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The myth of the entrepreneur – Undoing the imaginary of Silicon Valley

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A friend mentioned this new book about Silicon Valley to me a few days ago and I quote: “The author’s argument is wrong (but it’s pernicious). […] Indeed, entrepreneurship generates excellence and independent-minded people, while [another view – opposition to liberal capitalism] creates a population of people dependent upon the state.”

I’m not sure I agree with my friend: on the one hand, the relationship between collective and individual is a key topic around entrepreneurship. Does a company create value without “outstanding” individuals? The subject is as old as the world. On the other hand, the distribution of this value is a second subject which belongs among other things to the field of taxation and Piketty has clearly shown that, for several decades, the distribution gap has greatly increased in favor of the richest to the detriment of the poorest.

Marianna Mazzucato has shown this imbalance in The Entrepreneurial State, which she finds all the more unfair as she shows the primordial role of the State in upstream funding (education, research, public services in general) which provides a favorable context for the creation of wealth.

In the beginning of his book, Le mythe de l’entrepreneur – Défaire l’imaginaire de la Silicon Valley (The Myth of the Entrepreneur – Unraveling the Imaginary of Silicon Valley), Anthony Galluzzo explains similar things but it seems different to me. I am only at the beginning and I will see later how closely it joins the criticism introduced above. The author is a specialist in merchant imaginary and the subtitle is convincing, namely that it is necessary to deconstruct the imaginary of this region, based on story-telling around the stars of the region, such as Steve Jobs and Elon Musk (although Elon Musk has largely lost his aura). It shows us that Elisabeth Holmes tried the same approach but succeeded only very partially.

Joseph Schumpeter is quoted extensively in the book at the beginning, in particular it seems to me, for a critique of the role of the entrepreneur and of creative destruction. Galluzzo prefers to use destructive creation to show the chronology of actions. But I didn’t see in the beginning of the book, at least, that Schumpeter adds that capitalism cannot exist without advertising. So without story-telling and imaginary.

This imaginary of Silicon Valley is therefore, I believe, only what allows capitalism to self-develop, to survive, with all the current paradoxes of destructive waste. But behind this imaginary, what is the reality? Galluzzo refuses to oppose entrepreneurs and businessmen. I understand the argument. Creators, stars at least, can make a lot of money. But I don’t know if the main reason is their ability to do business or if they are simply at the origin of a creation that makes it possible to do business. I am neither an economist, nor a historian, nor a sociologist and I find it very difficult to make sense of things, all other things being equal.

Anatomy of the Myth – the Heroic Entrepreneur

So here are a few things that I found interesting in the beginning of the book:

1- The solitary entrepreneur

Steve Jobs was not alone and worse is perhaps not critical to the initial success. The story is indeed quite well known while Jobs is seen as the only genius of Apple.
– Steve Wozniak is the real genius (Galluzzo will not like the term) behind the first computers from Apple.
– Steve Jobs is said to have “stolen” [Page 35] many ideas from Xerox to build his machines. The story is known but the term “stealing” is too strong even if many Xerox employees were shocked. Xerox received Apple shares in exchange for this rather unique deal in history.
– “Mike Markkula can be considered the true founder of Apple, the one who transformed a small, insignificant hobbyist operation into a structured and solidly financed start-up. » [Pages 19-20]
– “Arthur Rock, meanwhile, is one of the most important figures in Silicon Valley, he contributed to the emergence of the largest companies in the region – Fairchild Semiconductor, Intel, then Apple. However, no biography has ever been devoted to him and his wikipedia page is starving”. [Page 20]

I will nuance Galluzzo’s remarks again. Certainly Wozniak, Markkula and Rock have not penetrated the imagination of the general public, but Silicon Valley connoisseurs are not unaware of them and the film Something Ventured (which Galluzzo does not seem to mention in his very rich bibliography) does not forget them at all. And what about this cover of Time Magazine.

2- The war for talent

“The functioning of the labor market in Silicon Valley, however, shows us a completely different dynamic. The industrial concentration in this region leads to significant personnel movements: an engineer can easily change company, without moving or changing his lifestyle. […] This high degree of labor mobility has been observed since the 1970s, when on average IT professionals only stayed in their jobs for two years [Cf AnnaLee Saxenian’s Regional Advantage]. When circulating like this, employees, even bound by non-disclosure agreements, take with them their experiences and knowledge. The propagation of this tacit knowledge is at the heart of the ecosystem, it allows permanent collective tacit learning. » [Page 45]

Galluzzo gets to the heart of the matter here, which makes Silicon Valley unique. Not so much the concentration of talent, which exists in all developed regions. But the circulation of talent. Almost everything is said!

However, Galluzzo adds a significant nuance that I was less familiar with: “Therefore, problems arise for entrepreneurs relating to what has been called in business jargon the “war for talents”. To carry out his projects, he must succeed in appropriating the most precious commodity there is, the work force of highly qualified engineers.” [Page 46]

Galluzzo then mentions the stock options, the aggressive recruitment but also this: “Another court case illustrates well the issues of employee retention. In the 2000s, several Silicon Valley giants, including Intel, Google and Apple, formed a “wage cartel”, mutually agreeing not to attempt to poach employees. This tacit agreement was intended to eliminate all competition for skilled workers and to limit wage increases.” [Page 47 & see Google, Apple, other tech firms to pay $415M in wage case]

3- The invisibilization of the State

The subject is also known and I mentioned it above. We too often forget the role of the collective in the possibility of favorable conditions and context. But Galluzzo shows that too often there is even a certain hatred of the collective, illustrated by the growing visibility of libertarians. It is also known, Silicon Valley is afraid of unions. Here’s another example I didn’t know:

“I want the people who teach my children to be good enough to be employed in the company I work for, and earn $100,000 a year. Why should they work in a school for $35-40,000 a year if they can get a job here at $100,000? We should hire them and pay them $100,000, but of course the problem is the unions. Unions are the worst thing that has happened to education. Because it is not a meritocracy, but a bureaucracy. »

You have to read the entire excerpt and maybe even the entire interview with Steve Jobs. Excerpts from an Oral History Interview with Steve Jobs. Interviewer: Daniel Morrow, April 20, 1995. Computerworld Smithsonian Awards. We are there in the core American culture and the importance given to competition between individuals rather than to the equality of the members of the collective.

So are there geniuses or not? Is there only Darwinian emergence of talents a posteriori among those who will have survived? I don’t know or I don’t know anymore. Probably something in between. Or maybe it is an act of faith, as long as sociology does not have elements that will allow me to have a more convincing opinion…

To be continued…

Optimism and Disillusionment in Silicon Valley. Part 2 : Steve Jobs in Playboy

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It is the third time I can relate Playboy magazine to technology startups. Strange.

In 1971, Intel went public the same day as Playboy and its co-founder, Gordon Moore, funnily recounts in Something Ventured: And a few years later one of the analysts: “The market has spoken. It’s chips over chicks, 10-to-1.” He did not exactly say that but something similar. I will let you search if you wish…

In 2004, the playboy interview of the Google founders, The Google Guys, America’s newest billionaires, was very controversial. Not because of the publisher, but of the timing. You can read
Google says Playboy article could be costly.

Finally I recently discovered that in 1984 was published a lengthy 13-page interview of Silicon Valley’s newest star: Steven Jobs, a candid conversation about making computers, making mistakes and making millions with the young entrepreneur who sparked a business revolution. Here are some extracts.

About computers

We’re living in the wake of the petrochemical evolution of 100 years ago. The petrochemical revolution gave us free energy – free mechanical energy, in this case. It changed the textures of society in most ways. This revolution, the information revolution, is a revolution of free energy as well, but another kind: free intellectual energy. It’s very crude today, yet our Mackintosh computer takes less power than a 100-watt light bulb to run and it can save you hours a day. What will it be able to do ten or 20 years form now, or 50 years from now? This revolution will dwarf the petrochemical revolution. We’re on the forefront.

Computers will be essential in most homes. The most compelling reason to buy a computer for the home will be to link it into a nationwide communications network. We’re just in the beginning stages of what will be a truly remarkable breakthrough for most people – a remarkable as the telephone.

It’s often the same with any new revolutionary thing. People get stuck as they get older. Our minds are sort of electrochemical computers. Your thoughts construct patterns like scaffolding in your mind. You are really etching chemical patterns. In most cases, people get stuck un those patterns, just like grooves in a record, and they never out of them. It’s a rare person who etches grooves that are other than a specific way of looking at things, a specific way of questioning things. It’s rare that you see an artist in his 30s or 40s to really contribute something amazing. Of course, there are some people who are innately curious, forever little kids in their awe of life, but they’re rare.

About innovation

What happens in most companies is that you don’t keep great people under working environments where individual accomplishment is discouraged rather than encouraged. The great people leave and you end up with mediocrity. I know, because that’s how Apple was built. Apple is an Ellis island company. Apple is built on refugees from other companies. These are the extremely bright individual contributors who were troublemakers at other companies.

Polaroid did that for some years, but eventually Dr Land, one of these brilliant troublemakers, was asked to leave his own company – which is one f the dumbest things I’ve ever heard of.

About growing

Anyway, one of our biggest challenges and the one I think John Sculley and I should be judged on in five to ten years is making Apple an incredibly great ten- or 20-billion-dollar company. Will it still have the spirit it does today? We’re charting new territory. There are no models we can look to for our high growth, for some of the new management concepts we have. So we’ve to find our own way.

The way it’s going to work is that in our business, in order to continue to be one of the major contributors, we’re going to have to a ten-billion-dollar company. That growth is required for us to keep up with the competition. Our concern is how to become that, rather than the dollar goal, which is meaningless to us.

There may be some imitators left in the $100,000,000-to-$200-000-000 range, but being a -$200-000-000 company is going to mean you are struggling for your life, and that’s not a really a position from which to innovate. Not only do I think IBM will do away with its imitators by providing software they can’t provide, I think eventually it will come up with a new standard that won’t even be compatible with what it’s making now – because it is too limiting.

[Jobs was visionary but could be always right. Look at Dell, Compaq, Lenovo, HP and Intel/Microsoft…]

I used to think about selling 1,000,000 computers a year, but it was just a thought. When it actually happens, it’s a totally different thing. So it was. “Holy shit, it’s actually coming true!” But what’s hard to explain is that this does not feel like overnight. Next year will be my tenth year. I had never done anything longer than a year in my life. Six months for me, was a long time when we started Apple. So that has been my life since I’ve been sort of a free-willed adult. Each year has been so robust with problems and successes and learning experiences and human experiences that a year is a lifetime at Apple. So this has been ten lifetimes.

There’s an old Hindi saying that comes into my mind occasionally: “For the first 30 years of your life, you make your habits. For the last 30 years of your life, your habits make you.” As I’m going to be 30 in February, the thought has crossed my mind. And I’m not sure. I’ll always stay connected with Apple. I hope that throughout my life, I’ll sort of have the thread of my life and the thread of Apple weave in and out of each other, like a tapestry. There may be a few years when I am not there, but I’ll always come back.

About artificial intelligence

The original video games captured the principles of gravity. And what computer programming can do is to capture the underlying principles, the underlying essence, and then facilitate thousands of experiences based on that perception of the underlying principles. Now if we could capture Aristotle’s world view – the underlying principles of his world view? Then you could ask Aristotle a question. Ok you might say it would not be exactly what Aristotle was. It could all be wrong. But maybe not.

Part of the challenge, I think, is to get these tools to millions and tens of millions of people and to start to refine these tools so that someday we can crudely, and then in a more refined sense, capture an Aristotle or an Einstein or a Land while he’s alive.

That’s for someone else. It’s for the next generation. I think an interesting challenge in this area of intellectual inquiry is to grow obsolete gracefully, in the sense that things are changing so fast that certainly by the end of the Eighties, we really want to turn over the reins to the next generation, so that they can go on, stand on our shoulders and go much further. It’s a very interesting challenge, isn’t it? How to grow obsolete with grace.

Post-Scriptum: It is difficult to add anything to this beautiful conclusion and yet I wish to create a (quite artificial) link between these first two parts. I just discovered it while finishing this article and the coincidence is quite beautiful. I didn’t know about this Steve Jobs interview. Much better known, even famous, is the speech he gave in 2005 at Stanford University, for the graduation of students (the “commencement speech” – my first article in this blog)

Coincidentally, Michael Gibson ends his book, Paper Belt of Fire, by analyzing another commencement speech given in 2005 and considered by some to be one of the most beautiful with that of Jobs. This is “This is water” by David Foster Wallace, the entirety of which you will find in This Is Water: Some Thoughts, Delivered on a Significant Occasion, about Living a Compassionate Life.

Here is its conclusion:

The capital-T Truth is about life BEFORE death.

It is about the real value of a real education, which has almost nothing to do with knowledge, and everything to do with simple awareness; awareness of what is so real and essential, so hidden in plain sight all around us, all the time, that we have to keep reminding ourselves over and over:

“This is water.”

“This is water.”

It is unimaginably hard to do this, to stay conscious and alive in the adult world day in and day out. Which means yet another grand cliché turns out to be true: your education really IS the job of a lifetime. And it commences: now.

Steve Jobs in Paris in 1984

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My friends at INRIA just mentioned to me a short but great interview of Steve Jobs by French Television in 1984, when he was asked if France could have similar start-ups to Silicon Valley. Here is his answer:


Even if you hear more the French translation, you can hear his voice too:
– Research level is good but concrete applications seem to be a problem, and this is an important step for innovation
– This is coming from a lack of companies ready to try
– The risk is seldom taken by large corporations, but by small ones
– You need many small firm with talented students and venture capital
– You also need champions you take as models, that enable saying “innovation is this”
– There is a more subtle problem, a cultural one: in Europe, failure is serious. If you fail in Europe right after university, it follows you for ever. In the USA, we keep failing all the time.
– What you also need is a solid software industry, because software is the new oil. You need hundreds of small firms and then you can dominate an industry.
– You need talented students, a good understanding of technology and encougare young people to create small firms.
– It’s all about private initiative. Big companies should not interfere, neither the government should. We should let entrepreneurs own it.

Thirty-five years later, is the situation different? And if he was still alive, would he say the same things? I let you judge …

Steve Jobs: “Just Ask”

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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”

Thanks to the student who gave me the link! 🙂

The crazy ones. The misfits. The rebels. The troublemakers.

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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.

Listen to the other versions too:

Steve Jobs by Walter Issacson

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I finally read the Steve Jobs biography by Walter Isaacson. I hesitated a long time (the original edition was published in 2011) because I feared disappointement. I had read the excellent The Apple Revolution as well as Return to the Little Kingdom. I finally read it in French and it is excellent. Read it if you have an interest in the topic. I’m not going to do any analysis, but as I usually do just mention some striking or subjective extracts. The citations refer to the French paperback release dated October 2012.

jobs-isaacson

Silicon Valley

Various cultural earthquakes upset San Francisco and SiIicon Valley in the late 1960s. There was the technological revolution, initiated by the increase of military contracts, which had attracted electronics companies, chip manufacturers, designers of video games and computer manufacturers. There was a sub-culture, the pirates – inventors of genius, cyberpunks, dilettantes as well as pure geeks, they also had in their ranks electronicians refusing to fit the mold of HP and their impetuous children who wanted to break down all barriers. There were (quasi-academic) research groups, who led in vivo experiments on the effects of LSD, such as Doug Engelbart’s Augmentation Research Center, who would later work at the development of the mouse and graphical user interfaces, or Ken Kesey, who praised the psychedelic drug in shows, combining music and light, run by a group of musicians who became the legendary Grateful Dead. There was also the hippie movement, from the Beat Generation of Kerouac, a native of San Francisco Bay, and political activists, born out of the Movement for Freedom of Expression of Berkeley. And encompassing all that, there were various spiritual movements seeking inner enlightenment – Zen, Hinduism, meditation, yoga, primal scream, sensory deprivation and Esalen massage.
Steve Jobs was the embodiment of the fusion of Flower Power and microchips, the pursuit of personal revelation and high tech: he was meditating in the morning, followed in the afternoon courses in physics at Stanford, working the Atari at night and dreaming of starting his own business. [Page 114]

A passion for entrepreneurship

Bushnell is of this opinion: “To be a successful entrepreneur, you must have something special and I saw this thing with Steve. He was not only interested in electronics, also by business. I showed him that one had to behave as if one would succeed in what one wanted to achieve and then everything would naturally follow. That’s what I always say: if you pretend to know what you do, people will follow. “[Page 111]

His closest friends think that having learned so young, he had been abandoned at birth had left indelible scars. “The need for total control of what he did comes from this injury” [Page 34] … “The most amazing thing about Steve is that he cannot help being cruel to some people – a kind of Pavlovian response. The key to the mystery is the fact that he was abandoned at birth.” [Page 35]

So he went back to Nolan Bushnell, “Steve asked me to put fifty thousand dollars on the table and in exchange he’d give me a third of Apple’s shares. I thought I was smart and I said no. When I look back, I still laugh. Not to cry!” [Page 142]

The reality distortion field

– “This is madness. It is impossible. ”
He was answered that Jobs would not listen.
– The best definition of this oddity, you find it in Star Trek. Steve creates a reality distortion field. In his presence, reality is malleable. It can make anyone believe almost anything. The effect of course disappears, when he is not there, but it prevents you seriously to have realistic expectations for anything.
RDF was a confusing mix of charisma and mental strength, it is the willingness to bend the facts so they fit the mold. [Page 207]
When Jobs decreed that the sodas in the fridge would be replaced by organic orange and carrot juice, someone on the team had printed T-shirts with: “Beware of Reality Distortion Field!” And on the back: “It comes from the juice!”

There is a small bug page 225: To draw circles, Atkinson found a trick based on the fact that the sums of odd numbers gave a succession of perfect squares (for example, 1 + 3 = 4, 1 + 3 + 5 = 8, etc.) [The statement is correct because the last sum is 9 and not 8!]

Being a pirate

“Better to be a pirate than join the navy” [Page 248] And the Jolly Roger decorated with the Apple logo floated for a few weeks on the roof of Bandley 3.

Apple_pirate_flag

The chapters on Jobs’ private life and Pixar are quite interesting. About the IPO of Pixar: “Earlier that year, Jobs had tried to find a buyer for Pixar, for fifty million dollars, just to recover his funds. At the end of this historic day, the actions he had kept – about 80% of the company – were worth more than 20 times that amount: one billion two hundred million dollars! It was nearly five times more than he had gained with the Apple IPO in 1980. But Jobs did not care to make a fortune, as he told John Markoff of the New York Times: “I do not intend to buy a yacht. I never did it for the money.” [Page 471]. He is in this respect very different from Larry Ellison, founder and CEO of Oracle with whom he became a friend who helped him to return to Apple.

Return to Apple

In this regard, there is an funny anecdote page 482: “Two years ago, Guy Kawasaki, Macworld magazine columnist (and former Apple evangelist) published in the magazine a parody telling Apple was buying NeXT and elected Jobs as CEO. The article featuring Mike Markkula talking to Jobs: “You want to spend the rest of your life selling Unix with a nice coating, or change the world?” And Jobs replied:” Now I am a father and I do not want to play adventurers.” The article made the assumption: “Following his troubles with NeXT, it is possible that Jobs, in his return to the parent company, will bring the Apple management a dose of humility. Bill Gates was also quoted; he said that if Jobs returned to the business, Microsoft would again have innovations to copy! Everything was invented and purely humorous. But the reality has this annoying habit of catching up all satires. “([Page 482 and see below]

And on his return: “His credo was perfection. He was not very good at compromise, or to arrange with reality. He did not like complexity. This was the case for the design of his products and the furniture of his houses, it was the same for his personal commitments. If he was sure of himself, then nothing could stop him, but if he had doubts, he sometimes preferred to throw in the towel rather than ending up in a situation that did not satisfy him completely. [Page 509]

Death

[With Markkula] They spent the rest of the time talking about the future of Apple. Jobs wanted to build a company that survives him and asked for his advice. Markkula replied that companies that remain are those who knew how to renew. That had been constant with Hewlett-Packard, beginning by constructing measuring instruments and then calculators and then again computers.” Apple was ousted by Microsoft from the market for personal computers, Markkula explained. You must change the course of Apple to another product. You have to be like a butterfly and accomplish your metamorphosis.” Jobs was hardly talkative, but he retained the lesson. [Page 515]

The music was obviously an essential art in the life of Jobs. We know his passion for Bob Dylan, Joan Baez, and the Beatles. But here’s a most interesting part: Bach, he said, was his favorite classical composer. He particularly liked the contrast between the two versions of the Goldberg Variations recorded by Glenn Gould – the first in 1995 by the little-known pianist of twenty-two years that he was, and the second in 1981, a year before his death. “They are like night and day, Steve told me one day after having listened to one after the other. The first is exuberant, young, brilliant, played so fast that it is a revelation. The second is more efficient, more austere. It reveals a deep soul, a painful experience. “Jobs was sick for the third time when he listened to the two versions. I asked him which was his favorite version. “Gould preferred the latest version. In the past, I preferred the first, the exuberant. But now, I understand better what he meant.”

Isaacson ends his book with a brilliant remark by Jobs on the topic of life and death. “But on the other hand, maybe it’s like an on/off switch. Click and nothing more!” He paused again and smiled. “This is surely why I never liked the on/off switches on the Apple products.”

The legacy

I could have put these final remarks earlier in the section A passion for entrepreneurship. “My passion has been to build a sustainable business, where people were motivated to manufacture great products. Everything else was secondary. Of course, it was great to make a profit, because it allowed us to create good products. But the motivation is the product, not profit. […] The difference is subtle, but in the end it is crucial because it defines all the people we hire, those we promote, the topics we discussed at meetings. […] People do not know what they want until they have it in front of them. That’s why I do not care about market research. […] The intersection between the arts and sciences. I love this juncture, IL has a magical aura. […] Our innovation holds a large part of humanity. I think great artists and great engineers are similar .. Both have the desire to express themselves. […] I have my own theory to explain the decline of companies like IBM and Microsoft. The company did a great job, innovates and comes almost to a monopoly in some areas. It was then that the quality of the product becomes less important. The company praises great sales people […] that eventually take control of the company. […] I hate people who say they are entrepreneurs when their sole objective is to build a start-up that they will sell or go IPO. They do not have the desire to build a real company. […] People should never stop innovating. […] I think most creative people want to thank their predecessors who left their legacy.” [Pages 889-892]

An incredible life. Jobs will remain one of the biggest celebrities of the twentieth century. I wondered when I finished reading this book what I remember of Apple and Jobs and here is the result.

Apple-patchwork-2

American Public Television PBS celebrates Silicon Valley

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February 5th 2013 was a special day for PBS and Silicon Valley: 3 documentaries were shown one after the other. It was:

1- Silicon Valley on PBS American Experience “TV’s most watched history series”

AmericanExperience-PBS2013

2- Something Ventured, one of my favorite documentary on the topic. I mentioned already here: Something Ventured: a Great Movie and I show ti to my students as often as I can!

3- Steve Jobs, One Last Thing

SteveJobs-onelastthing

If you don’t want to buy it, here is is!

You can also read the interesting 3 PBS films on Silicon Valley by the San Francisco Chronicle.

I read a lot about SV. Now we probably live times when it’s time to watch videos.

12.12.12 and Silicon Valley start-ups

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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…

Failure is a learning experience

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This is my third article in the journal Entreprise Romande (and thank you to them for editing my work and for the opportunity given to talk about topics that are dear to me.)

Every entrepreneur knows that failure is an integral part of business: a contract breach, a lost customer, a unsatisfactory hire… So why is failure so stigmatized in the European culture, and especially in Switzerland? Freeman Dyson, ths famous physicist explains it more clearly: “You can’t possibly get a good technology going without an enormous number of failures. It’s a universal rule. If you look at bicycles, there were thousands of weird models built and tried before they found the one that really worked. You could never design a bicycle theoretically. Even now, after we’ve been building them for 100 years, it’s very difficult to understand just why a bicycle works – it’s even difficult to formulate it as a mathematical problem. But just by trial and error, we found out how to do it, and the error was essential.” The example of the bicycle is just perfect: who would blame a young child for his multiple drops wjile learning who to ride it?

FAILURE AND CREATIVITY

Silicon Valley is known for its tolerance for failure, which, far from being a stigma, is even valued. “In Silicon Valley, if we had not tolerated failure, we would not be able to take risks and we would have many fewer entrepreneurs than we have today. If you fail for good reasons, that is to say almost all, except to be corrupt, stupid or lazy, then you have learned something that will make you more useful,” says Randy Komisar, based in Silicon Valley, as are the other people mentioned in this article. “You’d be amazed at how many investors prefer to back someone who has tasted the bitter fruits of failure. In failing you learn what not to do. Get your skin in the game and there is no failure—you have opened your mind to growth and yourself to reinvention,” adds Larry Marshall.

The fear of failure has deep roots. The school system encourages the child not to try or say anything if she does not know the answer rather than testing hypotheses, for fear of reprimand. Experimentation, creativity, the “process of trial and error”, are never quite encouraged in favor of more rational disciplines. “Indeed, we have psychological and intellectual difficulties with trial and error and with accepting that series of small failures are necessary in life. “You need to love to lose”. In fact the reason I felt immediately at home in America is precisely because the American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment”, says Nicolas Taleb, essayist of Lebanese origin and writer of The Black Swan.

The European start-ups do not fail! Their survival rate is 90% after 5 years of existence. But is it good news? In the first months of Google,co- its founder Larry Page considered a success rate of 70% of individual projects was ideal. Asking for more, “we would take too few risks.” And failure is so digested that Americans have created the FailCon (a conference on failure) in 2009. By sharing their experience of failure in public (because failure is still a taboo even in the United States), participants learn from their peers and leave strengthened. The famous entrepreneur and investor Vinod Khosla admitted to have failed more often than he was successful. “Failure is not desirable, it is just part of the system, and it is high time to accept it.” Would this explain why we do not create any Google Switzerland and Europe?

PREPARING FOR SUCCESS

Nevertheless, the failure will always be unpredictable. “Of course, business, just as life, is never a smooth curve. Failure can come as quickly, and more unexpectedly, as success. But true success is management of failure. Every time you hit a bad patch you must be able turn your fortunes around. That’s why it’s important to be always prepared for failure and build strong teams. To be a successful entrepreneur, venture capitalist or philanthropist, you must bring together people who know there will be problems, love to solve problems, and can work well as a team.” … “It reminds me not to be too proud. I celebrate failure — it can temper your character and pave the way for great achievement.” notices Kamran Elahian.

So, should we be not afraid to fail? A short and most moving answer comes from Steve Jobs, who – we must not forget – failed to grow Apple in the 1980s: “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.” And even better: “Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

When will a FailCon be organized in Switzerland?

A Chinese student introduced me to a few years ago the following proverb: “Shi Nai Bai Zhi Gong Cheng Mu”, which means “failure is the mother of success.” Asia might learn perhaps faster than Europe this important concept.

The Apple Revolution

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I have not read (yet) Isaacson’ authorized biography of Steve Jobs but found (by pure accident) another recent, funny an really great book, The Apple Revolution. Interesting too and somewhat related to a previous blog I published on Robert Noyce and the culture of Silicon Valley. As important is the subtitle: Steve Jobs, the Counterculture and How the Crazy Ones Took Over the World.

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!


(Go to youtube at http://www.youtube.com/embed/J0Rs7d16jhU if you do not see the embedded frame!)

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.”


(Go to youtube at http://www.youtube.com/embed/4oAB83Z1ydE if you do not see the embedded frame!)