Sculley Captivates ITEXPO, StartupCamp Audience

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Sculley Captivates ITEXPO, StartupCamp Audience

By Rich Tehrani, CEO, Group Editor-in-Chief, TMC  |  March 15, 2013

This article originally appeared in the March 2013 issue of INTERNET TELEPHONY.

John Sculley riveted the audience at StartupCamp 7 at last month’s ITEXPO (News - Alert) Miami.

Sculley rose to prominence as the leader of food and beverage giant PepsiCo, having served first a vice president in the 1970s and then president from 1977 to 1983. He went on to head up Apple (News - Alert).

He was the first MBA that PepsiCo hired and became the biggest advocate of creating a relationship with the consumer and the brand. At ITEXPO, Sculley talked about lifestyle and experience marketing and how the company created the Pepsi Experience and Pepsi Generation marketing campaigns.

Sculley also discussed the Pepsi Challenge, for which the company set up booths passersby took blind taste tests. The company did research ahead of time and realized Pepsi was slightly preferred in blind taste tests – 54 percent to 46 percent. But rather than just throwing up those numbers, the company wanted to get the expression of people when they realized they preferred Pepsi over Coke. Sculley said that drove Coke crazy.

The PepsiCo CEO was in his mid-30s when he got a call from a recruiter seeking leadership at Apple. Sculley said he was not the first person to be selected; he didn't have computer experience. Moreover, Apple’s board thought Steve Jobs (News - Alert) was too young to be CEO but was given veto rights.

The first meeting with Jobs took place shortly thereafter -- in 1982. Prior to that time, no one had gone from corporate America to Silicon Valley…  People running high-tech companies were all engineers at that time.

Eventually Sculley told Jobs no, and the Apple founder then famously asked the PepsiCo exec if he wanted to sell sugar-water for the rest of his life or change the world. A week later, Sculley had joined Apple.

At the time, Commodore and Atari were the market leaders by far, and IBM (News - Alert) was up and coming.

Apple had just launched Lisa at $10,000, which was a fortune for that time period and still is by today’s standards. Macintosh was more than a year away and subsequently, the company needed cash for development. The challenge was, the only cash flow came from Apple II, which was five years old. Sculley was tasked with keeping the cash coming from the old computer line and making sure there was enough of it for marketing of the Mac.

Jobs was fascinated with experience marketing, which is just what Jobs said they needed at Apple. Jobs said Apple would win with Macintosh in the same way [as Pepsi], said Sculley, who added, "Jobs was a fast learner.”

However, as we all now know, these two leaders eventually bumped heads.

They had a disagreement that led the board to ask Job to step down from running the Mac division. Sculley said that it was the wrong decision -- really innovative companies need to be run by product leaders. Even if you can do integrated marketing, it is the product that drives businesses, he added, so the Apple board should instead have focused on having the two men work more closely together. Sculley added that he had an amazing friendship and relationship with Jobs, and he just wanted to keep the culture Job created going.

Sculley grew the company more than 1,000 percent and was taking the leadership position from IBM. But he was against licensing the MAC OS and was subsequently pushed out. Being kicked out of Apple was the worst thing that had ever happened to him, said Sculley, adding that it took him decades to recover.

Fast forward to today. Sculley spoke about the companies he invests in now and commented on how the country's medical/health care problems can be solved with technology using the cloud. Misfit Wireless is one company in which Sculley is an investor; it uses wearable technology and the cloud to measure the health level of users.

Sculley also added that he wouldn't work for a large company today because all the fun stuff happens in small companies.

He also noted the “thin line between success and failure," noting that Intel (News - Alert) and Sun almost went bankrupt. And he indicated that what may separate the winners from the losers is how they handle themselves in near-death experiences.

Edited by Brooke Neuman