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)
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@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.
- 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
- Altas Shrugged
- The Selfish Gene
To do list ranks by:
- 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:
