Posted by: Bill von Achen | January 8, 2010

Some Lessons on Growth from a Technology Pioneer

More than 30 years ago, Bob Metcalfe started a company in Silicon Valley to develop a technology based on the theoretical foundations laid out in his doctoral dissertation. The company he founded was 3Com, and the technology that Metcalfe invented was the Ethernet, which today allows hundreds of millions of computers around the world to communicate with one another.

In the November 1999 issue of MIT’s Technology Review Magazine, Metcalfe shared his observations about what it took to be a successful entrepreneur in the then hot-high tech economy. But Metcalfe’s lessons have stood the test of time, and apply equally to non-technology companies for whom growth is the primary goal.

Here are some of Metcalfe’s lessons for business success:

Selling matters: The magical appeal of inventions like Ethernet or any new technology masks the fact that nothing really happens until someone goes out and sells it. From Metcalfe’s perspective, great ideas turn into profits only when companies focus their efforts on getting out in front of customers and make selling a priority.

At a startup, jobs grow faster than people: In 1982, Metcalfe went from being CEO of 3Com to vice-president of sales and marketing. But the theoretical step down the organizational hierarchy actually represented a significant increase in responsibilities. In fact, because of the company’s growth, Metcalfe’s new job was vastly more complex (and more important) than his previous position.

Don’t hire—recruit: The people who possess the skills you need to grow beyond your present level almost always have jobs that are bigger than the ones you need to fill right now. But hiring only for today’s skills places the future of the enterprise at risk. For Metcalfe, active recruiting of the talent you’ll need in the future is the only way to ensure that your growth won’t be held back.

People have operating ranges: As companies grow, the demands on people often outstrip their abilities. When you see an employee’s performance slipping in a fast growing company, it’s probably because they’ve reached the edge of their range of competence. Move quickly to replace them, Metcalfe advises.

Don’t listen to your customers: Many corporations have lost billions of dollars developing products that customers have told them that they want, only to find that needs change by the time those products are ready for the market. So practice your critical listening skills when in comes to hearing what your customers want, says Metcalfe, and make sure that you don’t check your own brain at the door.

Be an entrepreneur, not a visionary: For Metcalfe, some business owners have a vision of what their companies can become. But a successful entrepreneur also has plans and actions to ensure that that vision becomes a reality. It isn’t enough to be a “big-picture” thinker. It’s the ability to translate those visions into concrete action that makes the difference.

A summary of Metcalfe’s article is available at the web archive of Technology Review at http://www.technologyreview.com/web/11994/. Or, contact us at bill@smr-web.com for a complementary copy of the complete article.


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