Chapter 18 Section 2 Founder and CEO

Why did Jobs have to hire a professional manager like Sculley to be the CEO? It is not uncommon in Silicon Valley for the founders of IT companies to hire external CEOs.Young founders are passionate and capable of innovation, but lack management and business experience. When a company develops to a certain scale, the founders may not be able to control the complexities of marketing, sales, personnel, and finance.On the other hand, many founders who are obsessed with technological innovation are not necessarily really interested in management. They would rather communicate with computers every day than deal with messy meetings, approvals, and processes.At this time, the most direct way is to hire an experienced professional manager to be the CEO.

"Foreign monks can chant scriptures." This statement is not always correct in the IT field.Some founders and external CEOs cooperate perfectly, and the company is full of vitality.Some externally hired CEOs may not really be able to integrate themselves into the company. Unaccustomed problems can cause the CEO to dismiss the get out of class at least, and at the worst, cause the company to suffer. A good example is at hand. In April 2011, Google founder Larry Page took over the CEO command flag from Eric Schmidt, and announced in a near-perfect way that Schmidt, Page and Brin's troika had jointly The era of Google power is officially over. Ten years ago, in order to make up for their lack of experience in management, founders Larry Page and Sergey Brin invited Schmidt from Novell to serve as CEO.Schmidt is responsible for the company's daily operations, while Page and Brin focus on products and technology, but major company decisions are always discussed and decided by the three.At first, many people doubted whether this three-person co-management method would be inefficient.But soon, Google's rapid development dispelled everyone's doubts.In fact, Schmidt is both a good friend and an operational mentor to the two young founders.This kind of teacher-student and close friend relationship subtly cultivates the founder's own management and leadership skills. Ten years later, when the founder was confident, it was a matter of course for Page to replace Schmidt as CEO and take sole control of the company's operations.

Look back at Apple.When Jobs and Woz founded Apple, they just wanted to do a few businesses and sell some computers. Although both of them dreamed of changing the world, no one thought that Apple would quickly grow into a platform for them to realize their dreams.In the first few months, Woz didn't even quit his job at HP, but he just regarded Apple as a place to play in his spare time. But Jobs still noticed from the very beginning that even running a tiny company was far from being capable of two young men saving computers.It is based on this consideration that he invited Wayne, who is familiar with business and law, to help him in the early stage.A few months later, the Apple I sold well, and Apple gradually became a company.Once again, Jobs foresaw in advance that he and Woz were fledgling, talented but inexperienced, and if no one helped to guide them, it is estimated that many things would not work.Another problem that needs to be solved is that the development and manufacture of the Apple II requires funds.Two young people who are not well-known in the circle, apart from borrowing some money from acquaintances, where should they go to raise funds?

Or an acquaintance works.Jobs found his boss at Atari, Nolan Bushnell, and asked him for advice on financing.Bushnell immediately gave Jobs a business card, which was named Don Valentine.This Valentine is not simple. At that time in Silicon Valley, talking about Valentine’s name was like thunder, just like the green forest hero in the Water Margin talking about Timely Rain Song Jiang.Sequoia Capital, which he founded in 1972, is the most prestigious venture capital firm in Silicon Valley. It has invested in a large number of top companies such as Oracle, Cisco, Yahoo, and Google, and is also an investor in Atari.People gave Valentine a powerful nickname - the godfather of Silicon Valley venture capital.

The office of Sequoia Capital is located on Sand Hill Road on the west side of the Stanford University campus, a famous venture capital gathering place in Silicon Valley. In August 1976, when Jobs found Valentine at 3000 Sand Hill Road, Valentine was shocked by this hippie-like young man in a T-shirt and sandals.He was not too impressed with Jobs' business plan of building and selling computers, but he had never seen such a different, rebellious, passionate, and dreamy young man like Jobs before. "What is your goal?" This question, Valentine has asked countless entrepreneurs who visit their homes.

"I want to change the world." Jobs replied without hesitation. The nonchalant expression on Jobs' face seemed to say that changing the world was something that should and could be done, and that there was nothing to be surprised about.Valentine felt that the young man in front of him was either a megalomaniac or an unborn genius.He later told people that Jobs looked like a "human rebel" at the time.In Valentine's eyes, Apple's entrepreneurial plan is as naive as a child's play.But Valentine vaguely felt that helping this young man was the right thing to do.

Jobs later concluded: "The venture capitalists at that time were very helpful to the company. They were like your mentors. This is because the early venture capitalists, like Valentine, were the founders of high-tech companies. People or executives. Valentine was the vice president of marketing at National Semiconductor. This background allows investors to share their talents and experience like mentors in addition to investing money." Valentine, who is like a mentor, recommended another person who was willing to be a mentor to Jobs-Mike Markkula.Markkula is a businessman with extensive experience in marketing and management.He became a millionaire through stock options as a marketing manager at Fairchild Semiconductor and Intel, and then looked around for opportunities to invest in startups.It didn't take much effort for Jobs to impress Markkula with passion.Markkula decided to inject capital and join Apple in the form of angel investment.The equity distribution plan is that Markkula and the two Steves each own 30% of the shares, and the remaining 10% belongs to the engineer Rod Holt (Rod Holt).

At the end of 1976, Markkula, who joined Apple, helped Jobs formulate a complete set of corporate strategies and business plans.Markkula's expertise in business and marketing allowed Jobs to see the gap between professional and amateur.Although Jobs had a talent for marketing, he was at best an amateur at that time, far from Markkula.With a clear business plan, Markkula also persuaded Woz to resign from HP completely and concentrate on starting a business at Apple.Then, Markkula worked with Jobs and marketing PR firm McKenna to formulate a more comprehensive and targeted marketing plan.

On January 3, 1977, Apple completed the formal company registration procedures.But Markkula never intended to run the company himself.He frankly pointed out to Jobs and Woz that young entrepreneurs lack experience and are not suitable for managing companies, and experienced people must be hired. In February, Markkula used his connections to recruit Mike Scott, an engineer-turned-professional manager from National Semiconductor Corporation, the first CEO in Apple's history. It is undoubtedly a good thing to hire an external CEO, but the premise is that the founder and the CEO must cooperate smoothly.No one expected that Apple's process of hiring an external CEO would be so bumpy and full of twists and turns.Almost every external CEO left with frustration, regret, or even anger, and even the founders themselves were kicked out of the company because of disagreements with the CEO.It has to be said that the history of Apple’s external CEO hiring is almost a history of Apple’s early turmoil.

Take the first CEO Scott as an example. Although both Jobs and Scott were engineers, they have little in common. Jobs is a typical dreamer, he is always looking forward to realizing his dream of changing the world.In order to achieve his goal, he pursues and enjoys the highest power, and indulges his desire for control in management, but at the same time he is extremely lacking in management experience.Scott later said: "Jobs couldn't manage. He couldn't manage people. You had to start something with a plan, and he always had to step in from time to time and make things change according to his wishes."

Scott also pursues power and status like Jobs, but his greatest wish is not to change the world, but to show and prove his management skills as a CEO and lead a company to grow.Compared with Jobs, Scott is a purely professional manager. He often cares more about management methods, management skills and scope of power than he does about technical direction and company vision. Before Scott arrived, Jobs could do whatever he wanted.After Scott arrived, Jobs found that the center of power was tilting towards Scott.Markkula usually sided with Scott as well.Jobs, who has always been unyielding, had major or minor conflicts with Scott on various issues almost from the beginning, but this did not seem to affect the noisy development of various tasks. In order to compile the employee number, Scott proposed that since Apple Computer was invented by Woz, Woz is of course the No. 1 employee, then Jobs’ No. 2, Markkula’s No. 3, Fernandez’s No. Walter's No. 5, etc.Everyone has no problem with this number, with the exception of Jobs. "I'm Number 1?" Jobs asked. "No, Woz is No. 1 and you are No. 2," Scott said. "No. I have to be number one." Jobs was a little annoyed. "But Woz is already No. 1." "If I can't be number 1, can I be number 0?" Jobs played with numbers. Scott had no choice but to make Jobs a unique No. 0.Jobs cared about such a title, and he felt that only in this way could he show his specialness in the company. After the successful launch of the Apple II, sales skyrocketed.After completing the first round of large-scale financing in 1979, Apple began to show some signs of a big company.New employees kept arriving, and the company's internal processes became complicated and procrastinated.When there were only a dozen people in the company, it often happened that Jobs quickly ran to Woz or some engineer and said to him, I need this feature.The engineers worked hard for days and nights to make the functions Jobs wanted.Now, with the expansion of the company and the scale of the project, the management costs are high, and there are many situations where people are overstaffed.Jobs had to deal with engineers taking a long time to build a project and then not being able to deliver it.Scott hoped to use formal and institutionalized methods to solve similar problems, but Jobs always wanted to use his own mind and energy to seek breakthroughs. On December 12, 1980, Apple went public successfully.Apple's public listing is the largest IPO (initial public offering) since Ford Motor went public in 1956.As a result, Jobs became a billionaire worth $256 million overnight.But just a few days before Apple went public, on December 8, Jobs' idol - John Lennon, the lead singer of the Beatles - was shot dead by fans.This incident cast a shadow over Jobs' mind, and it also seemed to imply that Apple's ups and downs after going public. Crisis soon emerged.Just over two months after going public, Scott began to be very dissatisfied with the company's redundant establishment and overstaffing.Many newcomers did not demonstrate their due abilities on the job.Scott felt that layoffs must be used to keep employees motivated. Scott proposed laying off 40 or so employees, and Markkula and Jobs agreed without much thought. On Wednesday, February 25, 1981, Scott began the first large-scale layoffs in Apple's history.Each department manager submits a list of suggestions to Scott, and then Scott makes the final decision.But the process itself was a bit of a mess, and not all of the people who ended up getting fired were poor performers, some of whom had received good performance reviews a few weeks earlier.Moreover, the dismissed people actually include many employees of the company's most profitable Apple II team. In the afternoon, Scott said to the remaining employees: "I often say that when I feel that I am no longer happy as Apple CEO, I will leave. But now, I have changed my mind. When this job is not When I'm happy again, I'll fire some of you until the job is fun again." To the remaining employees, Scott's words were eerie and chilling.No one knows their future fate.When the company was just listed and the situation was good, so many people were fired, so how can we talk about the loyalty of employees to the company?Employees were so dissatisfied with Scott's rough approach that they dubbed the day "Black Wednesday." For such an ending, Markkula and Jobs were also very frustrated.Some employees asked Jobs face to face: "How did this happen? Is this how the company is run?" Jobs asked him blankly, "Then how should the company be run?" "Black Wednesday" made Scott lose prestige in the hearts of employees, and it also caused a fundamental change in Jobs and Markkula's views on Scott.Markkula felt that Scott's management style was becoming more and more crude and clumsy, which was in stark contrast to Scott's cautious and meticulous approach when he first arrived.Perhaps, Scott is only suitable as a CEO in a small company.Fortunately, the 4-year contract signed with Scott is about to expire.Before finding a suitable CEO, Markkula decided to go out on his own and lead Apple through a period of transition. In July, Scott, who dug his own grave, resigned sadly.Markkula temporarily served as Apple CEO, and began to look for a new CEO candidate. When Markkula decided not to stay with Scott, Jobs proposed to him that he wanted to be the CEO and manage the entire company.In the eyes of Markkula and other members of the board of directors, Jobs is still a big boy. If the experienced Scott can't play it well, Jobs, who has always been simple and rough in management, won't turn the company into a kindergarten?Markkula did not give Jobs any chance, and took over the power of CEO by himself, but at the same time, he also let Jobs serve as the chairman of the board of directors, which was regarded as a compensation for Jobs. Although he didn't get the CEO job, Jobs still had his own plans.If the board of directors does not allow him to be CEO, then he hopes to find a CEO who can cooperate with him tacitly and be influenced by him.He hopes that his ideas about the future of products and the company can be implemented into the company's daily operations without any obstacles.After repeated comparisons, Jobs fell in love with Sculley.After several contacts, Jobs felt that Sculley not only complemented his own strengths, but also could become his management teacher and train himself to be truly qualified to manage Apple. Obviously, both Jobs and Sculley overestimated the degree of complementarity and tacit understanding between the two.Fundamentally speaking, Sculley, like Scott, is a professional manager who pays attention to the process and respects the system.In terms of management level, Sculley is of course far higher than Scott, but it is also impossible for Sculley to truly understand Jobs' grand ideals about technology and the future, and it is impossible for Jobs to truly learn Sculley's rigorous and pragmatic thinking Way. In April 1983, Sculley, who had negotiated all the treatment conditions with Apple, came to Cupertino and started his 10-year career as Apple CEO.For the words of Jobs, "Sell sugar water, or change the world", the smug Sculley embarked on a road of no return.He would never have imagined that his arrival would be the beginning of the biggest conflict between Apple's founder and CEO.