Xerox

In order to predict the future, it’s useful to learn about the past.

I recently stumbled across an inteview about Xerox with Steve Jobs, and I found it quite interesting.

From what Jobs explains, there are many companies which drive growth through sales and marketing.

It’s a fine strategy for companies like PepsiCo which already have a clear, unchanging product.

But it doesn’t work for high tech companies like Xerox which face threats more frequently.

Quarterly results are important to a tech company, but if the company has the wrong priorities at critical times, a company can quickly lose relevance.

Therefore, we should be careful to note the “category” of companies we are invested in to determine whether those companies have their priorities correct at the current time.

Some important things to note:

1) Engineers and academics are most efficient within early-stage tech companies that must innovate as a first priority. Examples include Tesla and OpenAI, which constantly invest a lot in R&D to differentiate themselves as much as possible.

2) Salespeople are most efficient within most late-stage corporations with established offerings. Examples include PepsiCo, McDonald’s, or perhaps old, monopolistic tech companies with established products.

3) You can glean the “category” of any company by examining its current CEO. A mature company has a salesperson as the CEO, and will typically acquire other companies to quickly address any market threats. Meanwhile, a less mature company has an engineer as the CEO, and will typically innovate in-house to quickly solve market inefficiencies. Mature companies may purchase these newer companies to remain relevant.

4) A company which does not employ points 1) and 2) efficiently is likely failing to prioritize its urgent needs, which can destroy a company like Xerox prematurely. In other words, companies which strategically fail to allocate the right type of resouces during critical times, especially after early innovation success, can still lose relevance by becoming too “complacent”.

All businesses are different. There’s no “best” business model, and there is no “best” career. But history can teach us to identify the “category” any company belongs to, and can teach us how to find career paths that are worthwhile to us and the company.