Ten Commandments from Entrepreneurial
'Evangelist' Guy Kawasaki
When Guy Kawasaki talks about
business innovation, as he did recently at a University of Pennsylvania
technology conference, he brings more than 25 years of major-league experience
to the conversation -- a background that the good-humored investor and
entrepreneur calls "my checkered past." After getting a psychology
degree at Stanford and an MBA at UCLA, the Hawaii-born Kawasaki became the
second software "evangelist" at Apple Computer, where his job from
1983 to 1987 was to convince people to create software for the Macintosh.
Kawasaki fondly recalls his colleagues at Apple as visionary, driven and
"arguably the greatest collection of egomaniacs in the history of California
-- though the record has subsequently been broken by Google."
After leaving Apple, Kawasaki
started his own companies in addition to becoming an author, consultant and
venture capitalist. His books include The Macintosh Way, Rules for
Revolutionaries, Selling the Dream and, most recently, Reality Check.
Now 54, Kawasaki listens to pitches from start-ups regularly at his venture
capital firm, Garage Technology Ventures. Its portfolio includes technologies
ranging from logistics outsourcing to renewable energy, though he admits the
firm hasn't yet had its breakout hit -- its own Apple or Google. In 2008,
Kawasaki launched Alltop, a free Web site that uses RSS feeds to aggregate, by
topic, the latest stories from thousands of web sites and blogs. His blog,
"How
to Change the World,"
is among the most visited business
strategy sites.
At Penn, he spoke at a conference
marking the 20th anniversary of the Executive Master's in Technology Management
(EMTM) program, offered by Penn Engineering and co-sponsored by Wharton. His
talk, titled "The Art of Innovation," amounted to a 10-point
manifesto on how to make something of value for customers. Along the way, he
invoked funny and revealing examples that included everything from obsolete
ice-delivery men to beach sandals that open beer bottles.
The following is a summary of
Kawasaki's "Ten Commandments":
1. Make meaning, not money. "As venture capitalists," Kawasaki said, "we
deal with many companies, and often they come in [saying what] they think we
want to hear: that they want to make money. It's been my observation that most
companies founded on this concept of making money pretty much fail. They
attract the wrong kind of co-founders and early employees." Rather, he
says, entrepreneurs should focus on making their product or service mean
something beyond the sum of its components -- and the money may very well
follow. He noted how Nike made its aerobic sneakers for women into more than
just "two pieces of cotton, leather and rubber, manufactured under
somewhat suspect conditions in the Far East." With smart advertising about
how women traditionally have been measured and judged, Nike "turned $2.50
of raw materials into something that stands for efficacy and power and liberation.
They are making meaning with shoes. Great companies make meaning."
Certainly, Apple has done that with the Mac, iPhone and other devices.
2. Make a mantra, not a mission
statement. Bland, generic company mission
statements -- about "delivering superior-quality products and services for
our customers and communities through leadership innovation and
partnerships" -- serve no one but the consultant brought in to develop
them, Kawasaki said. Instead, keep it short and define yourself by what you want
to mean to consumers. Nike stands for "authentic athletic
performance." FedEx is about "peace of mind." To get everyone
internally and externally on the same page, explain why your organization
exists and how it meets customers' needs and desires.
3. Jump curves. Innovating is harder than just staying a little bit ahead of
competitors on the same curve. "If you're a daisy-wheel printer company,
the goal is not to introduce Helvetica in another point size. The goal is to
jump to laser printer," he said. That's easier in some businesses than
others. Kawasaki noted how in the days before refrigeration, the ice industry
consisted of ice harvesters in cold climates using horses, sleighs and saws to
collect ice outdoors during winter months. Ten million pounds of ice were
shipped in 1900 that way, he said. Then came "Ice 2.0" -- factories
that could freeze ice anywhere and an ice man who would deliver it to
establishments and homes. Finally came "Ice 3.0": home refrigerators.
Of course, none of the ice
harvesters got into the ice factory business, and none of the factories got
into the refrigerator business. That's because "most organizations define
themselves in terms of what they do," he said, "instead of thinking
'what benefit do we provide the customer?' True innovation comes when you jump
curves, not when you duke it out for 10% or 15% better."
4. In product design, "roll the
DICEE." That's an acronym. "D" is
for deep, which to Kawasaki means thinking about features that go beyond the
norm. One of his favorite "deep" ideas: Fanning Reef sandals, which
have a bottle opener built into the sole. "I" is for intelligence, as
seen in the design of Panasonic's BF-104 flashlight, which uses batteries of
three different sizes to accommodate the random mix of extra batteries many
people have around the house. "C" is for complete -- or being not
just a product, but including support and service. The first "E" is
for elegance: Beauty matters, according to Kawasaki. "Companies should
have CTOs -- chief taste officers," he said. The second "E" is
for emotive. "Great products generate strong emotions: Think Harley
Davidson, Macintosh."
5. Don't worry, be
"crappy." This doesn't mean ship a bad
product, but "your innovation can have elements of crappiness to it,"
Kawasaki said. Twitter has a litany of flaws, but it is changing people's
habits. The first Mac had plenty of room for improvement, but it made a
statement about the future of personal computing, and it did not need to wait.
6. Polarize people. Try to be all things to all people and you often ship
mediocrity, Kawasaki said. The boxy Toyota Scion xB looks ugly to some people
but very cool to its devotees. TiVo became popular while maddening the
advertising industry.
7. Let 100 flowers blossom. Borrowing from Chairman Mao, Kawasaki said you never know
where the flowers will emerge, so let them grow. Innovations may attract
unexpected and unintended customers. Think of Avon Products' Skin-so-Soft
cream, which became popular as a mosquito repellent. Rule one, he said, is
"take the money. Rule two: Learn who's buying your product, ask them why
and give them more reasons. That's a lot easier than asking people who aren't
interested 'why not,' and trying to change their minds."
8. Churn, baby, churn. Always improve. Listen to customers for ideas. That's
difficult, Kawasaki said, because an innovator or entrepreneur must often
ignore the advice of naysayers and "bozos" who say it can't be done.
Once it is done, and the product reaches the hands of customers, it's time to
start listening to their feedback. "Once you ship, then you flip,"
Kawasaki said.
9. Niche yourself. Find your place, Kawasaki urged. He showed a simple X-Y
graph, with the usual four quadrants mapping the variables
"Uniqueness" and "Value." A product or service does not need
to be unique if it delivers value. That, he said, is how Dell won market share
selling computers. In the lower left quadrant of his X-Y graph he placed many
of the me-too dot.com companies of the late 1990s that were low value and
uninspired. But in the upper-right quadrant were high value, unique products
and services. They included the online movie-ticketing service Fandango and the
Clear card that can speed passage through airport security. "The
upper-right-hand corner is the holy grail of marketing," he said.
"It's where meaning is made, it's where money is made, it's where history
is made."
10. Follow the 10-20-30 rule when pitching to venture capitalists. That means no more
than 10 PowerPoint slides, a limit of 20 minutes for the pitch, and using a 30-point
font size in the presentation (to keep it simple). The goal of such pitches
isn't to walk home with a check, he said, it's to "not be eliminated"
from consideration.
Kawasaki added one bonus point for
innovators -- and a mea culpa. "Don't let the bozos get you
down," he said, trotting out some well-worn statements from technology
naysayers, such as IBM chairman Thomas Watson's assertion in 1943 that the
total worldwide market for computers was "maybe five" (computer
historians question the authenticity of the unsubstantiated quote), and Western
Union's inability to see a use for the telephone. These companies were trapped
by thinking about what they already did, rather than what could be done next.
Ignore them, Kawasaki said. Nevertheless, he admitted he was a "bozo"
himself once. In the mid-1990s, he was offered a chance to interview for the
CEO position at Yahoo. He declined. He saw the web as just another thing to do
with a computer modem, and a web index as having limited value. "By my
calculation, this decision cost me $2 billion."
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2258
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