Ken Auletta : Media Maxims

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MEDIA MAXIMS by Ken Auletta

Steve Jobs delivered the Gettysburg Address of graduation speeches in June of 2005. This corporate rebel would not dress for the occasion. His long black robe didn’t completely camouflage his jeans and dark sneakers, and only the red sash around his neck added a splash of color to his pale skin and the pronounced stubble on his face. It was a gloriously sunny day, and for 14 minutes Jobs stood behind a lecturn at Stanford University and through round, frameless glasses read a v ery personal speech, pausing only to sip from his plastic water bottle bo ttle or allow the applause to subside. A man famous for not sharing personal information began by telling his audience he wished “to tell three stories from my life.” “The first story is about connecting the dots.” He recounted how he had been adopted by working-class parents who never graduated from college. Seventeen years later, he attended Reed College but decided to drop out after 6 months when he realized that he was bored and was exhausting “all of the money my parents had saved their entire life.” He spent the next nex t year sleeping on the floor of friends and auditing classes that provoked his curiosity. Of particular interest was a calligraphy class, where he learned about spacing between letters and “what makes great typography great…. None of this had even a hope of practical application in my life. But ten years later, when we were

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2 designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography.” It was copied by Microsoft’s Windows. “If I had never dropped out, I would never have dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do.” “My second story is about love and loss.” He described starting in a garage with his friend Steve Wozniak, of building Apple into a $2 billion company, and of getting fired at age 30. He felt humiliated, rejected. But over time the “heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything.” Over the next five years he started a new computer company, NeXT, that one day allowed him to return to Apple; he acquired and built Pixar as the world’s first computer-animated feature film studio; and he met his wife and started a family. “I’m pretty sure none of this would have happened if I hadn’t been fired from Apple… Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love… If you haven’t found it yet, keep looking. Don’t settle.” “My third story is about death.” When he was 17 he read a piece of wisdom that stayed with him: “live each day as if it were your last.” Every day since, he said, “I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I do what I am about to do today?’” Never forgetting that he would one day die “is the most important tool I’ve ever encountered to help me make the big choices in















3 “a rare form of pancreatic cancer that is curable with surgery.” He had a reprieve, but it forced him to think about abou t death differently. Death, he said, “is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of o f Life. It is Life’s change agent. It clears out o ut the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away.…Your time is limited, so don’t waste it living someone else’s life… Don’t let the noise n oise of others’ opinions drown out your own inner voice.” He concluded by describing Stewart Brand’s Whole Earth Catalog , which had been a bible to him and others of his generation, gen eration, but after several issues Brand decided they had nothing left to say. On the back of the final issue was a photograph of a country road in the early morning, the kind of road adventurous hitchhikers might take. Below the picture in bold letters was printed, “Stay Hungry. Stay Foolish.” “It was their farewell message as they signed off… o ff… And I have always wished that for myself. And now, as you graduate g raduate to begin anew, I wish that for you. “Stay Hungry. Stay Foolish.” Not a bad way to sum up the life lessons of the Sinatra of business leaders. Steve Jobs’ stirring speech provokes me to wonder: won der: What are the enduring lessons we might draw from a close look at Google and today’s rapidly changing digital media landscape? I came up with these 25 media maxims:















4 The passion Steve Jobs imparted to Stanford graduates is among the foremost lessons one derives from Google. Start S tart with the the same words of advice ad vice – “Don’t settle” – that Larry Page offered the Stanford S tanford class in 2002. This intensity was revealed in the zeal with which he and Sergey Brin inspired the entire company to “serve the user,” to take more risks, to radically improve search. Recall Eric Schmidt’s words: while he assumed that “Google would be an important company; the founders always assumed assumed that Google would be a defining company.” A moment after he finished describing Google as “a rare” company, I asked Michael Moritz, an early investor in both Yahoo and Google, whether he felt the same enthusiasm for Yahoo. He winced, hesitated, then finally said: “Yahoo is a company I’ve been close to for a long time and feel a lot of affection and loyalty towards. But within the first 18 months to two years of being associated with Google, I began b egan to understand this was a very different company than Yahoo. It was rooted in the studies of the founders. Google was built on a foundation of Larry’s and Sergey’s intellectual pursuits. Yahoo was built on the foundations of Jerry’s and David’s interests. And there’s a big gulf between those two.” That deficit of passion, he suggested, was a reason that Yang and Filo chose not to be fully engaged full time with the company they created.

Focus is Required :

Passion without focus can lead you astray. Bill Campbell thinks the key to















5 and, typically, upside-down perspective on focus: “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully. I’m actually as proud of the many things we haven’t done as the things we have done.” Without a determined focus, decisions made on the fly can turn out to be b e wrong. Michael Eisner offered an example from his tenure as CEO of Disney. In 1999 Disney had acquired one of the early search engines, Infoseek, and coupled it with another acquisition to create the Go.com network. To lead it, Eisner installed Steve Bornstein, “one of the geniuses behind ESPN,” he said. Standing at a stall in the men’s room next to Bornstein one afternoon, he mentioned that he had heard that some search engines were thinking of having paid p aid searches. (This was long before Google contemplated the same thing.) “I said to Steve, ‘Should we charge?’” “ ‘Michael, we studied it. It’s not Disneyesque,” Bornstein replied. “You’re right,” Eisner quickly agreed; he was wary of allowing advertisers to jump to the top of the search results. But, Eisner said today, “I nev er thought you could identify the ads, put them on the right side of the page. That one men’s room, nonthoughtful decision – how many billions of dollars slipped through my fingers?... I was always looking for what the next application was. I just missed it.” Barry Diller, who had that unsettling session with Page and Brin in the early days of Google, when Page would not look up from his PDA to talk to him, now thinks what might be construed as rudeness was really focus. “They had their own method of communicating and processing,” Diller















6 They’ve stayed true to this. It’s a spectacular strength. It means you never get de-focused by the crowd.”

Vision is Required :

Without vision, even the most focused passion is a battery without a device. d evice. “Don’t be evil” is a vague incantation. Page and Brin’s effort to make “all the world’s information available,” and to first and foremost serve users, is a vision – one that successfully drove Google to index the Web, make news and books searchable, treat ads as information and to reject dollars do llars if the ads were not “relevant,” help users search for the best or cheapest products, find simple travel directions, store and search their e-mail, and share calendar information. Such a vision does not come from survey research and is not associated with “other-directed” personalities. Vision was Steve Jobs insisting that Apple make both software and hardware, anticipating that even stylish companies like Sony would falter if they did not d evise the operating systems for their own hardware, or deciding to create a simple-to-use digital jukebox to download individual songs for just 99 cents and combine this software with the gorgeous iPod hardware. It is said that Jobs creates “a reality distortion field,” meaning that his vision is so strong that he is able to bend ben d people to ideas that at first seem unrealistic. Vision is also Amazon’s Jeff Bezos insisting on “Earth’s biggest selection,” or for the Kindle, “every book ever published in 60 seconds.” Bezos believes

















7 Before he became a billionaire venture capitalist, Michael Moritz was a jou rnalist. He still enjoys plumbing the mysteries of why some leaders succeed and others fail, why some have clarity and others are muddled. How did two guys so young and inexperienced, I asked, approach Google with such clarity of vision about how to treat users or employees? “I ask myself the same question,” Moritz had h ad said. “Where did Steve Jobs’s vision come from at age 19 or 20? Where did Bill Gates’ come from when he said no at age 22 to Ross Perot when he wanted to buy his company? I think about that a lot. I wish I had the answer.” Part of the answer, he believes, comes from smart engineers – or those like Jobs who think like them – who “question everything and wonder why things have to be done as they were done before. I frequently shake my head in disbelief at how many big decisions they made at Google when the conventional path went in a different direction.” In his 2005 speech to graduating engineers at the University of Michigan, Page told them they didn’t have to go to business school. He said he had read an entire shelf of business books when he was younger, and among the lessons he learned was that “many of the amazing insights that happen in business actually come from people who really















8 thinking, and I did not fear, because of my classical background. When Alexander the Great took control when his dad died, he was twenty years old. He took the Macedonian army, which was the best army in the world at the time, and conquered Greece, got the Greeks to all join with him, and then marched across the Hellespont and invaded Asia. They didn’t even know where the world ended at that time. And he was dead at thirty-three, thirteen years later. He kept marching. He hardly ever stopped. And he never lost a battle.”

A Team Culture is Vital :

We’ve seen how Google’s 20 percent time and generous benefits give employees a sense of empowerment. True Tru e to its open-sources, wisdom-of-the-crowd ideals, Google has created a networked management that functions from the bottom-up as well as the top-down; in both directions, it unleashes ideas and effort. Recall Larry Page’s astute observation: “There is a pattern in companies, even in technological companies, that the people who do the work – the engineers, the programmers, the foot soldiers if you will – typically get rolled over by the management….. you end up kind of demoralized. You want to have a culture where the people who are doing the work, the scientists and the















9 from Time Warner in a room populated by executives from AOL and Time Warner. He glared about the room and growled, “Those bastards!” He resented that AOL executives referred to Time Warner as “old media,” even though a division like HBO made $600 million that year and was growing fast. Before long, AOL Time Warner’s stock plunged, plung ed, the top AOL executives exited, and the name of the company was changed to Time Warner. The AOL and Time Warner executives lost a vital component of success: the ability to listen. That’s how one builds a networked company. Millard (Mickey) Drexler is a good example. When he was CEO of the Gap, or now as CEO of the J. Crew Group, he made it a point to escape his office, to visit stores, stores, to bombard b ombard his employees and customers with questions. Susan Lyne, the CEO of the Gilt Groupe, recalled a visit she and the company’s two founders found ers made in 2008 to Drexler’s J. Crew office. He sat at a conference table in an open room, and had with him his marketing chief and another executive. Lyne explained that Gilt.com bought excess inventory from high-end manufacturers and conducted online first-come, first-served first-served sales, admitting only the site’s 500,000 registered members. Drexler said he had his own 300 stores, and didn’t know why this would be relevant for J. Crew. He was curious, though. He pushed the















10 He asked his marketing chief, “Why don’t we do flash sales in our stores?” And before Lyne left he said, “Let’s figure out something we can do together.”

Treat Engineers as Kings :

For most Valley companies, engineers are the equivalent of the television writer, the movie director, the book author. They are the creators. The 20 percent time Google grants its engineers gives them a sense sense that they are are liberated to take risks, risks, to follow their passions. Innovation, as Bill Campbell told The McKinsey Quarterly, comes when “the crazy guys have stature, where engineers really are important…. empowered engineers are the single most important thing that you can have in a company.” It is no accident that Page and Brin and Schmidt spend so many hours each week in meetings with engineers. Just as it is probably no accident that Apple’s engineering (like Yahoo’s) slipped when the company was run by a CEO more attuned to marketing. For most traditional media companies, the engineer is less as central. However, as digital is now part of the mainstream, and as older media companies struggle to master its challenges, they would do well to heed the advice Google’s David Eun offers: Don’t do















11 Treat Customers Like a King :

An important reason Google is usually listed among the world’s most trusted brands is that it conveys a sense that the user comes first. Advertising may produce 97 percent of Google’s revenues, but to a user it doesn’t feel that way. Google services are free, and they’re user friendly, just as an iPod is. The lessons Larry Page took away from reading Donald A. Norman’s The Design of Everyday Things helped shape Google’s approach to its customers. Or as Page P age said, “Having an attitude that your customer or users are always right, and your goal is to build systems that work for them in a natural way, is a good attitude to have.” Jeff Bezos uses a customer-is-king approach to shape Amazon’s corporate strategy. The most common question he’s asked outside the company, he once told the Harvard Business Review, is “What’s going to change in the next five to ten years?” It’s

the wrong question. The Th e right one, he said, is this: “‘What’s not going to change in the next five to ten years?’ At Amazon we’re always trying to figure that out, because you can really spin up flywheels around those things. All the energy you invest in them today will still be paying you dividends ten years from now. Whereas if you base your strategy first and foremost on more transitory things – who your co mpetitors are, what kind of

















12 Consumers are no longer tethered to a network program schedule, a wire, a single screen or device – a TV set, a game console, a physical newspaper, magazine, or book – for their information or pleasure. With choices, consumers feel in control, putting an end to the old agument over which is king, content or distribution or technology. It’s the consumer.

Brand Often Means Trust :

Along with “synergy,” the most overused shibboleth in the vocabulary of business executives is “brand.” They prattle on about “extending the brand” and “building the brand.” In most cases, they don’t have a clue what brand really means. “As soon as someones extols ‘the brand’ it means they are out of ideas and on their haunches,”















13 By focusing on the user, Page and Brin provided an organizing principle for Google employees that echoed Sam Walton’s adage: “ ‘If you don’t listen to your customers, someone else will.’”

Every Company Strives to Take the Risks Out of Capitalism :

Every company wants to grow, crush competitors, and minimize risks. If it can avoid the sheriff, every company lusts to become a monopoly. This T his truism is not peculiar to the digital age, but was clearly enunciated by a former media baron, Ted Turner: “You need to control everything. You need to be like Rockefeller with Standard Oil. He had the oil fields, and he had the filling stations, and he had the pipelines and the trucks and everything to get the gas to the stations. And they broke him up as a monopoly. You want to control















14 or to distinguish between ally and foe. Google started as a search engine, but quickly realized it could efficiently sell ads or aggregate news or search books or use its infrastructure to create cloud computing or expand into video by acquiring YouTube or expand into mobile devices. At the same time, Google’s AdSense supplies ad dollars to newspapers; AdWords partners with ad agencies to sell products; YouTube is a coveted promotional platform for the television networks; Android software supplies an operating system for more than a few mobile mob ile telephone companies. Amazon’s Jeff Bezos was one of four original investors in Google, and Amazon is among Google’s top ten advertisers, yet the two companies grind up against each other in cloud computing and in electronic book publishing, where Google now supplies digital books to Sony’s Reader, a direct competitor to Amazon’s Kindle. No one is more admired by the Google founders than Steve Jobs, and Eric Schmidt, Bill Campbell, Al Gore, and director Art Levinson serve















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The Speed Of Change Of Change Accelerates: The harnessing of electricity was a more disruptive technology than the Internet. As noted earlier, without electricity there would be b e no manufacture of cars or airplanes, no lights, refrigerators, telephones, air conditioners, televisions, subways -- or Internet. What, then, is unique about what is deservedly called the digital revolution? The rate of change is different. As also noted earlier, it took telephones 71 years to reach 50 percent of American homes, electricity 52 years, color TV 18 years, cable 15 years. Yet the Internet reached more than 50 percent of Americans in a mere decade. Facebook built a community of 200 million users in just 5 years. The swiftness of change makes those who make corporate decisions more insecure. They are forced to worry constantly whether a new technology will invade their domain; whether they’ve wrapped their brains around a mind-numbing new bit of















16 week,” where he read sheafs of material, and upon his return to Microsoft he would pepper the staff with memos. On May 16, 1991, he zeroed in on a 44-page document written by John Walker, the founder of Autodesk, a software company. Walker sent his memo on April 1, 1991, addressing it to the executives of the company he had stepped down from its board three years before. Walker’s title surely caught their attention: “The Final Days.” In his critique, Walker said he had “no desire whatsoever to see Autodesk’s management removed” or “to resume any role in management myself.” But he feared his beloved company was no longer alert to change, including “the emergence of a new standard applications platform” – Microsoft Windows. He enumerated the many companies “left behind” because “the game changed, but they did not” -- PC software like MicroPro’s Wordstar, Digital Research’s CP/M, among others. The “problem that afflicts Autodesk,” the founder fo under warned, “stems from a failure

















17 another victim of the Innovator’s Dilemma. However, as is true in football, aside from throwing an interception, the worst thing a quarterback can do is stand like a statue and wait, and wait, for a receiver to get open.

“Life is long but time is short.”

The words belong to Eric Schmidt, who explained: “Life is long in the sense that















18 less important than making an effort to end advertising dependency. Even Wired editor Chris Anderson, who once more forefully advocated that free was the perfect model (his 2009 book is titled, Free), has been intellectually honest and amended his position. Blaming the deep recession, Anderson appended a “Coda” chapter near the end of his new book in which he wrote that he now believes “Free is not enough. It also has to be matched with Paid.” Eric Schmidt also shifted his view on charging for content on the Internet. “My current view of the world,” he told me in April 2009, 200 9, “is you end up with















19 will lose the trust of their customers. An additional ad ditional revenue source will give them more mo re leverage to resist.

Digital is Different:

“When a product or o r industry goes digital, it changes fundamentally and irreversably,” Marc Andreessen said. Hardware becomes less important, software more















20 stage for new story tellers. It is not one on e distribution channel but many thousands of them, each one a website on which stories might nest. There are no scarcity issues – sorry, we have only 21 hours a week of prime time to squeeze your program into; sorry, we have sold every 30-second spot in the Super Bowl. Because there are so many choices on the Web, and only a click away, Web stories will often be shorter, more mo re like “snacks.” According to Scott Moore, who until late 2008 was Yahoo’s Senior Vice President and head of media, on the Web “people have shorter attention spans. We find the ideal length















21 shotgun at groups. This rifle is a powerful weapon for advertisers, and a potential menace to privacy.

The Web Forges Communities, and Threatens Privacy :

In the analog world, where communication is one-way, the audience passively watches and reads – or switches channels or mediums to passively consume something

















22 Facebook retreated, restoring the original o riginal contract terms. This was still another reminder that even on social network sites -- where users share the most personal information – the issue of privacy is a ticking bomb. b omb.















23 friends, search the world’s libraries, escape local stores to find better prices, place online orders, tap into medical knowledge to care for a loved one, reach out to strangers from other countries. But while the Internet In ternet broadens, it also narrows. We create smaller















24 alarm that they are too weak to withstand competition from the Internet or iTunes, satellite, and Internet radio. With digital TV or the Internet, consumers’ choices are nearly unlimited. This does not mean the choices are better. It does mean that anti-trust















25 process. Apple turned to Motorola to make its chips; Intel instead made deals with IBM and Microsoft, and both came to dominate the PC industry. “”Had I respected Steve like I learned to respect him,” Grove said, “Intel would be Motorola!”















26 does not mean it will be tragic. The change from typewriters to PCs was painful for those who worked in the older industry. Employees were laid off, stores closed. And for those who still use typewriters, it has become an inconvenience to find ribbons and parts. But













































































Ken Auletta : Media Maxims

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