Building Blocks of a New Society:

John Sculley discusses Converging Technologies

By Educom Review Staff


Sequence: Volume 30, Number 5
Release Date: September/October 1995

John Sculley is chairman, CEO and founder of Sculley Brothers, a
high-technology marketing, consulting and investment firm specializing in
new companies and emerging markets. He was chairman of Apple Computer for
ten years, and before that served as president and CEO of Pepsi.

ER: Let me ask you about the commercialization of the Internet. As you are
well aware, there are some Internet old-timers who recoil in horror at the
whole prospect of the commercialization of the Internet. How do you feel
about that?

Sculley: I think it's inevitable. Any network with such broad public access
is going to draw heavy interest from the commercial users, and the
tremendous success of the Internet makes it a very obvious place for the
people who are willing to spend the time to figure out how to add the
security and add the services that make it attractive. It's also a much
better model than most in terms of how new services will develop
commercially, because it is one that is entirely driven by the marketplace
as opposed to someone coming in with a preconceived idea of "here's what we
think you want, and therefore this is what you'll have to buy." So I think
there is a very high probability that there will be commercial services on
the Internet. What it comes down to is whether there is a way for people to
still be able to keep the model that's made the Internet so successful,
which is "you ask, you get," as opposed to most commercial advertising
models, which is "you get, without necessarily asking." So I think finding a
way to deal with those two concepts is going to be fundamental to the whole
existence of commercial services and the more traditional Internet services.

ER: So you think that signals a systemic change in marketing?

Sculley: Well, I think in focusing on the idea of one-to-one marketing,
being able to customize to the individual is certainly a systemic change in
marketing, because without digital technologies and all the things they
imply it would be impossible to have one-to-one marketing on a very broad
scale. So I believe that there are going to be entirely new experiences that
will come out of that customization which we really haven't seen yet. Just
as the first movies were really film-staged plays or the first television
was really radio shows with pictures, we really don't know what this new
experience is going to be like. The only thing we can be pretty sure of is
that it is not going to be like anything that we have known before. It isn't
going to be television over the Internet. It is going to be entirely
different, and so it is a combination of the new experiences, which is
really a new community, that is organized around people's interests, as
opposed to being organized around geography and the ability to
customize�these are going to be building blocks of an entirely new kind of
society.

ER: So your thoughts extend beyond marketing to...?

Sculley: Well, you see, I always thought that marketing is not a function,
that the best marketing is integrated into what you are doing at the
systemic level. I think it is only more true as we move into the world of
visually-enabled services and products. We saw that with total quality
management, TQM. It took 30 years for people to understand Dr. Demming's 14
principles of how quality is really systemic to a successful organization. I
think the same thing is going to happen over the next several decades�that
the world will understand the tremendous advantages of looking at marketing
systemically. And, really, at the center of marketing is not technology, is
not sales, is not products�at the center of marketing is consumer behavior,
human behavior. It's behavioral changes that really are the major leverage
points of marketing, and we are going to be going through the most
phenomenal period of human behavior changes that perhaps we've ever
experienced.

ER: Do you see marketing as a form of education?

Sculley: No, I don't. I see marketing as being more important in terms of
how we deliver education, because education in the digital age is really
more about learning than it is about teaching. It is more about the
recipient being in control of the experience as opposed to the instructor.
And in this day and age when recipients can choose whether they want to
experience this or not (they can go to something that is more interesting if
this doesn't interest them), and you have people growing up in a world where
they are conditioned by MTV, by arcade games, location-based entertainment
experiences�all these very high-intensity, high entertainment value
experiences�it's going to be increasingly important that education learns to
deliver its product, when the recipient is in control, with as much of an
entertainment experience as the things it is competing with.

Unfortunately, we are not just competing with books anymore. We are
competing with these very high-entertainment-value experiences. That's what
people are becoming very accustomed to, and I don't think we are going to be
able to isolate the academic world from those kinds of experiences. We are
going to have to learn how to adopt marketing techniques into the academic
world as much we will in the commercial world, or we won't be successful.
It's pretty clear that there are substantial parts of the educational
system, particularly in K-12, that are failing today. As we rethink the
product of education, I think we are going to have to rethink the marketing
of that product.

ER: Are you basically an optimist about this? Ten or 20 years down the
road�how do you see the fate of education and the fate of the world?

Sculley: I'm basically an optimist. There will be some tremendously exciting
advances in education because we are asking the right questions today, which
really comes down to education being centric to the person learning, not
centric to the person teaching. And all the new technologies are going to be
increasingly more supportive of a learner-centric model. So I am very
optimistic that we are going to have some dramatic improvements in terms of
learning tools and the motivation for people to be interested in learning as
well.

If I'm pessimistic about something it is that I am not sure we will be as
successful with all segments of the society as we would like to be, because
it is not clear, for example, that you can separate the ability of someone
to learn from the environment in which they grow up. So it is going to be
increasingly more challenging, I think, to make sure that we don't have
large segments of our society who are basically left out of the opportunity
to take advantage of what may be some incredibly exciting advances in
learning tools and learning experiences.

Another thing that worries me, looking out into the future, is that it is
not clear that even training everyone for the new kind of work in itself is
going to be sufficient to satisfy the needs of society, because it is not
clear that there is enough work to go around. The new kind of work just
doesn't require as many people as the old kind of work. While the skills are
clearly going up with knowledge workers, the need for blue collar workers is
going down even faster, and we find a huge gap in terms of segments of our
society who just aren't motivated to have jobs, and may not have either the
motivation to learn or even access to some of the new learning technologies.
So I think there are some very challenging problems that are going to have
to be addressed over the next 20 to 40 years.

ER: Do you think it is possible that even the demand for knowledge workers
will decrease? I mean, the demand for movie stars�actors�has decreased over
the years. We don't need as many actors when you have movies that can
project one actor millions of times. What about star programmers? You don't
need as many star programmers, do you?

Sculley: Well, it seems that every time we have tried to focus on a
potential dilemma like that, we have always been surprised at things turning
out a different way. If you go back to the 1930s, there were a number of
people saying the telephone system would never expand much beyond what it
was because you couldn't find enough telephone operators to be able to plug
in the jacks, to connect people to all the phone calls that would be made.
And obviously it didn't turn out that way. Technology came along and solved
that problem. So we may find solutions to some of these problems that we
can't even contemplate at this time that will be available to us 20 or 40
years from now. But I think that at this point, when you look out into the
future, the number of knowledge worker jobs is probably going to be less in
terms of percentage of jobs in the work force than what we would like it to
be, and I think that it is going to be a challenge to figure out how we get
enough work to go around for everybody. The minimal, sort of "threshold"
skills are clearly going to go up, but it is not clear that even that is
going to be enough to guarantee everybody a job. I think that is going to be
a hard guarantee to make.

ER: Do you think the information highway, as it's dreadfully called, is
going to make the problem worse or leave it alone or make it better?

Sculley: I think one of the great miscalculations ever was calling this an
information superhighway, because it isn't a highway at all. A highway
suggests that they connect you from one place to go to another place, and
this is much more of a web or a marketplace than it is a highway with access
roads and ingresses and egresses. I believe that once we do start to connect
the world up into these interest groups, we'll be organizing people in ways
that are very different from anything that we saw in the industrial economy
where national boundaries were important. What are the national boundaries
of cyberspace? What is the sovereignty of cyberspace? Who is in control of
the information that crosses the border?

All of these are issues that we don't have easy answers to. So I think as we
look at the impact of all of this on society, it is a lot more complex than
just "how do we get everybody on this new information superhighway?" I think
that is a simplistic metaphor that is probably not useful because it is
getting us to focus on the wrong problems -- the wrong problems meaning that
it is not really terribly important which technology ultimately wins.

The highway itself, if there is any kind of a transport metaphor there, is
just a commodity. We know, ultimately, that the bandwidth is almost free, so
it is far more useful, I think, to start to look at other things�when we
talk about the convergence of the three C's for the information
superhighway, its been communications, computing, and content. I think that
more and more as we begin to think of this as the information supermarket,
we realize it is really the convergence of customization, of community (of
an entirely different kind than we've seen before, but we're getting early
indicators from the Internet what that might be like), and of commerce. At
the center of all that is the ecology of human behavior, and it is that
ecology of human behavior that is really resulting from the convergence of a
new kind of community and a new kind of commerce and a new level of
customization beyond anything we have seen before. So I think there are far
more important questions dealing with that than there are with
communications technologies or the computer technologies or the repurposing
of content to work in a new digital world over a highway.

ER: As an optimist, what would you say to the pessimists and to the
non-believers? In Cliff Stoll's book, for example, that you may have
read�Silicon Snake Oil�he is very disillusioned about the side effects, the
unintended consequences, of overhyped technology. What do you think of that
trend of thought?

Sculley: Well, we know already, even though this is very early in the game,
that there has been a tremendous amount of over-hype and excitement about
one direction, and six months later there is excitement about another
direction, and then six months later there is excitement about something
else. So I think we have to sort of sober up and take it for granted that we
do not really understand yet what this is all about, which I consider to be
a positive statement, because it means that there is something very big
going on here�that is a fundamental change in the ground rules that is going
to touch all aspects of our economy, our society, how things take place on
the planet. And so we shouldn't be discouraged just because we don't
understand it yet.

I believe that there are going to be moments where we are going to realize
that being able to surf the Net isn't a replacement for sex, you know. There
are lots of things that are better when you can go to a library and read a
real book or when you can walk down a street and see real people or sit in a
cafe and talk to real friends that we can't yet simulate with surrogate
experiences using technology. And yet much of the early hype suggests that
we have already found the replacement for those pretty conventional
experiences.

On the other hand, I imagine that 20 or 40 years from now we will take for
granted entirely different kinds of experiences from what we know today, and
many of them will be very positive. And they will be rewarding to our lives
and they will probably make it a lot more interesting to be around. So I'm
an optimist in that. I think one has to be careful not to over-react too
quickly because all of our content is shaped on where we have been and we
are just at the beginning of the road. This is just the beginning of the
journey in what this new networked society is all about.

ER: You are a visionary yourself so you should be good at identifying other
visionaries. Are there any people that you think are particularly heroic in
their vision of information technology and/or education?

Sculley: Well, I think anyone who calls themselves a visionary or even
suggests that they are a visionary really runs the risk of acting like a
charlatan. "None of us really knows" is the honest answer. All we can do is
have a set of ideas, and I'd much rather focus on people who have
interesting ideas at this interesting time than people who claim to be
visionaries, because it's just too difficult to really know how all this is
going to turn out. What we do know is that a lot of things are happening now
at an incredibly rapid pace, and that there are moments when the insertion
of new ideas, when you have events colliding, can have a tremendous impact
on the future. And I think the best we can say now is that there seem to be
a lot of people who are coming up with a lot of ideas of what they think can
happen as technologies start to collide, bring industries together. And I
think the experience of the Internet suggests that it isn't going to come
from a small handful of so-called visionaries, it is really going to come
from hundreds, thousands, eventually millions of people who are out
experimenting with things. Some things that turn out to be successful will
be complete surprises�no one can predict either what they are or where they
will come from. And it is those surprises that I think are far more
important than anything that would come from supposed visionaries.

� 1995 Educom.



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