00:00hi everyone welcome to the a 6nz podcast
00:02I am sonal this weekend's special
00:05episode features Marc Andreessen in
00:07conversation with Clayton Christensen
00:08father of disruption theory professor at
00:11Harvard Business School and author of
00:12several books including his most recent
00:14competing against luck the conversation
00:16took place at our inaugural a six in Z
00:18Summit is moderated by longtime tech
00:21writer and editor in chief of
00:22backchannels Steven Levy and covers
00:24everything from management to product to
00:26modularity but they begin with Clay's
00:28book the innovators dilemma which
00:30popularized the theory of disruptive
00:32innovation and actually turned 20 years
00:34old this year I'm wondering have your
00:37views changed about how companies get
00:42disrupted how big companies can't stay
00:45what's lots happened in 20 years
00:48especially in the technology realm
00:50what's different and have you adjusted
00:53your thought sense it's changed a lot I
00:57think the most important thing I learned
00:59is I learned a bit about what is a
01:02theory and how is it developed so
01:05theories when they emerged from the
01:08researchers Minds never did they emerge
01:12perfect they were always just kind of
01:15half-baked and what success was
01:20predicated upon is subsequent
01:22researchers had to find things in the
01:25world that the theory could not explain
01:28and if you can find an anomaly that your
01:33theory can explain it gives you the
01:35opportunity to improve the theory you
01:38know and so that's what happened to us
01:40over the last 20 years what were some of
01:44the big anomalies that caused you to
01:48well one of them is you know the diagram
01:52of disruption where there are two
01:56trajectories one is the trajectory of
01:59improvement that customers can use right
02:02and another is a trajectory of
02:04improvement that innovating companies
02:06provide and I can't tell you how many
02:09millions of slides I
02:13ejected that shows that trajectory of
02:15technological progress almost always
02:18outstrips the ability of customers to
02:20use it actually isn't true hmm and where
02:26is one of my students said that hotels
02:33aren't disruptive and in fact if you
02:37look across history there had been no
02:41disruption of hotels the trajectory of
02:45improvement had been flat somebody else
02:50there hasn't been any disruption in
02:52higher education and so for a while in
02:56my mind civil I guess what that means is
02:58disruption applies to some industries
03:01and not others but then Airbnb came
03:05along now here is a new business model
03:08and all of a sudden what was flat went
03:12boring and disrupted them in a powerful
03:15way if I'm recalling your theory
03:19correctly it's almost like a classic
03:22disrupter in that it started off on the
03:25low end you know giving convenience that
03:27you know and serving a market that the
03:31bigger place seems not to be interested
03:33in right yeah so maybe which is late
03:35rather than being an anomaly or just the
03:37innovation didn't come about yet so I
03:39think what we can say is that the the
03:42processes and the pressures on companies
03:45to improve is always at work but nobody
03:52in the hotel industry thought that
03:55anybody could disrupt them the
03:57incumbents were so powerful and it turns
04:00out that they're wrong so you can
04:03predict that somebody are gonna try to
04:06disrupt whether they have been able to
04:08do it is still something that we need to
04:11study some arcs it was a couple years
04:14before clay published his book that you
04:16were mosaic Netscape but after the book
04:20you kept this rough thing with the
04:22Opsware and now the venture capital
04:25how did you come across clays work has
04:27it shaped what you do your thinking or
04:29or basically he just makes you confirm
04:32what you're doing a wall when I first
04:33entered business I didn't know anything
04:35about business because I've never taken
04:36a class on business not that I ever
04:39could have actually made it into the
04:40admissions process of Harvard Business
04:42School so I didn't really know anything
04:44if I had a number of coaches and mentors
04:45who could teach me things but I wanted
04:47to learn more and so I went and I read
04:48about a thousand business books and then
04:51fed about nine hundred ninety eight of
04:52them into the shredder because it's just
04:54it's extremely hard to learn business
04:56probably but a big reason for that I
04:58found is a lot of business books kind of
05:00fall into two traps one is the
05:01extrapolate off the recent past and so
05:03they're very kind of short-term in
05:04nature it's whatever worked in the last
05:06five years projects forward the other
05:08problem they have is I think they they
05:09confuse correlation with causation
05:10mmm-hmm and so they'll take a set of
05:13companies that are doing well then
05:14attempt to reverse engineer the causes
05:16for why those companies are doing well
05:17when in reality generally what you're
05:19seeing are the effects of what happens
05:20when companies do well there were only a
05:22couple bucks that really you know stuck
05:23with me and it's really clays book and
05:25then of course Andy Gross book tons and
05:27tons of books will tell you a company ex
05:28screwed up because they were incompetent
05:30and dumb to which apparently the lesson
05:32from that is don't be incompetent in the
05:33Dom approaches I guess a useful piece of
05:35advice but the clays book that was so
05:37striking was the observation that when
05:39big companies get disrupted it's not
05:40because they're incompetent and dumb in
05:42fact quite the opposite it's because
05:44they're very competent and smart all the
05:46existing commitments that they've made
05:47all the existing customers they're
05:48servicing the existing margin structure
05:50that they have and for me that was a big
05:52mental left turn which is like oh that
05:55explains why all of these incredibly
05:57hard-working short people end up in this
05:59trap and of course what's striking in
06:01we'd love to know what you think about
06:03this if you can read the idea you can
06:05know that it could happen to you
06:08you can like fully determine to yourself
06:11that it's never going to happen to you
06:12and then yet it will still happen to you
06:14after 20 or 20 years of watching people
06:16try to cope with this do you think it's
06:18possible to know that that can happen
06:19and then be able to then alter behavior
06:21in order to prevent it or do you think
06:23it's simply state because of the nature
06:25of the fact that that company's end up
06:27with so many obligations so I I believe
06:31that it doesn't have to kill you but
06:36it'll kill you if you
06:37understand how the world works in other
06:41words these processes in the established
06:43companies can I tell you a story that
06:46taught me a lot about this so in 1999
06:51out of the blue the phone rang and
06:54Secretary William Cohen who is the
06:57secretary of defense in the Clinton
06:59administration called me never met the
07:02guy but he said I read this theory of
07:05you from your work called disruption and
07:08I wondered if you could come down to the
07:10Pentagon and explain what that is to my
07:13staff so I described its process of
07:17disruption and then I said I'd like to
07:21describe how this process of disruption
07:25worked its way through an industry that
07:27is totally different than yours it's
07:30just so that you can visualize it in the
07:32abstract sense and so I told him about
07:37how a disruption occurred in the steel
07:40industry because in the steel industry
07:43the simple product at the bottom was
07:46rebar the high end of the market was
07:49sheet steel that used to make appliances
07:52and cars and then the integrated steel
07:55companies like u.s. steel and Bethlehem
07:58were making the whole range of these
08:00products but in the late 60s a new
08:04technology called mini Mills came in at
08:07the bottom of the market melting scrap
08:10in electric furnaces and these mini
08:14Mills got better and better and better
08:16and all but one of the integrated
08:18integrated steel companies like
08:21Bethlehem Steel all but one of them went
08:25into bankruptcy and died and the mini
08:28Mills now account for nearly 70% of the
08:32market so I described this is the way
08:35this had happened and then a man who was
08:38sitting on the front row raised his hand
08:40and he said clay you're clueless about
08:43why we're interested in this arunya and
08:46I said I actually include us and he said
08:50well let me show you leave that steel
08:52diagram on the screen and he said what
08:57you call sheet steel assume the most
09:00demanding market in steel he crossed
09:04that out and he said we call that the
09:05Russians and what you call the
09:08integrated steel companies like
09:10Bethlehem Steel that make everything we
09:13call that the US Department of Defense
09:16and what you call rebar at the bottom of
09:20the market we call that terrorism and
09:23what you call the mini mills screaming
09:26up market we call that non nation
09:28nations like al-qaeda and and he said so
09:33that's why we're interested and then he
09:36sat down and then all of the hands went
09:39up and and most of the questions were
09:42have there been any instances of where
09:46the incumbent leader got disrupted from
09:50below but rather than having it killed
09:53them they went down and co-opted them
09:55and I said there have been a few
09:57examples but in every case the the
10:01leader who caught this next wave had to
10:04set up a completely different business
10:06unit and manage it independently with
10:09different processes a different
10:11architecture or economic structure and
10:14those have been the only instances where
10:17the leader stayed is the leader two
10:20months later the secretary Cohen called
10:23me up and he said today were announcing
10:26in the Pentagon that we're setting up a
10:29fourth armed of our services we have the
10:33army the Navy the Air Force and special
10:36forces command and it's organized
10:40independently so that we can have
10:42different processes in a different
10:44structure so that we could go after
10:46terrorism we have been trying for six
10:49years to figure out how to organize our
10:53art department of defense so that we
10:57could counter terrorism but we just kept
11:01fighting against each other
11:03finally you had a model and it gave us a
11:06common language in a common way to frame
11:09the problem so we could reach consensus
11:11around what otherwise would have been a
11:13very counterintuitive course of action
11:16and the reason for the long story is I
11:21think when the established leaders have
11:24a tough time capturing disruption even
11:27though they they think they understand
11:31it what makes it hard is they don't have
11:34the common language and a common way to
11:36frame the problem the interesting thing
11:38about the department defense story in
11:40that case which I hadn't heard before is
11:41the idea of Special Forces was not new
11:45Delta Force for example been around
11:46since the Vietnam War Delta Force was
11:49part of the army yes
11:51Delta Force was reassigned to SOCOM when
11:53so calm was created most of the Navy
11:55SEALs and the the other and so so what
11:58you're saying is basically SOCOM
12:00administrative Lee was then going to run
12:02these units that have previous existed
12:03in a different way that's right and the
12:05core problem was allocating resources
12:08from these guys versus these guys and
12:11they couldn't ever put it all together
12:13in a way that met this strategy that
12:16they needed to implement increasingly
12:18there are companies that are saying oh
12:21we get it we have the architecture in
12:25the logic to frame it and so it's not as
12:30lethal a disease as it used to be well
12:35this is fascinating because putting this
12:37in a theoretical construct sort of
12:40confounds or impression the disruption
12:43is just so tied with technology itself
12:45right and you know mark is that is that
12:48it odds with sort of the theory there
12:50don't talk about your view of the you
12:52know the product cycle theory of
12:53innovation we'll take what we can get
12:55from a theoretical standpoint anything
12:57that makes what we do seem that random
12:58it's tremendously reassuring and ideally
13:00helpful which disruption certainly is a
13:03couple things I've observed which is
13:04just the way that people perceive
13:07disruption is that it's the tech
13:09industry attacking other industries
13:10right and so it's the tech industry
13:12attacking education or is the tech
13:14industry attacking financial services
13:16the tech industry attacking and
13:17newspapers in reality the main form a
13:20disruption that happens in the tech
13:21industry our tech startups attacking
13:24you know you get these giant you know
13:25hugely successful tech companies and
13:27then you get a thousand startups coming
13:28at them that's one interesting thing
13:30second interesting thing is it's there's
13:33there should be some sort of there needs
13:34to be an equation or a constant of the
13:36amount of time that you get to call
13:38yourself a start-up before you yourself
13:39become right for disruption yes this is
13:41right connect Claes work to Auntie grows
13:43work the way clay clay talks about when
13:45companies are in a position to get
13:46disrupted is when they have an existing
13:47business existing organizational
13:49structure and he always talked about CEO
13:51failure at success having a lot to do
13:53with commitments which is sort of the
13:55the human version of the of the
13:57structural arguments the commitments
13:58that the CEO makes to those customers or
14:00to the investors on things like margin
14:02structure to the employees on things
14:03like strategic plans and Andy always
14:06argued that too many CEOs get hung up
14:07and effectively gets subject to
14:09disruption because they end up basically
14:10over committed but then to actually
14:12account for it requires breaking too
14:14many promises yeah and CEOs can't break
14:16the promises which is another way of
14:18saying they can't reengineer what they
14:19do at the core of the business and so
14:21one of these I find striking hopefully
14:23will be working with a lot of our
14:24companies you know here in the room for
14:25you know 10 15 20 years about five years
14:27in you just you start to see startup
14:29CEOs that have actually made a lot of
14:31commitments to a lot of people and have
14:32built a lot of assumptions into the
14:34business and then there will be other
14:35startups to come along and all of a
14:37sudden don't respect any of those
14:38commitments in any of those obligations
14:39in any of those structures so I actually
14:41think the disruption cycle is playing
14:43out earlier I don't know if it's earlier
14:45than it was in the past but I think it's
14:46playing out earlier than people believe
14:47I never thought it in those terms mark
14:49and I think a reason why you see the
14:53acceleration is more than I remember now
14:59there are two different types of
15:01architectures and products the closed
15:04interdependent architecture is
15:07interdependent because if I change one
15:09thing I have to change everything it
15:11takes a lot a time to change a
15:15fundamental architecture in a product
15:17the other type of architecture is an
15:20open or modular architecture where how
15:23the pieces of the system fit together
15:27modularity enables new products to be
15:31developed so much faster the gravity is
15:36shifting over to markets that are
15:38optimized by a modular architectures and
15:42in new products and new technologies
15:45very often it's still it's in a stage of
15:48interdependence and it's slow so we
15:52can't say that the whole world has
15:54flipped but little by little I think the
15:58evidence there the weight is on
16:01modularity and therefore fast recycle
16:05that's right right that's true I'm just
16:06kind of curious um whether the founder
16:09if the founders is the CEO when the
16:11five-year twist comes or whatever is the
16:14company better prepared generally the
16:18thing that founders have is literally
16:19the ability to break all the promises
16:20the founder can say I know I told you
16:23last Tuesday we're building you know
16:24widget acts and we're doing the
16:25following away with this margins but
16:27I've got news for you we're now doing
16:29building widget y in this totally
16:30different way if you don't like it go
16:31get another job and there's this
16:33mystique where the employees tend to
16:36give the founder especially a successful
16:37founder the benefit of the doubt and
16:39they say you know basically they say you
16:41know maybe he or she is wrong but maybe
16:42there's magic happening here now I don't
16:44believe it's just the founder like the
16:46founder is special because the founder
16:47is literally the name of the door effect
16:49started the company there's also such a
16:51thing as a founder mentality and this is
16:53also something I think in Andy Grove
16:55himself believed as well which is that
16:57it's not just founders who can do this
16:59it's CEOs would have the founder
17:01mentality who can also do it and there
17:03are some spectacular examples in the
17:05history of business where non founders
17:06running these companies were able to do
17:08really radical things that are normally
17:10only associated founders I agree he
17:13could add one other element that could
17:16make it a founding management team
17:18better or worse at this in accounting we
17:23teach people that you should ignore fix
17:25and sunk costs and only look at the
17:29marginal cost and marginal revenue
17:31associated with the proposal that you're
17:34making a decision about and that idea
17:39should ignore sunk costs and just look
17:43at the marginal cost creates real
17:46problems for the management team so by
17:49analogy we wrote a case about this in
17:521992 and that mini-meals had driven the
17:57integrated steel companies out of every
17:59tier of the market except sheet steel at
18:02the high end of the market the
18:04management at US Steel decided that they
18:07needed to make a mini meal to start to
18:11attack against these mini meals and then
18:16the CFO came in to the conference room
18:19and he said this makes no sense at all
18:22because when my average cost of making
18:26steel is three hundred and fifty dollars
18:28per ton we have 30% excess capacity in
18:33our existing Mills if you guys want to
18:36sell an additional ton of sheet steel do
18:41it in our existing Mills because the
18:43marginal cost is only $25 a ton and so
18:49they didn't do it and the mini Mills
18:51kept gaining market share last December
18:56US Steel 50 years later announced that
19:01they were going to build their first
19:02mini mill next in Birmingham Alabama's
19:06regular mill and then in January of this
19:10year they announced that they weren't
19:12going to build a mini mill and the
19:15reason is that they had 30% excess
19:18capacity in their existing mills and if
19:23we're gonna do it let's do it let's
19:25utilize what we have and to me what
19:29enables or makes it impossible for
19:32management to make it a good decision is
19:35this marginal versus full cost pressure
19:39that forces people to want to use what
19:42you have rather than create something
19:46new and in order to break that you've
19:49got to have the mindset that you're
19:52but you have to be willing to withstand
19:54the attacks that will come from people
19:55that will say you're being grossly
19:56irresponsible yeah because how can you
19:58ignore this huge install basically have
20:00how can you ignore this huge customer
20:02base we have that's right I I don't want
20:04to go too much farther
20:05returning to the theory that you you
20:08know talk about here they're the jobs to
20:10be done theory I wanted to talk about a
20:12little more cuz it almost seems like if
20:15you do this theory right you're
20:17inoculating yourself against disruption
20:20yeah what does it mean when you say to
20:23have the people on a company think of
20:25their product their service as something
20:28to be hired and have a resume and apply
20:30for a job well what pushed us into this
20:34direction is you've seen in I don't know
20:39how many jillion management meetings
20:42where you produce in your best case and
20:46we need this amount of money it's gonna
20:49hit these milestones this year next year
20:52and so on and then about 80% of the
20:56innovations that get that funding from
20:59the corporation you then deploy it into
21:02the market and they fail and why is it
21:06that you can't be correct more than 20%
21:12of the time is innovation simply a
21:14crapshoot that failing is intrinsic to
21:18success or not we taught that we should
21:21understand the customers than if we
21:24understand the customers will develop
21:26products that they will buy but the
21:29actual reality is that we get it right
21:3220% of the time so we decided that
21:36understanding the customer is the wrong
21:38unit of analysis but rather jobs arise
21:43in our lives and we have to get these
21:45jobs done and some are incremental
21:48germanity when we realized that we have
21:51this a job to do we have to go out and
21:54find something to get the job done
21:57understanding the job is what we need to
22:02not the customer it's the job because
22:04the job is the causal mechanism that
22:07causes people to go by out and pull it
22:10into their lives and use it and
22:13understanding the job is the critical
22:15unit of analysis so here's an example
22:19good friend comes back into town with
22:22this spouse and they want to take you
22:26out for dinner on Saturday night and you
22:31say that's a great idea we'd love to do
22:33it let me check with my wife she said
22:36don't you remember we had this
22:37commitment on Saturday night can they do
22:39it on Friday night so you call them up
22:41yeah they're available Quinn well let's
22:45do it at 8:00 o'clock and then you call
22:48back what kind of ethnic food do you
22:51like and you get there so let's go to
22:54this restaurant you call them they don't
22:56have space for you so you call back is
23:00there another time no we have to do it
23:02then because we have babysitting
23:03problems and clearly there's a job that
23:06had arisen and you're doing workarounds
23:09to get the job done and then somebody
23:13comes along and said wait a minute
23:15what's what's the fundamental reason why
23:18we're doing all of these workarounds
23:20then they come up a visit concept of
23:23opentable that solves the problem some
23:28startups in the valley they get
23:30criticized because they don't think at
23:33all in those terms they really don't
23:35have a customer idea of you know they've
23:37they've got a plan and they've got a
23:39pitch do you buy that is that what you
23:42find basically the way I think about it
23:44related to this I think about basically
23:45a technology change happens like
23:47something happens in in the core
23:49technology architecture change so
23:51there's tcp/ip or there's the
23:53microprocessor or there's the smart
23:54phone the strength of the valley is you
23:56get a thousand startups that basically
23:58swarm all the different possible
24:00implications of that change and so you
24:02get a thousand mobile apps you get a
24:04thousand devices that use the
24:05microprocessor you get a thousand
24:07internet startups trying to do every
24:09conceivable application of the internet
24:10and then clay to your point it's it is
24:12something like an 80% mortality rate
24:14right most of them don't work
24:15and a small number of them do work and
24:17find somehow either deliberately or you
24:20know consciously or unconsciously find
24:21the job to be done and then they're
24:22becoming big important companies the
24:25well-meaning kritis are like geez that
24:26seems like a lot of waste why don't you
24:28just think through upfront what the
24:30problem is right what's this with the
24:32solute so-called solution versus product
24:34why don't you design a solution rather
24:35than a product let it you solve a
24:37problem rather than just sort of see
24:39what happens so here's the challenge the
24:42historical track record of innovators
24:43technology innovators predicting the
24:45consequences of their innovations is
24:47very poor so is everybody else's
24:49predictions my favorite story on this
24:52which I just always go back to and I
24:53think about this is Thomas Edison who
24:55was a tremendous track record of success
24:56you know invents the photograph and he
24:59brainstorms ideas on the use case of the
25:02phonograph and you know his preferred
25:04idea idea number one as a 19th century
25:07devout white male Protestant you know
25:09elder of the community in the
25:11three-piece suit was obviously the
25:13purpose of the phonograph says so
25:14everybody can have a library of sermons
25:17at home of course it turned out the
25:19killer app turned out the job to be done
25:21for the phonograph was music it turned
25:23out by the way it was music primarily
25:24for kids by the way it turned out it was
25:26John ruse and music that were primarily
25:28new right blues and then later jazz and
25:30then later rock and roll and this came
25:32as a complete surprise to Edison he had
25:34no reason to like believe or disbelieve
25:35this is just he had a worldview of what
25:37this was of what of what the job to be
25:38done was that was just completely wrong
25:40and then the phonograph ended up being a
25:42transformative innovation for reasons he
25:43didn't expect and so I would say that
25:45the Assumption the job to be done theory
25:47is that it is actually possible to
25:48identify a priori what the job to be
25:51done is as compared to let the
25:52technology out and then let the
25:54customers figure it out so I believe
25:57that if you're not looking for the job
25:59to be done then you will observe
26:03something that happens and impute
26:05because of this then then if you're very
26:09careful about watching what people do
26:12then finding a product that gets the job
26:15done is faster if you understand what
26:19causes Tobiah we can develop products
26:22that nail the job better and better
26:24better and that is really hard for a
26:27disruptive company to go after because
26:31they enter the market thinking that if
26:34they make better products than the
26:36competitors they will win the game so
26:38once you get the job done how do you
26:40sustain growth from that how do you
26:43build up from that so if you understand
26:47the job to be done it then allows you to
26:50ask another question about it that is in
26:54order to get the job done what are the
26:57functional dimensions and the social and
27:00emotional dimensions of that job to be
27:04done and almost always even for
27:07sophisticated high-tech products they
27:11have emotional social and functional job
27:14elements of the job if you understand
27:17that then you can come to the next level
27:20which is but that's the job what are all
27:23of the experiences in purchase and use
27:26that we need to provide the customer so
27:29that they will nail the job perfectly
27:32that become the criteria by which the
27:35customer chooses to buy your product
27:38versus somebody else's if we define them
27:41well not only does it help us do the job
27:44better but allow it defines the business
27:47model and that's what differentiates our
27:51product from the competition and once we
27:55understand the experiences we need to
27:58provide then the last layer is what do
28:02we need to integrate and how do we need
28:03to integrate them so that you can
28:06provide these experiences required to
28:08get the job done and that combination of
28:12that package of things makes it very
28:15hard for somebody to disrupt you and it
28:19defines what you and you could uniquely
28:22can do so it's not going to change that
28:24the pace will the license a little
28:26different question you know people know
28:28both of you is people who can write a
28:30lot of times about things I want to ask
28:32each of you if you could recall time
28:35when you were wrong on something
28:38or maybe even somewhat wrong and you
28:40wish you knew then what you know now
28:44how long do we have so what I found at
28:48least in kind of my line of work either
28:50as an entrepreneur or an investor what I
28:52find useful is a framework to think
28:53about mistakes is actually two different
28:56very important to be able to
28:57differentiate between them mistake of
28:59commission and mistake of omission so a
29:01mistake of commission right is I start a
29:04company or I invest in the company and
29:05it doesn't work and I tried something in
29:07it failed mistake of omission is I had
29:10an opportunity to start a company or
29:11invest in the company and I chose not to
29:13and it became a huge success and then
29:16tortures me for the rest of my life the
29:18nature of the economics of the tech
29:20industry is that over time the mistakes
29:23of omission end up being much bigger
29:25mistake of commission is you can lose
29:27one X mistake of omission as you can
29:29lose a thousand acts because that was
29:30the upside you could have gotten and so
29:32all the mistakes that I care about are
29:33all mistakes of omission and I'll just
29:35give one example from the past I don't
29:37know whether I would have had the
29:38opportunity to invest or not but Google
29:40just struck me as absurd on its face for
29:41two obvious reasons one is everybody
29:44knew search was low quality user
29:46experience and two as everybody knew
29:49that search was a cost center and out of
29:50profit center those were to widespread
29:52prevailing views and I in that case I
29:54didn't do enough thinking from first
29:56principles and didn't really work my way
29:57through and it wasn't open enough to the
29:58idea and so that's that's one that
30:00always resonates in my head so when you
30:01have an error like that how does that
30:05change your thinking were there times
30:06later that you felt oh wait a minute
30:09Google and then you did something
30:10different you would do we do otherwise
30:11yeah so every VC has a bunch of theories
30:14on why we make the investments we make
30:15and then I like to do what I you know
30:17what they call the backtest which is
30:18like okay they say you know Sergey Brin
30:20and Larry Page walk in the room and you
30:22applied your criteria fancy criteria to
30:24their you know at the time would look
30:25like total craziness like would they
30:27have would they have gotten funded in
30:29the nature of history right after the
30:30fact is all that totally obvious at the
30:32time these all looked incredibly
30:33uncertain and incredibly tenuous and for
30:35reasons that we could talk about at
30:37length in each case naturally as we go
30:39through life we accrete beliefs beliefs
30:41about how the world works beliefs about
30:42you know causes and effects beliefs on
30:44patterns you know that we've seen in the
30:45past either successes or failures either
30:47you know this actually worked or massive
30:49scar tissue or something that didn't I
30:50try as hard as I can
30:52to be as ruthless as possible at
30:54shedding the old beliefs at leaving them
30:56they are so rarely actually predictive
30:59of something new is it very difficult to
31:02do because it's a fundamental attack on
31:03the ego right it's just thinking that
31:04somebody does that to you it's like no
31:06no you're wrong on acts like your
31:07natural reaction is no I'm not like
31:08you're wrong you're an idiot and so to
31:09do that to yourself is like it's like
31:11it's a it's a very unnatural process
31:13let me give two so before I became an
31:15academic I started a company with
31:17several MIT professors to make a set of
31:19products out of advanced materials I was
31:23the business guy my partners were the
31:25technical brains and in the early 80s we
31:29raised sixty million dollars which is a
31:32lot of money back then and one of the
31:34biggest investors was BMW because you
31:38could calculate that if you used silicon
31:42nitride instead of steel in making the
31:45engine you could save a big number in
31:49efficiency costs because you wouldn't
31:52have to cool it so anyway they decided
31:56that we would start by using silicon
31:59nitride to make piston pins that connect
32:04us the piston to the connecting rod and
32:08they gave us the the specs we tested
32:13them out the Gazoo went over to Munich
32:16and triumph and they had this test
32:19engine laid out all ready to put in
32:21these different piston pins and we
32:24turned it on in it it shaked
32:28uncontrollably and it turns out that
32:33many of the other elements in the system
32:36were designed to accommodate the
32:40up-and-down movement of Steel and you
32:44couldn't take that out and put in a
32:47different material with a different
32:49ratio in order to BMW to use our piston
32:54they will actually need to redesign the
32:58engine block to reduce reassemble or
33:04and if they did that then go have to
33:08redesign the car so we came home with
33:12our tails between our legs there's a
33:16theory about innovation that we call
33:20interdependence and modularity and it
33:22did not exist in the time we did
33:25something that was impossible to do and
33:28had we had a theory we could have
33:31predicted what's scary is even BMWs
33:35engineers didn't know that there was
33:38this inner dependency but that I think
33:40mark that's exactly what you're talking
33:41about in my language I spent my life
33:44trying to provide more and more theories
33:47of causality so that people don't have
33:51to win by trial and error but I went in
33:55and with a book you wrote called how
33:59will you measure your life and which you
34:02took some of your strategies and apply
34:06them in a non-business sense to people's
34:10tells me what you found one day I was
34:13driving to work about 6:00 in the
34:15morning on here on Avenue in Cambridge
34:18and I realized out of the blue that God
34:22doesn't hire accountants in heaven and
34:27as I tried to understand where did this
34:30idea came from I realized that what's
34:32going on is you and I have finite minds
34:37and because we have finite minds I can't
34:41keep track of all of the invoices that
34:43come in and go out but rather we have to
34:46have an accountant to add up all of the
34:48numbers in all of those invoices and I
34:51can then look at the sum of all of the
34:53detail because of our finite minds we
34:57have to a granade things we get a sense
35:00of hierarchy in the business world so
35:04people who preside over bigger numbers
35:07are more important to mankind than
35:10people who preside over smaller numbers
35:13we have this sense that if we can go up
35:16this hierarchy and preside over bigger
35:18numbers my life is is worth meaning but
35:23then I realize God actually has an
35:27infinite mind and therefore he doesn't
35:31need to aggregate up above the level of
35:34individual people in order to have a
35:37perfect understanding of what's going on
35:39in the world and what that means is that
35:44when I die and I have my interview about
35:47whether they're gonna let me in or not
35:49not gonna say oh my gosh the famous
35:54Clayton Christensen of the Harvard
35:56Business School what God's gonna do
35:58instead is say clay I put you in this
36:01situation can we just talk about the
36:04individual people who you helped to
36:06become better people because you used
36:09the talents that you have and then lest
36:13you forget we gave you five wonderful
36:15children what did you do to help them
36:19become magnificent people and the reason
36:23that God doesn't need to hire
36:24accountants is he will only measure my
36:28life by the individual people who I
36:31helped to become better people and I was
36:35grateful with that insight because being
36:39a teacher gives me opportunities to help
36:44individual people but even more than
36:48that I realize that management is a
36:52noble profession because every day a
36:56good manager goes to work and does her
37:01best to help everybody in the
37:04organization to succeed more
37:09productively and rewarding Li than they
37:13were able to do that before
![How To Succeed As A NEW & YOUNG Realtor [Deals Every Month + Luxury Listings]](/_next/image?url=https%3A%2F%2Fi.ytimg.com%2Fvi%2FrtrRghgTayc%2Fhqdefault.jpg&w=3840&q=75)
