In the 1980s, Steve Jobs, co-founder of Apple Inc., brought on board a new CEO, John Sculley, a successful business leader from New York who moved to Silicon Valley to help the company spread the word about the new Macintosh.
Sculley had achieved fame while running Pepsi, leading it to challenge its main competitor, Coca-Cola, in the U.S. market. At Apple and years into a close friendship, Jobs and Sculley collided over the company’s strategy , and Sculley proposed to the board of directors that Jobs be removed from his management duties. Apple’s founder subsequently left the company he created.
After his time at Apple ended in 1993, Sculley began focusing on applying the business lessons he learned from his time in the Valley by mentoring and investing in entrepreneurs, building what he now calls “transformative” companies. He helped build businesses in telecommunications, health care, retail, marketing and smartphone manufacturing. Today , he is involved in companies such as RxAdvance, a cloud-based platform for pharmaceutical companies, and Zeta Global, a digital marketing company with offices in the U.S., the U.K. and India.
Scully recently spoke with U.S. News, explaining how he enjoys finding a noble purpose in doing business and sharing some of his views on world competition, technology and global trade. The interview has been edited for length and clarity.
What do you see other countries doing that the rest of the world can learn from?
The biggest contrast is the different way that China thinks about building entrepreneurial companies. In the U.S. the idea has been largely shaped by the success that has come out of Silicon Valley: You start with a visionary idea, you develop the intellectual property that will enable it and then you build the company focused around that vision and intellectual property and become dominant in that sector. That isn’t the way that the Chinese are building their technology companies. China doesn’t focus on creating the innovative technology or even value their companies around their patent portfolio. They think all intellectual property should be open-source to anyone who wants it , and that’s highly controversial for trade negotiations.
What China does and what they’ve done better than anyone in the world is that they focus on brute-force marketing, speed to scale. For them , scaling is way more important than it is in the U.S. — in fact , we don’t even know how to scale rapidly , nor do we have a 1.3 billion-population marketplace.
What is the U.S. still doing better than the rest of the world?
The U.S. still is way ahead of the rest of the world in the important technologies: AI, machine learning, precision medicine. On the other hand, technology is changing so quickly. We have almost no elected members of Congress who know anything about technology , or less the specifics of health care. While they are good people and well-intentioned, the challenge is that , for instance, health care needs to be reimagined from the ground up.
The McKinsey Global Institute estimates there is $900 billion of waste, fraud, misuse, abuse, every year. The solution is getting the private sector to spend the time to learn enough about the health care industry that they can actually start bringing the same innovation, the same technology, from other industries such as e-commerce, social media, finance, and adapt them to the incredibly complex ways that work is done in this highly regulated , special-interest industry for health care.
How do you view the new tariffs between China and the U.S.?
The question is whether the approach that the (Trump) administration is using, to say, “We want to have a fairer balance between the imports and exports that the U.S. has, country by country,” would be the difference that would be advantageous not just to the U.S., but to the rest of the world. And there’s a lot of controversy around that, because the reality is that just balancing trade between exports and imports between countries is a little bit simplistic. We are a consumer-based economy, we depend on low-cost products from China to keep the prices down from inflation and I think it is perfectly a good idea to be negotiating to try to bring in better balance for the things that would be better for the U.S. I am just not sure trade wars are going to be the answer.
What trends do you see in technology that are here to stay?
When I think about technology today I think about Moore’s law, which has been consistent for the last 48 years: The number of transistors that you can put on a given area in a microprocessor would double in about 18 to 24 months. And that means that we are getting the benefits of almost 50 years of compounding that, of exponential change. So when you think of the first Macintosh , it had almost no power at all , and today we have about 2 billion people in the world who are carrying around a supercomputer in their pocket. That said, Moore’s law today is enabling entire new types of industries beyond personal computers: mobility, cloud computing, big data, artificial intelligence, precision medicine, navigation of drones, robotics.
What’s the most important lesson you learned from your time at Apple?
The big (lessons) that came out of Apple are still (lessons) that I think about to this day. When you start with a big vision and you are able to really think about something that is going to create an entire new industry, one that never existed before, and you are able to attract incredible , talented people to join you and you have a set of clear principles as Steve Jobs did for Apple, this becomes foundational to the company’s success and to building a company like Apple that eventually became the most profitable company in the world.
What are you betting on these days?
The thing that I focus on is called “platform businesses.” The big change in business architecture of corporations (is that) we are going from silo-function technologies, department by department, to platforms which are able to take all the data and transactions, the business processes that companies have regardless of what industries they are in , and take them across the entire business. I spend quite a bit of time on artificial intelligence, biotech, machine learning, but it all comes back to the business architecture of platforms. Platforms are the building block for everything that goes forward, as distributing electricity was 100 years ago.
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John Sculley, former Apple CEO, on China, Tariffs and the Future of Technology originally appeared on usnews.com
