NevBlog

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)

Full Size JPG part 1
Full Size JPG part 2

•  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.

• He doesn’t like the word “hiring.” He “recrafts.”
• The best people almost always have lots of options.

 

• 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.

• People confuse testimonials and word of mouth with network effect.
• It’s in my interest to get you to sign up.

 

• He likes saying “Ahoy” to greet
• Owns an island camp in Maine. w/ boats

Favorite book

1.  Altas Shrugged
2. The Selfish Gene

 

• Urgency and Importance
• Absolutely must do now
• Stuff you forget — throw this list out

 

• 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: