John Sculley’s career has spanned several decades and industries. From 1977 until 1983, Sculley served as president of Pepsi-Cola, preceded by seven years as vice president of the company. He left for Apple after Steve Jobs famously persuaded him: “Do you really want to sell sugar water, or do you want to come with me and change the world?” He ran Apple for 10 years.
Since then, Sculley has helped a range of companies get off the ground in the capacity of co-founder, chairman, investor or advisor, including MetroPCS. He’s been involved with ventures in telecommunications, fintech, marketing and healthcare, and he became Chairman and Chief Marketing Officer of RxAdvance in November 2016.
Sculley has a lot to say about what makes a highly successful business — and the opportunities that entrepreneurs have to solve problems and disrupt legacy corporations in this era of exponential technological evolution. Read on to learn Sculley’s thoughts on social entrepreneurship, artificial intelligence and why the 77-year-old believes the next five years will be the most interesting of his life.
The interview has been edited for clarity and brevity.
On purpose-driven business
“When I showed up at Apple, I was by then a veteran of the cola business. I thought business was all about market share and competing against this strong and respected competitor.
“It wasn’t until I was sitting around with Bill Gates and Steve Jobs and listening to them late one night in the Mac engineering lab that I heard something I’d never heard before. They were talking about their noble cause. By that, they meant that they wanted to change the world by empowering individuals with tools for the mind — and change the world one person at a time. I had never heard anything like that before. No one in corporate America was talking about changing the world or empowering individuals and things of that sort.
“If you look at the most successful companies that I’ve seen in my time in high tech, and moonshot opportunities, it always begins with a huge customer problem that is ready to be solved. We saw it when Google said, ‘Hey, there’s a way to empower people to navigate all kinds of information and knowledge.’ And you can see it with Facebook, where Mark Zuckerberg said, ‘I’m going to connect all the people on the planet to all the other people on the planet.’
“These were noble causes that were shaped by huge customer problems. If you are dealing with a really big problem, and a really big solution, you want to characterize it into a noble cause.
“So many people think, ‘Well, the goal of starting a company is to make a lot of money.’ In my generation in Silicon Valley, nobody was there to make a lot of money. We all did, but that wasn’t why we were there. We were there because we were passionate about doing things that had never been done before.”
On the exponential rate of change today
“I used to say that genius is the ability to see the obvious 20 years ahead of the rest of us. Now we’re in exponential times, and I say genius is the ability to see the obvious maybe a couple years ahead of the rest of us.
“It means that most of the innovation is probably going to happen in new companies. That doesn’t mean the new companies won’t be acquired and scale. Jet.com was started in July 2015, and it was sold to Walmart in August 2016. Here’s one of the largest corporations in the world that’s now put a startup team, which came from a company that didn’t exist 18 months ago, in charge of its ecommerce effort.
“If you go back just a few years ago, no one could imagine that you could be moving high-resolution 4K content around and that Facebook and YouTube would be the two largest content video networks in the world. Who would’ve imagined that, even five years ago? If you think about sensors, you see the whole industrial internet is just beginning, and industrial companies like GE, Intel, Cisco are talking about completely reinventing their companies around smart cities — around solving problems which involve monitoring everything imaginable in real time.
“You can see it in industry after industry. It’s all moving in exponential time. And that means that, what used to take 10 years takes one year, and what used to take one year takes a few months. For entrepreneurs, it’s a fabulous time, because if you get the right business, and the right team, and the right moment, you have an opportunity to really scale.
“If you’re a giant incumbent corporation and you don’t take seriously that the world is shifting from linear time to exponential time frames, you could well see your business disappear. Of course, the classic story of that was Kodak. The same year that Steve Jobs took the iPod, put a phone chip in it and made the screen bigger and called it an iPhone, Kodak, which had been a $26 billion market cap company, doubled down on its film processing investment to compete with Walmart for the single-use film camera market. Four years later, Apple owned the world, and Kodak filed for bankruptcy.
“I mean, look at the auto industry, how, just in the last 12 months, General Motors puts a $500 million investment in Lyft. The new CEO of Ford said he was reconceptualizing their company into the Ford auto and mobility company, and that they were going to be as much into personal transportation services and intelligent systems in cars as they were into the traditional building of physical cars.
“There are a lot of smart CEOs out there, even in the biggest companies, and they really are going to do everything they can, I think, to avoid having what happened to Kodak happen to them.
“It’s a spectacular time. I’ve never, in my working lifetime, seen a more interesting time for entrepreneurs who have vision and passion to do something that can be fundamentally innovative in a giant industry. You can have the courage to take on even hugely respected competitors. There are going to be some amazing success stories over the next five years. This probably will be the most interesting five years of my entire life, not just the things I’m involved with, but watching what other people are doing, too.”
On artificial intelligence and the future of work
“When I was at Apple, we built the first personal digital assistant with Newton. The product failed, but the technology that came out of it is still alive and well. One of the key technologies was the ARM processor, which is in every mobile device in the world today. Another one was the early intellectual property that was developed for personal digital assistants.
“I think one of the most interesting areas to watch is what is going to happen with these intelligent assistants. Today, they do relatively simple tasks. But the more interesting thing is how Amazon has now licensed out a software developer toolkit, plus an API, and more and more companies are building Alexa into their systems. And I think that Alexa — and it could be true for the others as well, for Siri, Cortana and Google Assistant — you’re going to see that these products, which are relatively fun to use now, are going to be incredibly smart in just a few years.
“I’ll give you my prediction on this one: The big challenge is that we have many people in our workforce who are frustrated. They haven’t had increases in their income in 20 years. They don’t have skillsets that match up to the kind of jobs that are available. I saw this from the early days of the personal computer industry: It starts as a curiosity. And then it’s a novelty. And then it becomes useful.
“These products are going to be enablers for a whole generation of people who might otherwise miss out on some of the better jobs in the future. I think we’re going to be going through an era where it will be the reinvention of work. There will be better and better tools. Whereas the personal computer solved, ‘How do you make highly skilled people even more productive?’ I think that artificial intelligence, combined with intelligent assistants, in many different product forms — it could be something you wear, or carry around in your pocket, or that sits on a desk or table — we’re going to see that we’re going to go through an incredible explosion of technology applied to solve really big problems, like the reinvention of work.
“The other thing I’ve learned is, the way in which work is done today is dramatically different than it was when I was in Silicon Valley in the early days. In those days, you did everything yourself, and it was very difficult to have partners, it was difficult to get capital, and you had to make choices and do things yourself. Now, if you look at a workforce, whether it’s a small company or a large multi-billion-dollar corporation, the work is done in projects, it’s not done by functions anymore. People on the project team may be full-time employees, they may be independent contractors, they may be consultants, they may be customers, they may be partner companies. They’re all connected with tools that enable them to work independently and communicate — they can be on several project teams at the same time. It’s just an entirely different way that work gets done.”
On the best advice he’s learned throughout his career
“I think the thing which I appreciate more and more is that it’s always about the people. There are plenty of really smart people in the world wanting to do cool things. And the reality is that, when people show up in Silicon Valley, many of them were valedictorians of their schools, and they quickly discover, so was everybody else. So just being smart or just having a great idea isn’t enough. It ultimately comes down to, ‘Can you put the team together — or if you’re not creating it, can you join the team that can execute?’ Because most of building a successful business is about execution.
“For example, Inktomi and AltaVista actually came before Google. They were doing what Google is doing today, but you don’t hear of them anymore. Google was able to go to the next level and say, it isn’t just about navigating information. They figured out how to do relevancy ranking. They figured out a business model so that you could sell ads in a bidding system, called AdWords, and they turned it into a business. But they weren’t the ones who invented search.
“Have the perspective to recruit the right people at the right time, to solve the right problem at the right time, always looking at things through the eyes of a customer, always measuring success through customer metrics. The best way to get the right people is they have to have a clear understanding of what the company’s trying to accomplish — that’s why you see the best CEOs are the ones who can explain what their vision is. They keep it simple. As Einstein used to say, ‘You don’t really understand something well unless you can explain it in a simple way.’ And those sort of principles just keep getting repeated over and over again with the most successful companies. You try to pick your areas of competence and instill that into the culture of your company.”
On healthcare and other industries that are ripe for disruption
“We spend twice as much on the delivery of healthcare than any other developed country in the world. We’re the only developed country in the world that doesn’t cover, with health insurance, all of its citizen population.
“The ultimate answer to, ‘What do you do about a replacement for Obamacare?’ ultimately is going to be more about, ‘How do we innovate in the way that healthcare is delivered?’ Instead of just, ‘How do we shift the subsidies around or the way we allocate resources at the political level?’
“Patients are customers, too. As a customer, they want to be treated with a better and better experience.
“You see industries that have been completely revolutionized, from the music industry, to the publishing industry, to now the television industry, to the retail industry. All of these industries have gone through their own transformation, and yet here’s healthcare, just kind of sitting there. It’s an industry that I think is just waiting to have true innovation come in and solve really big problems.
“I think the challenge in healthcare is that it is such a complex industry. It’s largely shaped by special interests. It’s highly regulated. Most innovators typically try to avoid regulated industries. I’ve been involved with several regulated industries since I left Apple. So while many people are apprehensive about innovation in regulated industries because of their complexity, I actually think those are some of the best opportunities.
“The innovation that has started in health tech, for the most part, hasn’t yet been focused on the most challenging problem, which is, ‘How do you deal with these patients who don’t always know many of the things that could make their lives better in terms of how to eat properly, how to exercise, maintain their adherence to medications, weigh themselves every day, all of those necessary things?’ But more importantly, if you look at many of the digital health companies that have begun, they largely are made of exciting technology — better and better sensors, and things like that. But they haven’t figured out how to make money. And if you’re going to make money, it isn’t just about having cool, shiny objects, cool devices.
“You’ve got to have a business model which has enough there in terms of cost-saving opportunity that you can take on the risk. That’s hard to do unless you have pretty deep domain expertise into healthcare, and I think it’s one of the things that’s held back the kind of role model companies that I think are going to start to appear in healthcare over the next several years.”