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I must have read a dozen books about the founding of Apple Computer over the years, so when co-founder Steve Wozniak wrote his autobiography iWoz a few years back, I made a mental note of it, but never got around to reading it. Woz and I happened to be speaking at the same conference last week. They say you should never meet your heroes, but meeting Wozniak was a real honor. He is one of the most talented engineers and nicest guys I've met. His onstage interview was a bit scattered (imagine opening a faucet of Woz), but it was great to hear him speak about his experiences in designing the Apple II computer, how Basic and Visicalc helped turn the Apple II into a platform, the importance of privacy in social media, etc. 

iWoz is co-written with veteran PC Week reporter Gina Smith though told in Woz's unique style. Smith spent over a thousand hours interviewing Woz and then transcribing and reviewing the interviews and suffering through numerous Woz pranks. Woz's sense of humor and lightness come through in spades.

Although Woz was less a part of Apple than Steve Jobs in later years, those who know the history know that Apple would not have existed without Woz. The Apple II computer effectively created the personal computer revolution. It was first all-in-one design, the first computer that you could plug in and use. The Apple II+ was the first computer I bought and I still have one in my closet. It works perfectly 40 years later.

With the average iPhone app today weighing in at 100mb or more, it's hard to appreciate how much work went into creating software that could run on a 48k machine running at 1Mhz. It was Woz and other early apple employees like Randy Wigginton, Chris Espinosa, Bill Fernandez, Daniel Kottke, who labored to make that Apple II a reality. Woz, gave some of these early employees shares of stock worth tens of millions of dollars out of his own pocket when Jobs refused. 

For those interested in the history of Apple, this book is a unique opportunity to hear it from the guy who built it. You get everything from selling blue boxes with Steve Jobs to how he built what became the Integrated Woz Machine (IWM) disk controller for the Apple II and Mac.

Here are a few excerpts from the Q&A with Woz:

• Amazon: iWoz
• Wikipedia: Steve Wozniak, Apple II, Apple II+
• Byte Interview: History of Apple Part 1, Part 2
• Press coverage: NY Times, Wired

Norman Nie, co-founder and early CEO of SPSS, died a few days ago. I had the pleasure of working with Norman for several years when I was on the board of Revolution Analytics where he was CEO for several years. Norman was as smart and tenacious a software executive as I'd ever met. Well into his 60s, Norman was gearing up for another bite at the apple. He was a huge believer in the power of Open Source R as a way to build the next generation of statistical software and predictive analytics.

While not a programmer, Norman's impact on the software industry was giant. He created SPSS in 1968 along with Tex Hull and Dale Bent at Stanford University. When Nie moved to University of Chicago, Hull joined him and they continued development for several years, giving the software away free to universities and businesses and publishing a textbook manual. When profits started rolling in, SPSS was incorporated in 1975 with Nie as CEO. 

SPSS is one of the oldest mainstream commercial software packages that is still available today. The original version of SPSS was written in Fortran and ran on mainframe computers. It was ported later to more than 60 operating systems including minicomputer platforms, DOS in 1982, with Mac and Windows versions following in the early '90s. SPSS was the "swiss army knife" of statistics and introduced predictive analytics to a generation of students and computing professionals.

SPSS was eventually acquired by IBM for $1.2 billion in 2007. In a strange turn of events, Norman sued the company to assert his rights in the ownership of the SPSS name and trademark. 

Just last week, with the final board meeting to approve the acquisition of Revolution Analytics by Microsoft, Norman Nie passed away after a long battle with cancer. I'm told he approved the acquisition from his bedside in his last remaining days. Norman was that kind of a guy.

He was a helluva fighter, a smart, passionate son of a gun. Not always easy to work with, but he went out with his boots on and fighting until the very end. He made a mark on the industry that will continue to inspire others for decades on.

Norman, we'll miss you. 

• Wikipedia: Norman Nie, SPSS, Revolution Analytics, R
• SPSS: History of SPSS
• Forbes: Power in the Numbers
• NY Times: Are You Ready for R?

My former boss, Marten Mickos, has created an excellent new resources for early stage founders, managers and execs called www.Schoolofherring.com. Each post has a short write up and often a 2-3 minute video covering a topic such as giving feedback, Peter Drucker's principles of good management, what it takes to build an effective team, hiring for strength etc. Some of these topics are very practical, like how to send good email, others are more thought-provoking, such as the notion that bad news is good news --one of my personal favorites.

Some of these ideas come from legendary management guru Peter Drucker, but they are all shaped with Marten's unique and practical experience.

• School of Herring: Main site, Peter Drucker 
• Amazon.com: The Effective Executive
• HBR: What Makes an Effective Executive? (PDF) (HTML)
• Forbes: Drucker on Leadership
• Wikipedia: Peter Drucker

There is a good article over at Re-Code by ex-Microsoft VP Steven Sinofsky called "The Four Stages of Disruption".  It describes the evolution of products and markets through disruption, drawing from Sinofsky's own insights and also building on the work of Everett Rogers ("The Diffusion of Innovations") and Clayton Christensen ("The Innovator's Dilemma.")  There are few software industry execs with as much experience in shipping billion dollar software products as Sinofsky.  And he understands how brutal it can be to manage large teams.  In my view, Sinofsky is always worth reading, though he can be a bit, ah, verbose at times.

There are dozens of examples of disruptive technologies and products. And the reactions (or inactions) of incumbents are legendary. One example that illustrates this point would be the introduction of the “PC as a server.” This has all of the hallmarks of disruption. The first customers to begin to use PCs as servers — for application workloads such as file sharing, or early client/server development — ran into incredible challenges relative to the mini/mainframe computing model. While new PCs were far more flexible and less expensive, they lacked the reliability, horsepower and tooling to supplant existing models. Those in the mini/mainframe world could remain comfortable observing the lack of those traits, almost dismissing PC servers as not “real servers,” while they continued on their path further distancing themselves from the capabilities of PC servers, refining their products and businesses for a growing base of customers. PCs as servers were simply toys.

At the same time, PC servers began to evolve and demonstrate richer models for application development (rich client front-ends), lower cost and scalable databases, and better economics for new application development. With the rapidly increasing demand for computing solutions to business problems, this wave of PC servers fit the bill. Soon the number of new applications written in this new way began to dwarf development on “real servers,” and the once-important servers became legacy relative to PC-based servers for those making the bet or shift. PC servers would soon begin to transition from disruption to broad adoption, but first the value proposition needed to be completed.

Sinofsky makes a number of good observations on how markets and products evolve through disruption.  But there is a certain irony to reading about disruption by a Microsoft exec.  Is Microsoft a disruptor or a disruptee?  I'd say Microsoft has been on both sides of the disruption equation.

In the early days, Microsoft was a pioneering company that created vast new markets where none existed.  If Microsoft products were not initially the best in their categories, their persistence and steady release cycles gave them the features they needed to beat competitors in just about every category in which they competed, whether operating systems, applications, or networking software.  There were some notable exceptions, such as Microsoft's failure to beat Quicken in personal finance software.  But in general, Microsoft was the 800 pound gorilla in the market and few were brave or foolish enough to tackle them head on.  

The most clear example of Microsoft being a disruptor was it's entry into "back office" markets for server software as Sinofsky described.  The "Wintel" combination of Windows server software and Intel X86 architecture had a profound effect on redefining the server market.  It enabled large corporate Enterprise customers to move server workloads off expensive proprietary Unix systems for a fraction of the price.  You could argue that SQL Server was not as good as Oracle or that NT was not as good as Unix, but for many users it was "good enough."  And Microsoft was smart enough to add Enterprise DNA to the company to help them build this new class of software.  I'm sure in some cases the incumbents saw what Microsoft was doing, but dismissed it's solution as mere "toys."  And by the criteria of the incumbents that was exactly so.  

But where did all that disruption mojo go in recent years?  The emergence of smartphones and cloud-based software left Microsoft flat-footed.  New versions of Windows have been acknowledged failures.  It's rebooted it's mobile and cloud offerings several times.  And in the last couple of years there's been a steady stream of departures from the executive suite including Sinofsky, Bob Muglia, Hank Vigil, Craig Mundie, Ray Ozzie, Robbie Bach, J Allard, and soon Steve Ballmer.

In the mean time, Apple, Google, Amazon, Salesforce, Box and others have been the innovators coming up with new cloud-based offerings and products that have disrupted incumbents including Microsoft, HP, Dell and others.  

So what do you make of Sinofsky's article?  How is it disruptors get disrupted?  Let me know in the comments.

• Re-Code: The Four Stages of Disruption
• Amazon: The Innovator's Dilemma

In case you haven't figured it out, I'm a fan of Guy Kawasaki and his "How to Change the World " blog.  If you like his blog, you should check out his book "Reality Check."  Yes, you can read most of the content for free on the web, but sometimes a printed copy is more convenient.   Like if you're on an airplane.  Or on the toilet.  Or if you want to underline it.  Or if you want to underline it while you're on the toilet on an airplane.  Ok, you get the idea. 

The book covers some of the best items from his blog, categorized into themes like starting a company, raising money, business planning, innovation, marketing, schmoozing, management, hiring and firing and more. It's not a bunch of high-falutin' theories either. It's hard lessons learned by working with hundreds of entrepreneurs. Guy is also a player coach, having built four startup companies and served on the boards of ten companies. So it's practical advice rather than academic theory. And even though it's practical, it's still entertaining. You won't find the top 10 lies of VCs or the top 11 lies of entrepreneurs in any other book. And I doubt you'll read either of those pieces and not learn something either about yourself or about how you conduct your business. With more than 90 essays (including some great Q&A pieces) if you heed just a fraction of the advice in this book, it will pay for itself tens if not hundreds of times over. How's that for a compelling ROI?

While a lot of his advice is oriented towards startups, in my experience, it's equally applicable to large companies.  It's all about focus and execution.  Guy was one of the top rated speakers we ever had at the MySQL Users Conference, and he's well worth whatever he charges for these events. 

• InfoWorld: A Needed Reality Check for Enterpeneurs
• Amazon: Reality Check 

Back at the South by Southwest conference in the spring, I happened to meet Tony Hsieh, CEO of the online retailer Zappos. He and a crew were driving around Austin in a purple school bus giving away copies of his book "Delivering Happiness."  They were also giving away pizza and beer, which is another good way to deliver happiness. 

If you're not familiar with Zappos, it's an interesting story.  At first, Hsieh was just an angel investor in the company, but as the company struggled to raise additional funds from larger VCs, Hsieh ended up committing more capital and eventually became CEO.  There were still many ups and downs in building the company, but eventually they found their stride and became a billion dollar online retailer of shoes.  Their claim to fame was the focus on customer service, making it easy for customers to buy their shoes --or return them --all with free shipping.  In 2009, Amazon acquired the company for approximately $1 billion.

The story of Zappos is an interesting one, and I wish the book provided more details on how the company grew, challenges they faced scaling the business, etc.  "Delivering Happiness," like a lot of books by CEOs, is somewhat uneven.  There are some good lessons on building the culture of a company, but some areas are glossed over.  You never really get a clear understanding as to what went wrong culturally at Hsieh's earlier company LinkExchange.  There's a lot on Hsieh's early years as a high school and college student coming up with ways to make money, which may or may not be of interest. Most of the sidebars on culture by Zappos employees are more illustrative of the energy and enthusiasm at Zappos than they are instructive to outsiders.  

There are some good ideas in the book and things to keep in mind in building a company and a culture.  But it falls short of what it could have been in providing more take away lessons for managers and entrepreneurs. 

• Amazon: Delivering Happiness
• Delivering Happiness: Official site

Here's another interesting session from the South by Southwest Interactive conference a few weeks ago... Dharmesh Shah, co-author of the Inbound Marketing book, gave a concise, high-speed presentation on some of the best practices in social media marketing.  Here are a couple of video clips from his session:

A lot of the startups I work with, both open source companies and SaaS, are now taking Inbound Marketing more seriously as a way to grow their business, whether it's an open source business, cloud, SaaS or some combination.  The reality is it's just not good enough to have a killer product.  You need to have a dialog with prospects and make sure that they can find you.  The good news, is with products from companies like HubSpot and Marketo, it's much easier to implement these techniques than ever before.

Of course, these techniques are good for larger companies as well as startups. I wrote a guest posting for HubSpot's Inbound Marketing blog on that topic.

• Amazon: Inbound Marketing
• HubSpot: Main site, Blog, 

I just got around to reading Salesforce.com CEO Marc Benioff's book "Behind the Cloud." Ian Howells over at Alfresco recommended it to me.  Benioff tells the story of how he started salesforce.com in 1999 and over the course of ten years, turned it into a billion dollar power house.  Although we take for granted the idea that Software as a Service (SaaS) and cloud-based applications make sense, just a few years back this was radical stuff.  

Of all the CRM implementations I've been involved in during my career, the only ones that were really successful were those that used Salesforce.com. The old model of spending a million dollars and taking a year or more to customize never had a good payoff and salespeople hated using them.  But with the SaaS model, you can be up and running in days.  And its easy enough to use most sales people will take to it with a minimum of fuss.

Benioff's model for making salesforce.com was completely disruptive of the traditional enterprise software approach: It was a proven market, with the incumbents were only catering to the needs of large customers.  So there was an even larger market whose needs weren't being met and could never afford a traditional enterprise solution with all its complexity.  And better yet, the traditional competitors couldn't afford to sell at Benioff's lower subscription prices.

Just five years after he launched salesforce.com, his largest independent competitor, Siebel Systems, was acquired by Oracle, putting Salesforce.com in an even stronger position.  And the rest, as they say, is history.

The book is divided into chapters covering elements of marketing, sales, technology, finance and so on, each with a dozen or so "playbooks" describing a technique salesforce.com used.  Some are short and obvious, but the lengthier entries, where Benioff describes what worked and what didn't at Salesforce, are excellent.  That said, the book's style leaves it in a bit of a no-man's land.  It's not quite the usual biography or behind-the-scenes business book, but neither is it a standalone management tome.

Still, there are good lessons here for any CEO or executive.  And if you're interested in Software-as-a-Service, then this book is essential reading; it's practically a blueprint.

• Amazon: Behind the Cloud,  The Innovator's Solution

 
 I'm an advisor, investor and board member to several startup software companies including Revolution Computing, Pentaho and most recently Erply a new Software as a Service (SaaS) company.  One of the common threads I look for is the opportunity to disrupt a large market.

One of the things that made MySQL successful was its use of open source technology to disrupt the multi-billion dollar database market.  In Silicon Valley, people often talk about disruption, but usually what they mean is they have some new feature or a new way to do things that is 10x faster or 10x cheaper.  Those are good things, but that's not necessarily sufficient to make a business truly disruptive.  

The classic disruption model as defined by Clayton Christensen comes down to 4 important factors:

1. There's a proven market with large incumbents
   This demonstrates that customers are willing to pay money to solve this problem
   
   
2. There are underserved customers whose needs are not being met by the incumbents
   They may be receptive to a "good enough" product that is easy to access
   
   
3. The incumbents cannot profitably meet the needs of this market
   Ideally, their entry into this market would hurt their core business 
   
   
4. To disrupt market, you need to disrupt all the players, not just some of them
   If there are other players, you need to disrupt all of them

If you have all of those things, then your business could be disruptive.  But typically many startup companies ignore the third point.  It's not enough to do something the incumbents don't do today, you want to do something that they cannot do, because it would hurt their existing business.

In the case of MySQL, the product targeted the underserved web developer market.  MySQL was not only a better fit technically in that area, but due to its open source model, it was a business that was unattractive to the incumbents. (Or it was, until it grew to beyond $100 million in revenue.  Now Oracle will leverage this force to compete against Microsoft SQL Server.)  

There are plenty of great businesses out there that are not disruptive; perhaps you're creating a new market, or you're introducing a new innovation that the incumbents have not discovered.  Disruption isn't the only strategy, but if you can make your business disruptive, you gain a significant advantage in the market place.

• Amazon: The Innovator's Solution