On November 5, 2019, Endeavor Atlanta hosted Silicon Valley legend Donna Dubinsky at its latest Scale-Up breakfast. During the conversation, Donna reflected on the ups and downs of her 30+ year technology career, including scaling Palm Inc. and Handspring and now leading AI software company Numenta. She led us through her exciting journey and discussed the making of one of the first ever handheld computers, her experiences with Bill Campbell and Steve Jobs, near-death experiences, and what defines the true character of a leader. Enjoy this amazing chat with Donna!
You've got a fun, scrappy story about your start at Apple. Can you share?
I was at Harvard Business School and Apple was hosting their first ever MBA interviews. In order to land an interview, candidates had to submit an application. I had seen the Apple II and thought "Oh, man. This is really important stuff, I've got to go to work for these guys.” I submitted the application but was not accepted because I had no technical background.
Undeterred, I went to the cubicle where interviewer Jennifer Bestor was and I sat outside her cubicle for hours. Every time she came out to get somebody to bring them in to interview, I would say, "I'm here because I really need to talk to you..." I wasn't harassing her, I was nice and patient.
By the end of the day she says, "What gives? What's your story?" And I just said, "Look, I know you're looking at people with technical resumes, and I don't have a technical resume. I get that. But, I'm somebody who would buy your product. I'm somebody who knows what value this could bring in the business world. I want to be customer-facing, and you need people who understand your customers." The argument was good enough that she brought my story back to California, and I ended up being the only, and the first, Harvard MBA hired, the only one that year and the first one ever at Apple.
How did you get to know Bill Campbell (another tech. legend) and eventually get pulled into Claris, an Apple subsidiary?
I semi-reported to Bill at Apple, and while we developed a very good relationship, we went through some tough times. There was a very famous Harvard business case on Apple in those years about my argument with Steve Jobs. Steve and I had very different ideas about how to physically deliver Apple computers to people. We had this huge problem, and Bill had to end up helping us resolve it. I developed a close relationship with him through this adversity. When Bill decided to create Claris, he reached out to me and said, "I'd like you to come be on my founding team as VP of Operations." I said, “I don't want to do that anymore." I had gone off to work for Apple Australia and loved doing sales and marketing internationally. I asked, “Have you thought about a VP of International Sales and Marketing?” He agreed, and I came back from Australia to help him found Claris.
What was that like? What were some of the challenges you faced?
Apple had created software products, like MacPaint and MacWrite, to show off the computers, but hadn't really advanced them. Claris’ vision was to allow the software to stand on its own.
We started it, and we were very successful. I started setting up international and went from virtually no business to 50% of the business, very quickly. I went around the world and signed up distributors. It was a pretty clear pathway to building this into a better company. And then we started developing. We developed Microsoft PC-based products as well as Apple products. We would take MacWrite and try to put it on both platforms. That was what caused Apple to think an independent Claris wasn't such a good idea and they decided to buy it back into the company, rather than spin it out as an independent company. That was when I decided to leave and take some time off. Bill decided to leave right after I did.
How did you get connect with Jeff Hawkins, Co-Founder of and Palm Inc. and Handspring?
I decided after I left Claris, to take a year off and go to Paris. I wanted to study French, and so that's what I did for a year, I just studied French.
When I came back, I was looking for what to do next. I had done a bit of self reflection in Paris over the course of that year. I came up with the big idea that I wanted to be a CEO. I just felt like I had the potential for that. I felt like I could do it, and I wanted to give it a try. I then decided I needed to find a business partner who specialized in product and technology.
I went out on a very deliberate search for somebody who was looking for me, who wanted a partner like me. My first step when I returned was to sit down with Bill Campbell. l said, "I'm back [from Paris], and this is what I want to do. Do you feel I'm ready? Do you feel I could take this step?" Because I knew that if anybody in Silicon Valley was going to consider me for a CEO job, the very first call they were going to make was to Bill Campbell. And he said, "I'll support you.” I met a lot of people in the course of the search, but nothing really compelling until I met Jeff Hawkins.
He was interested in me as a CEO and I said, "I know you're going to do references on me. Here's a whole list." I gave him former bosses’ contacts, former colleagues, people who worked for me. I overwhelmed him with names. But I also said, "I want the same from you, because I'm also interviewing you to be my business partner. It's really important to me that I check you out, too." I did as much reference checking on him as he did on me, and I really feel like what I heard about him were things I would hope people would say about me. Thirty-five years later and we're still working together, so I guess it was a pretty good choice.
Can you describe the handheld market in the early days?
We built the Zoomer, one of the very first handhelds. We did it in a consortium. Casio built the hardware. GeoWorks had the operating system, and we were creating the Personal Information Manager (PIM), for example the calendar or to-do list option. We had six companies sitting around a table designing this thing, which was an utter total disaster. Radio Shack was distributing it and they told us the ideal price point was $299. That was the price point that they made the most money on at the highest volume. Higher than that, the volume drops off; lower than that, the margin drops off. This product was $699. It was huge, expensive, slow, and too heavy, nobody wanted it.
Jeff and I walked out of that experience with real clarity on what we needed to do next, the PalmPilot. There were fundamentally different design principles for the Palm based on what we learned with the Zoomer. We also learned to no longer work with a consortium. We wanted to make all of the decisions. We were going to ensure one cohesive design approach to every piece. Though the Palm ended up being a huge success, we initially couldn't finance it. We went around trying to get people to give us money to bring this product to market, but we were the company with the failed Zoomer. I spent months knocking on the doors of Silicon Valley, nobody was willing to answer. Thankfully and finally USRobotics came along. They made modems, and modems were going away. They basically said, "This is the future. We want to own this." And so, they ended up buying us.
Can you speak more about the time after the US Robotics deal was finalized and the launch of the PalmPilot?
We launched the Palm and sold 10,000 units a month for the first four or five months. This was after the Zoomer sold around 10,000 units total. The first 50,000 buyers were pretty much 100% self-rated computer experts, men, between the ages of 35 and 45. You could not define early adopters better than our first 50,000 purchasers. Those guys went out and sold this product to their neighbors, their spouses, their friends, their companies, they became our sales force. They basically sold this product for us.
At one point, we had problems with the devices failing in the field. I got my best developer, Ron Marianetti, plus five other of my best people in one room, and said, "I'm locking the door here until you guys figure out what's going on with these devices."
The problem turned out to be a simple change that caused a complex failure. We had loaded a software patch for another problem onto the device. Somebody added a sticker under the battery cover to warn of disconnecting the battery, which would lose the patch. But when you pushed open the battery, the sticker caused friction that caused the battery to disconnect and caused it to lose the software patch anyway. It was literally a sticker that caused the issue.
How did you manage company culture and the size of the team and bringing more people onto the team?
Culture starts from the top. I tried to model it from the top authentically and honestly everyday. I told my team everything. If it was bad I told them, if it was good I told them. They learned to trust that what I said was the truth.
I also tried to do things to make myself visible and accessible. I used to have lunches called, 'Dine with Donna,' where once a month, a random selection of employees sat and had lunch with me. We'd go around the table. They'd introduce themselves, tell me what they're working on. I would answer questions and have a discussion in a very small group. I only could touch a handful of people that way, but believe me, every one of those people went out and told other people, "You're never going to believe it, I just had lunch with Donna Dubinsky." It was amazing how that kind of interaction reverberated.
Can you talk about the Palm sale and the shift to Handspring?
Palm was acquired by USRobotics and they were acquired by 3Com. Post the 3Com acquisition, Jeff and I left and created a new company called Handspring. Handspring was another rocket ship.
We knew by the time we started Handspring that we wanted the device and internet to be connected, but we didn't know how yet. Jeff’s simple solution was to design a slot in the device where we could plug in anything and figure it out as we go.
We created this slot and the people ran with it. They made amazing things, like the earliest camera phones and audio recorders. The slot was truly loved because of the flexibility it gave. We produced them in these fun colors, which led to another conversation with Steve Jobs. He thought he could maybe patent colors. I had to inform him that anybody could do colors if they wanted to.
At Handspring, things went well until I made an enormous mistake, the biggest mistake of my career I would say, which was that we entered into a new lease. We were growing like crazy. We were publicly traded. We were the fastest growing company in American business history, doing over $100 million in our third quarter of shipping. I took a big lease out on a piece of property under development and literally the market crashed the day I signed lease. After this, things went south really, really fast.
It started with Palm competing against us. They had a ton of inventory and were our main competitor. They started cutting prices like crazy. I made the decision to not engage in a price war. I sat back and said, "Let them clear their inventory, and then everything will be okay." But that didn't happen. They just kept selling more and more at a lower price. We were selling less and less, so eventually we had to match them. In the meantime, I have this enormous new debt, really crushing debt in this big lease that I had just signed for the ongoing growth of this company, which was now stalled. I remember the day that one of my investors, who I was very close to, said to me, "You know, you're going to have to look at a bankruptcy filing." I could not believe that I had gone from being on the cover of magazines, as one of the fastest growing companies in American business history, to talking about a bankruptcy in the space of a few months.
I did end up settling the debt and making a major payment, but it ended up weakening the company cash-wise pretty significantly. I got in front of the company and I told them the truth. I said, "We're in trouble. We signed this lease. It was a bad decision. I got us into it. I'm going to get us out of it." It was one of those real moments of truth. I cried myself to sleep when I realized I was going to have to go through this. I woke up the next morning and I said, "It's really easy to be a great CEO in the good times, that's not hard. This is when it's hard. This is what determines whether you’re a great CEO or not.” I got us through it. Palm eventually approached us with this idea of an acquisition.
In the time since we had left, they'd done a great job of incrementing the products, but hadn’t done much in regard to communications. We were all about figuring out this communications stuff with the slot. They suddenly realized that communications was the future, so they bought us as a way to take that advancement that we'd done in the past. I went on the board.
Skipping forward to today, can you talk about founding Numenta?
Jeff and I started Numenta 14 years ago. The day I met Jeff, he showed me his Sony Palmtop and told me that all the handheld computer stuff was a sideline for him, what he really wanted to figure out was how the brain works. He saw a cover article in Scientific American magazine that said the biggest problem to solve in our lives is figuring out how the brain works. Nobody knew how it worked, which astonished him and continues to be true today. As many neuroscientists and neuroscience institutes exists today, they actually have no idea how the brain works. Jeff decided he wanted to solve this problem. Fourteen years ago we decided to start the company Numenta. It had two missions; a scientific mission to figure out how the brain works, and a commercial mission to figure out how to apply that to computers to make them smarter. We have bounced back and forth between those missions over the last 14 years pretty regularly. We have pretty much accomplished goal one on figuring out how the brain works. Jeff has done remarkable work in advancing the state of knowledge and understanding the brain and how it works. We've written extensively about this. We're now interested in applying this to the field of deep learning and machine learning.
Looking back, how would you do things differently?
I wouldn't have signed that lease. I couldn't have known what was to come, but what I realized later is that I should have done more risk assessment. One thing I learned from Meg Whitman from Hewlett-Packard is the ‘White Hat/Black Hat Method’. During ‘White Hat/Black Hat’, she would wear the white hat and would assign out the black hat. Whomever was black hat would make an argument opposite of whatever the discussion. Whether it be an acquisition or a major financial commitment, the black hat would come in and argue passionately on the other side, even if they didn't believe it. I didn't have that. I didn't have someone say, "We shouldn't do this. It's too much debt. It's out of scale with our company. What if there's a recession?"
What are some of the most important ways that you've created cohesion within the leadership team after you've hired new people?
I learned from Bill Campbell what I call the ‘Communications Architecture.’ I would meet with the closest leadership team weekly. Everyone would go around the table and say what they were worried about or what they had to inform everybody else on. That was a huge part of the communications architecture; as opposed to a hub and spoke, one on one. I communicated that this was the team managing the company. We're all going to share everyone else's problems here and try to be on the same page.
I also made the director level a cohesive team. Every six months we had an offsite, so we had a rolling 12 month forecast. Every six months we'd come together. We would replay on the first six months that had been planned last time and add another six, and I would have every group stand up and present. I'd also plan for down time, so that people would have the opportunity to build relationships through recreational activities. I really tried to create that director level group as my emissaries into the company to build up knowledge and culture and so on. Again, I took that all directly off Bill Campbell, because that's what he used to do.