In Walter Isaacsonʼs biography of Steve Jobs, Isaacson describes the time that Jobs cold called Wendell Weeks, the CEO of Corning, Inc., to learn about Gorilla Glass (which is now used in more than 500 devices). Weeksʼ assistant refused to put him through, but offered to take a message. Jobs described that as “typical East Coast B.S.” In response, when Weeks returned the call, he was told by Apple’s receptionist to put his request in writing and to fax it.
The story ended well for both Apple and Corning, but it did highlight cultural differences between East Coast (and other) Fortune 500 companies and Silicon Valley.
At yesterday’s GE event, I saw several hints of that.
a) “Software is eating the world”
Chris Anderson of Wired asked Marc Andreessen on a panel to elaborate on the theme of his famous WSJ column, and Marc talked plenty of the Valley’s superb software capabilities . Jeff Immelt of GE said hardware, software, analytics and deep domain expertise are all important. And to emphasize hardware is far from dead, there was a giant, GEnx engine on stage (see photo of Tom Foremski at event – he is at least 6 ft and is dwarfed by it). Immelt looked at it with as much love as Steve Jobs used to when he showed off a new Apple device. With 20 sensors it can generate 1 TB of flight data a day. And Immelt talked about 250,000 intelligent pieces of hardware in other industries – scanners, turbines etc. Finally, he commented in his 30 year GE career, he has seen the world come full circle on the importance of manufacturing. The GEnx engine with its precision machining and material science advances are just one example of that.
b) Horizontal versus vertical
The Valley knows extremely well how to scale horizontally – it has given the world IT infrastructure, back office applications and plenty of other technologies which work well across industries. Immelt and the customers showcased yesterday (see this post) were all about verticalization. Deep domain knowledge with massive operational payback.
c) Investment Money versus Customer Revenue
Andreessen commented what a great job VCs have. They learn from portfolio companies and prospects all day long because “ we can write checks”. Immelt in appealing for Valley firms to come partner with GE, only casually mentioned an investment fund. But he repeatedly promised customer access – the opportunity to work on real life challenges in some of the most complex and demanding customers in the world. It reminded me of the expression I heard when I had my own startup: “Customer revenue is mother’s milk, VC money is sugared water”
d) My heroes have always been…
The Valley worships Jobs, Zuckerberg, Page, Ellison, Chambers – local company executives who have made it big. Immelt talked about peer Fortune 500 companies like Caterpillar which sell complex equipment. He could have also mentioned Siemens, Emerson, Deere, Komatsu and others who are also rolling out data intensive service offerings around their equipment.
e) It’s a small world after all
At various points during the day Immelt invoked Emirates Air, Etihad Airways, Qatar Airways and Korean companies in his comments. Apple, HP, other Valley companies are no global slouches, but few have the global intensity of GE. During a break I was talking to one of Immelt’s staff about his global travels. He has met with Putin, Cameron, Merkel, most other global leaders.
Watching the GE team in action yesterday, I was reminded of the late 49ers coach Bill Walsh springing his West Coast offense on the NFL. Only in reverse. The Valley has not seen much like Immelt and GE.