Shorter “Adventures in Business.”

Shorter “Adventures in Business.”

I read in the WSJ today that Bill Gates’ favorite business book, as recommended to him by Warren Buffet as his own favorite business book back in 1992 but originally published in the 1960s, is Business Adventures. It’s twelve New Yorker essays.
Here is a shorter version:

Chapter 1 the stock market.
It’s a mad place. Ruled by emotion and panics in the short run. Witness the crash of 1962. Plus it never changes — great lines from an observer of the Dutch 1600s side by side with the 1960s. No wonder Warren Buffett loves this book — 1987, 2001, 2008 all show the same.

Chapter 8 communication at GE.
A long discussion of how GE vowed and preached from CEO down against price fixing and yet its VPs did price fixing — all while talking directly to each other about what they were doing. The willful negligence and miscommunication is striking.

Chapter 5 — Xerox
What an awesome story looking at the ascendancy of Xerox, the Microsoft or Google of its era. Organizing the world’s information and all that.

Disruptive innovation, the acceptance of a new technology and the conditions for its adoption. The social impact on education and intellectual property holders. The quest for a scientific breakthrough and the discouragements on the way. How great.

Some highlights:
– photocopying was first invented in the late 1800s and didn’t catch on. Wet paper. The dry process was needed.
– an independent tinkerer invented the fundamental process – a Swedish emigre in Astoria, Queens!
– unable to make it all work together, he parked it at a research institute for a share of royalties
– a small company called Haloid, in Kodak’s shadow in Rochester came across the IP, and bet the ranch and more on getting the tech to work. The execs went without pay, mortgaged their houses, etc etc.
– they did it! And the dry copying process went ballistic — from 1960 onwards they went from $1mm revenues doubling annually to $500mm
– they licensed much of their IP broadly to competitors (Wintel style)
– they invested aggressively in the vertical stack of publishing and books and education
– they were boldly public-interested taking strong positions to protect writers and make unlicensed copying illegal

On the matter of strategy and starting up products, it’s just a gold mine of wisdom that sounds like a guy writing today about Oculus or Apple. This stuff is from 1968.
– Xerox salesmen were constantly surprised to see how the public was using the copiers
– they struggled with the overwhelming temptation to violate copyright
– McLuhan “Xerography means every reader can become both author and publisher”
– magazines have predicted the “end of the book” and therefore the “end of writing”
– and lots more worth reviewing
– of course the piece is written in ’68, at a puzzling turning point for the stock where it has set back quite a lot. Maybe 7 years later is when PARC is spewing out brilliant ideas and commercializing none of it. Fascinating! Xerox from cutting edge to fat piñata in 20 years.
– Google was founded in 1998, 16 years ago.