Elephants Can Dance

Tuesday, June 23rd, 2009

Steve Blank was at the Stanford library, going through the papers of Fred Terman, the professor who encouraged Bill Hewlett and David Packard to start HP, when he came across this letter from Hewlett back to Terman:

At the time, HP was a 17-year old company with $20 million in test equipment sales and 900 employees. It was still a year away from its IPO.

Ten years later — at Dave Packard’s insistence — it introduced its first computer, the HP2116A, as an instrument controller.

Thirty-three years after that, it split into two companies, which have gone their separate ways:

  • Agilent is a $5.8 billion dollar test and measurement company.
  • Hewlett Packard (HP) is a $118 billion PC manufacturer — the largest in the world.

And that’s why Steve Blank says that elephants can dance — under the guidance of either a founder or an outsider with fresh eyes:

Intel was founded in 1968 to make memory chips (bipolar RAM) but 17 years later they got out of the memory business and become the leading microprocessor company.

IBM had a near death experience in 1993, and moved from a product-centric hardware company to selling a complete set of solutions and services.

After failing dismally at making disposable digital cameras in 2003 Pure Digital Technologies reinvented their company in 2007 to make the Flip line of camcorders.

Apple was a personal computer company but 25 years after it started, it began the transformation to the iPod and iPhone.

A few carriage makers in the early part of the 20th century made the transition to become car companies. A great example is William Durant’s Durant-Dort Carriage Company. Durant took over Buick, in 1904 and in 1908 he created General Motors by acquiring Oldsmobile, Pontiac, and Cadillac.

Leave a Reply