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I knew what was in Jobs’s head: Sculley

InflexionPoint founder John Sculley talks about his time at Apple, challenges of creating new firms
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First Published: Mon, Jan 21 2013. 04 25 PM IST
John Sculley says he will probably spend about $100 million over the next year to buy companies in India or finance existing businesses through equity capital.
John Sculley says he will probably spend about $100 million over the next year to buy companies in India or finance existing businesses through equity capital.
Updated: Wed, Jan 23 2013. 01 07 AM IST
Mumbai: John Sculley has been investing in and acquiring technology firms around the world through his company InflexionPoint Acquisition Corp. since stepping down as chief executive officer (CEO) of Apple Inc. in 1993, although he insists he isn’t a venture capitalist. After purchasing Delhi-based information technology distribution company Iris Computers Ltd in October for $300 million (around Rs.1,620 crore today) and co-founding an Indian e-commerce company ChangeMyTyre.com, an online store for car tyres, in May, InflexionPoint plans to invest another $100 million in India this year. In an interview during a recent visit to Mumbai, Sculley, also a former president of PepsiCo. Inc., spoke about the challenges of creating new companies and investing in India, and recalled the time he spent with the late Steve Jobs at Apple. Edited excerpts:
How much do you plan to invest in India and what type of companies do you eye?
We will probably spend about $100 million over the next year to buy companies in India or finance existing businesses through equity capital. I am not a venture capitalist. We usually create our own deal flow. We find our ideas through the people we meet because we have domain expertise in mobile services and healthcare. We don’t buy companies that need to be turned around. We buy those ready for expansion.
What do you do after acquiring these companies?
When we buy a successful company, we see what it needs—be it working capital, relationship with an original equipment manufacturer or scale to be sustainable. We focus on picking the right time and the right teams.
What are your plans for ChangeMyTyre.com?
We have invested a few million dollars in ChangeMyTyre.com, but eventually we will invest more. Internally, we hope to get ChangeMyTyre.com to a $100 million turnover in three-four years. Tyres are very expensive and the roads are notoriously bad in India. The country has a much lower amount of replacement tyres sales at 50% while in the rest of the world, it is 70%. So there’s a huge opportunity.
You spent a lot of time with Steve Jobs and (Microsoft Corp. founder) Bill Gates.
I have spent an incredible amount of time with Steve Jobs—seven days a week and most of the day. I really knew what was in his head. He wanted, and these were his words, to make a dent in the universe, which he did. He was absolutely focused on changing the world and he was prepared to sacrifice a lot of things. He had no interest in wealth. I used to spend a lot of time with both Bill Gates and Steve Jobs. I cannot recall a single conversation where either of them ever talked of money.
The other thing I would say is both those individuals had exactly the same vision, but entirely different ways of achieving it. I used to watch them arguing with and screaming at each other. Yet, Bill Gates invented shrink-wrapped software. No one put any value in software for personal computers. It was given away for free. Bill came up with the idea to shrink-wrap it, put it in a box and sell it. He could have priced it anyway. He was very clever, he priced it very high. Eventually, hardware had low margins and software had high gross margins. It could have been the other way around, but that’s how it was done. He believed the whole industry was about software. He was willing to compromise the experience of using the product.
Steve would argue with him and say, “I won’t compromise on anything. I don’t care about market share, I care about elegance of the product and the experience of the user. Software and hardware have to work together. It isn’t just software.” Steve did what he used to call zoom out, zoom in. He would zoom out, and look at the big picture and there was no one who could articulate that vision with more inspiration than Steve.
How do you draw on that experience in InflexionPoint?
I am not a genius like Steve Jobs. But I can recognize how important it is to have a set of first principles. Steve had the set of first principles. I saw them 30 years ago that are still the first principles of Apple today. When I look at companies, I encourage CEOs to figure out their first principles, discover and believe in them. Your people should understand them and live up to them. These are important ideas to be consistent with.
I have learnt that regardless of the industry, the most disruptive innovation takes place on the edges of transformation. There is a very thin line between success and failure on the edge. CEOs often wish for moments where they could have used another set of eyes. My role is really a mentor relationship with leaders. I don’t do heavy-lifting, but I’m always available. We want people to have freedom to run their business.
How much of a challenge is it to start a business in India?
India is a very complex country from a regulatory and tax standpoint, and in dealing with various state and city levels. Foreign investors who have come to India have not been as aggressive as they originally thought. India priced itself out of the market pretty quickly when people were looking for valuations that were beyond what the rest of the world was valuing. It has taken longer to see the success stories in India, when you consider how much talent is there and how big the opportunity is.
So what advice do you give to those on the edge of failure or success?
What I admire about Indians who are my good friends is that many of them have been successful in the US and have come back to the country. They are interested in what they can do for India and giving something back to India, and that is a great statement of character. I have huge respect for the Indian culture in how people treat success. So we want to ensure that leadership of these companies cares about the culture. We identify these values early on. Financial investors don’t always look at those things.
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First Published: Mon, Jan 21 2013. 04 25 PM IST