It's not uncommon today for a CEO to leave a big company to run a start-up--but it was ten years ago. John Sculley, who went from PepsiCo to Apple, was among the first to invert the corporate ladder.
You knew John Sculley as the big-company guy who corrupted the soul of Apple Computer. Now he's just another fella doing start-ups
John Sculley has spent his career working his way down the corporate food chain.
First he was a divisional president of $10-billion PepsiCo. In 1983 he quit to run much smaller Apple Computer. Forced out after 10 years there, he landed at Spectrum Information Technologies, a fledgling public company that turned out, essentially, to be a charade. So he went smaller still and in 1995 joined Live Picture, an Internet-imaging start-up with all of five employees.
And it's there, at the smallest of the small, that he claims he's found true happiness. "If there were the kind of entrepreneurial opportunities there are today when I was starting out," he declares, "I never would have gone to a large company in the first place."
He even sounds convincing.
That may come as a surprise to most people, since these days it's not fashionable to say much of anything that's charitable about John Sculley. When his name is invoked, it's usually to pillory him for an array of presumed offenses that range from Apple's present death spiral to his own pretensions of techno-enlightenment.
More to the point, his latter-day career is often characterized as a sort of Greek tragedy of the Oedipus at Colonus variety: the onetime king, overflowing with hubris, forced to wander the wilderness in a series of humbling misadventures. "My goodness, what has happened to him?" one business publication recently jabbed, describing Sculley's demeanor at a public appearance as "cadaverous" and "gasping for respectability." It would thus be easy to dismiss Sculley's avowals of love for small companies as so much self-serving spin control, an attempt to recharacterize a very precipitous fall from the corporate heights.
But Sculley, 59, seems genuinely invigorated. "I've probably never been in better health and had more energy than I have right now," he says at his home in Maine, sounding anything but cadaverous as he squeezes in a little sailing between biweekly trips to the West Coast. And he's been putting his money where his mouth is, too, by backing small companies through his own venture firm. Talking about Sirius Thinking, one of the latest start-ups he's been working on, Sculley gushes, "It's one of the most exciting projects I've ever been involved with."
Not the sort of words you'd expect from a man who's supposed to have hit bottom.
As Sculley tells it, he has been wandering in the wilderness, only it's been in search of something other than power and glory. "As you get older you have more information about yourself and what you're good at," he says. And the conclusion he's reached is this: "What I have always enjoyed doing is building things as opposed to managing them." It's an odd declaration for someone who's always been considered the apotheosis of the corporate professional--and was imported to freewheeling Apple because of his stature as such.
But Sculley offers a starkly alternative history of his career. The narrative he tells begins with his childhood infatuation with technical gadgetry (at 14 he was granted a patent for a color-TV tube he'd invented), with his early love for industrial and graphic design, and with his days as a graduate student at the University of Pennsylvania's School of Architecture. It's a history that also includes a long-ago stint rebuilding PepsiCo's nascent and troubled International Foods division, which he still regards as the most formative--and fulfilling--experience of his early business career.
That job, ironically, was considered one of the most unsavory in the corporation. "It was considered the dumping ground," says Sculley, whose responsibilities there included righting a horribly run-amok potato-chip plant in Brazil. "It was like being banned to Siberia." But, as he related in his 1987 autobiography, Odyssey, "I loved what I was doing. I was running and starting little companies, and I had a wonderful group of young, bright people with me," including PepsiCo's current CEO, Roger Enrico. "I was completely in charge of my own life."
This was John Sculley the builder, the creator, the "architect of ideas." The man who, as Pepsi's marketing chief, launched such breakthrough hits as "the Pepsi Generation" and "the Pepsi Challenge." The man, as Sculley explains it, he's spent much of his subsequent career trying to recapture.
Little wonder that Sculley was so susceptible to Apple cofounder Steve Jobs's now-famous taunt: "Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?"
When Jobs, with those words, persuaded Sculley to swap Pepsi for Apple, in 1983, Sculley's move was heralded as a bold, even impetuous gamble--and a monster step down. With today's corporate executives jumping to start-ups that barely exist, that viewpoint now seems a tad quaint. After all, Sculley was joining a company that had already hit the Fortune 500 and whose cofounder, Jobs, had graced the cover of Time. Headline news back then, such a career move "wouldn't even deserve more than a little blip in the back of the paper today, because it happens all the time," notes Sculley, with only a little exaggeration. "The world has changed a lot in 15 years."
But not so much that his more recent moves haven't left mouths agape.
When he was forced out of Apple, in October 1993, most Sculley watchers expected him to take the helm of a corporate titan like Motorola or Eastman Kodak or IBM, all of which were rumored to be eyeballing him as a potential CEO. Instead, just one business day after leaving Apple, Sculley stunned everyone by signing on with Spectrum Information Technologies. Spectrum who? came the chorus of responses.
Based in the Long Island town of Manhasset, the obscure wireless -communications company had patents on a technology that enabled portable computers to send data over cellular-telephone networks. With just about 170 people on the payroll, it was nearly 100 times smaller than Apple. "I doubt that you could have announced much that would have been as surprising to Wall Street and the media as this," an amazed interviewer Lou Dobbs told Sculley on CNN's Moneyline, "that you are taking over a $100-million company."
Actually, Sculley could have topped that announcement. He might have mentioned that he was taking over a $100-million company that was under investigation for fraud by the Securities and Exchange Commission. Of course, Sculley didn't know that at the time, but four months later he did. Red-faced, he exited Spectrum to a welter of negative publicity, flinging a lawsuit at Spectrum president Peter Caserta (who later pleaded guilty to mail fraud and conspiracy charges).
"It was a terribly embarrassing situation," says Sculley. "I was so burned out and so hurt by how I'd been treated by the board at Apple that I just didn't use good judgment. I ended up with a bunch of bad characters."
If the Spectrum debacle amply highlighted the perils of choosing the wrong small company to hop to, Sculley didn't sour on entrepreneurial outfits. His solution, rather, was to go even smaller. "I could have just given up and gone out on the beach," Sculley continues. "But I didn't. I went back to high-risk businesses again, but this time I did it differently. I did it only with private companies and purposely did it out of the public eye."
No joking here: with only five employees, the company he joined, Live Picture, definitely was out of view (though the head count has since climbed to 175). Based in Campbell, Calif., it makes Doom-like photospatial navigation software and is now part of a nest of start-ups Sculley helps guide. "My real interest," he says, "is using Live Picture as a centerpiece for a number of other companies."
To that end, Sculley and his two younger brothers--one the former head of H. J. Heinz's food operations, the other a former head of worldwide private banking at J. P. Morgan--started Sculley Brothers, a small venture-capital firm. Among its early investments: Sirius Thinking, a start-up Sculley cofounded with the former creative executive vice- president of Jim Henson Productions. It's about to launch a children's public-television program, with CD-ROMs, videos, and books to match.
So why is Sculley so happy? "First of all," he says, "I enjoy visual products and services." Secondly, he's free to flit from one start-up to another, building ideas with small teams of creative people--he calls it being a "venture catalyst." ("Did John give you his 'venture catalyst' talk?" groans one venture capitalist.) Finally, says Sculley, "it means I can design my life the way I want to live it." Today that means getting up at 5 a.m. for a conference call with an Israeli company that Live Picture acquired, eating breakfast with friends, taking another conference call, getting in some sailing, and then flying to Boston for the afternoon.
Though Sculley insists he's found his true calling, any speculation about him inevitably returns to one question: Is he making any progress on a comeback?
This obviously irks Sculley, who takes pains to deflate the notion that he's gambling on any of his companies to carry him back to superstardom. "I can't guarantee that Live Picture or any other company is going to be an overwhelming success until we do it," he says.
More important, he's annoyed by how the whole notion of a "comeback" distracts attention from the real point: his personal discovery that, for him, working with small companies is an end in itself. It makes him happy.
"These are really the best days," he told the Los Angeles Times. "I've got it all now."
But seriously, wouldn't Sculley consider returning to the corporate fold if the right offer came his way?
His response cuts off the question before it's halfway complete.
Say what you want to about Sculley. Accuse him of tanking Apple. Fault him for playing with technology without being a technologist. Call him a crummy futurist. But when it comes to careers, it's possible he'll be remembered as a genuine original, a true innovator. He is the man who invented a new career paradigm for the entrepreneurial age: the inverted corporate ladder. The man who made the downwardly mobile CEO respectable.
In that sense, finally, history may judge John Sculley worthy of the descriptor he's always coveted. He may be a visionary after all.
Jerry Useem is an associate editor at Inc.