Notes - Bob Metcalf on Tim Ferriss Podcast

I took Notes on this episode with Bob Metcalf (founder of Ethernet, and cool dude that speaks to entrepreneurs here in Austin all the time):

Bob Metcalfe — The Man (and Lessons) Behind Ethernet, Metcalfe's Law, and More (#297)

@Bob Metcalf

MIT. Harvard Engineering, PhD
1973 invented ethernet
1979 started 3 com corporation, Now acquired by HP
Lived in Austin, TX. Lived here for 7 years
Polaris Venture Partners for 10+ years
Started playing tennis early, Peak was 1972, near end of PhD
Was captain of MIT Tennis team
Doesn’t play at the moment, want to leave 50 lbs first
Learned lots of this from tennis especially how to compete
- Likes to compete. Likes to win.
“What makes a good competitor?”
- some people will throw rackets or stomp around. Made it a point to stay calm
His coach would always say, “You only have to get the last point!.”
His parents weren’t very competitive so he thinks he got it from tennis.
Specialty was doubles. He liked playing w/ a partner.
In tennis hitting hard is good, but accuracy is far more important.
From tennis he learned the value of getting a coach

May 22nd, 1973 = Important date. He was in his office @Xerox in Palo Alto, he typed a memo outlining Ethernet.
- used 1/2″ thick coaxial cable
- “Ether” was medium thought to carry light, used that word because no one was using it anymore.
Ethernet is the “plumbing” of the internet. Its job is to physically carry packets around the world.
Google and Facebook play on top of ethernet
Previous transmission of bits was 300 bits/second
When he built the first Ethernet, it ran at 2.94 megabits.(2,940,000) (10,000x faster)!

At MIT ’64-’69’, became an engineer, did a small stunt at Harvard but realized Harvard didn’t like engineers.
- Rig hot CS research project was apparent. It was a well funded version of the internet for the Advanced Research Projects Agency of the Department of Defense.
- They got tired of buying new computers for each campus, so they tried to figure out a way to do resources sharing.
- Resource sharing was the first “app” Lol!

Initial packets switch sent bits one at a time down a wire.
A “packet” is a group of bits, into bytes, and then it has an address in the front. The “packet switch” then sends that packet to that address.
Transmission Control Protocol / Internet Packet = TCP/IP

“Metcalf’s Law” = The value of a network is N²
- Originally developed this guide to promote his 3-node network packets. And to sell more nodes, he used equation N²
- Was later written about in a book and dubbed Metcalf’s Law in 1995
- Could send email through this 3 mode network, but far more useful with way more nodes
- Cost of the network goes up linear, but the number of possible connections went up squared. (actually quadratic).

At MIT was first exposed to entrepreneur.
Met Steve Jobs, Bob Noyce, Bill Hewlett etc in Palo Alto, and took away! “If this person can start a company, then so can I.” You can see their limitations.
Xerox had a “charm school” that taught classes on business skills.
Learned from Steve Jobs you need adult supervision. Steve Jobs wasn’t CEO of Apple till 20 years later.

“You’d be surprised how many more order you get when you ask for them.”
People often “redline” at certain stages.
- Bob went from $0- $1 mil/mo
- Another person $1 – $5 mil/mo
- Another person $5-billion

People who operate on a different level. Different skill sets. 1 mil company different from $1 billion company. Some people have broad operating ranges some are narrow.

Never fire anyone alone. Always have someone [like HR around] w/ you,
- Just tell them, It’s already been decided. They either switch roles within the company or leave.
- Don’t give too many reasons, Preferably 0. “If you give a reason you have a pen pal.”
- We’d like you to succeed and move to a different role.

Have 3 qualified candidates (and if you’re rapidly growing) hire all 3.
Let them talk. Good salespeople often reverse conversation and make you like them, but then you learn nothing.
In beginning no one knows what a personal computer was, or what internet was. So was hard to recruit. As time went on it was easy.

Steve Jobs was enormously persuasive. Could win most arguments.
- Persuasiveness is about credibility, You can talk about missing and such, but they have to Belive you.
- Push recruiting to the people who will be working with that person.
- Tim’s example! “you can rate them 1-10, but not a 7 (it’s a lukewarm rating)
- Check references deeply. Backdoor references.

Steve Jobs went to Bob’s wedding, everyone fanned our store.
- Most of what he said was defending his high standards.
- He was amazing at gratitude, made Bob feel special by sending a limo and saying thank you and photographs with huge flash attachments, for Pixar toy story release.

Network Effect” N2— It’s quadratic, not technically exponential.

Favorite book

To do list ranks by:

Used to have an assistant, and they would schedule him for his meetings.
Now he got rid of assistant and it naturally screens out tons of useless meetings

Download these notes (and transcription) as a Google Doc: