Scott McNealy (Co-Founder, Sun Microsystems; Founder, Curriki.org) offers entrepreneurial tips [Video and transcript]
At last month’s Endeavor Entrepreneur Summit in San Francisco, Scott McNealy, Co-Founder and former CEO of Sun Microsystems shared his entrepreneurial wisdom in the welcome keynote. In addition to telling the story of the company’s beginning and reflecting on lessons learned since, he also talked about his newest venture, a non-profit called Curriki.org. Curriki is the leading K-12 global online community for teachers, students and parents to create, share, and find open learning resources that improve teacher effectiveness and student outcomes. The site, which is summarized in this PowerPoint and PDF, is also highlighted in two case studies (case 1 / case 2).
You can watch McNealy’s speech or read the transcript below:
Sun Microsystems’ Beginnings
I asked everyone at Endeavor what everybody wants to hear, and everyone said how we got started. I’m not sure that’s a terribly great story. It was four 27 year olds back in the olden days. We got to follow in the footsteps of Steve Jobs who was the first inexperienced, semi-ignorant, young, non-credentialed CEO to go found a company and really lay the groundwork. So when there were four 27 year olds who in 1982 went to get VC money, nobody batted an eye, even though I had three years business experience which was more than the other three founders combined. And we raised $4.5 million the first year. We started on February 24, we were profitable in May, we did $8.5 million in our first year, $39 million the second, $115 million the third, $250 million the next year, then it went to $510 million, and then $1 billion dollars, so that was kind of our growth ramp—I might have a couple dollars off.
Now how did it all happen? It was a Stanford and Berkeley University startup. Andy Bechtolsheim had invented the Stanford University Network Workstation under a grant while a PhD student at Stanford, and so it was the SUN network, so that’s how we got our name, on the Stanford University Workstation. And Andy was looking to get people to build his computer, his desktop workstation, but they weren’t really doing a good job; he was licensing it out to different people. And Vinod Khosla, my classmate from Stanford Business School, who I got to know mainly because he always seemed to be the last guy at every business school party–he found Andy and said to me, quit your job, let’s go start this company. And then we went to Berkeley and found the top software engineer for Unix from Berkeley named Bill Joy and the four of us started this. It was a nice combination of hardware, and software, and business school, somebody who had done it before and somebody who was inexperienced when we got started (that’s a joke). And the good thing about it is we didn’t know any better. Ignorance is bliss. That’s an important thing to remember. If you actually knew how hard it is you probably wouldn’t do it, so don’t worry about that.
Have a Controversial Strategy
I’d like to give you some suggestions, some quick ideas and thoughts to think about. Linda Rottenberg [Endeavor Co-founder and CEO] touched on the one I think is the most important and that’s the crazy thing. I’ve said for many, many years, you have to have a controversial strategy. It must be controversial. In fact, the more controversial, the better chance you have of making a lot of money. If everybody thinks what you’re doing is the right thing to do, everybody’s going to do it. Everybody does it, there’s no differentiation. If there’s no differentiation, there’s no pricing power. No pricing power, you’re not going to get a profit. No profit and you’re not going to be able to hire anybody, and you’re not going to make any money. It’s like walking into an interview and they say, “Why should we hire you?” And you say, “I breathe.” Fogging a mirror is not going to differentiate you at all.