Guy Kawasaki [ 4 JUN 2013 | Innovation Economics ] I am going to talk to you today about what I learned from Steve Jobs. I worked for Steve Jobs twice in my life.

The first time from 1983 to 1987 in the Mac division — which was the largest collection of ego maniacs in the history of Silicon Valley. And that’s saying a lot, if you know people Silicon Valley.

The second time was a right after the 1997-1998 time frame. So I had two tours of duty with Steve.

I will tell you that he was just the greatest influence in my life. I would not be where I am without him. The world is a lot less interesting place without Steve Jobs, there is no question about that.

I’ve seen many books and many things written about Steve Jobs and I took it upon myself to write from first-person person, who was inside the reality distortion field, what I learned from Steve Jobs.

I usually use a top-10 format but and Steve Jobs cannot be limited these usual rules. I actually have a top 12 format today.

I’m going to pass along everything that I learned from Steve Jobs so that you may apply it to your lives, your businesses, your studies, so that you may in fact change the world — because one other things that Steve Jobs certainly did was change the world.

May he rest in peace but may his influence continue to inspire us.

Number one thing that I learned from Steve Jobs is experts are usually clueless. They will tell you something can’t be done, shouldn’t be done, is unnecessary.

Many, many people in the 1983 time-frame told Apple to build a bigger faster cheaper Apple II don’t do anything silly like get to the next curve. Experts are clueless. Not one of them should be believed.

As a young person in particular, do not listen to the experts, listen to your heart, go for it.

When you encounter nay-saying, go against the nay-saying.

This is what I call Bullsosity. Bullsosity is like the flu. You have to inoculate yourself, so that when you encounter Bullsosity, you will already have built up a resistance.

I’m going to give you three examples of Bullsosity, so you will build up the antigens for Bullsosity.

“I think there’s a world market for maybe five computers.” The chairman of IBM allegedly said this. Five computers in the world i five computers in my house. I have all the computers he anticipated, in the world, in my house.

“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 in 1876. In 1876 Western Union wrote off telephony. Oops!

Western Union should be Paypal today. But it’s hard to go from Telegraph, to Computer, to Internet, if you skip telephone in the middle. It’s too big a chasm to cross.

“There’s no reason why anyone would want a computer in their home.” Ken Olson, founder of DEC. Great entrepreneur, great innovator. He was so successful on the minicomputer curve he could not embrace the personal computer curve.

Number one: experts are usually clueless.

Number two: Customers cannot tell you what they want. Customers will tell you they want better faster cheaper Apple II, better faster cheaper status quo. Better faster cheaper what you already make.

Nobody asked Apple for a 128K Macintosh with no software — thanks to my efforts — 400k floppy, 128K RAM. Nobody asked for that. They wanted better faster cheaper Apple II.

Customers usually cannot tell you what they want. You have to have your vision, your passion, you need to jump ahead of them.

The way to jump ahead of them, is to get to the next curve. The next thing that I learned from Steve Jobs: the action, the true action, the great innovation in the world doesn’t occur on the curve you are on. It occurs on the next curve.
Classic example: Ice 1.0.

Bubba and Jr would go to a frozen lake or frozen pond and cut blocks of ice in the 1900s.

7 million pounds of ice was harvested in 1900.

Technology at that point was horse, saw, sleigh. Frozen Lake. Frozen pond.

Cold time of the year. Go out to the lake, cut the ice. Ice 1.0.

Thirty years later: Ice 2.0.

Ice factory. Now you froze water centrally. Big technological change. Now it didn’t have to be winter. You didn’t have to be in a cold city. You could have an ice factory in San Diego.

You can have an ice factory in Hawaii. You could have an ice factory in Mumbai.

It could be anyplace.

Big change.

Ice 3.0: refrigerator curve. Now the iceman didn’t have to deliver ice your house. You don’t have to go to the ice factory to get your ice. You’re your own personal ice factory in your house called refrigerator.

A PC if you will, a Personal Chiller.

The very interesting fact is that none of the ice harvesters became ice factories.

And none of the ice factories became refrigerator companies, and why is that?

It’s because most organizations define themselves in terms of what they already do. We cut blocks of ice in the winter. We freeze water centrally.

We make a device called a refrigerator.

You need to step back from what you currently do and look at the benefits you provide your customers.

Your clients.

The ice business is fundamentally in the business of convenience and cleanliness and it can be done by harvesting ice.

But it can be done by freezing ice centrally and it can be done with your personal ice factory.

Concentrate on the benefits not the processes of your organization.

The fourth thing I learned from Steve Jobs is: the big challenges beget the biggest accomplishments. Give people what Tom Peters called the Big Hairy Audacious Goals.

When IBM came into the computer business Apple ran this ad. We welcomed IBM to the computer business because we wanted to take on the biggest, most impressive, the most dominant company. Welcome IBM. Seriously.

It was a huge goal. Steve told us we want to defeat IBM. We want to send IBM back to the typewriter business holding its Selectric balls.

The biggest challenge beget the biggest accomplishments.

Number five: design counts. Don’t let people tell you that design doesn’t count.

People care about thinness, and aluminum, not black ugly plastic laptops.

How many of you use the big black thick ugly laptop. Hold your hands up.

Yeah! You are oppressed! Because nobody, nobody, voluntarily uses a big thick black ugly laptop.

I feel bad for you. I feel bad for you.

You could have something cool, and thin and beautiful. Enough people in the world care about design.

Design counts.

Number six: use big graphics in big fonts. This is the key to pitching. Just do this, and you’ll be better than 90% of the people using PowerPoint.

I’ll show you a great, great Steve Jobs slide.

This is a Steve Jobs slide at its best. Huge Windows logo. Huge logo. iTunes 150 point font. The best Windows app ever written.

Steve Jobs, with this slide, is proclaiming that Apple has written the best Windows ap. He’s using a huge logo, a huge font. Count how many words are on that slide. iTunes, the best Windows app ever written. Seven words.

The key to a great powerpoint presentation: big font, big graphics.

If you use the small font, and you read your small font, what happens is the audience, one slide into your presentation, figures out, “This bozo! They’re reading their slides verbatim.

“I can read the slides to myself faster than this bozo can read them to me. So why don’t I just read ahead?”

And you lose your audience.

If you want, I realize this is a heavy engineering crowd, I give you an algorithm. The algorithm is: figure out who the oldest person is in the audience and divide their age by two.

If you’re talking to sixty year old people divide by 2. 30 points. 50-year-old people divide by 2. 25 points.

Some day you may be pitching a 16-year-old venture capitalist. God bless you. That day use the 8 point font.

But until that day: big font, big graphic.

Number seven: Changing your mind is a sign of intelligence.

Many people believe that changing your mind is a sign of stupidity, because you got it wrong — and you don’t want to admit that you’re wrong, you want to hide the fact that you’re wrong. You don’t want to hold it out that you had to change your mind.

Steve Jobs taught me exactly the opposite. This is a Press Release from June 11th, 2007. This is when iPhone was introduced.

“Our innovative approach, using web 2.0 based standards lets developers create amazing new applications while keeping the iPhone secure and reliable.”

June 11th 2007, the introduction of the iPhone.

Steve Jobs is telling you why there can be no third party apps for an iPhone. If you want to do something that adds functionality to an iPhone, you have to have a safari plugin. It’s because we’re doing you a favor. We want you have a phone that is secure and reliable.

One could logically ask at that point, “well Steve, why do you say that the phone has to be secure reliable but the computer doesn’t?”

Why is it that there are third party aps for the computer?

Never mind. Don’t ask.

A year later: Apple Press Release. “Apple executives to showcase Mac OS X Leopard and OS X iPhone Development Platforms at Worldwide Developers Conference 2008 Keynote.”

One year later Steve Jobs has gone from “we are going to allow no third party apps for the iPhone” to “we now have an iPhone development platform. May there be many, many different kinds of apps –ranging from measuring your heart rate to iFart. Whatever it takes.

This is a 180 degree reversal. Steve Jobs said, “Closed System.” Steve Jobs said, “Open System”.

12 months later .

Changing your mind is a sign of intelligence.

And just FYI, when Steve Jobs, in 2007, said that the iPhone had to be closed, that you would have a secure and safe phone, all the experts said, “my gawd, Steve is right. You have to have a really secure and protected phone.

12 months later Steve opens up the phone and guess what the experts say?

“My gawd, Steve is right! You want an Open System so you can have an app for that.

Number eight: value is not equal to price.

There’s a difference here. Macintosh iPhone iPod any of those things – “i” anything is not the cheapest. But arguably it is the highest value.

This is a screenshot from an ad where the Windows guy had to run a bake sale to get money to support the bugs in Windows NT.

The Macintosh guy doesn’t have to do that, because there are less bugs.

Effectively, it’s saying that yes, Macintosh may cost more at the front end. But when you consider training, and support, and debugging, it is a better value.

Price is different from value.

Try to never fight on price.

Number nine: A players hire A+ players. That is, a good person hires a better person — not a lesser person.

What you’ll see is that B players, because of their insecurity, like to hire C players. They want to feel better than the person they hired.

The problem is, when a B a player hires a C player, it creates this downward spiral and the C player hires the D player and the D player hires the E player and guess what?

Pretty soon you’re surrounded by Z players.

This is what we call, in Silicon Valley, the Bozo Explosion.

You need to fight the Bozo Explosion.

This is a picture of the Macintosh division.

This is a reunion held about 25 years after the Macintosh. Some of the brightest people I’ve ever worked with. I consider it an honor to have worked with them.

Number ten.

Number 10 is that real CEO’s Demo. They don’t pass it to a VP of Engineering or product manager a PR weenie.

They do The Demo. Great CEOs can do The Demo.

This is a picture of Steve demonstrating the Macintosh 128 K in 1984.

He did The Demo, by himself.

I think many of you will probably start a company one day. Remember this day. If you want to be a great CEO, you have to do The Demo

If you can not do The Demo, you are a loser.

Do The Demo.

Number eleven: Real entrepreneurs ship. They ship.

The way it works in Silicon Valley is we ship and then we test.

Except Biotech.

What are the differences?

If you look at this, this is a very early version of, essentially, a Macintosh.

However, it came from Xerox PARC.

Xerox PARC pioneered the mouse, graphical user interface, windowing, tiling, drawing with the mouse, all these kinds of things. But the difference between Apple and Xerox PARC is that Apple could ship.

You know there’s a great song “don’t worry be happy” by Bobby McFerrin. But really, when it comes to innovation, the correct song is “don’t worry, be crappy”.

The first Macintosh was arguably a piece of crap. 128 K of RAM. 400K floppy drive. No software thanks to me. Slow printer. Piece a crap. But it was a revolutionary piece of crap.

It was better than the best MS DOS machine. Better than the best Apple II.
The first laser printer? Arguably a piece of crap.

$10,000 dollars. Printing single-sided. 8.5 x 11. Slow AppleTalk network. A piece of crap.

But it was so much better than the best daisy wheel printer it was okay to ship.
The way it works in technology is you ship, and then you test.

Real CEO’s ship.

Number 12: Marketing can be distilled to one simple graph. This graph has two axes. On the vertical axis, we measure uniqueness. On the horizontal axis we measure value.

This a 2×2 matrix. If any of you go on to work for McKinsey you’ll learn that in a 2×2 matrix you always want the upper right hand corner.

Mckinsey will charge you 25 grand for that.

Let’s discuss all four corners. The bottom right corner is where you create something of value but it’s not unique. There you have to compete on price.

Same operating system on the same hardware. You have to compete on price.

The opposite corner. In the opposite corner you have something truly unique.

Only you do it. But it has no value. In that corner, you’re just plain stupid.

In the bottom left corner, that’s what I call the dot-com corner because there you have a company like — that does something that is of no value and stupid people like me funded 10 other clones of

So it has no value and it’s not unique, that’s the worst corner of all.

But the corner you want to be in, the Holy Grail of marketing, the Holy Grail of entrepreneurship, the Holy Grail of innovation, the Holy Grail of making meaning in the world, is the upper right hand corner.

Create something that’s unique and truly valuable.

Unique and truly valuable.

Macintosh was unique and truly valuable.

There are other things. This is the Breitling Emergency watch. This watch, if you pull out the antenna, it puts out an emergency signal. So you don’t do this when you just take the wrong exit. You do this when you’re about to die.

Because you do this there will be a Coast Guard helicopter looking for you and Kevin Costner is going to be in that helicopter.

But this is a watch that can save your life. Not many watches can save your life. This watch is unique and valuable. The key to all of marketing, all of innovation, is you need to be in the upper right hand corner.

Make something unique and valuable.

This is my last slide. And my last slide is to tell you one of the most valuable lessons that I learned from Steve is that in life some things need to be believed to be seen.

Usually you hear this the opposite way. That in order for you to believe something, you have to see it.

But I will tell you, when it comes to changing the world, what I learned from Steve Jobs is, if you believe in a Macintosh, if you believe in iphone/ipod/ipad, if you believe enough — then you will see it.

Because other people will believe in it. Other people will create software, other people will create products. So you need to foster the belief in what you are dreaming, so that it becomes a reality.

Which is very different than saying,”I don’t expect anybody to believe it until I see it.”

You need people to believe it before they can see it.

I’d like to wrap up.

I consider it an honor to have worked for Steve Jobs. It wasn’t easy. It wasn’t easy, but it was an honor. And I can tell you, right now, in heaven Steve Jobs is telling God what to do.

Refrigerator 4.0

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