Silicon Insider: Tech's New Humility
April 19, 2007 — -- Is modesty the newest competitive strategy for hotshot tech companies?
It's been said the last bit of one-upsmanship is humility -- that anybody can be triumphant in victory, but it takes really clever arrogance to be humble about your success. But staying low-key may also be a very smart way to keep your shareholders' expectations low, your competitors off-balance and the Justice Department out of your hair.
Humility is not what you would call a historically defining trait of Silicon Valley and the rest of high tech. On the contrary, almost from day one, tech has been the land of braggadocio, pomposity and hyperbole.
A century ago, both Edison and Tesla thought themselves Gods of Electricity. In the 1920s, Lee deForest, inventor of the (triode) vacuum tube, married a showgirl, moved to Hollywood and started writing editorials decrying how the entertainment industry had sullied his magnificent invention -- radio.
Michael S. Malone's new book, "Bill & Dave: How Hewlett and Packard Built the World's Greatest Company," has just been published and is available at major retailers.
And who can forget transistor co-inventor William Shockley and his call for a "genius" sperm bank to save mankind -- for which, of course, he would be a founding, er, depositor?
Watson, HP Give Way to Fairchild
The next generation of high tech heroes -- Watson, Hewlett and Packard, the Varian Brothers -- were noticeably more low-key, which may help account for their enduring fame. Though there was one eccentric maniac in the bunch: Alexander Poniatoff of Ampex.
But this polite group begat the most talented, outrageous and swaggering generation in tech history. The 'Fairchildren,' the 20-somethings who first built Fairchild, then the semiconductor industry, then Silicon Valley -- as well as their less insane but equally arrogant counterparts at Motorola -- set the standard for swagger that subsequent tech generations have struggled to match. And the fact that most of them became obscenely rich only seemed to prove that a loud mouth and thick wallet went hand-in-hand.
The '70s generation was a bit of a dud, but the 'grandchildren' of the Fairchildren proved more than up to the task. The gamers, led by Nolan Bushnell at Atari, the personal computer gang, with the singular Steve Jobs, and the codewriters, dominated by Bill Gates, managed to be cocky, outrageous and (in the case of the last two) both nasty and surpassingly weird. And, of course, they became among the most famous (and most successful) figures of their generation -- and their style and attitude became embedded into the DNA of every subsequent high tech entrepreneur.
All of this reached a zenith with the dot-commers. Young, smart and (initially) rewarded way beyond either their achievements or their competence, this generation of hip techies had arrogance to burn.
Many early dot-commers became tycoons in a matter of months in their first real jobs, and could only look down on all of those poor suckers and wage earners who had slaved for years just to make the down payment on a house.
I remember ridiculing on the pages of Forbes ASAP the pomposity of one of these overnight paper billionaires -- only to have him write a letter to the editor in which he complained that no one could appreciate how hard he'd worked for those 24 months to make his fortune.
Life, and the stock market, taught that generation a lesson in perspective when dot-com went bust. But there was no indication that the old swagger and strut would ever disappear from high tech life.
The Disappearance of the Tech Swagger?
Then, in the last few weeks, I've noticed an interesting and very subtle shift here in Silicon Valley. And I suppose it's going on elsewhere throughout the tech world. People are suddenly, and unexpectedly, shutting up.
I first noticed it at Hewlett-Packard. If you read last weekend's Wall Street Journal, you saw that I had an interview with HP CEO Mark Hurd. One of the remarkable moments in that interview for me was when I asked Hurd why HP didn't take advantage of the moment when it announced its terrific quarterly earnings to also proclaim that it was now also world's largest electronics company -- and the first to reach $100 billion in annual revenues.
Hurd's reply, that it didn't seem "like the kind of thing we do around here," struck me at the time as a marvelous return to the HP of old, when Bill and Dave nixed any public gloating over success. But now that I think about Hurd's comment a little more, it also seems like smart business sense.
After all, here in the 21st century, what is there to be gained for being the biggest company on the planet? It only makes you a target for competitors, class action suits and Congress.
Hewlett-Packard, I suspect, has had more than enough attention recently, and not all of it good, to last it for years -- so why go out looking for more trouble?
That's why I predict the company will make little hay out of yesterday's announcement by Gartner Group that HP has now passed Dell to become the world's biggest personal computer company.
Google Trying the Soft Sell
And Hurd isn't alone among first tier tech CEOs soft-pedaling these days.
Yesterday, Google announced that it was adding presentation software to its suite of office-oriented applications. This follows the company's recent announcement that it was buying the advertising firm DoubleClick to further consolidate its control over the online advertising world.
These are major moves, and a decade ago, one of Google's predecessors, say Netscape, would have held a major press event to trumpet the news and announce that it would soon, (a) own the advertising world, and (b) crush PowerPoint on the way to wresting industry dominance away from Microsoft Office.
Instead, when asked about the news at Web 2.0 Expo in San Francisco this week, Google CEO Eric Schmidt, looking more like Mr. Rogers in his pink tie and sweater than a "Master of the Universe," dismissed any real importance to the stories. Google and DoubleClick, he told the crowd, together amount to less than 1 percent of the world's advertising revenue.
As for the new presentation software, Schmidt shrugged and said, "It doesn't have all of the functionality, nor will it ever have all of the functionality, of Microsoft Office."
In other words, nothing happening here folks, keep moving.
Don't believe it.
The DoubleClick/presentation software announcements are very big news indeed. With the first, Google at last exposes its real strategy (ignored at first, not a source of terror to media companies) of wanting to dominate the media advertising world. And with the second, Google finally attacks head on the company it has been gunning for from the start, Microsoft.
There is no little irony to the fact that Microsoft is the target of this "New Humility." I suspect that in years to come we'll conclude that the high water mark of high tech corporate arrogance came during the dot-com bubble when Bill Gates decided that Microsoft was too strong even for even the U.S. Justice Department and the European Union to take on. He learned his lesson, and so, it seems, did everyone else..
Indeed, at a time when other tech companies are suddenly getting very quiet -- notice what little posturing you've heard from Cisco, Intel and even Larry Ellison's Oracle in the last few months? -- the only tech CEOs we see these days making big pronouncements are those two leftovers from the early '80s: Steve Jobs and Bill Gates (with the latter I also include Steve Ballmer). And their style seems equally anachronistic.
Jobs can still get away with it because Apple's products are so terrific, though it's all starting to look a bit like a pantomime. But Gates is increasingly looking like someone from another time.
Myself, I'm going to miss the old smart-aleck, chest-thumping world of high tech. But then, I don't have to answer to thousands of shareholders.
Meanwhile, did you notice yesterday all of the fireworks and celebrations around eBay's extraordinary quarterly profits? No? That's because Meg Whitman too has learned the lessons of the New Humility.
Tad's Tab: The latest from the teen tech trenches, by Malone's 15-year-old son, Tad Malone:
These days, just about any entertainment that once existed in the real world now has a clone in cyberspace. Consider www.jigzone.com, for example. Take any digital picture, upload it, and this Web site will turn it into a jigsaw puzzle. You can compare best assembly times and create all sorts of personalized puzzles. And you don't have to worry about the missing piece that fell under the couch.
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
Michael S. Malone, once called the Boswell of Silicon Valley, is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News, as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, the Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is best-known as the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNEWS.com "Silicon Insider" columnist since 2000.