post) to Alexandre Grothendieck ou le silence du génie first broadcasted in 2015 in Une vie, une œuvre, on the same radio.

From one thing to another, I downloaded Récoltes et semailles, a 929-page document written between 1983 and 1986 by the mathematician. You can download the pdf in French. Just as Perelman, Gödel or Erdős, for us, simple mortals, we can believe that genius rubs shoulders with madness and the journey, the life of these creators will undoubtedly remain mysteries forever.

I read a few dozen pages of this book and Chapter 2.20 fascinated me. I suggest you read it. I find this extract quite admirable and translated it with my limited means…

2.20 A shot look at the neighbors across the street

The situation seems to me very close to the one which arose at the beginning of this century, with the emergence of Einstein’s theory of relativity. There was a conceptual dead end, even more blatant, materializing in a sudden contradiction, which seemed irresolvable. Of course, the new idea that would bring order to the chaos was one of childish simplicity. The remarkable thing (and conforms to a most repetitive scenario…) is that among all these brilliant, eminent, prestigious people who were suddenly on their teeth, trying to “save what there was to be saved”, no one thought about this idea. It had to be an unknown young man, fresh from the benches of student lecture halls (maybe), who came (a little embarrassed perhaps at his own audacity…) to explain to his illustrious elders what had to be done to “save the phenomena”: one just had to separate space from time [68]! Technically, everything was gathered then for this idea to hatch and be welcomed. And it is to the honor of Einstein’s elders that they were indeed able to welcome the new idea, without resisting too much. This is a sign that these were still a great time…
From a mathematical point of view, Einstein’s new idea was trivial. From the point of view of our conception of physical space, however, it was a profound change, and a sudden “change of scenery”. The first mutation of its kind, since the mathematical model of physical space released by Euclid 2400 years ago, and taken up as is for the needs of mechanics by all physicists and astronomers since antiquity (including Newton), to describe terrestrial and stellar mechanical phenomena.
This initial idea of Einstein was subsequently much developed, embodied in a more subtle, richer and more flexible mathematical model, using the rich arsenal of already existing mathematical notions [69]. With the “generalized theory of relativity”, this idea broadened into a vast vision of the physical world, embracing in one look the subatomic world of the infinitely small, the solar system, the Milky Way and distant galaxies, and the path of electromagnetic waves in a space-time curved at each point by the matter which is there [70]. This is the second and last time in the history of cosmology and physics (following Newton’s first great synthesis three centuries ago) that a broad unifying vision has emerged, in the language of a mathematical model, of all the physical phenomena in the Universe.
This Einsteinian vision of the physical universe was in turn overwhelmed by events. The “set of physical phenomena” which it is a question of reporting has had time to expand since the beginning of the century! There have emerged a multitude of physical theories, each to account, with varying degrees of success, for a limited set of facts, in the immense mess of all “observed facts”. And we are still waiting for the daring kid, who will find by playing the new key (if there is one…), The dreamed “cake model”, who wants to “work” to save all phenomena at once… [71]
The comparison between my contribution to the mathematics of my time, and that of Einstein to physics, was imposed on me for two reasons: both work was accomplished through a mutation of our conception of “space” (in the mathematical sense in one case, in the physical sense in the other); and both take the form of a unifying vision, embracing a vast multitude of phenomena and situations which heretofore appeared to be separate from one another. I see there an obvious kinship between his work [72] and mine.
This relationship does not seem to me to be contradicted by an obvious difference in “substance”. As I hinted earlier, the Einsteinian mutation concerns the notion of physical space, while Einstein draws from the arsenal of already known mathematical notions, without ever needing to expand it, or even upset it. His contribution consisted in identifying, among the mathematical structures known of his time, those which were best suited to [73] serve as “models” for the world of physical phenomena, instead of the dying model bequeathed by his predecessors. In this sense, his work was indeed that of a physicist, and beyond that, that of a “philosophy of nature”, in the sense in which Newton and his contemporaries understood it. This “philosophical” dimension is absent from my mathematical work, where I have never been led to ask myself questions about the possible relations between the “ideal” conceptual constructions, taking place in the Universe of mathematical things, and phenomena that take place in the physical Universe (or even, lived events taking place in the psyche). My work has been that of a mathematician, deliberately turning away from the question of “applications” (to other sciences), or “motivations” and psychic roots of my work. Of a mathematician, moreover, driven by his very particular genius to constantly expand the arsenal of notions at the very basis of his art. This is how I was led, without even noticing it and as if playing, to upset the most fundamental notion of all for the surveyor: that of space (and that of “variety”), that is our conception of the very “place” where geometric beings live.
The new notion of space (like a kind of “generalized space”, but where the points which are supposed to form the “space” have more or less disappeared) does not resemble in any way, in its substance, the notion brought by Einstein in physics (not at all confusing for the mathematician). The comparison is necessary on the other hand with quantum mechanics discovered by Schrödinger [74]. In this new mechanism, the traditional “material point” disappears, to be replaced by a kind of “probabilistic cloud”, more or less dense from one region of ambient space to another, depending on the “probability” that the point is in this region. We feel, in this new perspective, a “mutation” even more profound in our ways of conceiving mechanical phenomena, than in that embodied by Einstein’s model – a mutation which does not consist in simply replacing a somewhat mathematical model, narrow at the armatures, by another similar one but cut wider or better adjusted. This time, the new model resembles so little the good old traditional models, that even the mathematician who is a great specialist in mechanics must have felt suddenly disoriented, even lost (or outraged…). Going from Newton’s mechanics to Einstein’s must be, for the mathematician, a bit like going from the good old Provencal dialect to the latest Parisian slang. On the other hand, to switch to quantum mechanics, I imagine, is to switch from French to Chinese. And these “probabilistic clouds”, replacing the reassuring material particles of yesteryear, strangely remind me of the elusive “open neighborhoods” that populate the topos, like evanescent ghosts, to surround imaginary “points”, which still continue to cling to and against all a recalcitrant imagination…

Notes :

[68] This is a bit short, of course, as a description of Einstein’s idea. At the technical level, it was necessary to highlight what structure to put on the new space-time (it was already “in the air”, with Maxwell’s theory and Lorenz’s ideas). The essential step here was not of a technical nature, but rather “philosophical”: to realize that the notion of simultaneity for distant events had no experimental reality. This is the “childish observation”, the “but the Emperor is naked!”, which made cross this famous “imperious and invisible circle which limits a Universe”…

[69] These are mainly the notion of “Riemannian manifold”, and the tensor calculus on such a manifold.

[70] One of the most striking features which distinguishes this model from the Euclidean (or Newtonian) model of space and time, and also from Einstein’s very first model (“special relativity”), is that the global topological form of space-time remains indeterminate, instead of being prescribed imperatively by the very nature of the model. The question of what this global form is strikes me (as a mathematician) as one of the most fascinating in cosmology.

[71] One called “unitary theory” such a hypothetical theory, which would manage to “unify” and to reconcile the multitude of partial theories of which it was question. I have the feeling that the fundamental thinking that awaits to be undertaken, will have to be placed on two different levels.
1_) A reflection of a “philosophical” nature, on the very notion of a “mathematical model” for a portion of reality. Since the successes of Newtonian theory, it has become an unspoken axiom of the physicist that there exists a mathematical model (or even a single model, or “the” model) to express physical reality perfectly, without “detachment” no burr. This consensus, which has been law for more than two centuries, is like a sort of fossil vestige of a living Pythagorean vision that “Everything is number”. Perhaps this is the new “invisible circle”, which replaced the old metaphysical circles to limit the Universe of the physicist (while the race of the “philosophers of nature” seems definitively extinct, supplanted handily by that of computers…). As long as one likes to dwell on it for a moment, it is quite clear, however, that the validity [of] this consensus is by no means obvious. There are even very serious philosophical reasons which lead to questioning it a priori, or at least to providing very strict limits to its validity. It would be the moment or never to submit this axiom to a tight criticism, and perhaps even, to “demonstrate”, beyond any possible doubt, that it is not founded: that there does not exist a unique rigorous mathematical model, accounting for all the so-called “physical” phenomena listed so far.
Once the very notion of “mathematical model” has been satisfactorily identified, and that of the “validity” of such a model (within the limits of such “margins of error” admitted in the measurements made), the question of a “unitary theory” or at least that of an “optimum model” (in a sense to be specified) will finally be clearly stated. At the same time, one will probably also have a clearer idea of the degree of arbitrariness which is attached (by necessity, perhaps) to the choice of such a model.
2_) It is only after such reflection, it seems to me, that the “technical” question of identifying an explicit model, more satisfactory than its predecessors, takes on its full meaning. It would then be the moment, perhaps, to break free from a second tacit axiom of the physicist, going back to antiquity, and deeply rooted in our very way of perceiving space: it is that of continuous nature of space and time (or space-time), of the “place” therefore where “physical phenomena” take place.
Fifteen or twenty years ago, leafing through the modest volume constituting Riemann’s complete work, I was struck by a remark from him “by the way”. He observes that it could well be that the ultimate structure of space is “discrete”, and that the “continuous” representations which we make of it perhaps constitute a simplification (excessive perhaps, in the long run…) of a more complex reality; that for the human mind, “the continuous” was easier to grasp than “the discontinuous”, and that it serves us, therefore, as an “approximation” for understanding the discontinuous. This is a remark surprisingly penetrating into the mouth of a mathematician, at a time when the Euclidean model of physical space had never before been questioned; in the strictly logical sense, it is rather the discontinuous which, traditionally, has served as a technical method of approach to the continuous.
Developments in mathematics in recent decades have, moreover, shown a much more intimate symbiosis between continuous and discontinuous structures than was previously imagined in the first half of this century. Still, to find a “satisfactory” model (or, if necessary, a set of such models, “connecting” as satisfactorily as possible..), that this one be “continuous”, “discrete” “or of a” mixed “nature – such work will undoubtedly involve a great conceptual imagination, and a consummate flair for apprehending and updating mathematical structures of a new type. This kind of imagination or “flair” seems rare to me, not only among physicists (where Einstein and Schrödinger seem to have been among the rare exceptions), but even among mathematicians (and here I speak with full knowledge of the facts).
To sum up, I predict that the expected renewal (if it has yet to come…) will come more from a mathematician at heart, knowledgeable about the great problems of physics, than from a physicist. But above all, it will take a man with “philosophical openness” to grasp the crux of the matter. This is by no means technical in nature, but a fundamental problem of “philosophy of nature”.

[72] I make no claim to be familiar with Einstein’s work. In fact, I haven’t read any of his work, and only know his ideas through hearsay and very roughly. Yet I feel like I can make out “the forest”, even though I’ve never had to make the effort to scrutinize any of its trees. . .

[73] For comments on the qualifier “moribund”, see a previous footnote (note page 55).

[74] I think I understand (by echoes that have come back to me from various sides) that we generally consider that in this century there have been three “revolutions” or great upheavals in physics: Einstein’s theory, the discovery of radioactivity by the Curies, and the introduction of quantum mechanics by Schrödinger.

Researchers and entrepreneurs: it’s possible! (part 2)

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A second post about this enlightening book after this one. A multitude of quotes that make this book really fascinating. The importance of the human component; entrepreneurship is not a science after all. The experience of the field probably counts as much as the academic knowledge, the adventures are unique in spite of their common features. Here are some new examples:



“The first meetings with investors are dialogues between human beings: they will see in you the person who takes risks, who has the ability to develop a strategy and execute plans. Three major criteria are of interest to investors: the team, in particular the CEO [Chief Executive Officer] who creates and inspires the company on a daily basis, and then the product and size of the potential market.” Pascale Vicat-Blanc.

“It is essential to open your idea, your project as soon as possible. The upstream contacts are very rich and can be quite simple”. Stéphane Deveaux. [Page 43]

“The creation of a company is first and foremost a work of definition and development of an offer and the positioning of this offer in the market”, explains Éric Simon. “I met a company that was immediately very enthusiastic. We had to solve many technical challenges that we had not encountered in the world of research. [But this first big client] led us into a dead end. […] I stood firm and remembered that even if you have an important client, you must immediately diversify so as not to be at his mercy.” [Page 55]

While market research and marketing training are often present in incubators, know-how is sometimes difficult to transfer. Researchers-entrepreneurs insist on the importance of the field. “So we did a lot of interviews, visits to customers, prospecting to really know our market. This is the best market research compared to buying ready-made studies.” Benoit Georis, Keeno [Page 61]

There arethen discussions about the relative importance of public and private investors, a phenomenon so specific to France. Yes an exciting book!

Researchers and entrepreneurs: it’s possible!

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Here is a book that I just discovered about stories of startups in the French digital field, those from Inria, the national institute (for research in computer science and automation) dedicated to digital sciences. It’s written in French ans is entitled Chercheurs et entrepreneurs : c’est possible !

I have read only a few pages so far but the quotes I read are so meaningful that I cannot help but extract some examples:

“Our friends were creating their business in Silicon Valley, like Bob Metcalfe with 3Com or Bill Joy with Sun. I had toured groups I knew on the other side of the Atlantic, at MIT, Berkeley, Stanford, explaining our project to them, their positive reaction reinforced the idea of getting started.” Silicon Valley was often a source of inspiration …

“What interested me was not doing research in itself, it was advancing technology to solve real problems. We had more and more funding; we have made satellite configurators for aerospace, ports, buildings and a strategic simulator for nuclear submarines” says Pierre Haren, the founder of Ilog. The product yes, but above all for customers …

“By definition, [we were] a high-tech company. [… but] As in any creation, at the beginning, we do everything even cleaning the floor! We took care of the commercial approach, of the optimization of the offer, and even of the premises. When we take care of a society, we are never quiet, we never take it easy. Whether we are ten or ten thousand people, the person in charge is always in the mine,” according to Christian Saguez, founder of Simulog and he further adds “My first advice to hesitant researchers is to take the step of creating without seeking comfort at all costs. You learn life and it’s all the beauty of doing business. With Simulog we had to invent everything and the model worked.”

There are many great lessons: I will certainly finish it soon. Thanks to Laurent for the gift 🙂

PS: I use that post about Inria entrepreneurs to mention Entrepreneurship Support at and around Inria as of October 2019

The Code – Silicon Valley and the Remaking of America – by Margaret O’Mara

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About 15 years ago, I was challenged by a colleague, who knew my passion about Silicon Valley, about why the region should survive and lead for the years or even decades to come. I had just arrived at EPFL and now that I am leaving this place where there are many people I love, I could give the same answer to my colleague: the talent and capital gathered there, with an expertise which seems to be never lost and an appetite for experiments and risk with not too much fear of failure, at least no stigma, are reasons why Silicon Valley has a bright future. Yes it has many drawbacks and weaknesses, but even when there is a major crisis, there is stil, whatever we think, enough diversity to continue to strive.

Margaret O’Mara probably thinks the same. At least she has written one of the most comprehensive history of the region and describes brilliantly all its strong and weak, positive and negative attributes.

The Code
Silicon Valley and the Remaking of America
By Margaret O’Mara

You have to think of it like a horse race, Morgenthaler would explain. That’s how the high-tech game worked. The horse was the technology. The race was the market. The entrepreneur was the jockey. And the fourth and last ingredient was the owner and trainer – the high-tech investor. You could have the best jockey, but if he rode a slow horse, then you wouldn’t win. Same thing if you have a fast horse but a terrible jockey. Great technology without good people running the shop wouldn’t get very far. And the race had to have good stakes. Riding a fast horse to win at the country fait wouldn’t reap many rewards, but the Kentucky Derby was another matter indeed. So it went with the market. These needed to be customers and growth, not saturation. [Pages 11-12] (You can check the Computer Museum archive about Morgenthalerhere (as a pdf).)

The flow wasn’t about transfer of technology, it was about talent – about people who moved back and forth from the labs of Stanford to the offices of its research park to the ramshackle warehouses and prefab office buildings that began stretching southward down El Camino Real. Everywhere else in the 1950s, academia was a true ivory tower, surrounded by impregnable walls between town and gown, between “pure” research and business enterprise. At Stanford, those walls dissolved. [Page 32]

“Inventions come from individuals,” observed Regis McKenna, “not from companies.” [Page 152]

“Good ideas and good products are a dime a dozen,” [Arthur Rock] later explained. “Good execution and good management – in a word, good people – are rare.”

More controversial maybe is John Doerr’s comment: Much later, one of the regions most successful and influential VCs, John Doerr, got in hot water after admitting that a major factor guiding his decisions was “pattern recognition.” The most successful entrepreneurs, he found, “all seem to be white, male, nerds who’ve dropped out of Harvard or Stanford and they absolutely have no social life. So when I see that pattern coming in”, he concluded, “it was very easy to decide to invest.” [Page 76]

After HP went public in November 1957, fortunes rose along with its share price. Yet from the start, the two founders consciously presented their firm as a business concerned with higher and better things. “I think many people assume, wrongly, that a company exists simply to make money,” Packard once told HP managers. “While this is an important result of a company’s existence, we have to go deeper to find the real reasons for our being.” Nonhierarchical, friendly, a change-the-world ethos paired with an unflagging focus on market growth and the bottom line – HP created the blueprint for generations of Silicon Valley companies to come. [Page 33]

The missile maker, the entrepreneurial university, the distinctive business sensibility, the professional networks, the government money, the elite (and homogeneous) workforce: many of the key ingredients were coming together in Palo Alto by the middle of the 1950s. [Page 38]

O’Mara combines anecdotes, stories and economic trends. For example, more than 500 companies went public in 1969. Only 4 did in 1975. […] in 1969, the national venture capital industry had raised more than $170 million in new investment. In 1975, it raised a paltry $22 million. What’s more, only one venture investment in four went to tech companies. [Page 158]

She shows there were thousands of similar (and unknown) companies to the one which became phenomenal success. In parallel to Apple, there had been ProcTech (or Processor Technology), IMSAI, Cromemco, Xitan, Polymorphic. Vector Graphic, with an initial $6’000 investment in 1976 reached 4’000 units and $400’000 in sales in 12 months, and $25M fiver years later. By 1977, there were 50,000 personal computers in use. [Pages 144-6]

(A side comment about a book I did not know of: The Innovation Millionaires: How They Succeed by Gene Bylinsky (Charles Scribner’s Sons, New York, 1976.)

She also clearly illustrates the role of public intervention and support. One story I did not know about is how much John Doerr was involved in fighting proposition 211 in 1996. It shows that despite the general view that Silicon Valley has no interest in politics, on the contrary, many individuals and institutions are much more interested than generally thought. (See Proposition 211 ) [Section The Litigator – Pages 333-8]

Similarly, the complexity of things is illustrated with Peter Thiel, a famous Libertarian, a strong advocate of weak states and of President Trump: he is the (funding) founder of Palantir, a startup which most revenues at least early in its history, came from the government… [Pages 384-7]

But culture is never far. When Russian president Medvedev visited Silicon Valley in 2010 to try and understand the region’s secrets, he concluded that there simply wasn’t enough appetite for risk. “It’s a problem of culture as Steve Jobs told me today. We need to change the mentality.” [Page 388]

So Silicon Valley’s success does not stop… “By mid-2018, Facebook had made 67 acquisitions, Amazon had made 91, and Google had made 214.” [Page 391] Let us remember tough that in the GAFAM group, 2 companies are not based in Silicon Valley, showing how powerful the region is, just in terms of perception! Let me just add here an old post about startups M&As: Cisco A&D published in 2016.

It is also from an architectural standpoint as mention on Page 392. With the new Facebook building in 2015, or Amazon biospheres and Apple Park.

And there is a lot of money made. Google has a few years after its IPO more than 1’000 employees or former employees with a $5M wealth including an in-house massage therapist. [Page 392]

As a conclusion of my reading, a final quote:

“As wealth grew, so did the mythos around how Silicon Valley was able to generate one innovative company after another. It was about allowing risks and not penalizing failure, they’d say. It was about putting engineering first – finding the best technical talent, with no bias about origin or pedigree. It was about that “pattern recognition” so fatefully identified by John Doerr, looking for the next Stanford or Harvard dropout with a wild but brilliant idea.

Of all those assertions, Doerr’s slip-up came closest to the heart of the Valley’s secret. “West Coast investors aren’t bolder because they are irresponsible cowboys, or because the good weather makes them optimistic”, wrote Paul Graham, founder of the Valley’s most influential tech incubator, Y Combinator, in 2007. “They’re bolder because they know what they’re doing.” The Valley power players knew tech, knew the people, and knew the formula that worked.

They looked for “grade-A men” (who very occasionally were women) from the nation’s best engineering and computer science programs, or from the most promising young companies, and who had validation from someone else they already knew. They sought out those exhibiting the competitive fire of a Gates or a Zuckerberg, the focus and design ascetism of Kapor or Andreessen or Brin and Page. They funded those who were working on a slightly better version of something already being attempted – a better search engine, a better social network. They surrounded these lucky entrepreneurs with support and seasoned talent; they got their names in the media and their faces on the stage at each premier conferences. They picked winners, and because of the accumulated experience and connections in the Valley, those they picked often won.” [Pages 399-400]

Loonshots or how to nurture crazy ideas by Safi Bahcall

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This is one of the best books about innovation I have read in years. The importance of crazy ideas, not the recipe on how to make them successful, but the attitude to make them less crazy. And more importanly, crazy ideas have much more impact on our lives than we may think. A must read. Here are some extracts to convicne you…

Loonshot : a neglected project, widely dismissed, its champion written-off as unhinged.

The Loonshot thesis :
1. The most important breakthroughs come from loonshots, widely dismissed ideas whose champions are often written off as crazy.
2. Large groups of people are needed to translate those breakthroughs into technologies that win wars, products that save lives, or strategies that change industries.
3. Applying the science of phase transitions to the behavior of teams, companies, or any group with a mission provides practical rules for nurturing loonshots faster and better. [Page 2]

“Bush changed national research the same way Vail changed corporate research. Both recognized that the big ideas – the breakthroughs that change the course of science, business, and history – fail many times before they succeed. Sometimes they survive through sheer chance. In other words, the breakthroughs that change our world are born from the marriage of genius and serendipity.” [Page 37]

“But the ones who truly succeed – the engineers of serendipity – play a more humble role. Rather than champion any individual loonshot, they create an outstanding structure for nurturing many loonshots. Rather than visionary innovators, they are careful gardeners. They ensure that both loonshots and franchises are tended well, that neither dominates the other, and that each side nurtures and supports the other.” [page 38]

“As we will see over the next chapters, managing the touch and the balance is an art. Overmanaging the transfer causes one kind of trap. Undemanaging that transfer causes another.” [Page 42]

A project champion: On the creative side, inventors (artists) often believe that their work should speak for itself. Most find any kind of promotion distasteful. On the business side, line managers (soldiers) don’t see the need for someone who doesn’t make or sell stuff – for someone whose job is simply to promote an idea internally. But great project champions are much more than promoters. They are bilingual specialists, fluent in both artist-speak and soldier-speak, who can bring the two sides together. [Page 63]

Contrarian answers, with confidence, create very attractive investments. [Page 63]

LSC: Listen to the Suck with Curiosity. LSC, for me, is a signal. When someone challenges the project you’ve invested years in, do you defend with anger or investigate with genuine curiosity? [Page 64]


Some famous creators of Loonshots:
https://en.wikipedia.org/wiki/Akira_Endo_(biochemist)
https://en.wikipedia.org/wiki/Juan_Trippe
https://en.wikipedia.org/wiki/Edwin_H._Land

Years later, Land became known for a saying: “Do not undertake a program unless the goal is manifestly important and its achievement nearly impossible.” [Page 96]

“Then the author has an amazing thesis about team size. “I will show that team size plays the same role in organizations that temperature does for liquids and solids. As team size crosses a “magic number”, the balance of incentives shifts from encouraging a focus on loonshots to a focus on careers.” [Page 164]

This magic number is

“Where G is the salary growth rate with promotion (for example 12%); S is management span – if it is narrow, each manager has a small number of direct reports and there are many hierarchical layers, whereas if it is wide, there will be more direct reports and less hierarchy – E is the equity fraction which ties your pay to the quality of your work. The final parameter F for fitness is return on politics vs. project-skill fit.
In many cases the magic number M equals 150… [pages 195-200]
Safi Bahcall has many other rich descriptions including the importance of power laws in innovations [Page 178] or this one [Page 240]

For a loonshot nursery to flourish – inside either a company or an industry – three conditions must be met:
1. Phase separation : separate lonnshot and franchise groups
2. Dynamic elequilibrium: seamless exchange between the two groups
3. Critical mass: a lonnshot group large enough to ignite.

Applied to companies, the first two are the first Bush-Vail rules discussed in part one. The third, critical mass, has to do with commitment. If there is no money to pay for hiring good people or funding early-stage ideas and projects, a loonshot group will wither, no matter how well designed. To thrive, a loonshot group needs a chain reaction. A research lab that produces a successful drug, a hit product, or award-winning designs will attract top talent. Inventors and creatives will want to bring new ideas and ride the wave of a winning team. The success will justify more funding. More projects and more funding increase the odds of more hits – the positive feedback lopp of a chain reaction.

How many projects are needed to achieve critical mass? Suppose odds are 1 in 10 that any one loonshot will succeed. Critical mass to ignite the reaction with high confidence requires investing in at least two dozen such loonshots (a diversified portfolio of ten of those loonhsots has a 65 percent likelihood of producing at least one win; two dozen, a 92 percent likelihood).” [Pages 240-1]

Disruptive innovation again [Page 263]

Use “disruptive Innovation” to analyze history; nurture loonshots to test beliefs.

In an article addressing recent controversy about the notion of disruptive innovation, Christensen explains why Uber is not disruptive, by his definition, and why the iPhone also began as a sustainable innovation. In Chapter 3, we saw that American Airlines – a large incumbent, not a new entrant – led the airline industry after deregulation with many brilliant “sustaining” innovations targeted to high-end customers. Hundreds of low-cost, specialty airline startups, “disruptive innovators” failed.
If the transistor, google, the iPhone, Uber, Walmart, IKEA, and American Airlines’ Big Data and other industry-transforming ideas were all initially sustaining innovations, and hundreds of “disruptive innovators” fail, perhaps the distinction between sustaining vs. disruptive, while interesting academically or in hindsight, is less critical for steering businesses in real time than other notions.
That, at least, is why I don’t use the distinction in this book. I use the distinction between S-type and P-type because teams and companies or any large organization develop deeply held beliefs, sometimes consciously, often not, about both strategies and products – and loonshots are contrarian bets that challenge those beliefs. Perhaps everything that you are sure is true about your products or your business model is right, and the people telling you about some crazy idea that challenges your beliefs are wrong. But what if they aren’t? Wouldn’t you rather discover that in your own lab or pilot study, rather than read about it in a press release from one of your competitors? How much risk are you willing to take by dismissing their idea?
We want to design our teams, companies, and nations to nurture loonshots – in a way that maintains the delicate balance with our franchises – so that we avoid ending up like the Qianlong emperor. The one how dismissed those “strange or ingenious objects”, the same strange and ingenious objects that returned in the hands of his adversaries, years later, and doomed his empire.

Fail fast or succeed slowly?

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Here is my lastest contribution to Entreprise Romande in their special summer edition “Le Temps, éternel insaisissable”.

If you are not a subscriber, here is a copy.

Fail fast or succeed slowly?
Hervé Lebret, head of startup unit, EPFL

Slow food, slow thinking, slow growth. After decades of hyperactive and probably destructive frenziness, humankind seems to want a pause. Yet for years I have been complaining that I do not see the Swiss and European startups growing fast enough and, natural corollary, I do not see failing fast enough these “living dead” as they are called in Silicon Valley, these startups that have or would have no future. So was I wrong too?

The debate between the supporters of Schumpeter’s creative destruction, “disruption” and those of a more sustainable incremental progress is as old as the word innovation itself. When I fell into the pot of startups during my American journeys, I quickly wondered why Europe had not experienced such spectacular success such as the GAFAs (Google, Apple, Facebook, Amazon). Whether it is desirable or not, the question is valid: is this difference not related to another less known phenomenon, namely that our startups never die or at least not fast enough?

Recently, the Swiss Startup Radar [1] gave the point of view of an Israeli: “In Switzerland, I observe a strong focus on the survival rate. Startups are encouraged if they have collateral, such as patents, and take a cautious course. As a result, eight out of 10 startups from ETH Zurich are still active five years after their foundation. In Israel, on the other hand, more attention is paid to the economic impact. What matters when assessing a project is the prospect of growth and the creation of new jobs.” The survival rate of companies after 5 years in Switzerland as in the USA is 50%. It is 90% for technology startups from Swiss academic institutions. It can be argued that researchers from these prestigious institutions are better trained and better able to withstand entrepreneurial storms. So why in Silicon Valley where researchers are probably no less well trained, the survival rate is only 75% after five years. And especially less than 50% after 10 years while we are still 80% in Switzerland? In fact, the multiplicity of support, mainly public, probably contributes to artificial survival and slow growth.

I fear that the debate will remain open and lively after this chronicle and only convince the already convinced. Impact and growth cannot only happen through cautiousness and moderation; they are also the result of risk taking and specialized financing which undoubtedly increase the failure rate: “Being an entrepreneur is not for the faint of heart” declared Bill Davidow, a famous American venture capitalist, the expectations are extraordinary and fatality is terrible. The investment horizon for venture capital is very short. Success must be visible in less than five to ten years and the success must be dazzling for these investors. It is a world that does not make any prisoner and failures are up to the ambitions, and worse, very fast (the famous “fail fast”). To have more impact, to create more capital value and also more jobs, it also requires investments of this kind. There is no question of the survival of startups of a few dozen employees, but the impact of a Google that in just twenty years will have created nearly 100,000 jobs, perhaps more than all European startups combined. We can criticize this industry for being very impatient and I understand that some entrepreneurs and political or economic decision makers are the first critics. I remain convinced that this is part of the price to pay for this larger impact.

[1] https://www.startupticker.ch/en/swiss-startup-radar

Bill Campbell, the Trillion Dollar Coach

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I had so often heard of this hidden secret of Silicon Valley that when I read about a book written about him, I had to buy and read it immediately. Which I did. And what about the authors: first and foremost, Eric Schmidt, the former CEO of Google…

I had mentioned Campbell 3 times here:

– first in 2014, in Horowitz’ The Hard Thing About Hard Things: there is no recipe but courage. This is there I had Campbell picture just between Steve Jobs and Andy grove.
jobs-campbell-grove

– then in 2015, in Google in the (Null)Plex – Part 3: a culture. This piece is also mentioned in the new book: Google decide management was not needed any more and neither Schmidt, nor Campbell liked it. Here is how it was solved: “The newly arrived Schmidt and the company’s unofficial executive coach, Bill Campbell, weren’t happy with the idea, either. Campbell would go back and forth with Page on the issue. “People don’t want to be managed,” Page would insist, and Campbell would say, “Yes, they do want to be managed.” One night Campbell stopped the verbal Ping-Pong and said, “Okay, let’s start calling people in and ask them.” It was about 8 P.M., and there were still plenty of engineers in the offices, pecking away at God knows what. One by one, Campbell and Page summoned them in, and one by one Page asked them, “Do you want to be managed?” As Campbell would later recall, “Everyone said yeah.” Page wanted to know why. They told him they wanted somebody to learn from. When they disagreed with colleagues and discussions reached an impasse, they needed someone who could break the ties.”

– finally last year, in Business Lessons by Kleiner Perkins (Part II): Bill Campbell by John Doerr.

Not bad references! I am not finished with the Coach. I have never been a fan of coaching and I am probably wrong. Let me just begin. “I’ve come to believe that coaching might be even more essential than mentoring to our careers and our teams. Whereas mentors dole out words of wisdom, coaches roll up their sleeves and get their hands dirty. They don’t just believe in our potential; they get in the arena to help us realize our potential. They hold up a mirror so we can see our blind spots and they hold us accountable for working through our sore spots. They take responsibility for making us better without taking credit for our accomplishments. And I can’t think of a better role model for a coach than Bill Campbell”. [Page xiv]

On the next page, Schmidt explains he may have missed on important point in his previous book (How Google Works) where he emphasized the importance of brilliant individuals, the smart creatives. And this may be the higher importance of teams, as described in Google’s Project Aristotle. I just give a link form the New York Times about this: What Google Learned From Its Quest to Build the Perfect Team. New research reveals surprising truths about why some work groups thrive and others falter.

The first two chapters are devoted to the life of this extraordinary character. A tireless worker, who started as an American football college coach to become the CEO of high-tech companies such as Claris or Intuit before becoming the Silicon Valley star coach. All told on the occasion of his funerals in 2016. If you do not want to wait for my next blog and not buy the book you may want to read the slideshare from the authors, but first you should read his manifesto, it’s the people.

People are the foundation of any company’s success. The primary job of each manager is to help people be more effective in their job and to grow and develop. We have great people who want to do well, are capable of doing great things, and come to work fired up to do them. Great people flourish in an environment that liberates and amplifies that energy. Managers create this environment through support, respect, and trust.

Support means giving people the tools, information, training, and coaching they need to succeed. It means continuous effort to develop people’s skills. Great managers help people excel and grow.

Respect means understanding people’s unique career goals and being sensitive to their life choices. It means helping people achieve these career goals in a way that’s consistent with the needs of the company.

Trust means freeing people to do their jobs and to make decisions. It means knowing people want to do well and believing that they will.

Crafts vs industry, the meaning of work according to Arthur Lochmann

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Following my recent posts about the meaning and values of work through Crawford’s Shop Class as Soulcraft, here are a few lines translated from the magnificent book by Arthur Lochmann La Vie Solide. I say magnificient because the writing is beautiful, precise, aerial.

Here are pages 99-102

Certainly, all intellectual knowledge, even the most abstract, involves a make, is realized in an action: the knowledge of a theorem of mathematics includes knowing how to apply it. But know-how is distinguished from intellectual knowledge in that the latter can just be available, actionable when needed, and stored in the meantime on external technical supports. The movement of outsourcing knowledge, initiated by writing, – this is the whole topic of Plato’s Phaedrus; writing, at the same time as it preserves knowledge, is also what exempts us from retaining it and making it truly our own – is today exacerbated by the development of new technologies and the permanent accessibility of knowledge offered by these. The relation to knowledge is modified. Knowledge becomes peripheral, whereas what one makes one’s own, what one interiorizes is the capacity to find it again and, above all, to process it. Probably this relationship to knowledge will experience deeper transformations in the coming years with the development of artificial intelligence, which allows to outsource not only the storage of knowledge, but also part of its analytical processing.

Know-how, on the other hand, is characterized by being internalized, incorporated. It involves an intuitive dimension that allows us to recognize the salient features of a situation and to identify the rules of action. You do not consult a video on Youtube to know how to pass a beam of five meters in length in a stairwell, you must have acquired an intuition of space. It alone will allow us to orient the beam to best use the diagonals of space, it alone will have anchored in us the continuous perception of both ends of the beam. However, it is not magic or innate ability. On the contrary, this intuition is an intellectual conquest. Intuition is developed with work. And in this elaboration, which is called experience, the repetition of operations plays a decisive role in making it possible to establish cumulative links between the experienced situations and the chosen solutions. Experience thus consists of a process of appropriation of life.

Several critics of modernity have diagnosed, even found, a gradual destruction of experience. First, because the lifespan of skills, and therefore the experience of their practice, tends to be reduced. In certain areas of activity that are particularly geared to change – as in the case of consulting, the function of which is to change institutions – experience is even ruled out in favor of innovative talent. More deeply, some thinkers of modernity consider that the very possibility of experience is called into question by the acceleration of social and professional rhythms. The appropriation of the “shocks” of everyday life and their transformation into experience requires stable narrative models to establish links between the past and the future. Like the analysis by Hartmut Rosa, when waiting horizons are constantly changing and “spaces of experience are constantly rebuilding” [1], we can only witness a gradual loss of experience.

In the craft trades, however, the techniques evolve slowly, and the skills retain a long life span. Experience therefore remains absolutely crucial. With time and situations, we acquire a whole repertoire of methods and tips that enrich, clarify and complicate material thinking. It is estimated that it takes about ten thousand hours of practice [2] to learn a trade in medicine, music or crafts. In terms of structure, it is indeed the time it takes to acquire an overview of the various situations that may arise and to master all the details. This duration also corresponds to the seven or so years of training (apprenticeship and then the tour de France) which are traditionally necessary to be granted companion by a companionship guild.

[1] Hartmut Rosa, Accélération, Paris, La Découverte, 2010, p.179
[2] In the venture capital world, one says that it reqiures five years and ten million to be come a good investor. Another illustration that experience matters there too and that VC is more about skills and crafts than about an industry of knowledge.

Then pages 153-155:

This knowledge, because it has been developed over time by and for the community, is similar to what we now call common goods, that is to say goods that are intended to be universal and that privatization can destroy or diminish – and which therefore require specific care. In contrast to the “professional secrecy” claimed by certain corporations to grant their knowledge only to those who would have been worth it, in contrast also to the idea of patenting techniques and methods, the will of transmission of knowledge that I have encountered on most sites is in my view of the same logic: know-how is an intangible treasure that belongs to all of society. Each worker is the temporary custodian. As such, her or his responsibility is to make it alive by transmitting it. “Any received word that you have not transmitted is a stolen word,” say the companions.

It is in such a conception of know-how as common goods that the attitude of computer developers working according to the principles of free software and open source is placed. The Linux operating system or Mozilla Firefox web browser is developed and constantly improved by a community of developers who produce their own software. They work first for themselves, making the tools they need, but also for the common good. This is the pattern followed by most free software: first developed to meet the specific need and not yet satisfied by a private community, they are then made public and made available to all, so that everyone can use them and, eventually, adapt them to their own use. Better still, the principle of collective intelligence on which this work is organized consists in considering that the best software will be obtained thanks to the collaboration of the greatest number.

Developers, artisans of modern times, are therefore in the lineage of the dêmiourgos – a term that refers to the artisans, from the ancient Greek ergon, work, and dêmios, public – while renewing its registration in the community. The community here is instituted by the sole decision to take care of a common good. It is not located geographically: it is that of the users of the whole world, in other words the universal common good. It is no more historically located: the process of transmission from generation to generation of old know-how is the process of real-time sharing.

This example, far from being trivial, is a sign of the vitality and modernity of craftsmanship as a way of working, of organization and more generally as a culture and ethical model concerned with the common good through the sharing of knowledge – this while standing out from traditional communities and social structures.