Steve Case Advocates Entrepreneurship for Economic Recovery
By Dong Liu
This afternoon at a heavily-packed Hewlett Auditorium audiences from all over the world came to attend Steve Case's talk during Stanford's Entrepreneurship Week. Steve Case is the co-founder of America Online and the founder and CEO of Revolution Partners. During his 30+ years of entrepreneurial experience Case summarized its essence and importance in national economic development. "We need innovation, risk-taking, and entrepreneurship to get the country back on track," he said. "Entrepreneurship is important because of the underlying economic climate of America and it's critical for our nation's future."
Case summarized his trials and tribulations in entrepreneurship into the "3 P's": people, passion, and perseverance. He is convinced that with a combination of all three factors all entrepreneurial endeavors will be rewarding. He described his own career path in three stages, each spanning almost a decade: 1. The growth of AOL. 2. The merger of AOL and Time Warner. 3. building the Revolution Partners.
Almost 30 years ago, Case read the Third Wave by Alvin Toffler and became intrigued in interactive services and in the idea of the "electronic frontier" which allows people to be connected to a vast amount of digital information. At that stage, it was more of an idea than reality and no companies were exploring a similar path. After graduating from college, Case worked in marketing for Proctor & Gamble and soon transitioned to Pizza Hut, whose highly entrepreneurial environment, relatively flat organizationl hierarchy, and independence of franchise decisions appealed to him.
Yet still, the idea of creating and developing internet interactive services captured him. In 1983, Case moved to Washington DC to work in the gaming company GameLine, which allowed customers to download Atari games and later moved to other interactive services such as emails. The experience at GameLink was a lesson in perseverance: GameLink's product was a disaster as it was shipped, which led the manager to comment that "you'd thought they'd shoplift more than that."
From 1985-1990 Case developed the strategy of creating private-labeled internet services and establish partnerships with computer manufacturers. The first service, PC Link, linked computers with interactive services and built modems into PC's. Yet they had to compete with Prodigy, a $1-billion company while they only had a couple million dollars of venture capital. But in many ways PC Link was a breakthrough because it had the first graphic-user interface, was free of charge, focused on community building, and introduced instant messaging.
Case showed two videos, made in 1987 and 1995, of interviews he participated in on TV programs to summarize the products. The first was for Quantum Link and the second was a PBS interview for AOL.
In 1987 Case's company built a new service called Apple Link, which used Apple's licensing of its name to connect Apple users to the internet. It was launched in 1988 but soon shut down in 1989 due to Apple's discomfort with the product. The falling apart of the Apple deal created a crisis in the company and made Case realize that they cannot rely on partnerships with other computer manufacturers but must stand alone as a business.
Due to a lack of marketing budget, they chose America Online as the name of the new company. Although online services were widely misunderstood and underrated in the 80s, by the 90s the tide began to turn in Case's favor and it gained more widespread acceptance. Yet up until 1992 it was against Federal law to connect a commercial service to the internet. AOL was in a sense the pioneer of all internet service companies, and was the first internet company to go public. It had 70 employees in the beginning and $70 million valuation.
But soon it grew into a $100 billion company with almost 20 million users at its peak. The bulk of AOL's accelerated growth came in the 1990-2000 period, until it became the number 1 stock in the 90s, above Microsoft and other technology stocks. With the rapid growth of AOL Case sought to move from the narrowband (phone line connection) to broadband and eventually to wireless, and as a result the merger with Time Warner was conceived.
AOL's merger with Time Warner was initially hailed as the best of both worlds, because both companies addressed each other's weaknesses and complemented each other's strengths: Time Warner could give AOL its extensive cable system with broadband capacity, and AOL could broaden Time Warner's traditional media confines and give it a new outlet. It took a year for the merger to complete because various lobby groups marched to Washington arguing that such a merger would create too dominant a company that would endanger others' survival. Case also took the role of Chairman of the Board instead of the CEO to focus more on strategic decisions than to immerse in day-to-day operations.
The merger was made for $350 million dollars and became a total disaster.
Case summarized the factors behind the eventual failure of the AOL-Time Warner deal. First, he attributed factors that ran outside of human control: the impending recession, the diminsh of advertising revenue, and the emerging Internet bust all did harm to the conditions and the prospects of the deal. Second, he concluded the failure on the part of the 3 P's: there was trouble in people because of the cultural clash between the different workforces of AOL and Time Warner, there was trouble in passion because the company became more corporate and devoted less passion to its core business, and there was trouble in perseverance because with the Internet bust, it was seen as the sector not to invest in because it cannot sustain itself, which caused many capitalists to back away. All in all, Case summarized the deal using Thomas Edison's words: "Vision without execution is hallucination."
After AOL, Case founded Revolution Partners, which "invested in people and ideas that would change the world," either in for-profit or non-profit organizations. He emphasized the importance of taking risks, because he feels that too many venture capitalists nowadays are not taking enough risks, despite the fact that entry barriers are now lowered and everyone focuses on building audiences to sustain itself. Revolution Partners has invested in ZipCars because it believes that people who live in the city should not be compelled to own cars for convenience and environmental purposes. It has also invested in healthcare services to educate consumers about healthcare reforms, as well as in Exclusive Resort, which allows people to rent holiday homes instead of purchasing property for single-season usage. The investment in Revolution Money, a financial service, was also a lesson in perseverance because despite years of disappointing performances during the recession, it was eventually acquired last year.
In conclusion, Case said that entrepreneurship is critical for the growth of the country and the development of its economic recovery. "It is patriotic and not just economically motivated," he said. "Now is the golden era for entrepreneurship because big companies are all playing defense now so it creates a tremendous opportunity to enter the market."
Wednesday, February 24, 2010
Tuesday, February 23, 2010
BioDesign Roundtable
Seven panelists from the healthcare industry tonight answered the question, "How will Comparative Effectiveness Impact Medical Device Innovation?"
The panelists included:
- Ross Jaffee M.D. of Versant Ventures
- Prof. Alan Garber M.D., Ph.D.
- Robert Pearl M.D. CEO of Permanente Medical Group
- Lewis Sandy M.D. SVP of Clinical Advancement with UnitedHealth Group
- Chip Hance, President of Abbott Vascular
- Prof. Rodney Perkins M.D.
- Dana Mead, Kleiner Perkins Caufield & Byers
- Amit Sinha, MBA of Goldman Sachs
The Health and Human Services website indicates that Comparative Effectiveness Research (CER) funds should:
support research assessing the comparative effectiveness of health care treatments and strategies, through efforts that:
Conduct, support, or synthesize research that compares the clinical outcomes, effectiveness, and appropriateness of items, services, and procedures that are used to prevent, diagnose, or treat diseases, disorders, and other health conditions.
Encourage the development and use of clinical registries, clinical data networks, and other forms of electronic health data that can be used to generate or obtain outcomes data.
The pertinence of this question stemmed from the $1.1 bilion earmark in Obama's American Recovery and Reinvestment Act of 2009 (distributing $787 billion total).
The $1.1 billion consists of:
- $300 million for the Agency for Healthcare Research and Quality
- $400 million for the National Institutes of Health, and
- $400 million for the Office of the Secretary of Health and Human Services
The panel tonight focused on the question of whether this emphasis on CER will impede innovation. The panel seemed to agree that the focus of CER should be on implementation instead of the politics. Robert Pearl of Permanente Group said that systems should focus on infrastructure to link databases for patient information.
"Providers could have no idea if people are getting medication from Wal-Mart or the V.A.," said Pearl.
The panelists agreed that CER should encourage companies to collaborate (especially small and large ones) and improves the infrastructure for research and innovation for quality care.
It is possible companies may pursue a business idea that has found success.
Chip Hance from Abbott did say "what the large company is looking for is some form of predictability."
The panelists agreed that there is a danger that many companies will become "me too" businesses, but Prof. Garber says the healthcare industry needs "me too" companies also.
"Often best drug is the third or fourth on the market, not first," said Garber. "It would be a disaster if we didn’t have competition."
One solution to America's healthcare problems may be the internet, said one panelist, in which patients can give and get daily feedback through personalized care.
The panelists included:
- Ross Jaffee M.D. of Versant Ventures
- Prof. Alan Garber M.D., Ph.D.
- Robert Pearl M.D. CEO of Permanente Medical Group
- Lewis Sandy M.D. SVP of Clinical Advancement with UnitedHealth Group
- Chip Hance, President of Abbott Vascular
- Prof. Rodney Perkins M.D.
- Dana Mead, Kleiner Perkins Caufield & Byers
- Amit Sinha, MBA of Goldman Sachs
The Health and Human Services website indicates that Comparative Effectiveness Research (CER) funds should:
support research assessing the comparative effectiveness of health care treatments and strategies, through efforts that:
Conduct, support, or synthesize research that compares the clinical outcomes, effectiveness, and appropriateness of items, services, and procedures that are used to prevent, diagnose, or treat diseases, disorders, and other health conditions.
Encourage the development and use of clinical registries, clinical data networks, and other forms of electronic health data that can be used to generate or obtain outcomes data.
The pertinence of this question stemmed from the $1.1 bilion earmark in Obama's American Recovery and Reinvestment Act of 2009 (distributing $787 billion total).
The $1.1 billion consists of:
- $300 million for the Agency for Healthcare Research and Quality
- $400 million for the National Institutes of Health, and
- $400 million for the Office of the Secretary of Health and Human Services
The panel tonight focused on the question of whether this emphasis on CER will impede innovation. The panel seemed to agree that the focus of CER should be on implementation instead of the politics. Robert Pearl of Permanente Group said that systems should focus on infrastructure to link databases for patient information.
"Providers could have no idea if people are getting medication from Wal-Mart or the V.A.," said Pearl.
The panelists agreed that CER should encourage companies to collaborate (especially small and large ones) and improves the infrastructure for research and innovation for quality care.
It is possible companies may pursue a business idea that has found success.
Chip Hance from Abbott did say "what the large company is looking for is some form of predictability."
The panelists agreed that there is a danger that many companies will become "me too" businesses, but Prof. Garber says the healthcare industry needs "me too" companies also.
"Often best drug is the third or fourth on the market, not first," said Garber. "It would be a disaster if we didn’t have competition."
One solution to America's healthcare problems may be the internet, said one panelist, in which patients can give and get daily feedback through personalized care.
Monday, February 22, 2010
Europe in the Global Entrepreneurship Scene
What is the current state of entrepreneurship activity in different countries around the world? How does this relate to global development?
In a lecture entitled, "Europe in the Global Entrepreneurship Scene", Vega presented the report's findings, particularly in relation to the European entrepreneurial sector.
The 55 counties covered in the report are divided into three sectors: "factor-driven", "efficiency-driven" and "innovation -driven" economies. As a rough guide, factor-driven economies include developing nations such as Uganda, where entrepreneurship is largely sparked by necessity, and innovation-driven economies cover counties such as the U.S. and U.K., where entrepreneurship is likely initiated by a drive to produce new and enterprising products. In addition, the report distinguishes entrepreneurial activates as having either high or low impact with high or low early-stage activity.
For example, according to this year's report, Uganda - which has the lowest Gross Domestic Product (GDP) of the nations surveyed - displayed high early-stage entrepreneurial activity, which had a relatively low impact. In contrast, the U.S., which has a high GDP, displayed low early-stage entrepreneurial activity with higher productivity.
According to Vega, the report, which compared entrepreneurial activities in 2006-2007 to 2008-2009, demonstrated that the innovation-driven world, which includes much of Western Europe, has suffered from a lack of confidence in the entrepreneurial sector, with a fall by 50% in opportunity perception, a 33% increase in fear of failure and a increase in necessity entrepreneurship over innovation entrepreneurship. He used the example of his home nation Spain as a demonstration of this phenomenon.
The report also surveyed the views of the entrepreneurs themselves, comparing their attitudes to the start-up market.
While more than half of the entrepreneurs interviewed claimed that starting a business was more difficult in 2009 than in 2008, 20% found it less difficult. Interestingly, young, well-educated entrepreneurs displayed greater optimism than their more experienced peers, saying that they expected to see more opportunities for their businesses due to the economic decline.
When asked which countries and sectors, in light of these findings, would be best to invest in, Vega joked, "If I knew, I would probably be doing less teaching and more investment."
In compromise, he said, Eastern Europe is a good area to watch, as well as so-called "sexy" industries, such as nano- and green-technology. "Opportunities, in my opinion, are everywhere," said Vega. "Even in the midst of crisis, you still get tones of possibility."
Laying down the law on startups
Amid the crackling of lunch bags and sandwich plastic, Monday's second E-week event, Legal Tips for Startups in Today's Economy, kicked off at the Stanford Law School to a packed audience. Hosted by the Stanford Law and Technology Association, the event--billed as a panel discussion and brown bag lunch--featured four speakers from the Emerging Companies Group at global law firm Orrick, Herrington & Sutcliffe LLP.
Harold Yu '93, a former undergraduate at the university who graduated with a degree in computer science, moderated the discussion, which ranged from examinations of intellectual property rights to explanations on the incorporation process.
As the crowd trickled in, Greg Heibel broke the ice by making it clear that the legal panel was not to be confused with a concurrent E-week event, The Power of Social Technology.
"If any of you are expecting Hammer, this is not the right room," he cracked in a reference to the other event's more notable speaker, MC Hammer.
Yu began the talk by examining the process by which startups were put together. Presenting situations and questions to the other panelists, he began a dialogue that asserted the importance of sorting out intellectual property rights from a company's outset.
While Heibel emphasized that starting a corporation was "very easy," he advised that entrepreneurs set clear agreements regarding equity and later compensation. Sort out compensation matters when "everyone is still happy," he said, comparing the discussion with his firm and companies as the "closet thing that Orrick comes to practicing matrimonial law."
Stephanie Sharron, a partner who specializes in business transactions, added to Heibel's statements by discussing the importance for individuals to know who they were working with.
"When you're first putting together a company, emphasize how important the team is," she said. "Focus on your idea and who your team members will be... When looking strategically at the company, put into place things relating to [intellectual property], the share of company and so forth that will allow you to add members."
Heibel also provided some more immediate advice for startups.
"Please, don't incorporate in California," he said to a round of laughter, alluding to the state's unfavorable tax policies.
As the discussion opened up to questions, audience members began to direct dialogue toward the problems that the current economy posed to startup ventures. Partner Richard Smith stated that while the recession was "thawing," he still felt that "resources for startup companies are still scarce." Smith later suggested that, in today's market, risks were inevitable and skimping in certain areas were all but unavoidable given the lack of financial backing to companies.
"Businesses are not risk-free," said Smith. "The last thing you want to do is promise a guarantee."
Entrepreneurship Week at Stanford will continue until Sunday, Feb. 28. For more information visit http://eweek.stanford.edu/.
The Power of Social Technology
After the a nostalgic reminiscence of the world before Windows and a now considered primitive little game called The Colossal Cave, Graduate Business School Dean Garth Saloner, spoke about his experience with Twitter - through which he informs students and alumni on what's going on in the Business School.
"It's hard to find your voice in Twitter," he said. And then he proceeded to give us some homework: "All of you tweet this: 'Saloner said that the future of social technology is to Twitter and Facebook what Guitar Hero was to The Collosal Cave. It is impossible to imagine how its going to evolve."
He warned that twitter and other social media should be regarded as what they are: part of a set of tools.
"This kind of technology increases the need for traditional content – we should spend more, not less on these resources," he said.
Robert Scoble, the technical evangelist and blogger of Podtech and Building 43 was the first one on the podium after Dean Saloner. The Economist has described Scoble as "a minor celebrity among geeks worldwide."
Scoble joined Microsoft in May 2003 as part of Channel 9 MSDN video team. He produced videos that showcased Microsoft products and employees. He became sort of a hybrid between a PR and a tech guru while he often criticized Microsoft or praised the competition.
He told the story of when he quite Microsoft in 2006. He told a room of 15 people he was quitting before telling his boss and told them to keep their mouth shut. Within three days, 15 million people knew he had quit Microsoft.
"Every eight mins it doubled. When it hit eight blogs I called my boss, because I thought he would be even more pissed if he saw it on the screen."
He took this as a lesson. Social media allows messages to multiply exponentially, cutting costs considerably for companies who want to get their images across.
"Would you rather have a thousand dollars today or a penny that doubles every day?"
He also explained how these networking tools helped him get interviews and the trust of people who, if he would have called out of the blue, would have probably shot him down.
"Study who’s following who, take that person out to lunch, and he might introduce you to the person you need."
He mentioned how many companies - like Ford, for example - use social media to engage and solve problems in real times, giving companies a human face.
But, like Dean Saloner, he also warned entrepreneurs - or future ones, to not get caught up in the tools, and focus on the content.Loic Le Meur, founder of a Seesmic, a web application helping to bring all the social software in one interface, and Web3 in Paris - the largest tech event in Europe. It started with 300 people and grew to 3,5 thousand. He used no traditional marketing material - just social media.
On his blog, loiclemeur.com, Le Meur posted 22 points on how to change marketing strategies along with the growth of social media. If you want a summary, the best one I could come up with is this: be everywhere, always, responding, listening - simply unwrap the entirety of your social capabilities upon your web audience.
He said that volunteering information and criticism on your own business is better than trying to make everything look perfect.
"I’d rather have people criticize our brand than not say anything," he said. "People will forgive you for not being perfect but not for concealing. If you talk about the negative parts of the company, it might make it even stronger."
"You have to identify your best fans. Its not about getting a million fans like MC Hammer, but good ones..." A soaring chorus of lighthearted 'boos' drowned out the last words. He had a point though - a thousand fans can get the word out to millions.
Yes, MC Hammer did say "Hammertime!" - twice.
The Oakland born hip hop star who coined the pants and the slippy dance moves, told us how he transformed his image through social media.
For those who want to get a taste of what I'm talking about, check out MC Hammer's DanceJam has been called 'the Facebook for dancers.' Dancers make their own profiles and upload their videos, not only dancing to 'U Can't Touch This,' but to a myriad of other genres - some of which you've probably never heard before.
He sees social media as a way for entrepreneurs to insert themselves into conversations to test the waters for new products or projects. At the same time, entrepreneurs can give brands or future collaborators a heads up on what they're thinking about.
He said social media can even beat the media at breaking news, which may damage one's image. David Letterman, for example, beat the news in revealing his sex scandal, and even made the audience laugh.
But, back in the 90's, when he started seeing all these media outlets pop up, he was appalled, he said.
"Now there were two outlets for my art and that was a barbaric thought." It diminished the value of a nicely crafted product - his music for one.
"People are throwing themselves from buildings and landing on their back for views," he said.
But there's an obvious good side to being able to publish your ideas without having to go through a middleman.
"You show your idea to a guy whose wife said 'no' last night, and he says 'I dont like it' – who made you judge!" he said,
"Who says that because you don't like it, I can't show it to the world?"
Wednesday, February 25, 2009
Creativity Challenge: The James Bond Casino Caper
Students and entrepreneurs came together Tuesday night to save the world from a deadly asteroid strike. That, at least, was the premise of the tongue-in-cheek event run by Alistair Fee who teaches creative thinking at the Queens University Belfast.
The exclusive event admitted only 30 participants after screening their applications for humor, creativity, and level of interest. Alistair explained the application process “Is a way to bring in only people who really want to participate. When they have applied and dressed up, they come already humming.”
The Setting
Clips and stills from James Bond movies played on the large screens in the School of Design where the event was held. Guests came dressed as their favorite Bond hero or villain. In practice, this meant tuxedos and suits for the men, evening dresses for the ladies.
The mood was lighthearted and convivial. Halfway through the event the guests were asked to fill balloons and send them flying throughout the room.
Participants drank and networked before engaging in the main event. Dividing into fives, they were briefed on doom’s approach and tasked with averting or mitigating the catastrophe.
The Challenge
Forrest Glick interrupted the chatter to inform guests that a meteor had been recently spotted hurtling towards earth. Greenland was its most likely target, threatening rising sea levels, earthquakes and permanent environmental disruption.
Split into teams, the guests collaborated on white boards, brainstorming ideas and debating outcomes.
The solutions proposed ranged from nuclear strikes to miniaturized black holes to melting Greenland to soften the impact.
Throughout the evening Alistair could be seen moving from table to table, offering encouragement and advice. He insisted that guests not focus exclusively on the engineering problems but take into account politics and implementation.
The Point
“In the course of your business or life you will come across situations where you have to make a decision in a short period of time. You will have to collaborate with people you don’t know who know a great deal about something,” explained Alistair after the event.
With the world safe again, participants were eager to talk and take pictures before being unfortunately hustled out of the building by organizers.
Along with Alistair and Forrest Glick the event was organized by Belen Torres-Gill and Tina Seelig.
The exclusive event admitted only 30 participants after screening their applications for humor, creativity, and level of interest. Alistair explained the application process “Is a way to bring in only people who really want to participate. When they have applied and dressed up, they come already humming.”
The Setting
Clips and stills from James Bond movies played on the large screens in the School of Design where the event was held. Guests came dressed as their favorite Bond hero or villain. In practice, this meant tuxedos and suits for the men, evening dresses for the ladies.
The mood was lighthearted and convivial. Halfway through the event the guests were asked to fill balloons and send them flying throughout the room.
Participants drank and networked before engaging in the main event. Dividing into fives, they were briefed on doom’s approach and tasked with averting or mitigating the catastrophe.
The Challenge
Forrest Glick interrupted the chatter to inform guests that a meteor had been recently spotted hurtling towards earth. Greenland was its most likely target, threatening rising sea levels, earthquakes and permanent environmental disruption.
Split into teams, the guests collaborated on white boards, brainstorming ideas and debating outcomes.
The solutions proposed ranged from nuclear strikes to miniaturized black holes to melting Greenland to soften the impact.
Throughout the evening Alistair could be seen moving from table to table, offering encouragement and advice. He insisted that guests not focus exclusively on the engineering problems but take into account politics and implementation.
The Point
“In the course of your business or life you will come across situations where you have to make a decision in a short period of time. You will have to collaborate with people you don’t know who know a great deal about something,” explained Alistair after the event.
With the world safe again, participants were eager to talk and take pictures before being unfortunately hustled out of the building by organizers.
Along with Alistair and Forrest Glick the event was organized by Belen Torres-Gill and Tina Seelig.
Tuesday, February 24, 2009
Entrepreneurial leaders share insights on Global Leadership and Talent Equation
Four Silicon Valley-based global executives joined the “Solving the Global Leadership and Talent Equation" Panel Discussion of the Eweek, sharing insights about the crucial elements of recruiting talents and managing across borders in a global environment.
The event, hosted by Stanford Program on Regions of Innovation and Entrepreneurship, took place Monday at Bechtel Conference Center of Encina Hall. The panelists were Eric Benhamou, Chairman and CEO, Benhamou Global Ventures, David Chao, Co-Founder and General Partner of DCM, Michael Zhao, CEO and President, Array Networks. Kyung Yoon, CEO of Talent Age Associates served as the moderator.
The discussion centered on four topics: global recruitment in general; essential traits of global leaders; mistakes and lessons from previous recruitment; challenges of a global career and solutions.
Global Recruitment in General
To address the challenges for global teams, said Eric Benhamou, “you have to be able to create trust, commitment and shared goals even though you may have difficulty in creating shared experiences.”
To find the right person, good interview skills are significant for both interviewers and interviewees, he continued.
His favorite interview technique is to ask interviewees to talk about specific scenarios and their reaction and solutions to them, e.g. “to describe when you were in a truly stressful situation and how you dealt with it”.
“This is very revealing,” said Eric, especially when you are recruiting people in a culture you are not familiar with and you can only rely on your instinct.
Michael Zhao talked about situations he has to face when interviewing people in China.
“In China, people believe if they don’t become a manager before the age of 30, they are a failure,” said Michael.
So every time when there is an opening of management level in the Chinese operation of his company, there will be hundreds of applicants. “But the problem is that most of them don’t realize they don’t have the skills to be a manager,” said Michael. “We have to convince them they are better being an engineer than serving as a manager.”
David Chao quoted Jack Welch that in big companies 2/3 of the people are failure, meaning 1/3 good people is an acceptable ratio. But for start-ups, it is essential to hire the best people in the very beginning, said David.
He also pointed out that the challenges of hiring the best people for start-ups in other countries. “Silicon Valley has this culture of working for start-ups,” he said, “But in other countries talents just want to work for big companies like Samsuny and Lenovo.”
He stressed that the skill he values most in an employee is the process management skill.
Essential Traits of Global Leaders
“In global environment, it is important to emphasize communication skills,” said Eric. “Communication skills refer to not just bridging language difference, but bridging cultural differences. A fast-moving company relies upon rapid and transparent flow of information.”
He thinks that a successful global leader must be able to achieve the transparent flow of information across all the international operations.
Michael also stressed the challenges for global leaders to manage across long distance and different time zones. In this sense, he said, the ability to build trust is highly valued, which means one has to always share information which is supposed to share. “The leaders of our international operations sit thousands of miles away,” he said. “If there is a problem and they don’t speak up, we don’t really know what it is going on.”
David summarized two key traits: passion for hating to lose and flexibility to adapt. He said he appreciated talents who have the ability to always figure out ways to win.
“Also, the market is dynamic. Business models have to change. The leaders need to adjust,” he said
Mistakes and Lessons
Eric cited a mistake he made when choosing the helmsman for a joint venture in China. 3Com, the network equipment company which he invests, built a joint venture in China with Huawei, China’s biggest communication equipment vendor. All the engineers are from Huawei, while the patents are from 3Com.
“This is a very hybrid company,” said Eric. “And we chose a CEO who is on surface a very polished highly global executive, who even speaks a little mandarin.”
But the engineers from Huawei, who are accustomed to the top-down style of Huawei’s founder and CEO, a former general of the Chinese Army, have problem with this CEO’s participative and gentle leadership. His inclusiveness was interpreted as weakness and indecisiveness and gradually the engineers lost respect for the CEO, said Eric. After eight months, Eric replaced this CEO.
Michael gave an example that once he hired a CTO to run his operation in China who is very gifted and a close personal friend to him. “But this just didn’t work out,” he said. “The lesson is a friend is a friend. Don’t overlook their shortcomings.”
David shared his experience when building team for Apple Japan. When he thought about the right person to run Apple in Japan, he thought surely it would be good to get someone who is very experienced in the sector. So he got someone from Toshiba on board. But later it turned out that talents were attracted to work for Apple in Japan because they wanted to run away from Toshiba style, which is very hierarchical.
Challenges of a global career and solutions
“Global leaders usually have to deal with strenuous traveling schedule and continuous hours of work to accommodate the time zones difference,” said the moderator Kyung Yoon. She asked the panelists for advice to strike a balance between career, life and community.
Eric emphasized on the importance of sleep. “When you are sleep-deprived, a lot of bad things happen,” he said.
Michael stressed on efficient planning. “Make sure everything is ready while you are there and you don’t waste time traveling,” he said.
He also said that mental health is just as important as physical health. And his secret to mental health is meditation.
David said that it is impossible to balance everything and people have to recognize that there is some sacrifice that has to be made with an international schedule. He told that with a schedule of traveling internationally for one week out of every five weeks, he wants to continue to do well and spend time with family. “What has been dropped is a lot of friends,” he said. “If I have a normal 9-5 working hours, I will have more time spending on Facebook.”
By Li Lou
Stanford University
M.A. Journalism '09
The event, hosted by Stanford Program on Regions of Innovation and Entrepreneurship, took place Monday at Bechtel Conference Center of Encina Hall. The panelists were Eric Benhamou, Chairman and CEO, Benhamou Global Ventures, David Chao, Co-Founder and General Partner of DCM, Michael Zhao, CEO and President, Array Networks. Kyung Yoon, CEO of Talent Age Associates served as the moderator.
The discussion centered on four topics: global recruitment in general; essential traits of global leaders; mistakes and lessons from previous recruitment; challenges of a global career and solutions.
Global Recruitment in General
To address the challenges for global teams, said Eric Benhamou, “you have to be able to create trust, commitment and shared goals even though you may have difficulty in creating shared experiences.”
To find the right person, good interview skills are significant for both interviewers and interviewees, he continued.
His favorite interview technique is to ask interviewees to talk about specific scenarios and their reaction and solutions to them, e.g. “to describe when you were in a truly stressful situation and how you dealt with it”.
“This is very revealing,” said Eric, especially when you are recruiting people in a culture you are not familiar with and you can only rely on your instinct.
Michael Zhao talked about situations he has to face when interviewing people in China.
“In China, people believe if they don’t become a manager before the age of 30, they are a failure,” said Michael.
So every time when there is an opening of management level in the Chinese operation of his company, there will be hundreds of applicants. “But the problem is that most of them don’t realize they don’t have the skills to be a manager,” said Michael. “We have to convince them they are better being an engineer than serving as a manager.”
David Chao quoted Jack Welch that in big companies 2/3 of the people are failure, meaning 1/3 good people is an acceptable ratio. But for start-ups, it is essential to hire the best people in the very beginning, said David.
He also pointed out that the challenges of hiring the best people for start-ups in other countries. “Silicon Valley has this culture of working for start-ups,” he said, “But in other countries talents just want to work for big companies like Samsuny and Lenovo.”
He stressed that the skill he values most in an employee is the process management skill.
Essential Traits of Global Leaders
“In global environment, it is important to emphasize communication skills,” said Eric. “Communication skills refer to not just bridging language difference, but bridging cultural differences. A fast-moving company relies upon rapid and transparent flow of information.”
He thinks that a successful global leader must be able to achieve the transparent flow of information across all the international operations.
Michael also stressed the challenges for global leaders to manage across long distance and different time zones. In this sense, he said, the ability to build trust is highly valued, which means one has to always share information which is supposed to share. “The leaders of our international operations sit thousands of miles away,” he said. “If there is a problem and they don’t speak up, we don’t really know what it is going on.”
David summarized two key traits: passion for hating to lose and flexibility to adapt. He said he appreciated talents who have the ability to always figure out ways to win.
“Also, the market is dynamic. Business models have to change. The leaders need to adjust,” he said
Mistakes and Lessons
Eric cited a mistake he made when choosing the helmsman for a joint venture in China. 3Com, the network equipment company which he invests, built a joint venture in China with Huawei, China’s biggest communication equipment vendor. All the engineers are from Huawei, while the patents are from 3Com.
“This is a very hybrid company,” said Eric. “And we chose a CEO who is on surface a very polished highly global executive, who even speaks a little mandarin.”
But the engineers from Huawei, who are accustomed to the top-down style of Huawei’s founder and CEO, a former general of the Chinese Army, have problem with this CEO’s participative and gentle leadership. His inclusiveness was interpreted as weakness and indecisiveness and gradually the engineers lost respect for the CEO, said Eric. After eight months, Eric replaced this CEO.
Michael gave an example that once he hired a CTO to run his operation in China who is very gifted and a close personal friend to him. “But this just didn’t work out,” he said. “The lesson is a friend is a friend. Don’t overlook their shortcomings.”
David shared his experience when building team for Apple Japan. When he thought about the right person to run Apple in Japan, he thought surely it would be good to get someone who is very experienced in the sector. So he got someone from Toshiba on board. But later it turned out that talents were attracted to work for Apple in Japan because they wanted to run away from Toshiba style, which is very hierarchical.
Challenges of a global career and solutions
“Global leaders usually have to deal with strenuous traveling schedule and continuous hours of work to accommodate the time zones difference,” said the moderator Kyung Yoon. She asked the panelists for advice to strike a balance between career, life and community.
Eric emphasized on the importance of sleep. “When you are sleep-deprived, a lot of bad things happen,” he said.
Michael stressed on efficient planning. “Make sure everything is ready while you are there and you don’t waste time traveling,” he said.
He also said that mental health is just as important as physical health. And his secret to mental health is meditation.
David said that it is impossible to balance everything and people have to recognize that there is some sacrifice that has to be made with an international schedule. He told that with a schedule of traveling internationally for one week out of every five weeks, he wants to continue to do well and spend time with family. “What has been dropped is a lot of friends,” he said. “If I have a normal 9-5 working hours, I will have more time spending on Facebook.”
By Li Lou
Stanford University
M.A. Journalism '09
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