Keynote

for MSTC Convocation, May 18, 2013, UTAustin AT&T Center By Bob Metcalfe UTAustin Professor of Innovation, Murchison Fellow of Free Enterprise Ahoy! Dr. Cadenhead, Dean Gilligan, McCombs Faculty, MSTC graduates, families, friends, and, whom did I miss? others. From our new Texas family here Austin, Hook em Horns, yall. From my old Viking family, plying waters of the North Atlantic for a thousand years, Ahoy! What a great honor, and great pleasure, to join in celebrating the 2013 Masters of Science in Technology Commercialization, AKA MSTCs, McCombs School of Business at The University of Texas at Austin. Yall, please join me in shouting Ahoy! Ahoy on count of 3: 1,2,3, Ahoy! To make a long story short, and I hope your Mother is here, even if only in spirit, because the sum and substance of what I plan to say today is to finally agree with your proud Mother, that you, MSTC graduate, are the most important person in the world. Building on that one clear thought, as food for thought, I would like (over the next two hours) to answer this question: Are founderati the people who invent, innovate, commercialize technology, found and

grow startups, entrepreneurs, intrapreneurs are they BORN or are they MADE? Again jumping to the back of the book, Ill give you my answer: Yall are MADE, and in no small part by being here at MSTC. To lay some groundwork, lets talk about our GOALS, and I mean our goals at the tippy tippy top. I submit our goals are nothing less than: FREEDOM AND PROSPERITY Freedom and prosperity have proven over hundreds of years to be a virtuous cycle, one driving the other, the other driving the one, and back around, spiraling exponentially ever upward. And what is the GEAR that links freedom and prosperity, or what is the ENGINE that accelerates the cycle? INNOVATION, particularly TECHNOLOGICAL innovation. Of course technology has its downsides, needing mitigation, and technology has its Luddites, needing rebuttal, but Im not one of those, and dare I say, neither are you. We see that alternatives to technological innovation make good movies but bad reality. Luckily for us in the United States of America, and particularly these days in the State of Texas, we have Free Enterprise, a time-tested system for revving up the cycle of freedom and prosperity. I am proud to be UTAustins Murchison Fellow of Free Enterprise, learning about and teaching our faculty and students what I think I know, not very

much, about how to operate the machinery of Free Enterprise. Sad to say that our Free Enterprise System is under attack these days, by people who would prefer to grow governments rather than economies. Thank goodness youre here to the rescue. Before you bolt out of here to get started, I have two complaints, one complaint about those in governments and the other complaint about many of my favorite founderati. Governments have no clue about the power of Freedom Of Choice Among Competing Alternatives, my acronym for which is FOCACA freedom of choice among competing alternatives, the key to progress. So, to grow government and/or GDP and/or create more jobs and/or get re-elected, what rope-pushing politicians do is -- follow my metaphor here -- they try to MILK the geese that laid the golden eggs. Aesop must be spinning in his grave. On the other side, my two favorite kinds of institutions, research universities and technology startups, out of which most freedom and prosperity come both damage themselves by eschewing management. Professors object to be managed and get away with it tenure, for example. Startup founderati too often think to their detriment that being lean, hiring their friends, hacking to all hours, eating Raman noodles, not wearing suits is all it takes to successfully scaling technology enterprises.

All the effective institutions Ive ever seen in my long life have at their core good governance and, as night follows day, good management. And I say that not just because I sport a bachelor degree in Industrial Management. I didnt have to be here today, and Im certainly not being paid to be here today, but Im here at the McCombs School of Business because I have seen that good management, especially of the commercialization of innovative technologies, is what makes the world go round, what brings Freedom and Prosperity. Dont know why it took us so long, but we finally made it to Texas two years ago. The mission I accepted from Dean of Engineering Greg Fenves and Dean of Business Tom Gilligan was to be a Professor of Innovation helping make Austin a better Silicon Valley. And by Austin I mean to include this our fair city and all its nearby suburbs - north, east, south, and west - Dallas, Houston, San Antonio, and El Paso. We do not aim to be BETTER than Silicon Valley, but a better Silicon Valley. By the phrase Silicon Valley I mean the bloodthirsty take-no- prisoners swing-for-the-bleachers Free Enterprise Venture Capitalism during the 1970s, 1980s, and 1990s in which I freely prospered. Some Austinites cringe when I say we should be more like Silicon Valley. They object from the back with some version of Keep Austin Weird! Having lived in and around San Francisco for 22 years, my retort is to warn Austin not to enter any weird contests against San Francisco.

Which is to say, you can be world-class technology commercializers and still be pretty weird. Another challenge to my Professor of Innovation mission comes from those who wisely ask, Can creativity, invention, innovation, entrepreneurship be taught? Are startup founders born or made? This is a frequent question answered outside of Austin with famous names like Jobs, Gates, and Zuckerberg. Here in Austin the question is often answered with proud reference to John Mackey, founder of Whole Foods Market, with his billion-dollar world HQ down on 6th and Lamar, and Michael Dell, founder of Dell, with his billion-dollar world HQ just up across Austins northern boarder. Mackey and Dell both attended UTAustin briefly and then dropped out before we could teach them much of anything. Its hard to imagine that the universities attended briefly by Jobs, Gates, Mackey, Dell, and Zuckerberg did anything more than ADMIT them. So, this small data set suggests, entrepreneurship cannot be taught, or at least wasnt in these famous cases. The same question -- nature vs nurture -- can be asked about great scientists like Albert Einstein, great artists like Pablo Picasso, or great musicians like Mick Jagger. Einstein studied math and physics at ETH Zurich. Picasso studied in three fine art schools, finally in Barcelona. Mick Jagger, while founding the Rolling Stones, was a business student

at the London School of Economics, where he probably learned to dance using the case method. And hey, the founders of Intel, Amazon, and Google were not college dropouts. Elon Musk, todays coolest innovator-entrepreneur -- PayPal, Tesla, and SpaceX -- got a business degree from Wharton and a physics degree from UPenn and started toward a PhD at Stanford before his first startup. Wait, I attended school for 23 years, graduating from MIT and Harvard, and then worked in corporate research, while hanging around Stanford in Silicon Valley for 8 years, before my fourth startup, my first really successful startup, 3Com Corporation in 1979. If you want to know, the key skill I was taught that most contributed to my success as a commercializer of technology was selling. My parents never went to college, a technician and a secretary, who for example had no inkling about the differences between the high arts of sales and marketing. I got started selling Readers Digest subscriptions, then as rush chairman of Sigma Nu Fraternity at MIT. I later sold a $2,000 sponsorship to an MIT conference. I took a Selling Skills class at Xerox with, I kid you not, 35 blonde saleswomen. In 1982, I, a PhD engineer, suddenly became VP of Sales and Marketing of my Internet startup. I couldnt get the URL 3.Com, because the World Wide Web would not take off for another 15 years, but I led 3Com sales and marketing to $1M/month in revenue and soon thereafter an IPO. I had been taught

not to be afraid of NO, to calmly ask WHY, to take the hint from God (or Darwin) who gave us 1 mouth but 2 ears, by making and keeping ever larger promises, and finally to get YES and say THANK YOU. I was not BORN a salesman, but am an engineer who got taught selling enroute to startup success. 3Com eventually did $5.7B in sales during 1999 and after 30 years became part of HP in 2011. I was 33 years old when I founded 3Com. The average successful entrepreneur is closer to 40. So, Im telling you, Jobs, Gates, Mackey, Dell, and Zuckerberg are delightful exceptions. And they may not even be the exceptions you think. I met an UTAustin undergrad recently, Alex Judd, who turned out to be Drum Major of the Longhorn Band. We talked about football, and I noted that we have a 100 football players, about a dozen of who weigh more than 300 pounds. But Alex bragged that the Longhorn Band has 400 musicians. Which reminded me that Silicon Valley has a lot of people starting companies, but many MORE prospering people in the supporting innovation ecosystem. So maybe its an oversimplification to think that Job, Gates, Mackey, Dell, and Zuckerberg were born to build Apple, Microsoft, Dell, and Facebook all by themselves. Maybe they nucleated teams of founderati who DID finish college and learned in the real world a thing or two about the commercialization of technology.

My friend Steve Jobs was not the only founder of Apple. Maybe youve heard of Steve Wozniak and poor Ronald Wayne, the other founders. But there was a fourth, six months later, Mike Markkula, at the time a semi-retired Intel executive who replaced Ronald Wayne. And quickly after that came CEO Michael Scott from National Semiconductor and an army of what Silicon Valley calls adult supervision, most with advanced college degrees, PhDs and MBAs, all schooled in Silicon Valleys system for scaling technological commercialization. After founding Apple in 1976, Steve Jobs did not become the world-beating CEO of Apple until 1997 -- 21 years after founding it. By then Steve had grown into BEING adult supervision; he had been taught and learned well how to commercialize technology using the Silicon Valley model. Which brings me back to Longhorn Football. I think it should be a strategy of UTAustin to have our founderati, our entrepreneurs, our startuppers, and our commercializers of technology, yall, to be as supported and as celebrated as our football players. Our startups should be more like our football teams. Thats why Ive been branding our innovation work at UTAustin the Longhorn Startup Program. Remember, many of the people who make our football teams successful never get on the field, or maybe only during halftime. Not everyone on a football team is the quarterback, nor are all founderati CEOs. What I like most about this analogy, by the way, is that I can strive to be the Mack Brown of UTAustin startups and hope, just like Mr. Brown, to

make $5M per year. In technology commercialization, a record of 9-4 gets you into the Super Bowl. In closing, when youre a hammer, everything looks like a nail. My field is networking, and so in technology commercialization its networking that I sell. Startups, my favorite commercializer of innovative technology, prosper with their networks: networks of scientists and engineers, of customers, of managers, of suppliers, of investors, of strategic partners, networks of early adopters. Which reminds me to mention that most exquisite innovation network, which Ive seen in the Sistine Chapel. Michelangelo painted a network of advanced technologies behind Adam on the left, and on the right, God with a network of needs, and their two networks reaching out, searching and pivoting, their fingers finally finding one another across Heaven, need touching knowledge, between TRL 6 & 7, that magical and holy commercial moment of creation of a technological startup. I hope its not been too much, agreeing with your Mothers, that yall MSTCers are the most important people in the word, with a story that includes Steve Jobs, Mack Brown, and the Creation of Adam in the Sistine Chapel. Go thee forth and manage technology commercialization, in startups or otherwise, and bring the world Freedom and Prosperity. My Mother Ruth RIP was Norwegian, and so let me close, as I opened, with the old Viking battle cry for technology commercialization: Ahoy!