Moonshot!: Game-Changing Strategies to Build Billion-Dollar Businesses

176 Pages·2014·0.99 MB·English

by  John Sculley

Moonshot!
Game-Changing Strategies to Build Billion-Dollar Businesses
John Sculley
Moonshot!
Game-Changing Strategies to Build Billion-Dollar Businesses
Copyright © 2014 by John Sculley All rights reserved. No part of this book may
be used or reproduced in any form or by any electronic or mechanical means,
including information storage and retrieval systems, without permission in
writing from the publisher, except by a reviewer who may quote brief passages
in a review.
Cover design by Brad Mooberry
Cover and interior photography by Doug Menuez ISBN e-Pub edition:
9780795343360
In memory of our parents,
Jack and Margaret Sculley,
who sacrificed so much for their three sons,
but tragically died too young
to see their sons become men.
And to my loving wife,
Diane Sculley.
CONTENTS
Introduction and Highlights by John Sculley
PART I MOONSHOT!
1. Moonshot!
2. Why Moonshots Start With a “Noble Cause”
3. Why Now Is the Best Time to Build a Billion-Dollar Business
PART II HUGE CHANGES TO THE MIDDLE CLASS
1. What’s Really Going On in the U.S.?
2. The Exploding Middle Class in Emerging Markets
PART III HOW TO CREATE A BILLION-DOLLAR BUSINESS
CONCEPT
1. Introduction
2. Solve a Billion-Dollar Problem
3. Relentless Pursuit of “There Has to Be a Better Way”
4. Disruptive Pricing: There’s No Place to Hide
5. Deliver a Lights-Out Customer Experience
PART IV POWERFUL TOOLS FOR SUCCESS
1. Getting Prepared to Build
2. Be Curious: Ask the Right Questions
3. Ground Yourself in Domain Expertise
4. Put the Right People on the Bus
5. Zooming
6. Back From the Future Planning
7. How to Pivot When Your Back Is Against the Wall
8. The Best Advice I Can Give an Entrepreneur: Find a Mentor
PART V MOONSHOT: A SUMMARY AND CONCLUDING REMARKS
Afterword I by David Sculley
Afterword II by Arthur Sculley
The Sculley Brothers
Acknowledgments
INTRODUCTION AND HIGHLIGHTS
CUSTOMERS COME FIRST
Unless you have a deep understanding of the concept of exceptional customer
experience, you may find your company out of business in a few years.
Why? Because the biggest Moonshot in years is happening right now: a
dramatic, rapid shift from producers-in-control to customers-in-control.
This Moonshot is being propelled by a tsunami of exponentially expanding
technologies never seen before: cloud computing, wireless sensors, Big Data,
and mobile devices. This wave is causing economic power to shift, from
business producers who worked hard to be in control of their customers, to
increasingly smarter and smarter customers. This time the customers will be in
control. As a lifelong business builder and consumer marketer, I am realizing
how this Moonshot is so incredibly world-changing.
Those who fail to grasp what is happening will miss the future.
Those who learn to take advantage of serving a very smart customer will be
the builders of future billion-dollar businesses.
Moonshot! is a book that will guide you through a journey, explaining, with
solutions, how to do it.
Jeff Bezos says his customers are incredibly loyal; that is, until the moment
someone else makes them a better offer. Customers are getting smarter. They
don’t even have to do much to get smarter. That’s because we are in a new era of
digital technology that will increasingly be about machine-learning systems and
machine-to-machine communication, with no conscious human intervention
required. The scale of customer data processing in the cloud will be so massive
that the customer will have immediate information and individual power on an
unprecedented level.
The Virgin brand has a reputation for exceptional customer experience so
powerful that Richard Branson has been successful with it in all kinds of
industries—from music, to mobile phone service, to airlines, and soon to
consumer travel into space. One knows that a Virgin customer experience
tolerates no compromises.
Elon Musk didn’t just create an electric automobile. Tesla is an entirely new
customer experience of how good personal transportation can be; it engages the
customer in a complete end-to-end experience system.
Mayor Mike Bloomberg was already a legendary disruptive entrepreneur
before he became New York City mayor for twelve years. He didn’t have to bow
to the lobbyists or special-interest groups. He treated New York City voters like
customers. His efforts to collect data on so many aspects of New Yorkers’ lives
meant not only could the government operate more efficiently, but voters could
find out what crimes or noise complaints have been reported in their
neighborhood, how clean their local restaurants are, and even where the
snowplows are after a blizzard.
MOONSHOTS
Moonshot is a term in Silicon Valley reserved for just a few of the most
important innovations that reset everything following after them. The invention
of the microprocessor was a Moonshot. So was the first useful personal
computer, the Apple II; as was the first affordably priced desktop publishing
system for creative people, the Mac. The creation of the World Wide Web was a
Moonshot. So were the launches of Google Nexus One and Apple’s iPhone.
What each of these Moonshots has in common is they helped make ordinary,
nontechnical, people smarter. They enabled what Steve Jobs used to call “tools
for the mind.”
The Moonshot I will unpack in this book is the leap computers have recently
made from “productivity tools” to intelligent personal “assistants.” A new
generation of automated intelligent systems using machine learning and
advanced data science has made this possible. IBM’s Watson, Microsoft’s
Cortana, Google’s Now and Apple’s Siri are examples. This Moonshot is
shifting economic power from traditional business producers to customers-in-
control, and it’s making customers incredibly smart. This Moonshot will change
every industry of commerce in the world.
Propelling this Moonshot are four amazing digital technologies, each of which
is growing at an exponential rate. Two of these technologies—cloud computing
and mobile devices—are already touching billions of users. Soon, billions of
miniature wireless sensors and a new generation of mathematical algorithms in
data science incorporating artificially intelligent systems will analyze consumer
behavior right down to the individual person, and automatically predict
outcomes, helping people to make better informed decisions. Never has such
powerful technology been commoditized so quickly, and become both so
affordable and pervasive.
THE ADAPTIVE INNOVATOR
A new breed of entrepreneurs is emerging, putting customers first. They are
raising the bar in customer-experience businesses with the incredibly ambitious
goal of being ten times better than anything previously available. Thinking about
your business plan as just an incremental improvement over the past will not be
enough to succeed anymore. There has to be a better way, and I believe that
somewhere in the world, some curious, optimistic, and very motivated people, in
industry after industry, will figure out what that way is. The process starts with a
few geniuses leading the way, then others become inspired. They are the
entrepreneurs who attract others who will help them build transformative
companies of the future.
I call this new breed of entrepreneurs the “adaptive innovators” and, as you
will learn in this book, there has never been a better time to build a billion-dollar
business. I will take you on a journey explaining why this opportunity is not only
possible but probable, presenting the lessons I’ve learned from the best
innovative minds, and offering many valuable insights and solutions that will
help you become an adaptive innovator. I’m a hands-on builder who has been
curious my whole life about the search for a better way to do things. I’ve had
some big success and some big failures; being an adaptive innovator can be
personally high risk but incredibly rewarding, too.
For adaptive innovators, as you will see, it’s the customer plan, not the
business plan that’s important. What are the metrics of a customer plan? The
rate of customer engagement and re-engagement; the conversion rate from
consumer engagement to becoming a transacting customer; the scoring of
customer satisfaction; the cost of customer acquisition; customer churn rate; the
effectiveness of the cycle of customer management; the retention rate of a
customer; and the lifetime value of a customer.
THE ADAPTIVE CORPORATION
One of the most important themes of this book is what I call “the adaptive
corporation.” Alvin Toffler wrote a groundbreaking book about The Adaptive
Corporation in 1985. My goal here is to explain how the adaptive corporation in
the present era requires a systemic design framework that is customer-driven,
flexible to change, and inclusive of multiple-domain expertise. Traditional
business processes will increasingly become obsolete, just as traditional business
planning is much less useful than the customer plan in the adaptive corporation.
I’ll give examples of successful companies that became victims of their own
success, explain why innovation happens at the edge of established industries,
and explain why domain expertise in multiple domains is essential to taking
advantage of much smarter customers, who also are far more powerful
influencers in determining how quickly a business scales. And I must emphasize
that the ability to scale supersedes the traditional profitability metrics we are
accustomed to using in projecting a business’s ability to survive and thrive.
You’ll learn why traditional business and financial metrics of performance,
while still helpful, are not as important as customer metrics are for adaptive
innovators building a transformative business. And you’ll discover that the
traditional business process will become obsolete, and why transformative
businesses are always about customer-centric data that updates itself in real time
and usually with machine-to-machine communication.
Everything we thought we understood about running a successful business is
open to better ways of doing things. It’s an exciting time for optimists,
entrepreneurs, and creative builders who want to learn how to build
transformative businesses that take advantage of the growing power of
customers.
THE ADAPTIVE MIDDLE CLASS
Here’s a reality that adaptive innovators already know and that politicians
choose to avoid: The incredibly successful middle-class aspirational lifestyle that
has shaped economies in the West for the past sixty years is no longer
sustainable in its present form. Meanwhile, emerging-market consumers
numbering more than two billion are looking forward to joining the world’s
middle class by the early 2020s. I am very involved with building new
businesses in Asia that are focused on the needs of their fast-growing middle
class, and I’m impressed with the resourceful and frugal designs that adaptive
innovators are creating to construct products and services at disruptive prices
without compromising the customer experience. This time, we should expect
that adaptive innovators from emerging markets will export creative solutions to
the West that will appeal to our own middle class. Think of this as the era of the
“adaptive middle class.”
How will adaptive middle-class customers behave differently? They are
making tradeoffs between ostentatious luxury and less-expensive alternatives. I
used to buy several expensive Brioni suits at a time. Now I prefer Lululemon,
Uniqlo, J. Crew, and Diesel jeans. Why? Because, as a customer, I love the feel
of the fabric and, in the case of Uniqlo, the technology of the fabric, which
breathes and adjusts automatically to the weather, whether it be hot or cold. I’m
into comfort, but I also travel all the time, so I love that these moderately priced
clothes pack so well in a carry-on bag. I don’t often wear a watch anymore
because it’s more accurate and easier to tell time with my smartphone. I use
subways and walk a lot in NYC because a ride in an NY taxi—when you can get
one—is not a great customer experience. Since Uber arrived, I love the Uber
customer experience.
THE ADAPTIVE MILLENNIAL
We have to pay special attention to what we can learn from the adaptive
Millennial generation. They have never known a world without amazing
technology. Their brains are hardwired to rely on mobile devices and mobile
apps for almost everything. They don’t watch much traditional television. They
don’t read newspapers or books all the way through. They skim for information.
They are on overload with social media. When they write, their preference is to
abbreviate. They are the best educated and most underemployed generation in
history. They are, by necessity, becoming start-up entrepreneurs because
traditional jobs are hard to find. Their aspirations include and often stress the
social value of their work.
The adaptive Millennials haven’t become addicted to conspicuous
consumption. They job hop, when they can get jobs. Sharing things works for
them. They prefer to rent rather than own, as it takes less capital. They will
conserve their spending by economizing where they eat, but will still splurge for
a ticket to a hip-hop music event. And they save more than older generations.
The adaptive Millennial generation will be early adopters of many
transformative businesses.
HOW THIS BOOK CAN HELP YOU SUCCEED
The real focus of my book is on solutions—how transformative businesses can
actually be built. This starts, of course, with creating a compelling business idea,
the “billion-dollar concept.” I will draw on real-world examples from rapidly
growing companies that I am either well aware of or personally involved with
today to lay out groundbreaking strategies that successful adaptive innovators
are employing to create huge new companies. One of the most important of
these, for example, is to deliver an incredible customer experience on a
quality level never before experienced. The most powerful model for future
success, I believe, is to combine an exceptional customer experience with a
disruptive price. We will also lay out specific, game-changing tools for success
that resourceful adaptive innovators can access to increase the chances of
building truly transformative new businesses.
I believe we are entering an unprecedented era for major new business
opportunities. While I have always been an optimist, I think this is the most