Sandeep Chennakeshu 5:48
No, actually, that’s actually incorrect. Okay, correct
Rolando Rosas 5:52
me,
Sandeep Chennakeshu 5:53
the godfather of Bluetooth is Dr. Niels read back. Ok. He was my boss and the CTO at Ericsson mobile phones, their absolute genius. He lives in Florida today. And he was the one who came up with this concept he actually wrote down on a napkin is to write things down on little pieces of paper and handout little tasks. And he told me, he said he invented and made the link. And I had a research team. And there was some very bright guys in the research team, there was a guy called Yap Hartson and another guy called Sven Marty son, they actually did most of the early work and the pioneering work. Now a number of us in the team also contributed. But really, I think it was Niels redbacks idea. And he came up with his idea with three really fantastic use cases. And he said, Look, the first use cases, imagine, you know, in those days, we didn’t have Wi Fi widely deployed. He said, imagine that if you’re on a plane, you can use your laptop. Okay, but you have to turn your phone off. When you are, when you get off the plane, you can turn your phone on, but your laptop is closed. What if these two devices could talk to each other over a short link. So on the plane, you can do email and whatever you want. You close your laptop, put it in your briefcase or on your bag, you get off the plane, you turn on your phone, and they will automatically synchronize with each other. And it’ll send off your emails, and then load your new emails or whatever you whatever messages whatever into your laptop. So when you go to your hotel, or you know your business travelers, it will be a real boon. Another idea was, hey, what about playing music without wires, you know, stuck to your years. And the third was hands free in cars, so that you basically couldn’t be distracted. The genius of an idea, and we a lot of people contributed but I think I would give the most credit to nails. And Yap Hartson and tisserand, Madison, both very good friends of mine and brilliant people. There, there are a whole bunch of others in the world,
Rolando Rosas 8:12
you were on that team. So So calling you the Godfather is probably the wrong word. But you were a viewer, contributor or player on the team, you’re you’re part of the team. So if you’re on a soccer team or football team, you you were there at that, I would say almost the origins of this Bluetooth, initiate this project that got off the ground that now is adopted by the world.
Sandeep Chennakeshu 8:37
Yeah, I was head of research and advanced development. So these ideas normally came to me to this to be work on and, and at the speed at the same time. We working on three super exciting projects, Bluetooth one, we were also inventing the architecture, and the system idea behind 3g for mobile phones. Not on the network side, but the 3g part or on the phone side. And at the same time, we were inventing a mobile satellite system. So in the early days, when you had a geostationary satellite, trying to provide Maritime Service, you know, you had big bulky phones really big, bulky phones, and how about we can have a typical cell phone size phone with just a special antenna? And could we still make it work? Because it’d be so convenient to carry. And that system is called Asus today. And it’s and it’s used all over Southeast Asia for maritime service. So it was a fantastic period where there was a lot of innovation. And these were three of the primary innovations during that decade.
Rolando Rosas 9:56
Wow, it’s just fascinating. I know that you know From having some friends that were in that, in that business or in the you know, the bones and the terminals are huge, you know whether the Thuraya whether it was Asus, which, which uses an Ericsson phone, whether you’re talking about Inmarsat, again, those big, big bulky things. This, this was a solution for a lot of folks that were in need of a product like this. And
Sandeep Chennakeshu 10:26
Raya, Raya and Asus are probably using the same standard.
Rolando Rosas 10:32
And the RIAA came when they first introduced their phone, it was much smaller than other solutions.
Sandeep Chennakeshu 10:39
That’s right. And that is because of the way we architected the standard. There’s and it was, it was revolutionary in the 90s. And you have to take into account a lot of considerations on the satellite, in order to make sure you could make his phone that small.
Rolando Rosas 10:59
Right, it was, it was a big game changer. You know, I recall, you know, my mother used to work at cellular one, when cell phones were being rolled out. And it was a big Motorola brick phone that everybody has seen, right, you know, put it in, it’s big, it was heavy. And the innovations like that’s why I was talking about the T 28. When I looked at that thing, it was as small as this BlackBerry that I have in my hand. And the quality of audio that it could deliver was amazing the reception on again, the reception, it hardly dropped the call. And at that time in the early 2000s, the networks were still not what they are today, you know, where you’ve got towers everywhere. So speaking about cell phones,
I want to play a clip for you from from Tesla that has announced the smartphone and you are the perfect person to give us an understanding of maybe what’s going on or maybe some thoughts as to what’s the likelihood that this could succeed given the uphill battle that you know so well when it comes to this industry, and the graveyard of other players that are there as well as the current incumbent. So Ori go ahead and roll that clip for Sandeep,
Guest Speaker 12:22
ation and anticipation the tech world is abuzz with excitement as Elon Musk, the visionary entrepreneur behind Tesla and SpaceX has finally unveiled the highly awaited Tesla phone model pie breaking away from the norms of the smartphone industry. Musk’s latest creation promises to deliver a revolutionary blend of cutting edge technology, innovative features and seamless integration with Tesla’s overarching ecosystem.
Rolando Rosas 12:47
What are your thoughts on what you just heard?
Sandeep Chennakeshu 12:50
Well, it’s a it’s a bold idea. You know, phones have changed significantly, since when we had to build everything ourselves. Because we were completely vertically integrated. But today, there is an ecosystem that supports third parties building phones. So it’s moved away from a technology game into industrial design and brand.
Rolando Rosas 13:18
r&d matters. So what I hear you saying,
Sandeep Chennakeshu 13:21
absolutely, user interface, and an application store, and a distribution channel, right. And if you have that, it’s possible to actually build something that people will buy, especially if it plugs into an ecosystem that you are dependent on and brings you convenience. Well,
Rolando Rosas 13:47
I think, you know, if I, if I were to give you a couple of companies along Tesla’s there for now, I want to put them to the side for a second because the challenges today may be a little bit different than when some of these companies are around. So I want to ask you, what happened to some of these companies that peaked and some of them are no longer there Motorola, what happened to Motorola in 2004? Or they’re about they peaked palm 2005 Nokia 2008, l g, around 2009. And one of the oldies but goodies, AIDS, TC, if you can remember HTC when 11. Why? Why is it so difficult? Or was it so difficult for these hardware manufacturers to stay on top? And can do or do you think that Tesla will have a different path than some of these other companies that I just outlined?
Sandeep Chennakeshu 14:44
Yeah, I think it comes down to a couple of things, you know, each generation brings a different disruption. Right? And you have to basically intersect those trends. If you miss the trend in a hyper competitive market. You could destroy it. These are like giant waves that just crash and just wash your shore. And it’s very difficult to recover. So the if you take, for example, when Apple came out, they realized that the killer app was the user interface. And that they realized that people wanted an app store, they taught people to use the phone differently. And that’s what people craved. And everyone missed it. And very soon, you got used and you know, there’s a, there’s a certain stickiness, when you have applications in a user interface. And stickiness is a barrier, which protects you against competition or the face of competition, people are loath to leave you and your ecosystem. And so they were able to create a high enough barrier for people not to leave. So many of the others it was, you know, they just didn’t offer the same capabilities. In the in some of them failed, because they lost out on distribution. And on the economics, the phone business is a very low operating leverage business, meaning that it has high variable cost. Okay, so if you don’t have scale, and you don’t have large enough distribution, you cannot afford the costs of running the business.
Rolando Rosas 16:24
So you can’t be a niche player in the phone business in the in the smartphone business? No,
Sandeep Chennakeshu 16:30
unless it is actually feeding from a bigger business. And it is incorporated in it. It’s impossible, because the margins for example, let’s assume let’s just do the math, right? Let’s assume that a phone company can make a 30% gross margin. Okay, some apple probably makes more. But let’s say 30%, okay, when I was running a phone business, that was a good margin, you spend 7%, on r&d To remain competitive, you spend 7%, on sales and to basically be competitors, 14%, you spent 4%, on marketing, that was 18%. And then you had intellectual property costs. You know, in the telecom business, so many people have patents, essential patents, that everybody collects at home. And that could be anywhere between 5% to 13%.
Rolando Rosas 17:25
On the patent, that you’re paying, essentially the royalty on that. That’s right. So
Sandeep Chennakeshu 17:29
if you’re basically on the low end of the scale, you’re doing okay, if you’re on the high end of the scale, well, you’re not making any money. Because if your gross margin is 30%, and we just calculated that you are at 18%, and add another 10% to that, or even 8%. Now you’re at 26%. And if your gross margins 30%, you got 4% at the bottom line, so any mistake and wipe that out. So it’s very, very hard to be in business.
Rolando Rosas 17:55
Wow. So it’s a very tough hill to climb. And it can be very low March. So so like you’re saying, you have to have scale, if let’s say that is where you’re you land at foot, let’s say Ford F in the in the single digits, you really need to crank out units. In order to survive,
Sandeep Chennakeshu 18:13
you need you need the economies of scale, because that gives you purchasing price leverage. It gives you manufacturing leverage, it gives you the ability to afford what your distribution channels will charge. But brand matters equally, and the ecosystem matters. But so if you can dovetail into an ecosystem that’s thriving, and people adopted, maybe it has legs. Well, and
Dave Kelly 18:41
that’s why they Elon had mentioned that, like they’re trying to put something within that Tesla ecosystem. So I wonder if that might stick
Sandeep Chennakeshu 18:49
to that. I don’t know at the moment. I haven’t studied it. But you know, it’s a bold move. And today, he doesn’t have to build his own chipsets, he can get that from companies like Qualcomm, or MediaTek. And, you know, there is an operating system from Android. You could use that or you could build one yourself, it’s going to be a little more expensive to do that. But you got to find a way to differentiate, because there are some very competitive technologies out there. So you’ve got to find something that’s going to create a stickiness to stay on that ecosystem.
Rolando Rosas 19:26
Well, I want to I want to probe you on that because there are there three players really today that are dominant. You’re looking at the new the new players outside of Tesla that are really strong apple in 2007. They released the iPhone as we know it today, Samsung, in 2010 released the Galaxy S which marked their entry into the smart the high end smartphone arena to try to compete with Apple and now Huawei, which I would not have imagined if you said In the if you and I were sitting at a cafe, you know, 10 years ago, and you’re like Huawei, they serve just the Asian low end market. They’ll never compete against Apple, or Samsung, they introduced their version of a smartphone in 2016, the p nine. Now enter Tesla, with their pie, you know, do you think, given these three very strong players, and probably this, we could have had the same conversation in 2005, when we were looking at the incumbent? Do you think there is a path there for success? Or for the pie? For Tesla?
Sandeep Chennakeshu 20:42
It’s possible, it’s, it’s definitely possible, you know, depending on what their strategy is, right, and once you get the adoption, I mean, the key is to get the initial adoption. Okay. And once you get the initial adoption, a lot of things can happen. I mean, a classic example is I’ll move away from and move away from these three companies, but look at geo in India. You know, when they started, they were, I think, eight operators in India. And within a ridiculously short time, they had like 100 million phones on their network. And today, they are the dominant network and the others are not around. And they are one of the few networks in the world that can can make money on a $4.50 cent ARPU, which is crazy. So so there are always disruptive models, that but you know, I haven’t studied this well enough to be to have an opinion.
Rolando Rosas 21:45
Well, let me ask you about disruptive models, because one of the things that you shared with me is you can be, let’s just assume, I Elon found a way here to be disruptive. But you also said to me that the one we spoke and I’d love to see how much you can talk about this here with us is that you were working with your team back in the Sony Ericsson days, on something years ahead of the iPhone, but business decisions were made otherwise, to go in a different direction. Can you talk a little bit about that?
Sandeep Chennakeshu 22:19
Yeah, I think again, you know, Neil’s Rebbeck had this vision about building a phone with a touchscreen. And, you know, we, along with Nokia and others, we found this group called Symbian that built an operating system. It was UK company, it was Scion, it was Nokia Ericsson, Motorola, that giant and we basically started Symbian. And they built a very nice operating system. And there were two versions, there was the one version which was one hand operated and the other one, which was touchscreen. In those days of the stylus, you had to pick up, you had to use a stylus because it was a resistive touch display. Capacitive screens were not available at that time. So Ericsson and Motorola both came up with two of them. Each of them came up with a touchscreen phone, Motorola came out with the phone called the tai chi, which was a very good phone. And later, you know, I mean, at the same time, not later, same time, Ericsson came out with this full screen, icon based product called the P 900. was first called the P 800. The P 900. Had the color screen. And it was revolutionary. It is the best phone I’ve ever used. I actually have it on my on the wall behind me. And fast forward a few years later. And by the way, you could do email, you could tag messages, you could do everything you wanted.
Rolando Rosas 23:54
It was ahead of his time. I remember
Sandeep Chennakeshu 23:56
time, you know, this was in 1999. Sorry, 2000 2001. It was just the best phone ever. Actually, ice. I stopped using it in 2006. It was that good.
Rolando Rosas 24:08
Run out of network was running off of
Sandeep Chennakeshu 24:12
actually I was forced actually by the company to change my phone because they wanted me to use another phone. Anyway, but in 2000 And I remember you know, sitting with my when we found Sony Ericsson, I was the CTO and I was sitting with my boss and I tell the story in my book. My boss at that time was very visionary guy again. I was fortunate first to work for Neil straight back and then to work for Katsumi Hara. Dr. Hassan was also brilliant. And a very product oriented guy and we were sitting in a restaurant in London and chatting about hey, roadmaps and cool ideas. And he told me that Sunday Pinot the real killer app on the phone is the user interface. He said he said You know, this stylus is not good, can you take the P 900, make it a capacitive touch display. And we just shown the world with the D 610. That we could do 65k colors, you know, the D 28 was only 4k colors, but the D 16 was 68 colors, or 6568 color colors. So I said, Okay, let’s go to the next generation, let’s get a really good color screen. And it’s going to be capacitive use your, your fingers to navigate. And he said, Go and go to sony go to Shinagawa. They’ve got a lab. In, in, in, in the guy was near Tokyo. Yeah. And he said you you go to the one of the labs, and they’ve got a beautiful interface called the feel interface, where you drag and drop, you pinch, you scroll, you do all this thing with your fingers and do the genius interface. And we will say, Okay, let’s combine the two and make this phone a little thinner. Right? And a little longer and brilliant idea, then I think, and this was way back in 2004. Okay. And, and I think for various business cost cutting reasons, we decided not to do it. Now, we were very successful with other phones, multimedia phones, which catapulted the revenue to three times what it was, but it was probably the biggest mistake we made. Because it was the precursor to the iPhone, and it was proven. And we just didn’t go ahead and do it.
Rolando Rosas 26:31
So you had the killer exe, you would say the killer app, which in this case was the touchscreen? Yep, that improved on the user interface that you already had that was already proven? Yeah, that was a that was by 5x. I remember the stylus had to be pressed on the screen. And the pressing of the screen is what allowed it instead of like with your finger today, where you it recognizes that movement, right? That’s correct. And so you come out, you come up with a product that’s innovative, you know, we’re gonna kill it. Talk a little bit about that decision. Because I think organizations, whether they’re small or large, are always in this, especially if you’re an organization that’s in the products industry, and you want to come up with something that push and pull between what our r&d team has in what they’ve innovated. And the business unit that’s making the dollars and cents on the launch of those products. Where’s the what happens it like this is a classic case of potential app killer, and then it gets shelved. And then now some innovator boom, literally, within a matter of two years, drops the hammer on everybody.
Sandeep Chennakeshu 27:45
Yeah, I think I think the answer is really conviction. And certain decisions. So if you look at the reason I admire Steve Jobs so much is that he had conviction. You remember, he had sold over 400 million iPods. And he realized that the iPod had limited days. And he had to have the cellular connection. And that’s how people were going to listen to songs. So he transformed to the iPhone, even though you’re a very successful iPod business. We, on the other hand, decided that maybe we didn’t have the conviction to do this phone. Interesting. And a few years later, of course, Sony Ericsson bought the the touchscreen interface of from Symbian called New IQ, but it’s too late. And Steve, Steve Jobs understood that it was not just the user interface, he also needed to create that ecosystem and hook them on with all the applications. And so, you know, if you look at what Apple’s doing systematically is creating more and more stickiness. Today, for example, if you look at Apple Pay, that’s an additional level of stickiness. After some time, you know, you, you basically find that you get used to certain things, you get used to Siri, you get used to Apple Pay, you get used to a number of things that you say, Okay, switching is still difficult.
Rolando Rosas 29:10
Well, then you’re you’re all in. That’s right. It’s very counter. counterproductive, not, not only that, but I remember a term that I had never heard of in my life, up until when Apple introduced their, their, their iPhone, which was BYOD that didn’t exist when BlackBerry was the dominant phone because the it was the de facto device in the corporate world. There was no Bring Your Own Device. That’s right. And as the iPhone grew traction in the consumer space, and people were like, you know, oh my god, I love it. I love it. I love it. I love it. I love it. CEOs were like, hey, it, fix this. I want it. I want it I want to use it for for work. And there was a lot of resistance In but even still with the it being resistant, they said no, no, no, no, no, eventually, that all crumbled when third party solutions came onto the scene to do BYOD. So you could have any, essentially, it was the iPhone that was forcing that hand in order to happen. And that, essentially, I would say, in my opinion, you worked at Blackberry. So you had no forced the the it broke the monopoly that that BlackBerry had on the corporate world, as well as the government sector, which was a strong user here in the US of blackberry.
Sandeep Chennakeshu 30:32
Now, you’re completely right, because what happened is, it’s exactly as you explained, Rolando. What happened is that the appeal of this consumer device, it was both Apple’s phone as well as Samsung phones. And, and what happened is a nobody wanted to carry two devices. So the issue was mobile device management. And a number of firms came up with mobile device management. And that’s exactly MDM, they came up with this. And they were basically able to convince CIOs that hey, on a single pane of glass, you could manage the other devices and had an option. And the security paradigm was broken. That as server
Rolando Rosas 30:32
Boy, that was everywhere, because I live right here outside of DC. So security’s always, you hear it from all these agencies around here. And there’s no way you could beat our beds server. Right?
Sandeep Chennakeshu 31:30
That’s probably, you know, back when he had brilliant security, but some point, you know, when something is free, just good enough, maybe good enough.
Rolando Rosas 31:40
You can’t, it’s hard to beat free, right?
Sandeep Chennakeshu 31:42
It’s very tough to be free.
Rolando Rosas 31:46
But yeah, you’re you’re absolutely right about stickiness, and the iPhone, and I, you know, I commend his jobs for being a visionary in you know, you said something that a word that I love, I love the word curious, because curiosity opens the doors to thoughts, ideas, and things that you weren’t thinking about. So it made me think about before we went on today, are there famous people, or people we know that had this at their core or said stuff about curiosity, and actually, I found some Albert, Albert Einstein famously said, I have no special talent. I’m only passionately curious, Walt Disney. He said, keep moving forward, opening new doors, and doing new things. Because we’re curious, Steve Jobs himself. He spoke at the commencement speech, the famous one he gave in Stanford, and spoke about the importance of curiosity, and following one’s on interest. In the last I got a few more, but I just make it short here. Bill Gates is known for his loving of reading, and curiosity, in problem solving, and innovation. So how do companies take this to the bank? This curiosity thing? How do they build it into their DNA? Is that something that’s possible?
Sandeep Chennakeshu 33:12
No, absolutely. You know, in my book, I talk about building culture and companies. It’s an entire chapter. And there is two parts to building culture. I call it raising the right army, which means changing behavior. And the other is leading that army. It all starts with the leader. Right, and there are some and there are five characteristics I believe these leaders need to have. One is clearly vision, with conviction. The second is managerial courage. But I won’t go into all of this. And the third one is leading by example. The fourth is the ability to communicate very clearly. And the fifth is curiosity to evolve. Then, if the leader has this curiosity to evolve, what they will do is periodically, they will have sessions, where they bring in their management and sometimes extended management, and challenge every aspect of the business, ask people to think out of the box, ask them to think where is the attack going to come from? instill a certain sense of paranoia? You know, and if you don’t have that, you know, you won’t you won’t be curious enough to look. And if you are arrogant, you know, the thing is, ignorance and arrogance is a very toxic combination. So one cannot basically have that right. You have to basically believe that somebody is going to disrupt your business because there are so many clever people with clever ideas. And you want to disrupt your own business before that happens. And unfortunately, you know, I’ve talked about this controlled experiment that people do. And you and I spoke about it earlier Rolando on you know, in the free Colin, there’s an experiment that executive coaches do. And they have people pass a basketball between two people. And all these executives are standing in pairs and passing a basketball at without dropping it, because that’s the exercise. And the person in a gorilla suit runs across the room. And they ask everyone, Hey, did you see the gorilla? And nobody did, or very few did. But that’s exactly what happens with disruption when you’re consumed with your day to day work. And you don’t create time to actually think, how are you going to get disrupted? And what are you going to do and by the way, this disruption can doesn’t have to come only from technology, it can come in sales, it can come in marketing, can come in business models, it can come in new financing schemes, so many ways. And so you have to be ready to look at that. And challenge every aspect of your business regularly in order to build that curiosity. And once you do that, it becomes infectious. And it gets viral. You know, I, I heard
Rolando Rosas 36:04
when I was coming out of college, I lived in a in Minnesota, the backyard of 3am. And I didn’t view they’re coming out of college. And one of the things that really impressed me about three M was that they they’ve invent muscle, a lot of things that they’ve been inventing for years. But one of the things that it sounds a lot like what you just said, they’ve built it into the culture I was told that they give on Fridays are different parts of the day of the week, for different departments, time time, to just think about products that could be developed. Because the next great idea could come just as much from an engineer, as somebody from sales. And they built in time into the week for people to have downtime. And just think about what could be the next thing that three M could come out with, in order to have the next post it notes, right, in order to, you know, make improvements on the next version of impulsive notes. So it’s really interesting how some companies like 3am explicitly habit as part of their cultural culture. And some we know that some don’t, and they don’t last too long.
Sandeep Chennakeshu 37:19
Yeah, you know, Erickson, the, you know, I always say the best company I’ve worked at my entire career was Erickson. And it was in the 90s and early 2000s, and started in the late 80s. And what Erickson did regularly was quite amazing. They would bring together 3040 People at offsite meetings regularly to three times a year. Okay, we’d meet in and for three days. And we would break up into groups and think about all of the things, it is very structured, people would ask good questions where we try to answer like, how is the business going to be disrupted? What are our consumers really asking for in our products? What will they ask for in a few years? How should our networks evolve? You know, all of these things? So it’s kind of interesting that, you know, I still remember vividly that we had barely started working on 3g, you know, this was 9094 95. Right? And we were working on 3g, okay, 3g was coming out in like, 2002. Three. But in 95, my team was already thinking about 4g, and this concept of doing OFDM over multiple antennas, and you know, what people call MIMO. Today was we thought of it already 9519 90
Rolando Rosas 38:47
You hold up? Hold up a second Sandeep, you know, you know, what, what, what 1995? What? What, I can’t believe that. That is an amazing thing. Look, if you’re a you’ve been in the telecom business, like I have for over 20 years, you can understand and appreciate the fact that that is an amazing thing. That that way back then, almost 30 years ago, you all were working on that way ahead of anybody else.
Sandeep Chennakeshu 39:20
And even they know that there was more. I mean, there was a network team already thinking about how to make the core network completely packet based, right and no longer circuit switch. So no, because we had already implemented CD PD and edge and all these things. So it was a natural evolution. So I think, I think Erickson really encouraged it. So it was it was a fabulous environment, you know, and when we had recessions, they double down on the investment in r&d. And that’s, that was the culture that I it was fascinating for a young engineer, to be given that opportunity. You know, and other companies, I’m sure, like Bell Labs did a lot to Bell Labs.
Rolando Rosas 40:06
It’s interesting. At that round time, you had Bell Labs, which eventually spun out and became Lucent, you had at that time, also, Nokia was getting their footing off the ground. You also mentioned, Eric, it’s almost like you guys were in a race, or like a technology race. And one thing you said to me in the pre call, that really changed some of the dynamics on some of these companies, was when domain or non domain experts came into the picture at some of these companies, and really changed the trajectory of what was because I would have thought, if you’d have asked me in the early 2000s, when we were also selling devices that were Ericsson based devices, now they’re all going to be around forever, or Nokia, they’re going to be around forever, they’re going to be dominant. In that domain expert expertise, it seemed like from what you’re telling me, wasn’t what carried it over that things changed, as things as time started moving forward.
Sandeep Chennakeshu 41:12
Yeah, I mean, my general opinion is, if you have a technology company, and its differentiation is technology evolution, then you you need people running it to have domain expertise. Otherwise, they will not make the right decision. And they will not know where to invest. Right. And sometimes these technology companies are run by people with a very strong financial background, and they want to it’s, you know, there’s a different metric they optimize for, it always works in the short term, but doesn’t work in the long term. Because you’ve not invested in the future. Do you
Rolando Rosas 41:57
think that’s why they brought Steve Jobs back after they let him go?
Sandeep Chennakeshu 42:01
I think so. Because I think that after some time, there was, you know, the, the financial engineering didn’t work.
Rolando Rosas 42:13
That’s probably the classic case. You know, there’s other companies that have brought back founders or that were, you know, they they like Charles Schwab, he was like, Go, he was brought back in, obviously, totally different sector, but it seems like founder run companies, I’ve read this stat somewhere, founder run companies tend to be more sustainable, be around longer, and some cases more profitable. So that’s, that’s fascinating. I really love that word domain expertise, you know, maybe you bring in a software guy or heavily, you know, a spreadsheets guide, that’s, that’s where he’s, he or she is most comfortable. But they may not be able to tap into that innovation expertise, like somebody that is in that sector or in that industry,
Sandeep Chennakeshu 42:58
but you need to have very deep knowledge, right. So if you’re running a phone business, you have to know about technology, you need to know about user needs, you need to know about volume, how your market is evolving, you need to know brand, you need to know distribution, how to handle your supply chain. So if you can’t dot the i’s and cross the T’s, and across all these, that, you know, you won’t have you don’t have the domain expertise, because you will miss something, and you’ll get disrupted. And I think that’s why finding CEOs with our broad expertise is hard. And that is why so many, so many companies are in trouble. Because very often, you know, they just don’t know the different plays they can create in order to win.
Rolando Rosas 43:50
Well, I want people that listen to this podcast, and they’re listening to your voice to win more. And I don’t want them to miss something as you just stated, so that’s why already give us the top three secrets.
AI 44:05
Well kept secrets Well, secrets, gotta keep them safe. And sound. Well, let’s see if I savers are just like as like Dima.
Rolando Rosas 44:21
Sandeep, we were talking earlier about some of the secrets. Some of these come straight from your experience and from your book. And I want you to share the secrets that you’ve, you know, you’ve learned in life and working all these prestigious companies working with fabulous people, or we go ahead and put the graphic there. On on number one, you said building a really good company. What’s the secret to building a really good company?
Sandeep Chennakeshu 44:48
So I mean, this is the topic of my book. And there are eight elements that are very essential to building a really good company. Use Start with picking the right business model and it has to be a sticky business model. Second, you got to build a foundation that generates cash, and it is cash that helps you basically grow your business. And then you need a strategy. And I, and the strategy encompasses the entire company. But the strategy in itself is not good enough. You have to have protective, some, some protective towers around the strategy. If you know, in my, in my example, I talk about a company as a castle. And the strategy is the perimeter wall. And the protective towers are product creation, product delivery, sales, channels, and execution. And together, they form. They’re not there, they form a very strong bond. And then the next element that you have to look at is, is the culture. And in my, in my example, like call it the the keeper of the castle, because of the keep fell, the castle fell, the culture is the most important in a company. And, you know, Peter Drucker said that culture eats strategy for breakfast. Wow,
Rolando Rosas 46:15
that’s a strong statement.
Sandeep Chennakeshu 46:17
That’s right. So strategy is what you desire to get done. Right, that’s what you want to get done. But culture determines what you actually get done. So if you don’t align culture, with strategy, invariably a strategy will fall. So building culture is super important.
Rolando Rosas 46:36
So like what you were saying earlier, which is, you know, being able to look in the rearview mirror, see who’s going to try to eat your lunch? That’s part of the culture, right? being paranoid, if that’s part of the culture, if it’s a mind set of how do we take these products to the next level? How do we beat our competition with with a distribution channel that’s better than the others? These are all elements of that culture? Is that right? Absolutely. And
Sandeep Chennakeshu 47:05
it’s basically building that desire to win. Win. Yeah, and the last element in this, in this first point is, was stakeholder confidence, your stakeholders, your your investors, your employees, and your customers. And you have to have that confidence if you want to win. So this is what I explain in how to build a really good company. And I talk about successes and failures and a lot of recipes, with a lot of examples from a number of companies around the world that I think make food make a lot of sense.
Rolando Rosas 47:39
Awesome, awesome. I love that. I love that people can actually digest the the examples that you put in your book. And I’ve definitely would recommend folks check that out. And then one of those things that that aligns well with having a company like you’re saying culture is directly related to people. And that’s, I would say you your number two secret is then building yourself to run those companies are essentially the people lining the people so that they can run those companies and make it a really good company. I believe that was your second secret, or you could put that up on
Sandeep Chennakeshu 48:18
on screen. Yeah, that’s true. You know, you know, after all, people are the biggest and best asset or most important asset in a company and so is the leader, because the leader sets the pace. And, you know, I say this in many podcasts, you know, Joel Arthur Barker, the futurist had a beautiful definition of who the leader is. And it’s the best definition I’ve seen, he contrasted a manager and a leader. He said, a manager is one who manages within a paradigm. And a leader is one who manages between paradigms. So when you want to manage between paradigms, you need to have certain attributes and characteristics. Now, everyone’s journey is slightly different. And, and so it’s personal. But I believe that there are some things that are very important to build a build yourself in order to run a company and one is you have to have, you have to have the ability to dream and dream with conviction. Okay, to do things that you think will happen, and do that with that conviction. You know, when I started mobile phones in 1984, I read about it and I wanted to do a PhD in it. And everyone told me, Hey, why do you want to do this? There’s everyone’s saying that there’ll be a million phones sold in the year 2000. And they are huge and bulky. But I was convinced that as all technology evolves, it will become an indispensable tool for human communication. And I’m glad I went into it. Despite all the naysayers, but and it will look
Rolando Rosas 49:52
at where it is today. And look at you think about back in your days. 9496 97 This was 84 or even 84? Okay, let’s go further back, nobody could have envisioned that something like this would be part of our daily life in our pockets. And essential, you know, Blackberry server went down, people went flipping out, because they couldn’t get their emails in, if your iPhone, all of a sudden the network went down because of a power outage, you’re, you’re like in panic, kick it. So something like that being so essential. It’s, it’s amazing that that technology is so it’s part of the fabric of life today. Like, you can’t imagine being without it. But I want to jump into the next piece because this is kind of a good segue. Yes, I can’t imagine not having my device on my hip. But that can also have a downside, which is, maybe I’m too stressed out, because every single notification messages coming through there, on top of what life has its own challenges. And you are going to let us know, you know, how can we can avoid some of the downsides of being stressed out, maybe from technology, maybe from other aspects of life and running a corporate environment.
Sandeep Chennakeshu 51:17
Before I say that, you know, just to complete the thought on bullet number two, six other things, there were six other things that you need to what I think are important one is get out of your comfort zone as often as possible, to test yourself, learn to deal with adversity. Learn from your successes and failures. You know, get battle tested, be curious. And always stay true. Don’t try to be something you’re not. And then going to the third point, which you said about stress, you know, everyone who’s got a busy corporate life and works very long hours, there’s invariably a certain amount of stress, indeed, and I have a story that I’ve actually written about, I go ahead. It was a Russian painter actually narrated the story. And I was in the audience. And it’s a beautiful story. It says there was a a hunter, who was in the forest, and in the forest, he saw a priest or a monk dancing away with glee. And the hunter was surprised and he said, Hey, he talked to the monk and he said, you know, shouldn’t you be in prayer and penance? And the monk told him, he told the hunter, can you string your ball and shoot that tree? Which is 200 yards away? You know, and he the hunter did so. And then he said, Hey, can you shoot it? 300 yards away. And the hunter did. So now he said 500 yards away? Can you shoot and the hunter said, Well, if I stretch my bowl, that much it will break. And the monk smiled and walked away. Okay, so the moral of the story is, the monk was dancing, okay to release his, his, you know, all of his pent up maybe stress, right? And similarly, so the story is that every day, right? Find something that you can do. That’s fun. You know, and I normally work between 12 and 14 hours a day. And at least I used to, I probably keep a similar schedule. But what I try to do is every day I try to do a few things that I really enjoy. Okay, and that takes the edge off.
Rolando Rosas 53:54
Like what? Like what I
Sandeep Chennakeshu 53:57
like, every morning when I get up and I get coffee. The first thing I do is I do a cryptic crossword, right? I try to get on the leaderboard
Rolando Rosas 54:08
pattern that tells me
Sandeep Chennakeshu 54:10
but it’s, but it’s fun, because it takes my mind off everything. I’m for that short period, I’m just focusing on this and nothing else. Nothing else. Right. And then of course, I spent I give myself enough time to do some reading and getting up to date on things. You know. And normally I love cricket. So I record a match to and watch it in the evening when I come back to relax. And so if you can break your day up into chunks, and you can basically spend a little time doing the things you like, you actually reset. And then of course the other thing is I would suggest you know, like I tried to basically remain fairly fit. Now. I don’t mean I can’t lift large weights or I’m not a triathlete or anything. You’re not
Rolando Rosas 54:58
into CrossFit. You’re not a Cross
Sandeep Chennakeshu 55:01
to small. When I basically what I try to do is I try to stay fit, and I control what I eat. Right? So I’ve kept my weight for 3540 years. So it keeps me fit, and it keeps my mind fit. And that’s
Rolando Rosas 55:19
all don’t they say that about the fortune 500 CEOs that like the vast majority of them have that one common denominator, whether they’re male or female, younger, older is that they find time to be physically active and do some some form of exercise.
Sandeep Chennakeshu 55:37
Yeah, I think it’s it’s both the physical aspect as well as the mental aspect. And you’ve got to be fairly relaxed in your mind to make good decisions. If you are perpetually stressed, then you’re probably in the wrong job.
Rolando Rosas 55:51
Right? Indeed, indeed, and, and as we know, stress, especially over sustained over a long period of time, leads to all kinds of nasty results on the mind and the body.
Sandeep Chennakeshu 56:05
Right. I agree. I agree. You know, I’ve made had a simple rule, in any job where I felt I couldn’t succeed, despite my best effort. I just left. No regrets, no regrets. I don’t blame anyone. They just said, Hey, this ain’t for me. Well, we’ll do
Dave Kelly 56:23
Sandeep, you know what, we never called out the title of your book. So I apologize. I just want to call that out. And I really liked the title, you’re calling us. The title of your book is Your Company Is Your Castle. And that resonates with me, Rolando, who created Global Teck 2021 years ago, 20 years ago. He’s often said, when we’re talking strategy talks about building a moat, building a moat, you know, so that our competitors can’t, can’t come to us. And, you know, I think for a lot Rolando, I mean, do you consider your company your castle? And the references like that? I would think
Rolando Rosas 57:04
Heck, yeah, this this, I loved the name of that book to the phrase building a moat was something that I took from working at Altria, also known as Philip Morris, a fortune 100 company, and they talked about that all the time, when I was there. And I took that, that mindset and when I started global tech, you know, what is our mode? What’s our differentiator? What are we doing to separate themselves from the competition? And I loved what you said Sandeep about being paranoid, I’m parenting paranoid almost every day. It to me, even. It’s not even though it’s not. So I always feel like there’s a day that our competition is just knocking at the door. And they’re, they’re prying in and seeing what we’re doing. To me. That’s kind of my mindset, even though I know that’s not the truth. But I kind of operate under that kind of philosophy, because it keeps you sharp, like, wow, they’re they’re right on our heels, they’re right behind that they’re right behind me that we better get going. We better do this. Otherwise, you know, they’re going to take over and pass us. So I really love that. You said that that’s part of one of the core tenants of, of great companies. Absolutely. So, Sandeep, you know, if people really want to nerd out on your book, where could they find it? Could they go to Amazon and check it out? Are they where should they go get this book? Yeah, so the, it’s on Amazon.
Sandeep Chennakeshu 58:33
It’s in a hardcover version, there is the Kindle version. And there is also an audio book. So in a depending on your preference, you can get the book and we
Rolando Rosas 58:47
have it for those that are watching on the video. It is five star ratings on Amazon. And I gotta tell you, Sandeep, we sell products on Amazon, we know how difficult it is to maintain a five star rating on Amazon and the book is five star rated. So you’re going to get a really good book that a lot of other people have also written very meaningful. Well thought out reviews, if you want to go check it, it’s called your company is your castle proven methods for building a resilient business? Anything else? You want to leave us with Sandeep? Any other thoughts?
Sandeep Chennakeshu 59:30
Not really. I mean, you’ve asked me a lot of questions and it’s been a fun 35 year career. I have had the fortune I’ve been really fortunate in my life to have been picked. You know, it’s it’s strange because I really never except for my very first job, which I got by calling someone. Right and the person invited me for an interview after the call. Right? And then once I got the job, they said, Can you basically send in your resume and So almost every job I got, I sent my resume after I was hired. And so it’s an odd situation. And I’ve been very fortunate that wonderful people have given me an opportunity. And I’ve also had the fortune of having phenomenal mentors, like I mentioned some on the, on the, on this podcast. And but the most is that I’ve had the best employees in the world, our co workers, they were coworkers more than anything else. And without them, I would never have seen the successes that I saw, which is why I dedicated the book to them.
Rolando Rosas 1:00:40
Oh, fascinating. Fascinating. I love that. That’s a great story. You were sharing with me how you got the job at Blackberry. And you weren’t even. It wasn’t you weren’t even at Sony Ericsson and they plucked you out and you went to BlackBerry. You were doing your own thing. You’re an independent consultant to them. Talk about that, and how you ended up getting the job at Blackberry.
Sandeep Chennakeshu 1:01:07
Yeah, actually, when I came back from Sweden, I came to Austin. And I was at Freescale, which was sold to private equity. And after a few years, I decided, you know, I had done a few turnarounds. And I said, Why don’t I go into business for myself and become a consultant and I have a consulting company called RSI consulting. R stands for Research and restructuring, an S stands for strategy. And it stands for innovation. So I had five multinational clients, who basically I was helping them do interesting things, wonderful five years. And during that, I was invited by in some investors, along with two of my colleagues to take a look at Blackberry, this was in 2013, and help formulate a plan, assess and formulate a plan as to what can be done to revive it. And one thing led to another. I was a consultant for over a year. And and then I joined the company, they had actually the CEO asked me and said, hey, we’d love you to join. And so I said you’ve got these five small businesses, that why don’t you allow me to work with them? I think I thought that they were unpolished gems. And, and so I had the opportunity, and thanks to my incredible employees, right, we were able to convert those five businesses into the cash cow for the company. Wow. And and today, you know, that portion of the business is probably being spun out. But what I read from the press, because I haven’t been in the company for almost six years. So that’s what I read in the press. So
Rolando Rosas 1:02:55
it didn’t you you said to me at one point they were they weren’t generating they weren’t as profitable prior to you coming on, and turning some of that around in that after you were there. You not only met the metrics that they were looking for, but blew them out of the water.
Sandeep Chennakeshu 1:03:14
Well, I can’t take it’s difficult for me to take credit.
Rolando Rosas 1:03:19
You’re a humble guy. I know. You’re a humble guy. But you were leadership there for a little bit a period of time, though, I
Sandeep Chennakeshu 1:03:25
think, no, I was I had a division. I had a division. There was there’s a CEO, in his very, very influential and senior person with a terrific track record. When I was when he was hired into the company. He gave me the opportunity and freedom to run my business. And at that time, Blackberry wasn’t doing well, because we were transitioning from phones to software and services. And so we were bleeding. And once that ship was righted. You know, I was given this opportunity to run these five businesses. And thanks to my incredible employees and the and what they were able to do, we were able to convert my division into a major cash cow for the company.
Rolando Rosas 1:04:13
That is just that’s just awesome. That is just awesome. And maybe, maybe putting some more zoom out, maybe saved the company, especially if they were bleat if they were in the red, who knows how long investors would have been holding on until they hit the sell button?
Sandeep Chennakeshu 1:04:30
I can’t I can’t take credit for that. I think you know, I think any turnaround is done by more than one person. And it’s a collective effort. I think it is would be disingenuous if I said it’s one person, but it’s a collective effort. And that’s why I think that I’ve had incredible employees and I’ve thanked them.
Rolando Rosas 1:04:52
Well, Sandeep, you’ve said it’s so well, you’ve said it so eloquently. I could have spent another two hours is picking your brain because there’s just such an infinite amount of wisdom and knowledge there that we could have shared with our audience. But I want to thank you for for coming on today. And if people want to follow you or check you out, where should they go?
Sandeep Chennakeshu 1:05:15
On LinkedIn is the best. You can find me on LinkedIn. And in the contact section, you have my email address. And you can send me a message. And we can connect, and then take it from there. Well,
Rolando Rosas 1:05:29
it’s been it truly has been an honor for me to have you on today is some of the solutions are solutions that I sold in the early days of Global Teck, and prior to that, and so talking to somebody that had a hand in bringing some of these toys, and some of these solutions to the market was just, it’s just for me. It’s just a great pleasure to have you and have this discussion with you today. So thank you for coming on, Sandeep.
Sandeep Chennakeshu 1:05:59
Thank you, Rolando. Thank you, Dave. It’s been a pleasure and privilege.
Rolando Rosas 1:06:02
Awesome. And so we’ve been talking to Sandeep, and if you want to nerd out more on this type of topic, and you want to learn how to get operational excellence, Dave and I covered two podcasts on this as well as hidden signals inside of business you may not be aware of that can cause problems if you’re not paying attention to them. You can check those episodes out on Apple or Spotify, or wherever you consume your podcasts. And I indeed, David, I will see you in those episodes.
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