Transferring Big Company Culture to Startups, Lecture by Dominic Orr / Aruba Networks (2007)

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Lecture 1
Transferring Big Company Culture to Startups
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Transferring Big Company Culture to Startups

Dominic Orr, CEO of Aruba Networks, describes his experience applying the HP way to a startup environment. Orr speaks about his focus on giving people freedom and trust which in turn sparks the passion and confidence that drives innovation.

 




Transcript



I'm fascinated by the fact that you spent 12 years at HP. And HP was known to have, of course, the HP way, a very very strong culture. How has that affected your running of a company like Aruba, that's a small company that's very quickly growing. Does that culture translate easily, or not? HP is a big phenomenon, right? And there is the old HP and then the intermediate HP and then the current HP. So I have to preface that first of all, I left HP in 1994. And also, it's a little bit presumptuous for me to try to capture in a couple minutes, the sense of what is called the HP way. But if I would dare to do so, I would say fundamentally, at least the HP way that I grew up in as a manager, it can be distilled down to one thing, which is: from a just pure business good judgment, productivity of your employees can be maximized by giving each one of them dignity and freedom and trust, and let them create passion based on that confidence and run for it. So that is a very very noble goal. And as you can imagine, actually, it needs more management technique than in much more controlled environments. And at least at the time that I was there, one of the criticisms of this approach is that if you're not careful, then you run into a kind of consensus management because then, now you are all feeling good, and no decisions are being made. And I think it was at that juncture they felt they were losing the speed to execute, and they need some changes. And then the previous generation of management came in and took it the other way, to be very very dictatorial, and so on. And I heard recently that it got back. So how do I translate that into a startup environment, right? I think, in a startup environment, it is very very important, even doubly important to give that dignity and respect for the employees because it is a self-sorting population over there. People kind of just are middle-of-the-road guys. They will probably stay in large corporations. The fact that they could leave a safe job and come join the startup for salary cuts for some, they normally come with some passion, and if you don't let them cultivate that, that's very very difficult, to make them feel happy. And also, because it is a small environment, much more focused, this whole danger of running into a consensus management environment is lessened, actually, in a small environment. So in other companies I managed, I tried to apply the HP way, and I think people appreciated it. Great. So it does seem to translate. Yes, yes. You can move it from a big company into a small hybrid company. I absolutely think so, because it all boils down to: at the individual level, the dignity and freedom that you give, the trust. And when people feel trusted, they go for it.

Lecture 2
Competing with Giants: It's All About Speed
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Competing with Giants: It's All About Speed

Dominic Orr, CEO of Aruba Networks, describes how a startup can compete with large, established companies. Orr argues that to compete with large companies an entrepreneurial firm must think about the ecosystem created by the larger companies and then identify the problems in that system that the larger companies are unable to address. Once an opportunity has been identified, a startup's single advantage is speed: because established firms have different incentives that lead to inertia, large firms are often unable to match the speed and flexibility of a startup.




Transcript



Now, one of the interesting things about Aruba is that you have decided to come head to head with some very big giants in the industry, such as Cisco. Now, how does a small company have the confidence and the strategy to go against a big giant like that? We do day to day, from product level point of view, have two competitors only: Cisco and Motorola. And we kind of find the space in between it. When you operate in that kind of environment, you cannot think of those giants as your competitors, or you're dead. You have to think of them as an environment in which you excel. So every product that you build, even plan about, think about, has to fit into the whole ecosystem, the environment that these big guys have. And you just look for what is really breaking, that they cannot fix. I've done enough startups now, so if you ask me to distill the formula of success of a small company competing against a big company, it all boils down to one factor: that is speed. Speed of execution, and speed of innovation. And that's not to say that in large companies, people are any less speedy. But the benefit of the big company is that they have the inertia. But the drawback is that they have the inertia, right? I remember when I first entered the industry, there's a popular saying that the reason God could create heaven and earth in seven days, is because he did not have any installed base. So the big company has this legacy of stuff that they have to sell, and they have a certain expectation of what they should avoid, what brand to project and so on. They have to stay the course. You can always map out in 3, 4, 5 quarters where they will be. And the way that you react is that you say that, "I'm going to get there fast. I'm going to get there with a vision that they cannot afford to execute, because by executing that new vision, it's going to tank the current business." So yes, we have probably, through that self-sorting process, the smaller company has probably a higher density of more -I won't say confident, but more motivated people who have the excellence and the drive to make things happen. But let's not fool ourselves. Cisco, Motorola, they have lots and lots of talents as well. Every bit, if you take individual by individual and look at the best engineers, they probably have equally, or even better engineers. So there's a fallacy of some really brilliant guru sitting on a mountaintop and creating this big thing. What we're really relying on for the startup is the ability to go full speed ahead without the burden of that install base. And you have to just drill that. Because, take a look at it. I just summed up. Aruba Networks is a five and a half year old company. If I sum up every single dollar we put in R & D in five and a half years, Cisco spends that within 5 days, less than 5 days. That's how dramatic the difference is. There's no way that you can outsmart this big guy, you can just outspeed them.

Lecture 3
Differences between Going Public in the Dot-com and Post Dot-com Eras
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Differences between Going Public in the Dot-com and Post Dot-com Eras

Dominic Orr, CEO of Aruba Networks, observes a significant difference between going public in the post dot-com boom era in comparison to the actual boom. Orr argues that in the post-bubble era investors are much more thoughtful and analytical.




Transcript



I've done this twice, once in 1999, and once in 2007, eight years apart. First of all, I'd like to comment on the dramatic environment between when I took Alteon public, and Aruba. In 1999, the mood was so vibrant, right? And then you always go for this IPO roadshow, you go into Boston and Fidelity and New York, all these big banks. And all those big black limos, triple parked. You cannot even go down there. And when you go up there, and you see the portfolio manager come in, he has not even read your SEC file, and so on. All he or she wanted was to sit there, to look really smart and then want to get a big allocation, they can flip it and sell it next day. So this time around, people actually read through everything, there's lots of parking space, you can just walk up there and. And if you want to stay behind, they even ask you for lunch. So they want to understand. They clearly have marked up the so-called S1 document, a lot of analysis about your core competency, how you can stand, and your business model and so on. So, much more thoughtful investing. So that is an important fact, to answer your pre-public versus post-public operations. Because of all these very thoughtful investment mentality, you really have to stick to what you tell them in your IPO roadshow, what is your vision, what is your business core competence and how do you drive that core competence into a business model of gross profit and net profit. And it makes you just have to think much harder, rather than just go. It's not just speed, it's thoughtful speed, right?

Lecture 4
Private versus Public Company Tradeoffs: Building Credibility
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Private versus Public Company Tradeoffs: Building Credibility

Dominic Orr, CEO of Aruba Networks, describes the tradeoffs for an entrepreneurial company between being private or public. Orr argues that being public offers a significant benefit for an entrepreneurial company because it confers credibility and legitimacy which can aid the startup in selling to larger organizations. Of course, these benefits must be weighed against the costs and limitations imposed by being a public company.




Transcript



So the issue of whether pre-public and post-public, what are the trade-offs. The trade-off is very simple. When you are competing with large giants, respectable ones, for that matter, as we are, your credibility is very important, because you're going to go in, and you're going to offer to be the secure wireless infrastructure for all of Microsoft's 60,000 employees, 350 sites, 66 countries. You better be able to look people in the eye and say, "I'm going to be around, and I'm going to respond to contingency speedily and so on." And as a private company, you tend to have to exert a lot more convincing power for people to believe that. And it's also easy for competitors: they might be procured, they might go out of business, they might be this and that. And so you have to spend a lot of energy. And then once you get.. The IPO, actually, in the case of Aruba, is not for the purpose of raising money, because we, at the time of the IPO, we have probably like $20+ million in the bank, we were cash-flow neutral to positive. So we don't need the money. But we went out and we raised $100 million. In that process, you get a branding process, branding of a corporate image. Now, people kind of read about you in Business Week, in Bloomberg and so on. And suddenly, you get exposure to the CIO and CxOs, and so on, so that when the technical team selected your technology, you don't get this blank stare from the high management, saying, "Aruba who?" Now, the burden that we have to pay, like I mentioned early on is, you're under a lot more scrutiny. Another thing is, of course, in the small company, one of the advantage you have to attract talents is through stock options and all these niceties. But after being public, you are under the so-called generally accepted accounting principle, the gap accounting, and you're under a lot of constraint of issuing stock options or else your company will never get profitable. So those are kind of the big thing that's on top of the well-known Sarbanes-Oxley compliances.

Lecture 5
Seeking Advice and Guidance as a CEO
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Seeking Advice and Guidance as a CEO

Dominic Orr, CEO of Aruba Networks, reflects on sources of advice and guidance in his role as CEO. Orr highlights the importance of a rigorous board and advisors to challenge his thinking. However, Orr also speaks about his use of psychological counselors to help his executive team work together as effectively as possible. He suggests that this effort is vital because although there are many talented individuals in Silicon Valley, helping these individuals work together as a team is the most important element required for success.




Transcript



You are the CEO. Who do you turn to for advice and guidance when you end up with a really challenging situation? Do I need to worry about my install base? Well, first of all, I have a very strong board of directors. And I actually pick, within the board of directors, two gentlemen who have been my boss before. And people said I was crazy, but I said, "I don't know. I liked them." I like to walk into the boardroom to feel I'm being challenged, and challenged critically, and with very wise people. So I use my board a lot. I also use management -- I won't say management consultant. I actually use more psychological consultants, psychologists quite a bit in the last ten years of my management practice, because ultimately, when you're talking about running a company, it all boils down to people, and it all boils down to your executive team working as a team. There is no lack of talent in the Silicon Valley. But the fundamental issue is when you put all A+ players in the same room, do they operate as a single team? And that is where you really get into a lot of counseling and looking at each person's psychological profile and strength and deficiency, and kind of convince them to take the counsel and work as a team. So all this counseling and advice is really, be around creating a very powerful, effective team, because the leader of a company like Aruba Networks fundamentally is there to solve crises and take advantage of opportunities. Which means there's no fixed formula. There's nothing written down in a book. Everyday, you go to work, you listen to the radio, and you listen, you check on the web and see whether there's a new thing that happened that might look innocent, but might hurt you 90 days down the road, or even in a year. Or something that you quickly react to take advantage of. Because being a CEO, if you are a really really enlightened one, you would not want to dig into the day to day operations of your staff, because that's what you have your staff for, right? So I think I work with firm advisers, consultants and so on indefinitely.

Lecture 6
Working With and Making Decisions with Great People
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Working With and Making Decisions with Great People

Dominic Orr, CEO of Aruba Networks, begins by describing two surprises he encountered when working with great people: first, how difficult it is for experienced people to change and second, how challenging it is to be intellectually honest. Orr then describes his efforts to overcome these impediments by cultivating a fast-decision making process focused on the facts and intellectual honesty. However, to achieve this environment each individual has to have a thick-skin and a commitment to self-evaluation, qualities that usually must be cultivated over time.




Transcript



I would say that one surprising thing is that people really -- when they are very powerful and very experienced, it's amazing how hard it is to change, in terms of the reactions and behavior. That is one thing that I learned over time. The other thing has to do with my management style. If you want to go for speed, and thoughtful speed, then you have to trade off between a lot of discussion and analysis versus going with the gut. So in order to do that, what I have is a phrase that summarizes the methodology, we call brutal intellectual honesty. What it is: there's too many decisions to make, there's too little time. And in order to not just use your guts, sometimes your gut's wrong, then you have very precious time to retract. What you want is to get all the facts and opinions and wisdom out on the table, have a really honest debate about it, given a limited period of time. And then at the end of that period of time, you say, "Okay, I have enough opinions and facts, let's make a decision and go." In that process, you need people to be very thick-skinned. Because I feel that if you look into a lot of situations, people get bogged down into very emotional arguments or political situations and so on, when they have projected out a theory or a certain way of doing things, a certain architecture and so on. And they put the passion, which is good, and the ego, which is dangerous. And then you see people locking it, and they get themselves into a position that they cannot back off. And then they have to find all kinds of ways either to face, lobby the other people to support them and so on, or save face. That is incredibly time wasting. And if you recall, this time is the only competitive resource that we have in our hands. We cannot allow that to happen. So what I encourage is people to be thick-skinned about it and put everything out, and don't defend it with your ego, and let intellectual honesty dictate. And that's what it is. And the brutal part is the tricky part. A lot of people apply it to the other guy. What I really meant when I created the term is to apply it to yourself, that when you really put forward a very passionate argument, when you actually get convinced intellectually, there's a better way to do it. Be brutal to yourself, and say, "Okay. Yeah. You're right. You know, I put my best foot forward, and next, right--I've got to do it your way." So in that process, I found out that there's an immense amount of counseling that is needed, because fundamentally, for people to be thick-skinned, they have to be very confident. And somehow, people carry packages in their lives, and so on. And not everybody is as confident with themselves as you think they are. And so a lot of the work is really to get them to be comfortable with themselves enough with the peers to achieve what I need to do, which is the brutal intellectual honesty methodology. So a lot of the trend I saw is around that area. And that's probably tied to my emphasis on thoughtful speed.

Lecture 7
Work-Life Balance for Driven People
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Work-Life Balance for Driven People

Dominic Orr, CEO of Aruba Networks, wrestles with the definition of work-life balance for people who are deeply engaged by their work. Orr recognizes that it can be difficult to separate work and life but that we must still make room for relationships that matter to us and ultimately this comes down to carefully managing and allocating our time and energy.




Transcript



So how do you manage your work-life balance when you're trying to go so quickly and accomplish so much? And has that changed? Has it changed over time? First of all, I want to have a disclaimer. I'm not a perfect example of this work-life balance thing. And second of all, I really believe that in a lot of situations, the work-life balance thing is not the right concept to use. The reason is, the term work-life balance implies that there is this thing called work, there's this thing called life. But I'm here sitting, talking to you and so on. Is it work, is it life? I hope not dead. I feel that this is work and life too. So my point is, there are people who take -- I'm sure there are, across the world, that take the x number of hours per week that they have to work, is really for the substantial benefit, for them to support their hobbies and their sustenance, and so on, as a human being, as a family. So if you really look at it that way, there is a section of your day that is dedicated to creating take-home resources. And then the other part of the day is to consume the resources. Then you have the balance, right? But in our world, we have all these buzz words, virtualization, miniaturization, globalization, mobility and so on. It's very hard for people who have passion about what they're doing, to define what is life, what is work. I think they're going to be all mashed up. I don't have the privilege to observe somebody like Picasso, how they work. I doubt very much it's, "Oh, 10 o'clock. So I'm going to have to go to work." That's not painting, right? And then, "Oh, 6 o'clock. I have to hit the pub." So when people really are inspired, and have a passion for the work, they carry the work with them. The issue is: don't let technology drag you down in the sense that it's okay to come up with an idea while you're driving, or while you're showering and so on. But don't let that Blackberry distract you every five seconds, so you cannot enjoy conversation with your kids, or with your significant other or whatever. So I would advocate the concept of a balance of ... I don't know what this thing's called ... that you keep a balance of mind share and a sort of control of time management. I think time management is getting more and more important. And if you look at all the brilliant people that succeed in the business world, they have the incredible faculty of mind power and the ability to balance and control resources, meaning energy, time and so on.

Lecture 8
Silicon Valley Compared to the World
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Silicon Valley Compared to the World

Dominic Orr, CEO of Aruba Networks, compares Silicon Valley to other places in the world and argues there are many more similarities than differences. Indeed, Orr emphasizes only one difference between Silicon Valley and the rest of the world: a focus on speed. By contrast, Orr argues that there are many similarities, namely how hard people work. He suggests that people work so hard for three reasons: 1) People want to have an impact, 2) People want to be in an environment they enjoy and 3) People want to be rewarded and recognized. The key to motivating people then, is allowing them to obtain these three objectives.




Transcript



I would say there's one pattern that I see that is different, domestic in the US, particularly in the Silicon Valley, compared to the rest of the world. And then I would like to perhaps highlight some similarities. I think that there is more similarity than there is difference. The major thing that I think is different in Silicon Valley is because possibly, because of this emphasis on speed, we tend to, in business, be transaction oriented. We look at project at a time, one transaction at a time. If you look into Europe, look into Asia, people kind of have a longer time frame, and they emphasize more on relationship. And relationship, not only dealing with the people part, but even relation between two entities, even one as the supplier, and one as a procurer. A relationship in that sense, meaning a sequence of gives and takes in multiple transactions. So you don't push the guy to the limit every transaction, and declare that's a win. So I feel that there is generally more inclination in domestic market an operations to kind of look at one project: one transaction. So that's kind of the major difference. The similarity. You know, I have only had the privilege to work in the scientific community when I was in the research and academia environment, and in the high tech industry. So I can only speak in that narrow field. I say, people are crazy. They work incredibly hard, unreasonably hard, to the point sometimes that it causes physical pain. Why? I was always curious why. When I go to different places, they all do. It's not just in Silicon Valley. You go to Singapore, you go to Kobe, you go to Shanghai, different places. So I talked to engineers. I like to, after the normal work hours, you kind of just pick peoples' brains, have a beer and so on. I find that if I generalize why people work so hard- -and of course, there are people who don't- -and I'm talking about when I talk to people who work so crazy hard, I find that there are only three reasons, common reasons, between a French engineer and an East Coast US engineer, and a Silicon Valley engineer, and the Japanese engineers. First, people fundamentally want to make an impact. They feel that this thing that they spend all this energy on makes a difference. It makes a difference for the company, most importantly makes a difference in the world. If you tell me that you guys finish this thing, you can ship a billion units, and they're all sitting in living rooms. They actually feel like that's an impact. So this making an impact thing is very strong, at least in the industry that I work in. Second is, people will work that hard only if they feel it's fun. Fun, meaning not that particular moment that you really really have to fix this thing, I'm only giving you five hours. Fun, meaning that this is a general environment that I enjoy. I enjoy the colleagues, and I think they're smart, and they're not obnoxious. And the people above me, below me, they are good people and so on. So they want to have fun, they want to have impact, they want to have fun. And finally, the want to be rewarded. And reward can come in two forms. Of course, first one is financial reward. I want to work so hard for the company, I get the stock and I want to get my mortgage paid out and so on. But the other part, it is less emphasized, but equally, maybe even more so, is they want to be recognized. They want to be heroes, in a very small sense. A pat in the back, an acknowledgement in a coffee talk, they want to feel proud in front of their peers. And it goes back to all this dignity and things. So in a nutshell, I feel there are actually more similarities in those areas than differences in the area that I mentioned.

Lecture 9
Differences between Student Life and Professional Life
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Differences between Student Life and Professional Life

Dominic Orr, CEO of Aruba Networks, reflects on what he wished he had known as a student. Orr argues that as a student, a great deal of emphasis was placed on individual accomplishment whereas in professional life the accomplishments of the team and the company are much more important than any individual contribution.




Transcript



When you were a student, and here you were a biology student, and a physics student, what do you wish you had learned when you were in school, or gotten exposed to, that would have helped you as you're in your position now? First I have to think about how I was like when I was a student. For all the time I was in school, through all the degrees, I was a science student. So I have no idea how your class MBA students and Engineering students, how you think. As a science student, all the way up to the Ph. D. level, I feel in the scientific academia environment, it is a strict meritocracy environment, that the unit for meritocracy is individual. We went out of the way to give credits for some research done and so on, for the individual, to the extent that you have a paper that the list of authors is longer than the paper itself, if it's a short paper. And I have to take it out and say now, larger and larger budget projects, like in the high energy physics research project and so on, because the budget is so huge, you have to forge a collaboration between this lab and the Fermilab and so on. So you have the collaboration. But fundamentally, culture is giving people individual credit for the creation, innovation of the thoughts and ideas and implementation and experiments and so on. I found that if you really got a degree and that kind of environment, and you move into a business world, I find it took me four, five years to adjust. In the business world, individual merit doesn't count. The fact that a consumer decided that Coke Zero is way better than new Coke, and it is not as good as Pepsi 1 and so on has nothing.. They have no idea who invented it. Is it a group? Is it a team, and so on. So in the business world, all it matters is whether the project is successful. And successful is defined by whether customers are buying it and loving it and continues to come back and buying it. So I think it took me a long time to adjust to it, because once you sink into the team winning, the cross function is not just engineering created a really good product, and marketing screwed up, therefore. That's beside the point. The whole idea is that our winning market share is the customer buying and enjoying it. So this whole teamwork concept is way, way beyond the individual recognition. Obviously, we recognize individuals for their contribution and so on. But the mindset, from day one is, think about the end result, how a cross functional team can achieve that. And it doesn't matter. If the team weans, everybody wins. That, I think, is I wish something that I had a real life experience tasting, when I was a student. It would make my adjustment from academia to real life industry a lot easier.

Lecture 10
Challenges in Cracking Big Markets
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Challenges in Cracking Big Markets

Dominic Orr, CEO of Aruba Networks, responds to a question about whether startups have a chance of cracking markets owned by big competitors. Orr suggests that startups often can find niches in big markets because they have greater speed to execution. However, Orr argues that success in a big market may be more than simply creating a niche but rather success is creating a large, sustainable business. Orr argues that the challenge of creating a large business is that you attract the attention of large competitors who try to destroy you. At the same time, as a company grows, it too eventually becomes vulnerable to smaller startups with even greater relative speed to execution.




Transcript



Okay, the first question, if I understand it is: Is it, in general, a hopeful case that because the incumbents are so busy with the inertia, that is, keeping the success, that the small company should rightfully have a hope to get a crack in some of the business that they either architecturally, or the business momentum don't allow them to address? Is that the gist of the first question? So I would say, the most important thing is to define success. Because of our transaction oriented nature, the short-term oriented nature, because we are in America, in Silicon Valley, sometimes we focus too much on initial success. Because a hundred companies get funded, maybe four get IPO, so that when you IPO, you feel like you had success. But you think about it. Aruba reported $41.7 million the last quarter. Cisco reported $9.3 billion? So is this something to celebrate, that you can find a $41.7 million crack in a $20 billion environment? To find that crack, there would be many many ideas that are available for you to get those cracks. Which points to one fact: good ideas are not difficult to find. It is execution, the operation excellence to get through to production and marketing and supporting your product. That is important. So a lot of companies fail, not because they didn't find those cracks. The four or five companies that get IPO out of the hundred companies funded is not because they got the four or five best ideas. I think probably a lot of them get the good idea. It's just that four or five of them have the tenacity and the operation management skill to carry it through. Now, the fact that you carry it through and form a bit of initial success is by no means assurance of longevity of a company, which is kind of tied to the second question you asked, which is, "What keeps me awake at night for Aruba?" So, in my view, in my space of enterprise, classed network infrastructure for the large companies, the Fortune 500 and Global 2000 companies, a critical mass company in this space is roughly annualized $400-500 million, half a billion dollars. And then you can claim that you have established a franchise of some sort, you have created a niche in this, and it can be ongoing. Or else, like I said, the only reason that the big guys let the small guys move along is because they're too busy doing the big things. But when you're big enough, then they no longer ignore you because you're not small enough for them to ignore. So they will come in, and they try to really point a gun at you, and then if you're not careful, you did not create your differentiated position, your customer loyalty, that is when companies start faltering. They came out, and they become $200, $300 million a year, and then they go away, because now they're getting the attention of the big guys. So I think people should define what success it, then don't declare a rival too soon. Which is, for both of my companies that I took public, one of my biggest concern is, I keep reminding people that basically, by going IPO, we have passed the qualifying round. Now we get to play. And don't walk around feeling that we have arrived. And don't put your stock price and your net worth on the screen saver, tied with stock price and so on. That is equally remaining vigilant and continuing to innovate, and continuing not to let that space, the initial success slow you down. Because you think about it, we have now 3,500 customers worldwide. Competitors, Cisco, I don't know, have half a million customers. Now, there's a startup behind us that I could tell you that, as I know of, another bold company that went around saying they have a business plan that's called Aruba killer, Aruba 2.0, or whatever, all the nice names. They do not have the inertia of the 3,500 customers. So at that scale, my blessing is my curse. So how do I not lose my speed relative to the guy who has half a million customers, but continue to use speed and agility to innovate. But how do I not let the other guy who has only 50 customers do one to me like I did to the other guy? So, that, really, is the job that I believe that the board pays me to do.

Lecture 11
Selling High-Tech Products and Services to an Executive Team
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Selling High-Tech Products and Services to an Executive Team

Dominic Orr, CEO of Aruba Networks, argues that to sell a technical product to an executive team, an entrepreneurial firm must focus on understanding and eliminating that executive team's problems. Eliminating CEO, CIO, CTO or CFOs problems means understanding and addressing their pain point sufficiently to overcome their fear of something new.




Transcript



The ultimate thing in people's minds, people have more problem in the job than just creating a wireless network. So you have to make people feel, "Okay, I'm taking problems off your plate. I'm not creating problems and another anxiety for you." So you have to go in and understand at a CIO, a Chief Marketing Officer and so on, help them at their level. If it's the CIO's major problem, operation expense control, because the corporate top-lines or his charter is to use IT at a competitive advantage. So the most important thing before you go in and see an executive is to understand from their perspective what they are looking for. And I think a lot of high tech marketing people forget that this is not about you, it's about them, because they have the budget. So that is key. So when we go into the CxO and so on, if they are functional executives, meaning the head of sales, head of product department, you have to understand what's the pain point. And they have to have enough pain point for them to say, "I want to overcome the anxiety of anything new." Fundamentally, people don't like anything new, except in cars and clothes and so on. So that is the main thing. And you have the CFO and the CIO of different industries, you have to address these.

Lecture 12
Lessons from Applying the HP Way to Startups
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Lessons from Applying the HP Way to Startups

Dominic Orr, CEO of Aruba Networks, speaks about lessons learned from applying the HP way to startups. Orr suggests that he has achieved great results from giving employees respect and dignity. At the same time, Orr acknowledges mistakes he has made in applying the HP way to startups. In particular, in a large organization, such as HP, there time for long feedback cycles because any mistakes from giving people too much benefit of the doubt are covered by the overall inertia of large company. By contrast, in a startup, there is little inertia and so the feedback cycle must be shorter and mistakes or problems must be resolved quickly.




Transcript



The question is a little bit more detailed explanation of how the HP way can be applied in the startup environment, and of all the HP way values, what tend to work, and what, not as well. They do three-day seminars on subjects like that. And for me, I just focused.. I think if you get the book written by Dave Packard, a very small book called "The HP Way," there were seven or eight values in there. I just picked one or two, and I blended it in one area, which I find, work again and again, is fundamentally give the employees respect, dignity. And associated with that, trust, so that they feel empowered to go out and innovate. And through that process, kick off the passionate part of the brain, and from then on, it's kind of uncontrollable. You get the energy, all of that. And the reason that I think that it worked very well is that because people are people, whether you work in a startup, whether you're in a large company. If you go down to that level of psychology, there's no difference. The thing that I found--I have my scars on my back as well--that in the old HP way, that in the execution of that, that has less tolerance in the outside of HP environment is how much time you give, when they want to ... obviously, you want to give them a longer and longer rope. But if it doesn't work out, how do you. The feedback cycle. I think, at least in the HP that I left, we tend to give people too much benefit of the doubt. If somebody. Then, well, try this, try that. And what you find, in a startup environment, since time is such a big sense, and you don't have the inertia to carry you for mistakes. The flip side of being able to go fast is, when you tank, you tank. There's no inertia. And so one of my first errors, and I remember that was after I left HP, and I know I want to do a small startup, but at that point in time, I was managing thousands of people. And I don't want to jump to as many as 30 people. So I choose an environment that I manage as a smaller section. And I really was not happy with my performance there, because I fundamentally do not appreciate. Suddenly, now, I don't have that inertia to help me now. Inertia is there, but it's much smaller. And I think I gave the feedback cycle too long. So I think that is the one caution from experience that I learned, that I want to share with you.

Lecture 13
The Benefits of Advanced Technical Training
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The Benefits of Advanced Technical Training

Dominic Orr, CEO of Aruba Networks, argues that the unique benefit of advanced technical training is not necessarily analytical thinking--this skill can be developed in many places. Rather Orr suggests that the benefit of advanced technical training is the courage to address uncertain problems with brutal intellectual honesty. For Orr, this quality has allowed him to innovate on the technical frontier while having the courage to recognize when he might have failed and needed to redirect his efforts.




Transcript



I would say, if you ask a lot of people who've gone through the Ph.D. thing and then in management, they would say, "Well, it trained me in my analytical capability to question and so on." That is true, but it is very generic. You can go through a lot of other routes to gain that analytical.. For me, being, in a way, I was very very lucky to be working with--both while I was in Physics at Caltech, and when I was in neurobiology in Caltech, I was working with people who were pushing the state of the art of their research. Through that observation of just how people handle the question of what's the scope of the problem that they want to ask, gave me one major psychological insight that I think a lot of my counterparts do not have. It is the courage to face uncertainty. A lot of people are just not comfortable when you are actually at the edge. When you have a business plan, they say, "How do you define your market? What's your objective? How many points of market share that in a year or two, with your business, can you achieve?" The answer is, if you're a good entrepreneur, you say, "If you really can segment that market that well, and predict, in two years, what your market share is, it's not worth going. The big gun's already going at it." So the only way you can have a chance to succeed is to go for an area where it cannot be defined and actually be segmented. And a lot of people are just not comfortable with that. But in your pursuit of really good scientific research, that is exactly where you want to go. And another thing is, the flip side of that is, you're not afraid of failing and then having to restart. That comes hand in hand. But you cannot get locked in too long, and that is really where another aspect of the brutal intellectual honesty comes in. Another aspect of that, other than just applying it at the staff level is, at the executive level. You want to invoke, when you are in territory like that, you need the courage. How do you derive the courage? You derive the courage by having a passion. Passion is derived from the vision. The good visions are that you are ahead of the game. Those are the good visions, right, and that means that you could be mad wrong. A lot of people, the problem they have is, because they need that courage, they have to invoke, they psyche themselves up, so to speak. And so when you work on something that people don't see, and then you wake up in the morning.. I have gone through many times, I drive to work, I don't know whether I'm visionary, or the grandest delusionist in the Silicon Valley. And I fluctuate within the month several times, depending on that basicworking or not, and the people delivering something and so on. So my point is, the whole scientific training of pursuit of truth, and let truth dictate, so you're not afraid, if you look at a wrong answer, to go back and find another one. And that brutality applied to yourself, to be totally driven by intellectual integrity, if you are wrong, after two and a half years and getting down and getting the product, say, "Sorry." Go back, rather than waste another two and a half years by justifying to yourself, because you're not ready to give up the two years' investment.