Dennis Kneale

  • Home
  • What’s Bugging Me
  • Dennis Kneale Media
  • Facebook
  • Linkedin
  • Twitter
  • YouTube

Surfing the Next Wave

May 7, 2014 By Dennis Kneale

Benioff at Confc Blog artFirst of three parts

In the next wave of the technology revolution, will your company or industry adapt to survive and even thrive—or get disrupted and swept away?

Three smart guys have some keen insights on what it takes to surf the wave, and why so many incumbent giants fail. Salesforce.com CEO Marc Benioff, AOL co-founder Steve Case and academic provocateur Vivek Wadhwa held forth in a panel I moderated last week at the Milken Global Conference; their views should resonate for months to come.

This summary is divided into four major themes, spread across three posts.  A picture is worth a thousand words, but this three-part column handles  thousands of pictures in 1,800 or so words, combined.  Read ’em and reap.

THEME #1: The Beginner’s Mind

Companies that lead in one phase of the tech revolution end up faltering later because they lose what Marc Benioff calls “the beginner’s mind.” They start out young and fresh-faced, willing to consider almost any direction or action. As they mature, they get less open and spontaneous and focus more on protecting than on innovating.

The question becomes, “Are you going to be that innovator again?” Benioff says. “The ones who are getting in trouble are the ones who lose that beginner’s mind.”

This is what befell Microsoft, whose stock price went virtually nowhere in a decade, despite the company’s success at preserving an overwhelming share of the market for PC software. “I think that if you’re a Microsoft shareholder over the last ten years, you think it’s a failure. The reason why is because they just kept their mantras too long,” says Benioff, an imposing, super-sized presence.

Microsoft’s mantra: “Windows Everywhere.” “That was very important to them,” he says, “but they didn’t get rid of that mantra fast enough. They lost their beginner’s mind. You can’t just keep repeating those mantras over and over again for 10 or 20 years, as if the world hasn’t’ changed.”

What about Salesforce.com’s founding mantra: “The End of Software”? “Well, we didn’t use it in this panel,” Benioff says. “We’re more about, ‘Run your business from your phone’ now.” The company’s website opens with a close-up of a smartphone.

THEME #2: Attacker or Defender?

AOL progenitor Steve Case gave an incisive explanation for what went wrong at his pioneering company. “We started as a disrupter, we started as an attacker. We shifted from being an attacker to being a defender. Brands are divided into these two camps, attackers and defenders,” he says.

It took America Online nine years to get to the first one million subscribers, and in the nine years after that, the rolls soared to 25 million “because we embraced the Net and saw it as an opportunity, not a threat,” he adds.

But, eventually, a market leader loses that edge and that willingness to embrace risk. “Executives are trained by business schools to manage risk. Entrepreneurs are not,” Case points out.

Benioff chimes in: “If the groupthink in your company is that you’re a defender, you’ve got a problem.”

Case: “And nobody says they’re a defender.” Execs speak, instead, of “maintaining market share” and “enhancing shareholder returns.” Code for not taking enough risk to stay out in front of those who are bent on disrupting you.

Facebook recently paid the jaw-dropping price of $19 billion to acquire What’sApp, an overseas texting service with half a billion users who pay all of a dollar a year; and $2 billion to buy Oculus, a maker of virtual-reality goggles that hasn’t yet sold a single commercial product.

Those deals may look like bold “attacker” moves at first glance, but Case says they aren’t that at all. “Those are defensive moves, not offensive,” he argues. Facebook decided “we’re going to give 10% of our company to these guys because these guys could become us guys down the road.”

Up next: Part 2, Incumbents vs. Upstarts:  http://bit.ly/1mDa2Fm

Part 3:  What’s an Incumbent to Do? http://bit.ly/1orb4RC

Click here for video of the full panel on Internet destruction: http://bit.ly/1j2UdiR

Filed Under: Top Story

Dennis Kneale

Dennis Kneale covers media & tech, healthcare & science, business vs. government and other pursuits in the realm where creative destruction collides with wealth creation.
  • View All Posts
Dennis Kneale

Dennis Kneale
25-year inkstained wretch (WSJ, Forbes) goes TV: ex-CNBC, ex-Fox. Here's the bio...

Sign Up for Email Alerts

Latest Tweets

  • Bullshit. https://t.co/jOgdo1EVe5 7 minutes ago
  • Witty of you, and what I said was accurate and true about a federal court order forcing separation of kids & adults… https://t.co/6vwp0ueCNy About 4 hours ago
  • Just finished my 445th workout on the great @8fit app. First meal of the day up now. #BreakfastofChampions https://t.co/59DyYlrrSF About 4 hours ago
  • Well summarized and succinctly put. https://t.co/azfh0c9Gwr About 5 hours ago
  • Trenchant observation. @McKaylaRoseJ https://t.co/Ja6yxBXisN About 5 hours ago
  • It is a rather stunning admission by the @Demwits that they doubt the mental comoetency of their “President.”… https://t.co/Y7mGuVopyv About 6 hours ago
  • So stupid. If you are that fearful, cancel the class. https://t.co/cB0uA7Wrjf About 6 hours ago
  • Searing. https://t.co/gm6z51I318 About 6 hours ago
  • Because someone authorized it. https://t.co/cjwINw0oCy About 6 hours ago
  • That is entirely, factually wrong, thanks to slipshod media coverage. In FACT, a federal judge’s order required sep… https://t.co/5nDkDdY1Va About 7 hours ago
  • Way too true. @megynkelly https://t.co/RWkhQ44Ef4 About 18 hours ago
  • “I’ll bet you do, sweet thing.” https://t.co/i2nwBKikA2 About 20 hours ago
  • Tge Times is a national embarrassment even to its own subscribers. Freshmen liberalism at its finest. https://t.co/WnFdOlJ59K Yesterday at 10:39 pm
  • Whoops, sorry about that. The driver stayed a gentleman, good on him. https://t.co/cpszBlYaEP February 24, 2021 9:37 pm
  • Searing and stinging. https://t.co/gT052icrih February 24, 2021 7:10 pm

Copyright © 2021 Dennis Kneale