For the tenth year in a row, The Economist ranked the Darden School of Business at the University of Virgina the "best business education experience.” Let’s pretend for even a sec that I know how they’d rank an educational “experience.” Or, why they’d choose to rank that instead of, oh I don’t know, job placements, or how many graduates became CEOs of Fortune 500 companies, or their alum’s average income five years out, or any other business-y metric. I mean, after all, it’s a *business* school. You think you know me. You think I’m going to write a mean-spirited column (yes, I use that word now — thanks, Bill) about the Economist. But nope. Here’s where I zag.
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For a long time… a very long time… all the best new ideas came from academia. Leading minds would think of stuff, research it, prove it, write about it, bat it about with peers, and teach it to students who would apply it willy nilly in thick blobs over grand freshly gressoed canvasses until layers of melted beeswax fused intelligencia minds with real-world practice.
Artsy metaphors aside, that still happens in science fields. But business isn’t a science field. Not anymore. Its touchy-feely outcomes are judged by the same people who award Olympic gold medals for triple-toe loops based on how people in frilly outfits interpret music.
The best business ideas don’t come from faculty housed in fancy modern glass buildings paid for by hedge fund megadonors and maintained by the outlandish tuition fees paid by resuming stuff students returning from their workaday lives.
The best busienss ideas come from the super-rich people who buy trophy assets and using them as real-life experimental labs. If you’re a practitioner — no — if you are someone who thinks about business and business ideas, this is a time to revel.
Jeff Bezos bought the Washington Post. It was losing money. Its business wasn’t sustainable. So, Jeff plucked a page from his day job running the world’s biggest derivative business. You thought I was going to say retailer. Retail at Amazon is an ingestion engine for customers. He loses money on his store but derives his largess into services like Amazon Web Services and, more recently, advertising. When Jeff bought WaPo he productized systems they used and licensed them to other newspapers. Trib paid him $100M to get the WaPo tool to run their newspapers better.
My favorite current example is Elon Musk. I know there’s an army of people who have grown to dislike the guy. Frankly, I never felt one way or another about him. Until he got to Twitter. Then, I noticed what he’s doing.
If you’re one of the three people who read this months-old version, you’re free to go. Class dismissed. For the rest of you, stick around, don’t take notes, and don’t worry — there won’t be a test.
Musk is like a kid in a sandbox playing with buckets and spades. Except he has multiple sandboxes — Twitter is just one of them. He has Space X, Hyperloop, Grok, oh, and Tesla. Oh, and, that one that implants AI in people’s brains — Neuralink.
On any given morning, he can wake up with an idea about rockets, AI, self-driving cars, transportation, media, the future of how machines and people interact on a remarkably intimate level and test it. I can’t even imagine what it must be like to think, “What if…” and have the resources and authority to find out. Just as broadly he can test management techniques, product development, pricing strategies, and all sorts of other things. And we get a free front row seat.
We’ve become so used to hearing CEO wax eloquently about their highly sanitized, fully formed “strategies” that we don’t appreciate that, here, we’re insiders. Usually, anything that made an idea unique was shaved off by teams of communications people long before the press releases reached us. The media interview junkets mostly derive from the same place that gives us homogenized milk.
But here we have Elon testing ideas in plain sight. The way an academic might have in days gone by. Let’s start with Twitter. He changed the name and URL of one of the most trafficked sites on the planet. Crazy. Because in his mind he’s going to make X into something more than a shortform blogosphere. He started charging people to use a better version of it. Insane. Until Meta started to do it. He laid off 80% of Twitter’s staff. Pundits said the system would collapse. Nope. Now, other companies are following. It’s OK to shed employees if they can’t make a difference. The list goes on and on. Each time dismissed by experts. Most times copied by other companies.
That’s just his Twitter schtick. At Space X he shoots rockets into various stratas around our sphere and media people criticize imperfect flights. He’s not aiming unaimed rockets at perfection. He’s testing things. Getting better each time. Proving solutions. We take it for granted that people can build and sell electric cars. Except when GM or Ford or Rivian or Fisker try to do it, it doesn’t work quite as well. He trained Grok on how hundreds of millions of people “talk” on Twitter. And people said he overpaid for that business. Now, Meta is in talks to buy Simon and Schuster to train their AI on a relatively finite literary library. I don’t need my AI to sound like a book. I need it to sound like a person. In that sense Musk is two steps ahead of other people and one step to the side of them.
You want to know why corporate America is stuck in a rut? Because we follow too many boring leaders. And are fed the comments about them. Case in point. Doug McMillon the CEO of Walmart has more than one million followers on LinkedIn. Two days ago, his big post was about visiting store #3717 and superstore #8249 in Tennessee. This insider, riveting pabulum got nearly 1500 likes.
Maybe we should take some chances with strategies. Not worry about failing so much. Worry less about what people think and think more about worrying less. Wave Jasper John’s version of the America flag (ok, it’s wood and won’t fly, but you get my point) and play Jimi Hendrix’s version of the national anthem. Go out and try something. That’s what the academic world does when it’s at its best. They plow virgin territory.
Too often, we follow boring leaders and we’re fed comments about them. This one caught my eye the other day. A ten-year professor of marketing at Darden’s business school (not tenured) lauded Disney’s CEO, Bob Iger for ignoring Musk “coming at him all the time.” Why is academia applauding the homogenized strategies spewed by CEOs and dismissing real ideation?
Funny thing. In the last five years, Musk has created $200B in value for Telsa’s shareholders. In the last five years Bob Iger has cost Disney shareholders $20B. A $220B delta is one sciency way to measure America’s business alpha.