What starts here changes the world.
- Bob Metcalfe is Professor of Innovation and Murchison Fellow of Free Enterprise in The University of Texas at Austin’s Cockrell School of Engineering.
- Dr. Metcalfe was an Internet pioneer at MIT starting in 1970 and in 1973 received his PhD from Harvard for “Packet Communication.” He invented Ethernet in 1973 and founded 3Com Corporation (now part of HP) in 1979.
- Dr. Metcalfe has received numerous industry awards and recognition including the ACM Grace Hopper Award in 1980, the IEEE Alexander Graham Bell Medal in 1988, the IEEE Medal of Honor in 1996, the National Medal of Technology in 2005, induction into to the National Inventors Hall of Fame in 2007, and the Fellow Award from the Computer History Museum in 2008.
- In November 2010 Metcalfe was selected to lead innovation initiatives at The University of Texas at Austin Cockrell School of Engineering. He began his appointment in January 2011.
- Entrepreneurial, technological innovation at scale
- [Photo by René Lego Photography]
- TALK ABOUT YOUR BACKGROUND...
- I've just started my fifth career. And these are not fly-by-night careers, these are 10-year careers. I don't count the 23 years that I spent as a student, that's not a career.
- I started out after that as a scientist engineer, and that's when I led the team that invented Ethernet. And then after that, I went off and started my own company, 3Com Corporation, and that took about 13 years.
- Then after that, I spent another 10 years or so as a publisher and a journalist, a trade journalist for InfoWorld Magazine. And then after that, I was a venture capitalist with Polaris Venture Partners for 10 years, out of Waltham, Massachusetts. And now for a year, I've been a Professor of Innovation at the University of Texas, at Austin.
- YOU INVENTED ETHERNET...
- I've been answering Ethernet questions for 30 or 40 years, and a lot of people think that there was a 'eureka' moment, or there should be a 'eureka' moment. Their conception of invention is there's a eureka.
- Ethernet was built on years of prior work in developing the early phases of the internet, the packet switch network. Then we needed a LAN version of the internet, so it was a small step building on what had gone before. Now there's been 38 years or more of building on that invention.
- WHAT ARE YOUR STRENGTHS?
- I'm an engineer and an entrepreneur, and what I'm good at is communicating about those things, that's where I tend to add value. I can write computer programs and build hardware, and I've done a lot of that. And I can start companies; I've started one big one.
- But the way I do that, you asked what I was good at, is communicating about all that. Would you like to know my secret? The secret of communicating is listening. I'm a really good listener. Say something interesting.
- WHAT IS METCALFE'S LAW?
- Metcalfe's Law began its life as a sales tool. We sold a bunch of 3-node Ethernets to early customers and after about a year, they all came back and said, "This 3-node network did exactly what you said it would do, but it wasn't very useful."
- I was head of sales in marketing at the time, so I needed an answer to that question. I made this slide up that showed that the cost of a network goes up linearly as you buy my Ethernet cards, but the value goes up as the square, which means it starts small and then it gets big. Then there's this point at which the square passes the linear and that's the critical mass point.
- So, if your network is too small, it doesn't really do enough for you, but if you can get critical mass, then suddenly it takes off. So I made up this slide, gave it to my 12-person sales force, we went out to our customers who had bought trials and we presented them with this concept, and so they bought more.
- Our recommendation was they needed 30-node networks. They only had 3-node networks -- they had to go to 30 before they stood a chance of experiencing this critical mass. So we sold a bunch of 30-node networks and the good thing happened, they proved to be useful. The next thing we knew we were selling millions of them, and it was very exciting.
- But then many years later, in 1995, a man named George Gilder saw this slide, and he's one of the guys who made Moore's Law famous, so he decided to make Metcalfe's Law famous. He decided that slide, that sales tool, should be called Metcalfe's Law, and who am I to argue with him? So I've been defending the Law for 20 or 30 years now.
- WHAT'S THE VALUE OF A GOOD IDEA?
- In my experience, ideas are a dime a dozen. Just having an idea is great, it's fun to have ideas, and you need to have ideas, and it's great, but don't make the mistake of thinking that having an idea is really the cat's pajamas because they're a dime a dozen.
- So one of the indicia of a good idea is: do you know anything about the field in which you have this idea? Do you have some expertise that it's built on or some experience that it's built on? Otherwise, you just have an idea, and they're a dime a dozen.
- ANY HEROS?
- The name that comes to mind on my heroes list, of course, is Steve Jobs. He helped me start my company, 3Com. He tried to recruit me to Apple; I stupidly resisted. Then when he got that I was trying to start a company, he helped me start the company and he was sort of a friend for a big hunk of the '80s, so he's on my eternal heroes list. I defend him every time someone attacks him, but he was a difficult person.
- ANY ADVICE FOR NEW ENTREPRENEURS?
- I'm very humble. I think people should be very humble about how good they are at starting companies, because I don't think anyone's very good at it. And we're struggling to know more about it and we're struggling to share our lessons, but we don't know shit about starting companies. It's one of the reasons I like to say, startup, the middle 3 letters of your word startup are A-R-T. It is an art that we're practicing here.