All Things D Is Haunted by the Man Who Isn’t Here

Steve Jobs in 2007//Photo Credit: Acaben/Flickr

RANCHO PALOS VERDES, California — This year, as with the last 10, several hundred top digerati have flocked to Southern California for the All Things D tech conference. As in previous years, the roster of speakers, interviewed by conference runners Walt Mossberg and Kara Swisher, is an all-star list of tech execs, along with figures from Hollywood and other sectors of modern industry. This year’s luminaries include Apple CEO Tim Cook, New York Mayor Mike Bloomberg, Spotify investor Sean Parker, LinkedIn founder Reid Hoffman, and screenwriter Aaron Sorkin. The sessions are entertaining as ever, and the audience networking reliably ferocious. But a shadow hangs over the festive intentions of a well-deserved 10th anniversary celebration.

It’s the first D Conference since Steve Jobs died last October.

That’s huge. After all, the D conference was the only non-Apple event where the late Apple CEO deigned to appear. He was on stage for six of the previous nine iterations, including a legendary co-appearance with Bill Gates in 2007. You can even argue that this is the conference that Steve built: A key reason that the then-unfamiliar contender for the hotly competitive conference dollar became a must-attend event was the announcement of Jobs’ presence. True, Bill Gates was a fantastic get—but Jobs was the Holy Grail of speakers. Getting both was like hitting the daily double at long-shot odds. And Jobs’ regular appearances made D special.

So it’s no wonder that his ghost haunts the proceedings.

Mossberg and Swisher haven’t planned it this way—they scheduled a single tribute session in the middle of the three-day event, where Jobs’ close friend Larry Ellison and Pixar president Ed Catmull would share their remembrances of the late visionary. But it seems that almost every session has some reminder of the man who isn’t here.

Certainly, this was to be expected in the case of the first slot of the conference, Mossberg and Swisher’s pre-dinner interview with CEO Tim Cook on Tuesday evening. Since Cook has not sat for such a public colloquy since assuming Jobs’ role, the session was hugely anticipated.
Cook is impressive, breaking down the details of the company’s extraordinary success. He also explains his consummately sensible decision not to try to style himself as a replacement for Steve Jobs. He makes the astonishing promise that Apple is doubling down on secrecy about its products. (I guess that means no more leaving prototype phones in bars.) He discusses patents, promises improvement in Siri, all but condemns Ping to the chopping block, and skillfully ducks questions about future products.

But the most memorable parts of the interview dealt with Cook’s former boss and mentor. Jobs’ last days, Cook says, were the saddest in his life. He recalled that in the months before Jobs died, Apple’s co-founder discussed what happened at Disney after its founder died. Disney executives agonized over decisions asking, “What would Walt do?” Jobs made it clear to Cook that this was not to be tolerated at Apple. “He told me never to ask what he would do,” says Cook. “Just ask what’s right, and then do it.”

No surprise that a session with Apple’s leader dealt with his legendary predecessor. But it is somewhat unexpected that on Wednesday, the first full day of sessions, Jobs continues to be evoked.

On his turn on stage, Aaron Sorkin talks about his concerns that he’s entering “a minefield of disappointment” as he undertakes the task of writing the movie adaptation of Walter Issacson’s Steve Jobs bio. It’s like writing about the Beatles—there’s a huge contingent of people who are emotionally attached. The screenwriter admits that he still doesn’t have a handle on Jobs—whether he should be, like most Sorkin characters, an aspirational hero or, like the fictionalized Mark Zuckerberg in the Social Network, somewhat of an antihero.

In the next session, LinkedIn CEO Jeff Weiner makes a point by recalling a presentation by Jobs in one of his All Things D appearances, where he described the chronology of the iPhone.

During the audience Q&A session with Spotify executives, an attendee asks Sean Parker if he might be a spiritual successor to Jobs. Parker notes Jobs was “a totally unique human figure.” And while Parker does feel he shares certain traits with Jobs, he would never claim to be his equal, excepting “occasional moments of megalomania.”

After Mossberg’s interview with Ed Catmull, Mahalo founder Jason Calacanis asks a question about his favorite speech in a Pixar film by the character Anton Ego in Ratatouille. Calacanis says he always felt that it was inspired by Jobs’ poem about “the crazy ones,” and Catmull doesn’t disagree.

Tuesday afternoon’s last session is the one explicitly devoted to Jobs. Even the music is fitting—Bob Dylan as the audience enters, the Beatles as they leave. Just like a Steve Jobs keynote. At D, the memorial begins with a video showing snippets from all of Jobs’ All Things D appearances. In each one Jobs wears his trademark black turtleneck, but depending on the year he fills it out less and less. Mossberg announces that starting today, videos of the full sessions will available on iTunes for free.

Ellison and Catmull swap memories of Jobs—how he learned from his experience at Next and Pixar to become a better executive, how he worked tirelessly to solve problems, how he became softer and more empathetic in his later years.

My favorite story is Ellison’s, about how he accompanied Jobs frequently to the prototype Apple store in a nearby warehouse, set up so Jobs and his team could constantly tweak the experience to approach perfection. Ellison noted how contrarian the effort seemed. “Don’t you read the newspaper?” he would ask Jobs. “They’re saying bricks and mortar are dead.”

“We’re not using mortar,” Jobs replied. “We’re using glass and steel.”

The memorial session evokes the character of Ellison’s friend—his single-mindedness, his creativity and his humanity. But the most significant tribute is that Steve Jobs is everywhere here.

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We’re Trapped in the Facebook Journalism Bubble

Mark Zuckerberg

Photo: Jon Snyder/Wired

I had been certain that the bubble would pop. But I was disappointed.

For weeks, print and pixel had been dominated by news, overwhelmingly uninformed or stale, about the long-awaited and presumptively historical Facebook IPO.

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Steven Levy

The social networking giant’s financial prospects were analyzed from every angle. The nature of Facebook’s business, the soap-opera twists of its early history, and its rise to 800 million users were re-examined more closely than Roger Clemens’ syringes. Critics analyzed the official video explaining Facebook to investors more closely than the Zapruder film.  (Or at least a Lana Del Ray video.) The cast of characters from The Social Network was ushered back on stage for biographical treatments that seemed looney mashups of Robert Caro and Perez Hilton. We now know more about Sheryl Sandberg than Lawrence Summers does.

The fact Mark Zuckerberg couldn’t give interviews during this “quiet period” (now there’s an oxymoron), didn’t stop him from being omnipresent on a level that Donald Trump would envy. Countless journalists who never met Facebook’s founder expounded on his ambition, leadership skills, and choice of dog breed. Those writers who had met him recycled old stories with a deftness that would put Berkeley environmentalists to shame. (Disclosure: Though I was sparing in my own bloviating — posting but a single article on Zuckerberg’s affection for hackers — I did position myself as a windbag on NPR and ABC. Shoot me now.)

The grinded-out opinions about Facebook ranged all over the lot. The company is an unstoppable juggernaut! Didn’t they say that about AOL? With its grip on our personal information, Facebook will dominate online ads. No, Facebook has to work too hard for ads, and users will freak at losing privacy. Mr. Zuckerberg — grow up and lose the hoodie! Zuck — keep the hoodie and show that you’re more a maker than a moneymaker! The only things that the posts had in common were the authors’ utter certainty that they were correct.

It was as if the press had decided that a million words about Facebook wasn’t sufficient — but a billion words would be really cool.

Only one thing made this spectacle tolerable: its seemingly firm expiration date. On a certain day, Facebook’s underwriters would price its shares. The stock would hit the market, and its performance would be noted. And the Facebook Journalism Bubble would finally pop.

But it was not to be. Because of some funny business when the big day finally arrived — you can read about this, oh, just about everywhere — the IPO actually triggered yet another wave of Facebook news, along with endless arguments about how the IPO was botched, or whether it really was botched. And the post-mortems had barely begun when Zuckerberg poked his own hole in the quiet period by posting a photo of his wedding, held barely after the peals of the (cracked) NASDAQ bell had faded. The nuptial was a determinedly low-key event, but for all the press commentary it generated, you’d think it was a geek version of Will and Kate.

So we’re still in the Facebook Journalism Bubble, reading basically the same articles by the same writers. Meanwhile, other stories get short shrift. Most of the venues that budgeted multiple Facebook posts every day barely found room for a story or two about the first private space vehicle to dock with the International Space Station. Surely that’s as big a story as discovering who designed Mrs. Zuckerberg’s wedding gown.

Which is not to say that there aren’t plenty of unexplored angles left in the Facebook saga. But preciously few in the sea of coverage dip into the real and persistent news of Facebook — it’s a company driving a tech-based redefinition of how we share human experience.

I suspect that years later, after all the billions of dollars have been accounted for, we’ll still be reading about those seismic changes.  Meantime, pass the bubbly.

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Tell Jabba I’ve Got His Money: Star Wars Revenue Throughout Our Galaxy

Illustration: Michael Cerwonka

When Luke Skywalker first tapped the button on his lightsaber in 1977, what also hummed to life was a merchandise empire that shows little sign of slowing its rampage through fans’ wallets. Toys, clothing, books, videogames, all the ancillary stuff associated with the Star Wars films, has generated an estimated $23 billion in sales over the years. In 2005, the year Star Wars: Episode III – Revenge of the Sith debuted, Lucasfilm generated $3 billion in merchandise sales alone. Add merchandise to the worldwide movie box office, DVD sales and rentals, and theStar Wars saga has brought in an estimated $33 billion. That certainly buys George Lucas a few clones.

What we all want to know, of course, is which character is worth the most? On that, the privately held Lucasfilm is coy. “Darth Vader is one of the most popular Star Wars characters across most product categories,” a Lucasfilm spokes-Wookiee says. “Your instincts are correct.” Reading between the lines of that Imperial statement the answer is clear: The Dark Side wins.


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HP Cuts 27K Employees, Looks to Cloud and Data Analytics for Growth

Meg Whitman, CEO of Hewlett Packard, is building a leaner, more focused company. Photo: ChinaFotoPress/ChinaFotoPress via Getty Images

Hewlett Packard CEO Meg Whitman announced the layoff of 27,000 employees Wednesday, or 8 percent of the company’s workforce. The painful move is part of Whitman’s strategy to refocus the hardware and software giant to take advantage of what Whitman describes as “some of the biggest shifts in technology that I have seen in my career.” Those shifts include data analytics, security and cloud-based software and services.

Layoff notifications to employees “will got out shortly,” says HP CFO Cathie Lesjak, and will be completed by October 2014, the end of HP’s fiscal year. Some portion of the layoffs will be handled through early retirement packages. HP expects to realize an annual savings of between $3 and $3.5 billion from the layoffs and attendant reductions in infrastructure once the cuts are complete. The layoffs announced Wednesday are the largest from a payroll perspective in the 73-year history of the company. Whitman took over as CEO of HP last September after a failed bid to become governor of California.

Facing drooping profits and a world more enamored of smartphones and tablets than HP’s bread and butter – PCs and printers – Whitman and her team went through every business unit in advance of the cuts, she says. Rather than make equal reductions across the board, they were selective. “We said, what do we want to focus on, how many people do we need to deliver it, and what pieces do we want to deliver?”

One part of the HP business that faces deep cuts is its services business, which saw revenue decline 1 percent year over year. HP bulked up on services when it bought EDS for almost $14 billion in 2008, but it has struggled since. It’s due for a change, Whitman says. “Services is a turnaround, and it’s going to take three to five years,” she says. What it will take, Whitman says, is moving away from slower-growing, lower-margin services – typical IT outsourcing offerings – to faster-growing and higher-margin cloud services, application-modernization services, security and data analytics. “Headcount will be down” in the services business, Whitman says. “But I believe we will have a smaller, more profitable services business over the next two to three years.”

Overall, Whitman was optimistic about HP’s turnaround and the signs she is seeing in the marketplace. In HP’s largest business unit, PCs, Whitman sees healthy demand in the near term, especially with Microsoft’s Windows 8 launch driving new computer purchases. “We feel pretty good about end-user demand for our products,” Whitman says. “We have struck that perfect balance between design and the workhorse requirements of customers.” And while the printer business was down 11%, Whitman sees opportunity there too. “We need to step up our marketing and demonstrate new use cases for printing,” she says. “We are going to get very aggressive in the printing business, and I feel very good about our way forward.”

If there was a note of caution from Whitman it was centered on business in Europe. There are the unresolved issues around the economic bailout and potential default of Greece, and the unknowns France’s newly-elected president, François Hollande, brings, she says. “Our business in the US and Asia is strong,” Whitman says. “My belief is that Europe is going to get a little bit softer before it gets stronger.”

Buried in the news of the layoffs was that HP actually beat earnings estimates by analysts. HP’s share price was up almost 10% in after-hours trading. “We feel cautiously optimistic coming out of Q2,” Whitman says. “I wouldn’t say we have definitely turned the corner, but we are getting there.”

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Upstart Eric Ries Has the Stage and the Crowd Is Going Wild

Photo: Eric Ogden

Photo: Eric Ogden

Scott Cook is conducting an experiment. “It’s the corporate-counseling version of speed dating,” says the spectacled cofounder of Intuit, the finance software giant. He’s gathered his troops in a brightly lit conference room, where members of four Intuit departments are seated in front of 300 colleagues—plus 1,500 more watching via webcast—to hash out some business predicaments. Each team will take five minutes to present its problem. Then special guest Eric Ries will come up with a solution.

Arun Muthukumaran, a group manager of Intuit Payment Solutions, kicks off the proceedings. He describes a feature that could dramatically increase the number of small businesses that sign up for the company’s payment services. But implementation would burn up 20 employees’ time for a month. What if customers don’t bite?

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Ries, dressed casually in a blazer, pastel shirt, and black denim, suggests a test: Rather than building the service and trying it out on customers, create a sign-up page that merely promises to deliver this groundbreaking capability. Then present it to some prospective clients. Compare their enrollment rate with that of a control group shown the usual sign-up page. The results will give the team the confidence either to proceed or toss the idea into the circular file. No one would actually get the new feature yet, of course, because it hasn’t been built.

“I guess we could piss off a few customers instead of thousands,” Muthukumaran says. Laughter ripples through the crowd.

Ries glances at his watch. “It’s 4:18 pm on Monday,” he says with a puckish grin. “On Wednesday at 4:18 pm, I expect an email telling me how it went.” The team members exchange glances that are equal parts bemusement and worry: They make software, not concepts. They build code through painstaking cycles of design, programming, and testing. Customers depend on their products and trust their brand. And this guy expects them to offer a feature that doesn’t even exist? Nevertheless, the rest of Intuit’s employees are exhilarated. The room breaks into fervent applause.

It’s something Ries is getting used to. At age 33, he is Silicon Valley’s latest guru. In the four years since he first posted his theories about running startups on an anonymous blog, his campaign to replace the typical product development approach—build it and they will come—with a system based on experimentation has become a juggernaut. Ries’ book The Lean Startup, published last summer, has sold 90,000 copies in the US. His blog, Startup Lessons Learned, has 75,000 subscribers, and his annual conference attracts 400 entrepreneurs, each paying more than $500. Harvard Business School has incorporated his ideas into its entrepreneurship curriculum, and an army of followers are propagating his principles through their own books, events, and apps. Whiz kids looking for investors pepper their PowerPoint decks with Lean Startup lingo, which has become so pervasive that TechCrunch announced a ban on Ries’ term pivot. Tech darlings like Dropbox, Groupon, and Zappos serve as Lean Startup poster children, and now the philosophy is reaching established companies, including GE and, this afternoon, Intuit.

Back in the presentation hall, Ries walks his audience through the tenets of his philosophy. The core motivation is simple, and a single slide sums it up: “Stop wasting people’s time.” Entrepreneurs and their managers, minions, advisers, and investors routinely pour their lives into products nobody wants. The business landscape is littered with the wreckage of nascent companies built at monumental effort and expense that imploded on contact with the market. (Paging Webvan! 3DO! Iridium!) Unlike an established company, a startup (or a new division within an established company) doesn’t know who its customers are or what products they need. Its prime directive is to discover a sustainable business model before running out of funding.

The key to this discovery, Ries proposes, is the scientific method: the business equivalent of clinical trials. Assumptions must be tested rigorously, Ries says—and here he rolls out one of those increasingly ubiquitous Lean Startup phrases—on a minimum viable product, or MVP. This is a simplified offering that reveals how real customers, not cloistered focus groups, respond. It may be a functional product or, like the Intuit team’s sign-up page, a come-on designed to elicit a reaction. Once tallied, customer responses produce actionable metrics, as opposed to popular vanity metrics, which create the illusion of success but yield little useful information about what customers want. By repeatedly cycling or iterating through a build-measure-learn loop—a method Ries calls validated learning—the Lean Startup develops a verified perspective that enables it to identify and fine-tune the mechanism that will keep the company growing, aka its engine of growth. Or, failing that, it can pivot to a new strategy. This, Ries insists, is the quickest, most efficient route to product/market fit (a phrase adopted from Silicon Valley kingpin Marc Andreessen), defined as the moment when a product achieves resonance with customers.

Never mind that this approach is a mashup of ideas culled from programming, marketing, manufacturing, and business strategy, leavened with hard-won insights that have circulated among Silicon Valley veterans for years. Ries makes no effort to hide his sources, and his presentation preempts his critics’ complaints. “Lean,” he explains, does not mean cheap; it means eliminating waste by testing ideas first. And it doesn’t mean small, but rather that companies shouldn’t ramp up personnel and facilities until they’ve validated their business model. His philosophy is not just for Internet and app companies—that’s just where it started. Reacting to customer behavior is not incompatible with creating breakthrough products like the iPhone, Ries says, which in the popular imagination sprang fully formed from the mind of Steve Jobs.

Right or wrong, the Lean Startup has a kind of inexorable logic, and Ries’ recommendations come as a bracing slap in the face to would-be tech moguls: Test your ideas before you bet the bank on them. Don’t listen to what focus groups say; watch what your customers do. Start with a modest offering and build on the aspects of it that prove valuable. Expect to get it wrong, and stay flexible (and solvent) enough to try again and again until you get it right.

It’s a message that rings true to grizzled startup vets who got burned in the Great Bubble and to young filmgoers who left The Social Network with visions of young Zuckerberg dancing in their heads. It resonates with Web entrepreneurs blessed with worldwide reach and open source code. It’s the perfect philosophy for an era of limited resources, when the noun optimism is necessarily preceded by the adjective cautious. In a highly connected, recession- ravaged economy, Eric Ries has created a story so persuasive that the Lean Startup may already be too big to fail.

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