Don’t Call It a Business Comeback

John Sculley on entrepreneurship, adaptive innovation, analytics, Wharton and any disruptive field with “tech” in its name.

By Matthew Brodsky

We’re going to try to resist the urge. We won’t do it to him (not just yet). John Sculley III WG63 often gets treated in some circles like a typecast actor. He gets inaccurately shorthanded with a role he played three decades ago. The guy who fired such-and-such. In equally a disrespectful way, the same business commentators who can’t stop calling him an “ex-CEO” now laud him for a business “revival.” Revival? Sure, Sculley is thriving, but has he ever not?

Let’s continue to look forward, not backward, much as Sculley himself does. With his wife Diane, Sculley currently is involved in at least 13 endeavors. Zeta Interactive (with Sculley as co-founder and vice chairman) just got valued at $1 billion. And his fitness-tracker firm, Misfit Wearables, sold in December 2015 for $260 million. His Indian mobile company, Obi Worldphone, launched an affordable smartphone.

Sculley

“There’s probably never been a more exciting time to be involved in transformation industries than right now, and I haven’t lost my curiosity to be a part of it,” he says.

Name the “tech” and he’s involved in it—FinTech, health tech, mobile tech—as well as big data analytics for marketing. He’s not running the companies day to day or doing the management heavy lifting, he is quick to point out, but he is “very active.”

He’s a repeat author as well, his latest book being Moonshot, a culmination of decades of contact with the world’s greatest innovators, distilling their knowledge and his own into practical ways for the next generation of entrepreneurs.

He’ll tell you one theme runs throughout everything he does: big data analytics. Along with marketing, analytics ties all the way back to Sculley’s time at Wharton. As a grad student, he worked for the Management Sciences Institute. He was involved with the West Philadelphia Redevelopment Authority’s planning to rebuild the area around Penn.

“I was doing things like standing out on corners with a little clicker, clicking traffic patterns hour after hour, building map as to where people were clustering and building statistical models, figuring out what were the first principles of how you plan traffic vis-a-vis everything from foot traffic to street traffic to locations of shopping areas that were near and about the Wharton campus,” he recalls.

His thesis adviser was Professor Wroe Alderson, with whom he built statistical models. He worked with Russell L. Ackoff on Monte Carlo gametheory and Markov chain analysis.

“A lot of the things that those professors were known as the pioneers in, I actually get to do today … only with incredibly more advanced computers than we had then,” he says.

We spoke with Sculley in depth about what he is getting to do today, his views on innovation and his advice for aspiring billion-dollar startup founders. What follows is a transcript of that conversation.

WHARTON MAGAZINE: One of the things that caught our eye about your current work is your involvement in the health care space. Why is health care so ripe for disruption today?

JOHN SCULLEY: Health care managed to miss the World Wide Web, and so it missed the PC revolution. It missed the Internet revolution, and it sure as heck can’t miss the big data science Part of the $3 trillion health care spend that I focus on is consumerization, the whole revolution of putting the patient more in control of their own health. Letting consumers know a lot more, whether it’s the transparency of health information or the incredible opportunity to build truly unicorn companies in the space of virtual care. [With] the ability to combine digital health with new ways in which people can access health professionals and do it remotely and with data analytics, we’re able to capture more and more data about people without them having to actually go to the doctor’s office and have a face-to-

Those are just a few of the areas that particularly excite me.

Since I’m a consumer marketer, I’ve been in the high-tech industry for 33 years and I’ve been in health care now for about 10 years, it’s really a chance to take those three domains and look at the vectors of where they can intersect.

WM: What is your definition of “entrepreneur”?

SCULLEY: My definition of an entrepreneur is someone who says there has to be a better way, a better product, a better service than what’s out there today in any number of industries. So an entrepreneur doesn’t necessarily have to come from any particular industry, but they have to have an insatiable curiosity. Entrepreneurs by definition are risk-takers. So not everybody is cut out to be an entrepreneur. Entrepreneurs are willing to make mistakes, pick themselves back up, learn from those mistakes and try to figure out a better way of doing things based on what they learned. There’s no country in the world that gives people more cultural latitude to be able to make mistakes and look at it as a learning process, not as a failure event, and so I feel very lucky that I have lived in the U.S. and gone to school here and have worked in Silicon Valley and worked in entrepreneurial businesses so much of my life and continue to do that.It’s just a fascinating time to be an entrepreneur. The access to capital, the access to talent—people who want to be in entrepreneurial companies—has never been greater.

WM: What’s the big takeaway from this shift?

SCULLEY: The big takeaway for me—and I’m practicing it now with all the companies that I work with—is that there’s been this incredible market power shift that has taken place. It’s already happened—it’s not something about the future, it’s already happened. Power is shifting from incumbents, industry after industry, to customers because customers are now paying more attention to the opinions of other customers than they are to the incumbents. And the implications of that are just overwhelming, if you think about it in terms of the ways in which entrepreneurs can create entirely new businesses and not have to focus on, “How much capital can I raise to spend how much on marketing?” But they can focus on, “How do I build products or services that solve such a big, important customer problem and the solution is so good that customers want to rave about it and tell other customers about it?”

WM: You titled the book Moonshot. Is it fair to ask entrepreneurs to always shoot for such a big accomplishment?

SCULLEY: They should be dreaming about moonshots and be inspired by the people who are achieving moonshots, but it doesn’t mean that everybody is going to be an Elon Musk C97 W97 or Newton. We’re going to see that you can be an adaptive innovator even if you aren’t building a multibillion-dollar company. You can be an entrepreneur who follows the same set of first principles. Whether it’s Mark Zuckerberg or Musk or Steve Jobs or any number of other exceptional entrepreneurs who were role models for many of us—you don’t have to be exactly like them, but you need to realize that moonshots today are not just about one or two individuals changing the world, but moonshots are about how the world is different the day after someone does something that is profoundly important. For example, when Steve Jobs and Steve Wozniak created the first useful personal computer, the world was never again the same. When Larry Page and Sergey Brin created Google and enabled people to search vast amounts of information over the Web, the world was never again the same. It changed the world for all of us, not just for them. And I think the significance of moonshots, which is a well-known metaphor in Silicon Valley, obviously inspired by John F. Kennedy saying back in 1961, “We’re going to put a man on the moon and return him safely within the decade,” [is that] we actually did it.

The moonshot really refers to the fact that we’re still living in amazing times, and we still have the advantage of expecting technology to give us magical possibilities, whether it’s the ability to use mobile devices, cloud computing—or ahead of us is this incredible change, what’s known as the Internet of Things.

WM: You’ve met and worked with so many of those amazing business and tech pioneers, and you’ve shared many in your book. Do one or two stick out in your mind?

SCULLEY: Many of these most talented entrepreneurs are willing to talk about what they’ve learned with me because they know I’m not going to ambush them. I’m there to try to help them express what came out of their experience that could be valuable for the next generation. One of the things that I always keep to heart is what I learned from Professor Marvin Minsky at MIT Media Lab when I was involved with them for 15 years. He used to say, “You don’t really understand something until you understand it more than one way.”

I’ll give you a current example. Take Snapchat.

I was reading a really interesting story about Evan Spiegel, who is one of the co-founders, and he said his big insight was that everybody was thinking about digital photography as an incredibly easy way to store your pictures as memories. He said he thought about this same technology as an incredible new way for people to communicate. That insight created a company that’s worth over $20 billion, and it just shows you how important it is to see things more than one way. To take things that seem obvious and suddenly discover that there are non-obvious ways of looking at the same facts.

WM: In your book you describe having such a capability as being an “adaptive innovator.” How can entrepreneurs train and learn that skill?

SCULLEY: You first have to learn how to learn. Learn how to ask the right questions. One of the most important things that you can get in a business education is not only learning how to learn but learning how to connect with other people and build relationships with friends and with professors and alumni and others who can help you see things a different way, and this is how you get these multiple perspectives. I never think, looking back on my Wharton education, “What did I learn in a class in finance or in marketing or in statistics?” I think about, “Who are the kinds of people that I met? What was I curious about? What tools did I get to think about and interpret many of the events that are going on today?” The other thing you learn if you want to be an entrepreneur is that the cut is all about doing something that hasn’t been done as well before. Again, you have to have a great curiosity.

WM: Regarding curiosity, we know you like to carry a notepad around with you to jot down observations and questions to remember to think about later. Can you share what you’ve written in it lately?

SCULLEY: Yesterday, I was at a board meeting of a new company called FlexPharm, and we’re working on an entirely new approach to solving neuromuscular cramps that everyone from athletes to older people get at nighttime. I was learning a lot about the whole field of neuroscience as the person who invented the technology that we’re using, Dr. Rod McKinnon who was a 2003 Nobel Science laureate in chemistry, was explaining [how] it all started because he’s an endurance athlete who likes to go out and do these long-distance ocean kayaking trips. He would get cramps when he was out there in the cold, and he had the great insight that the muscular cramps that he was getting were not going to be solved by focusing on the muscle. It was going to be solved by focusing on the nerve.

Two days earlier, I was giving the keynote at [a medical conference] about the whole future of data science and material science as it relates to genetic engineering.

Also last week in my notebook were notes from a board meeting we had at a company I co-founded in New York called Zeta Interactive. We’re one of the largest marketing data science companies in the world, and we were working on what’s the next phase of our investment and growth.

And if you look at my notebook from about two weeks earlier, I was giving the keynote at the Socialbakers conference in Prague. This is the largest social media marketing event of the year, and all the major companies were there … and the really interesting timing of that within my notebook was for the first time, we saw mobile video has surpassed traditional television video. So I’m sitting there saying, “Wow, I was around at the beginning of television, and now I’m here at the beginning of the next thing beyond television.”

There are lessons that have come back from each of those experiences that are helping me advise the CEOs of the companies I’m involved with to say, “Hey, you ought to be aware of this if you haven’t heard about it.” So it’s kind of connecting the dots.

WM: Forgive us for asking this, but you’re often referred to as the former CEO of Apple. If you could come up with your own shorthand description of who you are, what that would be?

SCULLEY: The reality is that I am the former CEO of Apple, but I don’t think about it every day when I wake up. It’s a relatively small part of my life because I left there 22 years ago, and the reality is that I have done so many things since Apple that I’m equally proud of as anything I was involved in at Apple.

I never look back, I always look forward, and I don’t even think much about describing what I do. It isn’t the title. I can tell you that when I was at Apple, I worked there in the era where Steve Jobs liked us all to make up our own titles because he didn’t have much respect for traditional titles. So I thought about it, and the title I came up with for me that was actually on my business card if somebody goes back and finds one from that era. It didn’t say CEO, even though I was the CEO. It said, “John Sculley, Chief Listener.” And I always looked at my title of Chief Listener being a lot more accurate of what I really cared about than anything else.

 

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