How to spend $200+ Billion for a Train Wreck

Once upon a time, a paragon of American innovation lost its way.  It embodied Einstein’s definition of insanity, spending over $200B for a train wreck… and they’re doing it again. The story starts in the last century and my part about 28 years ago.

In the early 90’s at AT&T, I was on a ‘special project’ with some friends to design the next generation core domestic network.  We were from Bell Labs and had “grown up” with the Internet (Arpanet, initially).  We were young and idealistic so our designed was based on the TCP/IP protocol.  This let us move anything over the network – email, faxes, images, movies, songs, phone calls, photos, anything – in real time.  We knew that with enough bandwidth, routers, redundancy and diversity, someday we’d watch or listen to concerts and movies live.   This way, we only needed 1 network (with tons of security & safeguards obviously) to handle everything.  The days of a voice-only network built on big expensive switches was over.  We presented our design to the powers that were. Answer? Nope! They thought it was the dumbest thing they’d ever heard.  [About 13 years later, a friend asked me if I still had the designs because they were looking to build that network.]

The 90’s were a battle between the network/telecom providers (AT&T, MCI, etc.) and the PC/Software maker end points (Microsoft) deciding where to put the ‘smarts’.  Microsoft et. al., felt they owned the smarts and just needed commodity dumb pipes to connect them together.  The networks knew if they didn’t have any ‘smarts’, they didn’t have any differentiable value from each other.  The smart ends would win the battle, forever commoditizing the networks. I saw this and worked on this firsthand.  It wasn’t pretty.  It led to a lot of spending with little success:

  • 1999: AT&T pays $44B to buy the cable company TCI, creating AT&T Broadband.
  • 2002: AT&T sells AT&T Broadband to Comcast for $47.5B after having invested about $58B more for a total of $102B in AT&T Broadband.
  • 2015: AT&T buys DirecTV for $49B.
  • 2016: AT&T offers to buy Time Warner (not the cable, the content) for $85B (and I don’t think this is a bargain price).

The networks lost the smart-dumb battle.  So, if it hadn’t worked before, why now? Is “Media” that different from smart-ends? Really? Maybe this is what they’re thinking:

  • AT&T is losing wireless customers with decreasing revenue/customer; 
  • DirecTV is losing customers because of cord-cutting;
  • Content drives revenue (yup, heard that 20 years ago); it uses lots of bits and time;
  • “New” Media companies are becoming networks– Facebook, Amazon, and Google (take special notice of Google – if I were AT&T, I’d worry about them non-stop).

Over 17 years, AT&T spent about $236B (BILLION) dollars to get in, out and back in to the cable and content business.   Having lived through some of this and trying to show why it wouldn’t work financially, strategically, innovatively, and a bunch of other ‘ly’s, here are at least 6 lessons I learned:

  1. If you can’t figure out how to add value to your own stuff, buying other stuff to bolt on, without understanding markets and customers, doesn’t work;
  2. Culture matters, first and only; Making acquisitions outside your traditional space is hard, it’s virtually impossible if your cultures are radically different;
  3. If you’re losing customers, DON’T buy a company in the same situation!!!
  4. If you keep repeating solutions that don’t work STOP! Either figure out something different or figure out how to be a profitable commodity… it works for Coke!
  5. Check the C-suite egos at the door; hanging out on the set of Game of Thrones isn’t worth billions to shareholders.
  6. In my next life I want to come back as a company AT&T buys.


What's Not There?

What a lovely home, probably somewhere out in the country.  From the crops on left, this must be a farm. From the swing set, they probably have kids (or grandkids).  The house seems to be fairly modern (look at the windows) and well maintained.  The horses look healthy.

What’s the story about this house and family?  Are they ‘weekend’ farmers who commute to jobs during the week?  Does one of them, or both, work from home? Are they full-time farmers, with the land being the main source of income?  Hard to know.

But what’s missing? Look at the photo; what’s missing?

See any cars or trucks?  Maybe the people are not at home – they’re at the store or work or a kid’s soccer game. Look closer.  Do you see any power lines going to the house? Hum… Maybe the power lines are buried.  That could be, but given the size of this house and probable acreage, I kind of doubt it. 

This is an Amish house in Lancaster County, PA.  

What if we look at what’s missing instead of just what’s there?
What if we ask why something we’d normally expect to be there isn’t?
What are we assuming is in the picture because it usually is?
What if folks are just fine with not having what’s missing?
What if they didn’t know they could even have what’s missing?
What will we discover if we start looking at what’s Not There? 

Who Are You?

When you meet someone at a party, an event, in the store, at a school, what do we usually ask? “What do you do?” or if you’re in college, “What’s your major?”

There are many ways in which others define us and we define ourselves:

·      Job, title, level;

·      Mom, Dad;

·      Daughter, son, sibling;

·      Aunt, Uncle.

·      College, university, and major or degree;

·      Home town, city, country;

·      Ethnicity;

·      Nationality(ies);

·      Religion;

·      Political leaning;

·      Talents;

·      Causes, volunteer efforts;

·      Board roles;

·      Combinations and integrations of the above;

·      None of the above – something else.

How do you really want to be identified? To be known? You may answer differently depending on where you are in your life and what matters.  That’s normal. But when you strip away all your functions and roles, at a very fundamental, who are you? What do you want to be known for? And why? 

Are You Obsolete?

Do you say, "Can you tape that show for me" when you'll be out missing a TV show or "Will you roll up the window?" when you're in the car?  When your friend keeps repeating himself over and over do you tell him he "sounds like a broken record"?  How often do you "hang up" the phone, "dial" a number or "ring" someone up? Think about it - 25% of the USA population doesn't know what it means to dial a phone let alone hang one up! Many of our idioms and phrases are tied to outdated technology and behaviors, and while some are still widely used (e.g., Stereotype, Pipe Dream (ha!)), the younger generation has no clue what they mean.  They are obsolete, meaningless. 

I wonder - if some of our language is becoming obsolete, are we as well? We can rue the loss of life as we knew it or we embrace the future.  Every generation has dealt with this, but today is different.  Today, we live longer. Our children (and some of us) have multiple careers, tweet, snap, text, google without hesitation while we 'flip through the channels."  It's a choice. We can choose to become outdated or to be relevant.  What will you choose?

Also published on Medium ~ Finding Blue Lobsters

10 Timeless Thoughts on Work & Life

Though she's only 20, Samanee Mahbub's insights into her 10 weeks in NYC are important for all of us at any age.  How many of these thoughts do you identify with? They are timeless, universal and very human.  Please read and reflect.

"On New York, and on life

After ten weeks in this city, I have a lot to reflect and think about on my last day before I embark on my next journey. This post has no clear theme other than what’s been going on my head. Thoughts about New York, about being lost, about feeling useless, about feeling useful, about adventures, about learning, about healing, about loving, about everything and about nothing. Hope you enjoy the thought ramble :) ...."

Who actually told us that feeling lost is bad, and that we actually have to have everything figured out?
Live your life with as much enthusiasm so other people can benefit from it.

Four Lessons From My Great Bosses/Mentors

Posted this in Medium this week.  Given all the discussion on Women in Tech, Silicon Valley biases, etc., I thought it was time to repost ...  and learn

My first boss at Bell Labs had a habit of yelling. While he was an equal-opportunity yeller, when he shouted at me in my first department meeting, I got up, told him when he wanted to talk, not yell, I’d be in my office and walked out. I was 20 years old, just out of undergrad, and sitting among a group of aghast Ph.D.’s . Perhaps this was not the best initial career move. But about 30 minutes later, he walked into my office and apologized...

When Disruption Meets Laughter & Fun

I was so honored to be a guest on DisrupTV with my good friend Vala Afshar of Salesforce and Ray Wang, founder of Constellation Research.  As to be expected, we had a great time talking blue lobsters, innovation, virtues, strategy and women in tech.  Take a look!


Rush to Discover, Don't Rush to Solve!

Oh wow! A problem.... let's go solve it! It's our first reaction, right? It's human.  We see a problem and our instinct is to start fixing it, solving it.

What if, instead of rushing to solve it, we rushed to discover as much as we could about the problem - like, why is it a problem, why is that a problem, why, why, why?  What are people doing when this is a problem? Is it only a problem when they are doing that? Where is it a problem? Only there? When is it a problem? Only then? What is the weather when it's a problem? What mood were they in when it was a problem? See? You learn so much when you Rush to Discover first.  You learn what really matters and why.  And guess what? Then you can work with the people who have this problem together - to create solution(s) that will really make a difference - that will work when, how, where it's a problem.

Rush to Discover. Don’t rush to Solve!

So, next time you see a problem, stop, discover and learn.... 

Human Assets or Asses?

Yup, I said it and mean the double entendre. 

What company doesn’t say people are their greatest asset? How many companies really treat their employees like assets? Not as many, and less than we’d like to think.  Too many companies still treat employees like Asses –beasts of burden, tools for labor.  And then, managers* get surprised (duh!) when employees act like asses – non-caring beasts of burden and seemingly stupid, stubborn people.

Golden Rule: It’s a Rule, not an Exception!

How employees act and engage all depends on T – on how you Treat them.  Remember the golden rule? Guess what, it’s a rule, not an exception.  Try Treating everyone you encounter this week, especially your employees, as an asset.  You might see some Asses become Assets (even you?).

* Not leaders, cuz real leaders don’t treat their employees like asses.