John Sculley III, the former Apple CEO responsible for helping mass-market the personal computer, and for driving $8 billion in sales during his 10 years at the company, doesn't seem to want to be remembered for his successes in Cupertino. And, although he's proud of helping to develop the wildly successful Pepsi Challenge advertising campaign, and turning a regional soft drink company into a globally recognized brand, he doesn't seem to want to be remembered as a veteran of the Cola Wars, either. Sculley, now 76 years old, is dedicating his life to finding, developing, and investing in the next "moonshot" technology. He also wants you to know that, contrary to popular belief, he's got nothing but love for the late Steve Jobs.
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The Apple of Jobs' Eye
His tenure at Apple, which began in 1983 and ended unceremoniously after he battled the Apple board, has been the subject of barrels and barrels of ink. He clashed with Jobs, he fought the board, and, in some respects, he failed gloriously. Despite all of the tension associated with this time in his life, he's happy to discuss what went wrong, why, and why he got a raw deal.
During his time as CEO, there were two camps at Apple—those who were trying to get the company to focus on selling software (a la Microsoft) and those who wanted to continue to deliver and expand the company's premium hardware offerings—the way Steve Jobs intended when he founded Apple in 1976. This was in the early nineties, several years before the dotcom era erupted. As Sculley tells it, he was intent on delivering handheld computers to the market, devices that could be used without keyboards, based on gestures and movement.
The two devices on which Sculley staked his reputation, Apple Newton, and General Magic, never materialized into the iPhone, or even the BlackBerry, both of which owe their success to Sculley and his team's exploration. Sculley said it was simply a matter of poor timing that stopped these devices from becoming moonshots, which is shorthand for groundbreaking, innovative, and ambitious technology. John F. Kennedy took a moonshot and we got Neil Armstrong. John Sculley took a moonshot and he got canned.
"I got fired," Sculley said, during a phone call with PCMag. "The reason I got fired was Moore's Law," which, put simply, is a 1965 theory that computer components and computers themselves would continue to get faster and smaller, thus driving innovation and consumer technology sales. "There was a strong feeling by many [at Apple] that Apple should license its software [to compete]…I was adamantly against that." As for Newton and General Magic, both devices were "introduced several years before the web…before the cellphone," Sculley explained. "Neither were successful and I got blamed for it. But out of Newton, the ARM processor was developed, and ARM is now a billion dollar company, in 8 billion devices. Timing is everything."
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"There were two CEOs between me leaving and Steve [Jobs] returning. In those intervening years [Apple] did license Mac software and they almost went bankrupt [because of it]. But when they sold the ARM technology and got $800 million they were able to buy Next Software (Job's new company) and bring Steve Jobs back."
Sculley takes a similar stance on his public fight with Jobs, who reportedly attempted to remove Sculley from his position after the two fought over the direction of the company's Macinstosh unit in 1984-1985. Sculley said that he never fired Jobs, and that Job's public battles with the Apple board were simply a matter of his ideas being ahead of their time. This has been his stance for more than three decades. However, Jobs never forgave Sculley for his departure (dismissal?), and he famously told the BBC in 1996 that he "hired the wrong guy" when he recruited Sculley from Pepsi.
"The principles Jobs created are still alive and well today," Sculley said. "He became a great CEO. Apple pays attention to detail better than anyone in the world today. [Jobs] may have been imperfect when he was young, as we all were, but he laid the foundation."
Sculley the Investor
Since his days at Pepsi and Apple, Sculley has remained active, albeit more low-profile than he once was. He was a founding investor at MetroPCS, he helped launch and sell Hotwire.com and Buy.com, he cofounded database and services company Zeta Interactive, and he launched Obi Worldphone, a smartphone company aimed at selling devices to the developing world.
He also published a book, "Moonshot," in 2014. The book examines how start-ups can become transformative businesses driven by data in order to solve a specific customer problem. "I never intended to write another book," Sculley said. "I've been involved with a fairly wide range of companies. Many became multibillion dollar businesses. All of the exponentially growing technologies will have derivative effects that will shift the power in the marketplace from large incumbent enterprise companies that have been dominating market sectors for decades to the customers [who buy these products]."
What Sculley means is business transparency combined with the viral nature of content creation has given consumers the ability to change how organizations go to market and where they dedicate their resources. For example: Sculley said companies like Facebook, LinkedIn, and Google don't spend money on advertising the way they would have in previous eras. "You don't have to [anymore]. Customers love their service so much they tell their friends."
In order to find those companies that will have a similar effect on the future of business, Sculley said, "I always look for a big customer problem that the start-up believes it can solve. My vantage point starts with the customer. The business plan is a look backward at where you were before and how much improvement you will have from a budget of resources moving forward. However, a customer plan is more important for an entrepreneurial company. Once you define the problem, everything revolves around customer metrics, engagement, recruitment, lifecycle, and retaining. You start to see the business in a very different way."
The problem, as Sculley sees it, is that technology that's unique one year quickly becomes a commodity the next year. So, the value of your business is its domain expertise. "A lot of smart people come to Silicon Valley with smart ideas, but you don't see 10,000 smart companies. You need the domain expertise to make it work."
"Kodak had smart people and a $20 billion market cap. In 2007 they spent several billion dollars in vertical integration to lower the cost of film processing to compete with Walmart. That was the same year Steve Jobs created the iPhone. All this happened when we went from 2G to 3G networks, which enabled you to go from sending text to sending an image through your phone. Those things gave Apple domain expertise in three different domains that Kodak didn't have. Within three years, Kodak filed for bankruptcy and Apple conquered the world."
Advice for Entrepreneurs
Sculley said he advises young entrepreneurs to learn to become risk-takers, to fail quickly, and to learn from mistakes in order to grow. Another important lesson that he teaches entrpreneurs is good recruitment.
"When I was young I thought I could do everything better myself. I didn't appreciate how important it is to recruit a great team. Team members will often have different experiences and better competence than you have with certain tasks. Try to recruit people who are actually better than you. One of Steve Jobs' greatest talents was recruiting really, really good people."
Sculley is currently scoping the healthcare domain to find and invest in the next Facebook or Google. "We have a really big problem in the US. We still don't cover everyone's healthcare. We spend $3 trillion in healthcare every year. What we're offering is unaffordable. We need to find a way to give better quality care at a more affordable rate to chronic care patients."
He is excited about a new company called RxAdvance that is building out a pharmacy benefit manager program designed to manage standard and specialty drug benefits. RxAdvance generated $200 million in Generally Accepted Accounting Principles (GAAP) revenue in 2015, and Sculley believes it will become a "multibillion dollar business" in three or four years.
When asked what advice he gives to young entrepreneurs who are thinking of starting a company, Sculley said, "You have to look at a business and determine if things can become fundamentally different [as a result of that business]. When Steve Jobs invented the iPhone, that was a moonshot. Imagine taking everyone's iPhone away today."