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CREATING & FINANCING
THE NEW ECONOMY
8. Think digital, act analog
The eighth thingonly two more to
gut outactually three, eight, nine and ten.
The eighth thing is to think digital
and act analog. "Think digital and act analog" means that you use all the power
of your SQL servers, your databases, your huge NT machines, your workstations, use all
that digital power, but, fundamentally, you are using that power for very analog
endsto build relationships, to increase customer satisfaction, to increase efficacy
and power and independence and productivity and creativity.
You have to think digital, but you
have to act analog. A very good example is Ritz Carlton (http://ritzcarlton.com). Ritz Carlton keeps track of customer
preferences as guests stay at their hotels. If you were to go to Ritz Carlton and say that
you were allergic to down pillows, the next time you went to a Ritz Carlton anywhere in
the world, they would pull up your record from this humongous database and give you the
right kind of pillow. The digital power has been used to do a very, very analog thing. In
garage.com's case, we have a lot of digital power. We have this whole digital database
where there is matching and Web forms and generated emails and all this kind of stuff.
It's all digital, but it comes down to very, very analog relationships. One of the
strongest relationships is between garage.com and another company, Silicon Valley Bank (http://svb.com). I don't know their
position here, but back in Silicon Valley, they are the bank for high-tech
startups. We use our Web site and have all this stuff going on, but, fundamentally, it's
because we get along really well with Silicon Valley Bank. They are a great banking
company and their president sees the vision of garage.com. It came down to a very analog
relationship. So you need to think digital, but you need to act analog and build those
alliances. Alliances are analog; they are not digital.
9. Don't ask people to do things
The ninth thing is this, don't ever
ask people to do something that you, yourself, would not do. Many times in a revolution
you are building this cool product or this cool site and you say, "Wow, it is so
great. People will go through this 12-page questionnaire to get a password. They will go
through the 10-week setup process. They will go through the $10,000 price point." But
you know that you, yourself, would not do that, right?
Here's another negative example. There
was a bank in California, not Silicon Valley Bank because Silicon Valley bank would never
do such a stupid thing, that created a genius of a marketing program. They had a computer
call people at their homes in the evening. If the computer detected a human voice that
answered the phone, then the computer said, "Please hold, a bank representative will
be with you shortly."
Now, let's review this process. Some
computer is going to tell me to go on hold to wait for a pitch. You know, this is not
rocket science here. Obviously, if that bank's vice president had gone home and received a
call from American Express saying, "This is the American Express computer. Please
hold. Someone will be with you shortly to explain the benefits of being a card holder of
American Express," he or she would have hung up the phone.
Okay, so that's a negative example.
I'm going to give you some positive examples. How many of you have children in this
audience? Wow. See, most of the high-tech audiences I speak to, they don't have kids.
Seriously. I don't think they have sex. I figured it out. I think that most audiences are
largely Windows users and as a Windows you have a choice of either having sex or printing.
I can do both. My wife and I have two kids, so we've had sex at least twice. I have to tie
this back into the speech or . . . where the heck am I going right? You wonder. You are
There is a point.
I have found that most audiences want
a speaker to succeed, so when they see a speaker sort of going off topic, they get really
nervous. "How is he going to pull himself back and rescue his own butt when he goes
off on this?" But let me tell you. Keep calm. Keep calm.
So, as I said, my wife and I have
these two children, and one of the things I discovered as a father in the early days was
that kids generate a lot of laundry. I really didn't know this until we went on our first
family vacation. A "family vacation," by the way, is like "Apple
marketing," an oxymoron.
So, we go on this family vacation and
I discover that kids generate a lot of laundry. I didn't know this at home, I guess,
because at home there is a laundry fairy. You throw the laundry on the floor and the next
day it's clean. Laundry fairy is usually associated with people with a Y-chromosome, I
have been told. Anyway, we go to this resort city and I finally figured out that kids
generate a lot of laundry. There are other consequences to kids generating a lot of
laundry. First of all, sending laundry through a hotel laundry system is extremely
expensive. Five dollars for a pair of socks, okay. There are also logistical issues. My
boys each have their own blankie and, without those blankies, they won't take a nap or go
to sleep. The logistics of sending out those blankies at 9:00 in the morning and maybe
getting them back at 7:00 at night is frightening because if those blankets don't come
back, they won't take a nap or go to sleep. If they won't take a nap or go to sleep, one
has to ask the logical question, "Why go on vacation at all?" Stay home with the
Okay, so all of this is leading up to
telling you about this great hotel in Kauai called the Kauai Hyatt Regency. If you go
there, you will see that there are laundry rooms on every wing. That means that there are
less guest rooms. It also means that less laundry is sent out through the hotel laundry
system. Finally, if you went into the laundry rooms, you would see that the washers and
dryers are free. I was just shocked that at a Hyatt Regency in Kauai they don't even want
the quarters that you'd have to put in at any other hotel, if they had laundry
rooms at all. That's a positive example of "don't ask people to do something that you
You know, a lot of you have kids. I
have to tell you some kid stories. Now, I know I'm getting off track. This is going to be
purely irrelevant, all right, understand that. I understand that. Maybe I can pull it into
biotech. Do we have any biotech people here? Okay.
I believe that there is a nesting
hormone. This nesting hormone kicks in approximately three months before the due date. The
nesting hormone has never been chemically identified, but I'm telling you, it exists. This
is what the nesting hormone makes you do. First of all, you have to make this big decision
about childbirth, and I'll tell you what happened with us. For our first child we were
going to do natural child birth, right? So first child, you go to Lamaze class. How many
of you have been to Lamaze class? Okay. I speak approximately 120 times a year. I'm very
comfortable in front of audiences, but Lamaze class, I have to tell you, absolutely threw
me for a loop. You are sitting in this room in bean bag chairs, and there is an instructor
who is a Grateful Dead fan and her name is Moonbeam.
You had the same instructor, huh?
a baby that is statistically more drowsy, more sleepy, and less attentive."
So, Moonbeam goes around the room and
asks my wife, Beth, "Why are you here?" and my wife says in her breathless
fashion, "Well, I'm here because I want to learn how to give birth naturally using no
drugs. I want to learn how to use relaxation and breathing techniques. I read in What
To Expect When You Are Expecting that if you have an epidural, that the chemicals
enter the baby's bloodstream, creating a baby that is statistically more drowsy, more
sleepy and less attentive."
I'm hitting her at this moment,
saying, "You know, Honey, those are features, not bugs."
So then Moonbeam comes to me and asks,
"Guy, why are you here?" I said, "Well, Moonbeam, my wife said I got her
pregnant and I had to be here."
That's one thing the nesting hormone
does. The second thing the nesting hormone does is to make you make a decision about
diapers. First child, you are going to use cotton diapers. How many had a first child and
used cotton diapers that you wash yourself? Okay, this is how this works. First child, you
are going to wash your own cotton diapers, biodegradable, hypo-allergenic soap, right?
It's born. Three weeks go by. You are
trying do this, but you notice some problems. You have these difficult choices. Either
your house stinks, or you feel guilty. Your house stinks because, one, you don't want to
wash its stuff with your stuff, so you are keeping it separate. If you keep it separate,
your house stinks. If you wash this little pile of stuff so that your house doesn't stink,
you feel guilty because you are using all this rinse water. So these are the choices.
After three weeks, we go to a cotton
diaper service, which also creates problems. Cotton diaper services create problems
because you are in a daze for the first 10 or 15 years of a child's life, so you forget to
take the diapers out, and, once again, your house stinks. Or they forget to deliver. It's
a mess. After six weeks of our first child's life, we went from cotton diapers that we
were doing ourselves in biodegradable, hypo-allergenic soap, to a cotton diaper service
to, "Tell you what, we are going to use Pampers and we are giving money to the Sierra
How many of you, when you had that
first child, bought the beautiful plastic bathtub with that thing with the 45° angle,
with the foam, so you could wash your child? Today, my kids are three and five. A whole
new logic kicks in, which is, "You went swimming today, you don't need to take a
bath. That's why they put chlorine in pool water."
When the first child is going to solid
foods, we went to the whole foods market where we bought these organic carrots that have
never even come within 50 feet of a pesticide. We took the carrots home, boiled them in
Perrier and mashed them. Today, with kids who are three and five, did you know that French
fries from Burger King is a vegetable? It's a whole different logic.
Anyway, those of you who are worried
that I'm running out of time or that I'm off track, I'm coming back to the speech. You
10. Don't let the bozos grind you
The 10th thing is, don't let the bozos
grind you down. Trust me, the bozos are going to try to grind you down. You could almost
make the case that when stupid people tell you that you are going to fail, it means you
are on to something. Let me give you some examples of bozo-sity, and this is bozo-sity
from smart people.
"I think there is a world market
for maybe five computers." Thomas Watson, chairman of IBM, said that in 1943. Five
computers. I have five computers in my house, all printing. With or without sex, all
"There is no reason anyone would
want a computer in their home." Ken Olson, president, chairman and founder of DEC
said that in 1977, a year after Apple had formed.
business plan for Federal Express got a 'C' from Yale."
"This telephone has too many
shortcomings to be seriously considered as a means of communication. The device is
inherently of no value to us." That's from a Western Union internal memo in 1876.
Imagine the difference between Western Union's approach to telephone and telegraphs versus
Sprint laying fiber optics near the locomotive.
"We don't like their sound, and
guitar music is on the way out." That from a recording company rejecting the Beatles
"A cookie store is a bad idea.
Besides the market research says America likes crispy cookies, not soft and chewy cookies
like you make." That was a response to Mrs. Fields' idea for Mrs. Fields' Cookies.
The business plan for Federal Express
got a "C" from Yale.
In a second moment of humility in the
same speech, which is really rare for me, let me tell you my own example of bozo-sity.
About three years ago, a partner at Sequoia who funded Yahoo! called me up, and said,
"You know, Guy, we have a company that we'd like you to interview for as a CEO."
At the time, I was living in San Francisco. San Francisco is an hour from Menlo Park where
Yahoo! was, so I said "Well, you know, where is the company?" Menlo Park.
"What's the company's name?" Yahoo!. I said, "You know, Mike, I have two
kids now. Best case, it takes an hour to drive each way, and what does Yahoo! do?" He
says, "Well, they make a search engine."
I said, "How could you make a
business out of a search engine? I'm just not interested. It's too far to drive and I
can't believe you can make a business out of a search engine."
Now, the interesting thing is, it's
not clear that I would have gotten the job. It is further not clear that if I had gotten
the job, that I would have done the tremendous job that Tim Koogle has done, but I tell
you something with almost total certainty, I would have been there long enough to vest
So the point here is that even smart
people can have moments of great bozo-sity. I just want to tell you that my interpretation
of this nay-saying and bozo-sity and predictions of failure is that they may really
indicate that you are on to something.
This is not to say that it's easy,
that whenever people say you are going to fail, you are going to succeed. I wish that was
the case. I fight some of this bozo-sity when people say, "Why does an angel network
or garage.com have to exist? There are too many deals already. There's too much
money." All that kind of stuff you just have to deal with, that
But I'll tell you one thing for
certain, no matter what people say, if you don't try at all, you will never know. That's
what separates a revolutionary from a run-of-the-mill person, so don't let the bozos grind
you down, okay?
I gave you 10 things, but if you cut
the 10 things down to three, in the big picture they are:
Create like a god
make a world class product or service
Command like a king
make really tough decisions, fight the status quo and break down the barriers
Work like a slave.
Those are the three things you have to
do to be a revolutionary. If you have revolutionary potential, I believe that you have a
moral imperative to try to make that revolution successful and make the world a better
place. You will find that defeating bozo-sity is more satisfying than accumulating the
economic trappings of success. Then you will find that making the world a better place is
even more satisfying than defeating bozo-sity.
Then you will understand the greatest
lesson of all, which is that being a revolutionary and making the world a better place is
the greatest role that life can bestow upon you. That is how to be a revolutionary. Thank
you very much.
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