Lessons from Steve Jobs by Guy Kawasaki: 2013 Intel Global Challenge Keynote

how many of you know about Guy Kawasaki I had a had a speech all teed up for you it was gonna be the top 10 mistakes of entrepreneurs but I decided I would give a different speech and I basically went back up there and changed everything so I'm gonna give you a speech that I think that this crowd would truly appreciate because I had the honor and I do mean it was an honor to work for Steve Jobs and he died about two years ago and I put together a speech based on the lessons that I learned from Steve Jobs because of all audiences in the world really I think that you would appreciate the lessons of Steve Jobs he was a remarkable person I worked in the Macintosh division for him this is like 1983 probably before many of you were born and that division was probably the largest collection of egomaniacs in the history of California that's saying a lot because there's a lot of ego maniacs in California the Macintosh division probably held that record for a good 30 years Facebook recently broke it but we held that record for 30 years because we work for Steve we had very special rules unlimited supplies of fresh orange juice we had a great travel policy anybody who flew more than two hours could fly first-class I interpreted that rule to begin at the moment you leave your apartment so I flew first-class everywhere for years I'd fly first-class from San Francisco to to Monterey and and this division was just trying to change the world and I learned so much from Steve I would not be where I am were it not for Steve so this is part tribute to him and part education and lessons for you there are many things that I learned from Steve that you can apply to your companies that will I hope help you create the next Apple because the world could use as many apples as possible you know Steve is gone now and I think the world is a lot less interesting place without him having said that I'm pretty confident that he's telling God what to do right now so you know our loss is God's gain although God may not be looking at it like that right now but he's telling God what to do that's the nature of his personality I'll give you another story as an insight into Steve's personality before I begin this so one day I'm working in my cubicle Steve Jobs shows up with a person I never met before Steve asked me the question what do you think of this company called nowhere klw a re knowledge software and I say well Steve the company software pretty much sucks it's boring it's character based doesn't use graphics doesn't use color it's nothing that we would want for a Macintosh and then he says guy I want you to meet the CEO of nowhere so that's Steve Jobs trial-by-fire and I learned a very valuable lesson that day that you know you better tell the truth because that was a test and that is a very good indication of what Steve was like so I have been watching tech speakers for about 30 years now and I learned two points about most tech speakers may you break this trend but most tech speakers first of all suck as speakers and secondly they go long that is a particularly bad combination because if you suck and you go short it's okay and if you're great and you go long it's okay but if you've sucked and go long that's like being stupid and arrogant you know it's just it's just a bad combination and so what I do is I always use a tough tenth format so that way in case you think I suck you know approximately how much longer I'll suck I have ten key points for you today so these are my top ten lessons of Steve Jobs so lesson number one that I learned is that pretty much experts are clueless experts are going to tell you what can and cannot be done what should and should not be done I would put myself in this bucket to not that I'm trying to say I'm an expert I'm saying that you know it's very very dangerous to listen to experts I think there are two kinds of experts in the world okay so there's one expert sort of a self-declared expert but you know it's it's pretty obvious that that person is a loser right you know self-declared egomaniac what we call a sham expert which is a combination of schmuck and expert and and that person it's that's not so dangerous an expert the really dangerous expert is this expert who's you know dresses in all black very rich powerful visible owns a lot of things in ending I like Maserati Lamborghini Ferrari Armani not not to pick on Italy howdy is okay I will say and so what I learned from you know pretty much experts the reason why they're experts and their advisers and they're they're journalists and analysts is because they cannot do if they could do they would be entrepreneurs like you so I think the way you have to approach experts is it's just like the way you approach the flu so how do you inoculate yourself for the flu you get exposed to a little bit of flu so that when you encounter real flu you already have built up resistance so I'm gonna give you some examples of clueless advice so that when you encounter clueless advice in your own life you have already built up the antibodies so Thomas Watson chairman of IBM allegedly said in 1943 that he thought there was a world market for five computers I have five computers in my house I have all the computers he anticipated in the world in my house imagine if your stever was and you said Oh Thomas Watson said is only walking for five computers why should we start Apple there's only five computers in the world another example this telephone has too many shortcomings to be seriously considered as a means of communication the device is inherently of no value to us Western Union said this in 1876 Western Union in 1876 wrote off telephony oops how many of you have used Western Union lately how many of you has these PayPal lately right so I think Western Union should be PayPal but it's very hard to go from Telegraph to internet if you write off telephone in the middle you know it's just too big a chasm to cross now maybe the strategic direction for Western Union in 1877 was let's teach Americans in the Morse code how hard could that be we'll teach everybody the Morse code then we can put a telegraph in every house right Road off telephony 1876 there is no reason why anyone would want a computer in their home right ken Olsen founder of deck a great entrepreneur great innovator but he was so successful in the mini-computer curve he could not embrace the personal computer curve that is truly one of the most dangerous things because if you were Steve or woz and you said mr. Olson we believe that computers should not be mainframes they shouldn't even be mini computers computers should be small and cheap and easy to use so small so cheap so easy to use they'd be personal computers personal computers you could have in your house and the expert the billionaire the creator of deck said to you but son there is no reason why anybody would want a computer in their home and if they had listened to such advice Apple would not exist so experts are clueless second thing I learned is that customers cannot tell you what they want customers are going to tell you we want better faster cheaper status-quo better faster cheaper Apple to better faster cheaper ms-dos machine no customer told Apple we want a cute little graphics toy with a mouse that integrates fonts and graphics and text together nobody told us about WYSIWYG printing they want a bigger faster cheaper Apple too they wanted to stay on the same curve nobody asked for this computer the beauty of Steve Jobs and I believe the reason why Apple has been so successful is that it either anticipates people want before they know it or they make something and then they make people want it either method can work okay but asking people what they want all they're gonna tell you is bigger faster cheaper marginally better status quo number three number three thing that I learned from Steve is that Wow design counts it may not be that everybody in the world cares about design but there are enough people in the world who care about design well do a little survey here so how many of you in this room use a Macintosh laptop some beautiful thin you know looking thing like that right and how many of you use this thick blick big ugly black plastic Windows laptop okay so these are the people who are oppressed because nobody would use a big thick ugly black plastic laptop unless they were forced to do it and I learned that from Steve Jobs design counts don't ever think that design doesn't count there is no excuse for lousy design next thing that I learned from Steve is that integration sells this is a great illustration of integration so lots of people attribute lots of reasons to the success of iPod the user interface the wheel all that kind of stuff right I think the reason why iPod was successful is because of the integration of iPod with iTunes there without iTunes a legal way to pay for music and 99 cents a song from the six biggest music companies iPod would not have succeeded it is the integration of iPod and iTunes that made iPod successful integration makes things sell next thing I learned is that innovation occurs on the next curve the next curve not the curve you're on classic example in eighteen hundred's there was an ice harvesting curve on the ice harvesting curve what did Bubba and jr. do Bubba and jr. waited for winter went to a frozen lake or frozen pond cut blocks of ice Bubba and juniors idea was saws horses and sleighs okay that was ice 1.0 ice 2.0 is the ice factory now major technological breakthrough it does not have to be winter it does not have to be a cold city you could have an ice factory in Singapore what a breakthrough no more waiting for winter no more waiting in a cold city this is a major breakthrough this is centralized freezing of water delivery through the ice man and the ice truck this is ice 2.0 ice 3.0 is the refrigerator curve thirty years later this is even better than an ice factory because the ice man had to deliver ice to your house before now you had your own ice factory you had a personalized factory you had a PC if you will a personal chiller significant breakthrough now the most important lesson from this ice 1.0 2.0 3.0 is that the people who are ice harvesters did not make the transition to ice factories and the people who were ice factories did not make the transition to refrigerators and this is because most companies and this is the warning for you most companies define themselves in terms of the process and the product they already make we harvest ice in the winter we freeze water centrally we make a mechanical contraption called a refrigerator if you were to zoom out of that and ask yourself well what does the customer of the ice harvesters the ice factory and the refrigerator company what do they get from those three kinds of entities they get and they get cleanliness so actually a nice harvester in an ice factory and a refrigerator company they're all in the same business they're in the business of providing people a means to cleanliness and convenience so you would think that a forward-thinking entrepreneurial ice Harvester upon seeing the possibilities of an ice factory would say holy cow Bubba we don't have to live in a cold city we don't have to wait for winter we don't need to cut blocks of ice we could build a factory and if you owned an ice factory upon seeing a refrigerator you'd say holy cow but we don't have to be limited freezing essentially putting ice in a truck and having our ice men deliver ice we could build refrigerators and we could sell these refrigerators to everybody who had electricity we could sell many more refrigerators than we could deliver blocks of ice but none of the companies ever did that they define themselves in terms of what they already did we harvest ice we freeze water centrally we make a mechanical gizmo called the refrigerator what I learned from Steve Jobs is that truly the innovation occurs not on the curve you're on but on the next curve if you're in a telegraph business it occurs on the telephone curve if you're on the copper base telephone business it occurs in the wireless space it's always the next curve where the great action is next thing I learned is that the biggest challenges beget the best work you know many people think that you should give a team and a company small bite-sized accomplishable it is sort of positive reinforcement self reinforcement little goals Apple did exactly the opposite Apple gave me and gave us the Macintosh division this huge goal we wanted to prevent worldwide domination of information by IBM we didn't want to make a slightly better personal computer we wanted to save society from a totalitarian you hope in George Orwell Ian 1984 vision of the future that's the goal that Apple set for the Macintosh division and you as entrepreneurs I want you to think of goals like that not to make a slightly better at widget I want you to prevent worldwide domination I want you to change the world next thing I learned from Steve is that contrary to what many people think that changing your mind is a sign of a mistake or stupidity changing your mind is actually a sign of intelligence the fact that you could notice that you did something wrong and then you had the courage to change it I'll give you an example at the introduction of the iPhone Steve Jobs says our innovative approach using web 2.0 based standards lets developers create amazing new applications while keeping the iPhone secure and reliable let me translate Steve Jobs speak for this Steve Jobs is saying no external applications the way you create added functionality for an iPhone is a Safari plug-in that's what web 2.0 based standards means no applications you have to make it work within the Safari browser the experts remember slide one the experts upon seeing this said holy cow Steve you are so right a phone has to be secure and reliable we shouldn't let all that crap from third-party developers onto our phone we need to keep it secure and reliable now one could ask well why does a phone have to be secure reliable but your computer can have third-party software shouldn't your computer be secure and reliable but let's not go down that track the experts said my god Steve either you did it you're absolutely right let's keep our phones secure and reliable fast forward 12 months 11 months Apple executives to showcase Mac OS 10 leopard and OS 10 iPhone development platforms at worldwide developer conference 2008 keynote let me translate this for you this is Apple 11 months later saying we're going to open it up now anybody can write an app we've created an SDK we've created a platform for you to create iPhone apps in other words this is a hundred and eighty degree reversal 2007 we keep the phone secure and reliable we lock out apps 2008 we open up the phone we let you create apps 180 degree reversal they when the experts hear this they said Steve you're absolutely right you need to open up the architecture we want to have I fart and we want to have you know life 360 we want to have let let a thousand flowers blue we need an app for that and when I saw this I said wow wow wouldn't you think they would say Steve you are an idiot you said the phone had to be closed a year later now you're saying the phone has to be open but really the market the experts everybody figured out you know what Steve was wrong the first time locking people out of making apps was a mistake but Steve and Apple to their credit realize the mistake and completely reversed themselves so you as entrepreneurs when you realize you have the wrong model or the wrong product or the rock surface so the wrong vision on the wrong pricing or whatever it is I'm telling you now changing your mind is a sign of intelligence not a sign of stupidity number eight number eight that I learned from Steve's that value is not the same thing as price because I can honestly tell you no one ever bought a Macintosh because the Macintosh was cheaper no one because it is simply not true however if you add everything up including what you'd have to raise to do Windows debugging a Macintosh is a better value and I learned this from Steve it's not the list price on day one it's the total cost of ownership through the lifecycle of a product it is the product it is the support the training the transferability of data it is not simply the list price value is more important than list price the ninth thing I learned from Steve is that a player's higher a plus players that is if you're an a player you hire people who are better than you not worse than you if you're a B player however you hire C players and if you're a C player you hire a deep layer and if you're a deep layer you hire an EPA er why does a B player hire C player who hires a D player who are a zani player it's because if you're a B player you want to think that you're smarter and better than the person you hire and so you hire someone beneath you and then that person hires someone beneath them and if you start down this path you will wake up one day and you will see what's called in Silicon Valley the bozo explosion you need to fight the bozo explosion especially engineers because engineers think that engineering is hard and everything else is easy right so if you're an engineer you think this is the hard stuff sales is easy marketing is easy finance is easy ops is easy right I can hire anybody to do that and you will find out that you want to hire people who are better than sales than you are as an engineer because that's what makes a team strong did you hire a plus player this is a picture of the Macintosh division employees this is about 20 years after Macintosh was introduced and I have never worked at a smarter group of people than these people they I I am I'm like 50% of the IQ points of these people I freely admit that this was a truly great experience this changed my life number 10 number 10 I learned is that real entrepreneurs ship they don't just live in this darkroom programming trying to make this perfect product they ship they ship something that is the next curve but I'm telling you based on a song there's a song called don't worry be happy what real entrepreneurs do is they don't worry be crappy I'm not telling you that when you jump curves that when you get to that next curve it has to be perfect I'm telling you it has to be on the next curve but the first permutations of a product on the next curve are never perfect the first laserwriter was so much better than the best Daisy wheel printer but it was far from perfect the first Macintosh was so much better than him an ms-dos machine or an Apple 2 but it too was far from perfect the first telephone was so much better than the best Telegraph but it was far from perfect so don't get me wrong I'm not telling you to ship crap okay I'm telling you to ship something that jumps curve that is innovative and revolutionary but has elements of crappiness to it this is a machine made by Xerox PARC arguably the difference between Xerox PARC and Apple is that Apple could squeeze the trigger and Apple could ship Xerox PARC wanted to just make a better and better and better computer and it never shipped that's the difference and I learned this lesson from Steve at some point real entrepreneurs ship the 11th thing cuz I'm gonna give you bonus tonight because I'm at Cal the 11th thing is all the marketing boils down to this very simple equation which is marketing equals unique value okay I'm going to give you the equivalent of an MBA in the next slide very simple graph vertical axis how unique is this thing horizontal axis is how valuable is this thing this is a two-by-two matrix if any of you work for McKinsey first summer or anticipated working for McKinsey first summer this is called a two-by-two matrix I'll tell you what what Kinsey will charge you $250,000 for you want to be in the upper right hand corner now you're all qualified to work for McKinsey okay so let's go through all four corners bottom right corner bottom right corner is where you have something that's valuable but it's not unique you slap the same operating system on the same hardware you have to compete on price it's a generic business it could be valuable what you do but it's about price in the next corner is the corner where you have something that only you do it is truly unique but it is of no value in that corner you are just plain stupid this corner the bottom left corner is the worst corner because in that corner you have something that's not valuable and not unique I call this the dot-com corner okay so let's let's review one great example from the dot-com business pets.com let me just give you the Silicon Valley pitch for pets calm and may you never use such logic okay so this is how it goes there are 300 million Americans one in four owns a dog 75 million dogs each dog eats two cans of dog food per day 150 million cans of dog food per day total addressable market with my rock star programmers how hard could it be to achieve a mere one percent market share one percent market share of a hundred and fifty million cans of dog food per day is one and a half million cans let's say I make conservatively speaking $1.00 per can that's a million and a half dollars per day gross margin and unlike b2b business dogs eat every day of the year right so we take one and a half million dollars and we multiply by 365 and we get 500 600 million dollar business worst case conservatively speaking first year revenue how hard could this be right with our patent-pending curve jumping paradigm shifting rockstar software we're gonna we're gonna solve this supply chain management problem because the dog food business is supply chain management you have a dog you have a cow you need to kill the cow cut it in pieces put it in the can get it to the dog this is CRM you know what Carl relationship management okay and in this path from dog to cow or cow to dog there's inefficiencies in it and so we're gonna break down those inefficiencies one inefficiency is the dog food store why do people go to a dog food store what do you get in your car find a parking space go into the store and buy dog food like why would you do that do you go in that store do you make taste comparisons are you doing shopping no it's for crying out loud it's dead cows and cans right so we're gonna eliminate the dog food store that way everybody can get at this discount on dog food the problem is that you may give a discount on dog food but then you have to charge to get the dead cow in the can to people's houses and so you take out this discount but then you have to put in shipping and handling and then somebody has to be at home because when UPS drops off the dead cow and again somebody has to be there to get it so it's not as convenient and it's the same effective price so really it's not that valuable to be pets calm if you're a customer and then to compound that problem stupid people like me we said wow kleiner perkins has a pets calm Sequoia has a pets calm you know Draper Fisher Jurvetson has a pets calm we need a pest car right because oh my god seventy five million dogs eating two cans of dog food per day conservatively speaking that's a big market we need to tap that market so that's why there was pets calm be pets calm I piss calm last minute pets calm discount past there are ten ways to spend as much money online as at the dog food store and be less convenient so in that corner you're not valuable and you're not unique that's the worst corner of all may you never be in that corner the corner you want to be in is this corner up here okay here's your MBA marketing all right you want to be in the upper right hand corner you want a product the only product that you can buy songs from the six major music companies totally integrated very valuable to do that and you can only get it on an iPod right that's the corner if you in the car business you know all of us have cars that can park parallel to the curb that's fine if there's lots of parking how many of us have a car that can park perpendicular to the curb that's the smart car one of the few cars that can park perpendicular to the curb many of you have watches right brightening makes a watch called the brightening emergency if you unscrew a big knob on the brightening emergency pull out the antenna it broadcasts a signal 121.5 megahertz signal to airplanes airplanes see the signal and they say ah somebody's having emergency send Kevin Costner in the Coast Guard helicopter to rescue that person all right so this is not something when you take the wrong exit off highway 880 this is when you're about to die but that is truly a unique watch it can save your life right so I'm telling you if you're an engineer you need to create a product that's unique and variable if you're a marketing person you need to convince the world that the product you've created is unique and valuable that is the Holy Grail that is the essence of entrepreneurship when you're in that upper right hand corner you make meaning you make margin you make money you make history that's where the action is then you will endow not just chairs you'll be giving buildings to Cal okay that's the corner you want to be in and the last thing I'll tell you as my extra extra bonus for my friends here at Cal many times when you come to entrepreneurship you'll deal with skeptics and the skeptics will say well if you show it to me I'll believe it but I'll tell you my experience and what I learned from Steve Jobs when it comes to entrepreneurship this is the way that it works sometimes you have to believe in something to see it as opposed to see something to believe it the only reason why Mackintosh succeeded is because we believed in Macintosh we believed in it so much that we convinced people to write software for it when it didn't make sense we convinced people to start using it when there was no software we believed in its so strong that eventually it came true and if we had taken the attitude that when everything is perfect and everything was done and we could see it that's when we would believe it it would never happen and I dare say that that's the test for most entrepreneurial companies right so I'll give you some examples Pierre Omidyar founder of eBay he says my girlfriend collects Pez dispensers she wanted to sell Pez dispensers online there was no way for her to do it so I created a eBay by the way that's a total story okay it's a great story but it's a story in a sense you know eBay is one of those kind of companies right so eBay if you didn't believe in eBay if you didn't believe you could get a reasonably price to use the HP printer if you didn't believe that you would never see the HP printer listed if you were the seller of the HP printer you would never think to try to sell something like that online because you know you'd have to ask yourself well if I'm the seller of this printer how do I know I'll get paid and if I'm the buyer of this printer how do I know after I paid it'll work people needed to believe in eBay before they saw it people needed to believe in Google right like there were five other search engines at the time whoever thought that you know the way to measure relevance is the inbound links I mean who would have thought what if your YouTube what are the founders of YouTube so imagine the pitch for YouTube so we need unlimited bandwidth and unlimited server space so people can up illegal video and and what's going to make us tip is when people start dropping Mentos into diet cokes okay who in this room would fund YouTube all right how about Twitter oh yeah we're gonna enable people to set out 140 character messages to anybody in the world telling them that their cat rolled over that the line at Starbucks is law and right now it's about cats and it's about Starbucks but someday it will change governments it will change the world one might logically ask the founders of Twitter at that point well what no one might logically asked the founders of Twitter at that point well you know have you heard of email have you heard of SMS have you heard of IRC you know there are already ways to send out stupid text messages what does the world need with another one but people believed in Twitter it started at South by Southwest people believed in Twitter and so one day you woke up and Wow Twitter is a great form of communication in all these cases it took people believing in Apple eBay Twitter YouTube Google for those companies to become real and that is probably the most important lesson I can leave you with at all that as an entrepreneur you're gonna face a lot of skepticism a lot of doubt a lot of challenges and what its gonna take for you to succeed is first of all you need to believe because if you believe you might see and that's the lessons of Steve Jobs good luck to you all thank you

Channel: UCBStartups

Views: 8,955

Rating: 4.8499999 out of 5

Keywords: Guy Kawasaki (Author), Intel Corporation (Organization), Entrepreneur (Profession), Steve Jobs (Computer Designer), Keynote (Type Of Public Presentation)

Id: dkKOhDJhKnI

Length: 35min 12sec (2112 seconds)

Published: Fri Nov 22 2013