Metcalfe and Jobs recommend Marketing as first priority

Internet Pioneer Bob Metcalfe at ITEXPO West’s StartupCamp Event

While ITEXPO is taking place in Miami this week, we thought we’d share with you a speech given by Internet pioneer Dr. Robert (Bob) M. Metcalfe at StartupCamp during last fall’s ITEXPO. During his presentation, Dr. Metcalfe reminisced about Steve Jobs, who approached him about designing Apple’s network (Metcalfe would have called it “orchard” instead of “Appletalk”) and who introduced him to Job’s own PR firm, convincing him to hire them before he hired a VP of engineering. As we saw from Jobs’ whole life, he put marketing before sales, product development, engineering or any other discipline. Marketing-as-priority #1 was passed on to Metcalfe. If both industry pioneers think marketing & PR are job #1, do you?

Metcalfe also shared his thoughts on what makes a startup successful, along with his vision of the future of innovation.

We think Dr. Metcalfe’s hard-earned wisdom about what makes startups and tech companies successful can perhaps be a catalyst to transforming your own business. Enjoy!

When Bob Metcalfe retired from 3Com in 1990, the company placed a plaque on the new headquarters with this inscription:

“The only way you can tell the difference between being stubborn and being a visionary
is whether or not you are right.”

There is no doubt that Bob Metcalfe — the founder of 3Com and inventor of today’s local-area networking standard, Ethernet — is a visionary. During one of the best talks we’ve heard, Metcalfe, now a Professor of Innovation, Fellow of Free Enterprise and Professor of Electrical and Computer Engineering at The University of Texas at Austin Cockrell School of Engineering, shared some of the wisdom he now imparts to his students as he counsels them that they can one day change the world. As Dr. Metcalfe teaches, “How to get your startup going and get the free enterprise system to work for you.”

Metcalfe’s secret weapon

“My theory is the fate of startups depends on the networks that they form. Customer networks. Investor networks. Technical staffing networks,” said Metcalfe.  According to Metcalfe, startup networking and vision is the “secret weapon.” To illustrate, he recounted how, back in 1979 when he was launching 3Comm, his phone rang late one night. The caller?

“A young man introduced himself, said he was Steve jobs. He said he was from some company called Apple Computer in Cupertino.”

Metcalfe, along with the rest of the world, didn’t know who Jobs was at that time, so he asked Jobs to tell him about the company he was starting. Jobs did that, and explained his reason for calling that night. Metcalfe said, “Steve had heard that I was a networking expert and he felt that Apple needed to do networking eventually. Although their specialty then was the standalone PC, his vision was that eventually they would be networked and since I was the networking guy, he was looking for me. He invited me to Cupertino.”

Metcalfe went to Cupertino and met with Jobs, who did indeed want him to be the networking guy at Apple. Metcalfe turned Jobs down.

“Unfortunately, I had just incorporated my new company (3Com) and I had to break the news to Steve. And, you have to remember, I was doing this within Steve’s reality distortion field. So, I went to Cupertino and, amidst Steve’s reality distortion field, I explained to Steve that I had started my own company and I didn’t want to join Apple.

But I had this idea for networking his computers and I called it ‘orchard.’ A little glimmer of marketing there. Steve was very impressed that I called the network ‘orchard.’ And what he did, after I turned him down, was he recruited Bob Belleville, the guy who had worked for me at Xerox, and who became the head engineer on the Macintosh. And Bob immediately put a cheap Ethernet into the Macintosh –which was AppleTalk. Sort of Ethernet divided by 40. So, I missed the chance to design AppleTalk.”

It turns out that even though Metcalfe turned him down, Steve Jobs did him a favor. Jobs, who understood better than anyone that an innovative concept requires more than brilliant technology, introduced him to his own PR firm.

“He said, hey you’re starting this company. There are people I want to introduce you to. And he dragged me down onto Litton Avenue in Palo Alto to a business called Regis McKenna advertising and public relations. The first guy he introduces me to is an advertising and PR guy. Which gives you some hint of where Steve was going.”

Jobs went on to introduce him to others, but according to Metcalfe, 3Com had a PR firm before it had a VP of Engineering. “What benefited me was that Steve shared his network with me.”   Metcalfe told the audience, “I got the vision thing from Steve and it had a lot to do with the success of 3Com Corporation.”

“Let me visionate.” 

Metcalfe also shared what he sees as the future of the internet, which is where  video, mobile and embedded traffic intersect with energy, healthcare and education, there will be business opportunities.

At the end, Metcalfe took questions from the audience. Here are a few of his responses:

Q. Why do startups fail?

The uncontrollable ego of the founder. Lack of focus. “You just want to do too much and companies often die because they try to do too much.” Not enough money.

Q. What are the most important qualities a CEO of a startup should possess?

Metcalfe told the audience there are five things they should know:

1)     They should know that starting a company requires a lot of energy. (i.e., “take care of your health, not pulling all-nighters and subsiding on Ramen noodles and Coke and typing bugs in your software because you’re delusional”)

2)     You need to know how to write.

3)     You need to know how to speak.

4)     You need to know how to plan.

5)     And, you need to know how to sell.

Says Metcalfe, “The CEO should be able to do all of them, and here’s the secret to all of them: Listening.”

And, to wrap up, some final wisdom from Dr. Bob Metcalfe: “Not all life’s problems can be solved with a new website.”

The video is available here.

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