The Hindu Business Line : A ‘ground floor’ view of Silicon Valley

Deep tensions around the table in Hewlett-Packard boardroom, tough-fought merger battles, unclear directions in 2005, newspaper articles attributed to leaks, abrupt resignations, illegal phone tracing, Congressional inquiry…

On this tumultuous note Tom Perkins begins Valley Boy ( www.landmarkonthenet.com), a book that gives you a ‘ground floor’ view of Silicon Valley.

He describes an edgy moment in the ‘bland, monotoned’ HP boardroom, ‘void of any decorative interest or distinctive feature — not even photographs of the founders,’ thus: “Without further debate, I stood, closed my briefcase, and simply said, ‘I resign,’ just those words. I left that nondescript room with its majority of cipherlike directors, as I now saw them, for the last time.”

Looking back at the May 2006 resignation ‘from the board in cold fury’, Perkins draws inspiration from Nathan Hale, the Revolutionary War hero, who had said, “I regret that I have but one life to give for my country,” and gives it a twist to say, “I regret that I have but one HP board seat from which to resign.” But his history with the company goes back decades…

Perkins recounts his meeting with Dave Packard and Bill Hewlett at an IEEE exhibition booth. They were assembling things personally and Perkins, fresh from his graduation, pitched in to help. “While we were getting everything set up, they interviewed me. When I left, Dave said that I would be receiving an offer,” writes Perkins.

“I was so impressed by these guys that I didn’t talk to any other potential employer, and that day we established an association and friendship that endured through the decades, until their deaths.”

To Perkins, Dave was a mentor, an inspiration. “He taught me everything I know about entrepreneurship, and was the most important influence in my life. Dave was a giant, and the proof is, probably, that there are many dozens of others who feel just as strongly about him as I do.”

When Perkins reported for his new job, Dave would tell him, after a warm welcome, that he was “about the first MBA type they had hired, and that the other managers were uncomfortable with the whole idea of MBAs.”

HP earned about $20 million a year then; it didn’t have a personnel department because Dave felt that ‘people are too important for a personnel department.’ So, he oversaw Perkins’ training, starting from the machine shop.

“Dave knew what he was doing,” remembers Perkins. “I needed to lose most of my MBA arrogance and prove myself in the nitty-gritty of making a quality product that customers would pay for. And also I needed to prove that I could earn the respect of the HP ‘family’ in doing so.”

Ideal read for the weekend, to fire you up for the week ahead.

More than genes and memes

It should be unnerving to know that we humans, according to biological insights, are but “hosts for two replicators (genes and memes) that have no interest in humans other than the role they play as a conduit for replication,” as Keith E. Stanovich writes in The Robot’s Rebellion: Finding Meaning in the Age of Darwin ( www.press.uchicago.edu).

“Humans, for example, can be viewed as huge colonies of replicators swarming inside big lumbering vehicles (essentially humans as sophisticated robots in service of the gene colonies),” he describes.

Genes, as you know, ‘contain the instructions for building the bodies that carry them,’ and ‘memes build the culture that transmits them.’ We may well be robots – vehicles designed for replicator propagation, concedes the author.

“But we are the only robots who have discovered that we have interests that are separate from the interests of the replicators,” he argues. “We indeed are the runaway robot of science fiction stories – the robot who subordinates its creator’s interests to its own interests.”

The robot’s rebellion is needed, urges Stanovich, if we want to transcend the limited interests of the replicators and define our own autonomous goals.

Empowering inputs.

Right-fit franchising

You can use franchising to increase your profits, assures Scott A. Shane in From Ice Cream to the Internet ( www.crosswordbookstores.com). The book lays down eleven rules for successful franchising.

First rule, ensure that franchising is right for your industry. The author identifies nine characteristics that make franchising appropriate for an industry. These include labour intensity of operation, brand name reputation, importance of local knowledge, and high standardisation.

“Franchising is more effective in industries such as computer stores, in which the product or service is provided to the end customer at a set location, than in industries such as carpet cleaning services, in which the product or service is provided at the customer’s premises.”

Franchising has its advantages and disadvantages. To reap the pluses, check if you meet two conditions, as follows: “First, a chain of outlets must be superior to independent businesses seeking to serve customer needs.

Second, the chain must be better organised through ownership by independent operators rather than by employed managers.”

When a business has to innovate and change frequently, the franchising model may not be very effective, cautions Shane. “The use of contracts to govern relationships between franchisors and franchisees makes it difficult to change policies or structure, or adopt products or processes that were not known and specified in the agreement at the time that it was signed.”

Being a successful founder of a franchise system is much like being a good professional gambler, the author notes in conclusion. “If you know the games where the odds are least stacked in favour of the house, and you understand the rules of the game you are playing, you can greatly improve your chances of winning.”

A guide for the business developer.

Tailpiece

“I keep learning a lot from technology.”

“Such as?”

“Like talking in sputters on the mobile phone to trail off a call by mimicking weak signal, rather than abruptly ending the call!”

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