Three Big Ideas 

Day 329 Week 48 Sunday, November 26, 2023

The first is that Innovation is involuntary, and it is an extension of the creative fact that all human beings are born with the ability and necessity to be good at in order to survive. Innovation does not come about because a boss decrees it. It’s not a magical thing that only some people can do. It is an involuntary part of being a human being.

The second large idea is that nobody can do anything by themselves. It always takes a village or a team or stakeholders. Stakeholders are other people who have some stake in your success when you’re creating a renovating. The image of the lone an artist in their studio or the musician in their practice room with inventor in front of their desk it’s just very incomplete. All of us need help no matter who we are.

And the third idea is what’s in it for we? Too many people only asked the question what’s in it for me?  You have to turn the M upside down and turn it into a W. Since you cannot do things by yourself, and you know that they were going to be others and part, it is really worth your while finding out what’s in it for them, or what’s it for us, or was it for we.

Now, who are these messages for?  Not as much written for innovators, as for creative outliers. The difference between these two groups is that one comes from the other. Innovators come from the group called creative outliers. The difference is innovators have their ideas and inventions adopted. They have their Works listened to, viewed or read. In short they have traction.  They are in a dance with an external reality.

You have to have traction before you can scale. You have to scale in order to make money.  You cannot be a sustainable innovator unless somebody is willing to pay for what you’re doing, and that means you are delivering value to someone that is adequate for them, to part with their money and give some of it to you.

This may be unwelcome  news for many artists, creators ands inventors. It means, they all need to act like small businessman.  Education is a not-for-profit exercise and ostensibly so is art. They both have expenses and they both need to pay the bills and they both need to be concerned about cash flow.

Even Miles Davison and Duke Ellington, to world-class innovators how to keep a band working, and it cost money to travel and sleep and eat. Important that they each had a team of virtuosos who are more difficult to deal with, but worth it. This was the case at Bose at Apple, where I worked for 15 years. They all recruited virtuosos not just who was avaialble. And they all had to operate a business to stay afloat.

Selling Time

Day 320 Week 44 Q4 Thursday, November 16, 2023

Have you ever finally completed a work, which could be a product that represents who you are in the world and what you want to be, and that you are proud enough of the result to go out and really sell it? And to also have the understanding that you are also selling yourself with this product.

It is a glorious feeling. All creative outliers have to earn a living along with everyone else unless they have inherited wealth or have a patron. I prefer the stakeholder path, where a group of people helps you, and you also try to make sure they get something in return for helping you. Just as I do not want to receive money without turning it in, which is why I am no longer interested in running a nonprofit. I am not comfortable asking for money, but I am comfortable earning money.

This is not so simple. I am not comfortable earning money doing something that I either do not want to do or do not think is producing any value in the world. I had no problem going out and selling the acoustic wave piano because I knew that it would positively change people’s lives, and it did. It also created a brand new mark for the self-contained electro-acoustical piano, which to this day sells at least in the hundreds of millions of dollars per year, if not billions internationally.

That product came into being almost 40 years ago, and it was the last product. I was really excited about selling. I was also excited about bringing audio to the computer world and selling it while working at Apple.  But this is a different feeling. This time, I am not working for a large company. I am working for myself. I own all of the intellectual property, rights, and credit; although I had a lot of help, it is indisputably my work, and I can finally say that to the world, and this will not be the last one. This is the first of many.

This is clearly the path for me. I do want to have a me-sized company with a single person; although there could be contractors, there will not be people with equity. There is a single person in charge, and it is me. I very much like this feeling, and I am very much up to accepting the responsibility to make it succeed or fail.

The democratization of technology has reduced the barriers to entry to commence new enterprises. You do not necessarily need to have a manufacturing plant or a laboratory, or even a studio. You can have an idea and some skills and judgment and some capital and a lot of hours of work, and you can make something happen.

And as my father-in-law says, Go Forth Mightily!

Shareholder Value

Day 285 Week 41 Q4 Friday, October 13, 2023

After you have something of value to deliver, you may find the stakeholders you are now working with have become different. You see, the people who are good at making things are not necessarily good at selling things. The converse is also true. The people who excel at selling do not always know how to make anything. Suppose you are moving from the traction phase to the scaling phase. A corporation may be formed, and you may find yourself as the CEO.

As CEO, you may be taking literally the concept of maximizing shareholder value. Here is where I made a rather large mistake. I focused on short-term shareholder value instead of long-term shareholder value. I was also such a neophyte that I had not yet learned that the early small fry friends and family investors did not really determine valuation.

As an under-thirty-year-old first-time CEO, I was quite full of myself and thought I knew much more than I actually knew. I had gotten our first investor for the relatively small sum of $20,000, and remember, this was more than 40 years years ago when $20,000 was still something. From this initial investment, I thought I could derive a valuation. Simple calculation, right? $20K for a few percent of the company and then multiple to bring it up to 100% to determine the value of the company.

Well. I quickly learned that valuations are determined by large, not small, investors when I found two larger investors who had their methods and calculations to determine the value of a fledgling company. Now., at the time, I was not even clear what the difference between a small and a large investor was or how many different investments might be necessary, and this is a moving target.

But back to shareholder value. Both of the potential larger investors had strategic reasons to invest. They made hardware, and we had a large, complicated, and expensive software package, which we sold for $25,000, that ran on minicomputers. The personal computer had barely been invented at the time, so computers were still million-dollar things, not thousand-dollar things.

Investor A was a large company that told me it had deep pockets and would be capable of investing in subsequent rounds of financing. The other offered more per share but was much smaller. I thought I was a good CEO by going with the larger valuation determined by the smaller investor. But the other reason was an ego reason. The larger investor basically defined a trajectory by which I would be bought out and ejected from the company in a few years after more rounds of financing when I would no longer be qualified to run the company. 

In my youthful arrogance, I rejected this smaller offer partially due to valuation but equally to being kicked out of my own company without realizing I was being offered an exit, which would have permitted me to retire in my early thirties. The two large lessons are long-term shareholder value and do not let your ego get in the way of your success.

Executive Innovation Chairman 

Day 186 Week 27 Q3 Thursday, July 6, 2023

There is a strong tendency today in society to worship celebrity. I do not know what happened to being internally referenced and having checks and balances, but it is clear that absolute power tends to corrupt. The centralization of power is not great for innovation. Ideas typically must run a gauntlet to get adopted, and having impenetrable boundaries is not the way of change. Ideas and technologies have to seep through and change their form along the way to achieve their potential.

When business or political leaders have too much power, it tends to limit collaborative adaptation. Some fantastic leaders are brilliant forces of convergence guiding their entities to greater heights.  But most leaders do not fall into this category even if their ego propels them to believe they are. 

One case in point, is when the CEO of a tech company is also the Chairman of the Board. Not only does this destroy the checks and balances a young inexperienced CEO needs to progress, but it can propel them into an upward ego spiral deifying them in the process if they look like they may be able to make a lot of money. 

It is clear that a CEO is responsible for returning shareholder value, but over what time frame? Long-term or short-term? And for what size enterprise, small or large? And besides the fiscal and legal perspectives, what about the innovation perspective?

Yes, companies have to make money and obey the law, but is there an innovation angle to explore here?  There are certainly examples of this concentration of power truly working well from an innovation perspective. In the tech sector, HP was one, Apple another and Bose Corporation as well, were all led by amazing individuals who managed to grow not only from technical capability to management and executive capability but all of the way up to governance, where they presided over the board of directors.  This is not the norm, and most young CEOs are not going to be able to do this, no matter how large their ego becomes and how deified society makes them.

It is extremely short-sighted for society’s predilection for celebrities and celebrity to carry forth and dominate governance, especially when it comes to innovation. Ideas can come from anywhere, and if shut out, the larger enterprise can suffer. 

Is there a role for innovation governance? Can there be board members who know a lot about bringing ideas to fruition? Sure, we need tax and legal experts, but what about idea experts or innovation experts? There are many dances for executives to dance. And they are not the same dances that board members have to dance. They do not have the same priorities or the same responsibilities. They also do not have the same relationship with insight, ideation and innovation either.  

Food for thought.