Welcome back. This is session four of week three and we're going to talk about the role of failure in achieving success. We're going to talk about how creative people change the world not by succeeding but, at least initially, by failing. And I'm going to tell you a story or two about how this works. This is a story told to me, in person, by a friend. His name is David Dotti Promullter. He was Executive Vice President of Intel, until he retired just a while ago. He was a driving force behind the Centrino chipset. And this was a chipset that reduced the power consumption of laptops, extended battery life, made it possible for us to carry laptops around, unwire your world, plug into wi-fi, wherever your are, Starbucks, or wherever. And really changed our lives in many ways. And this is story about how failure was the basis of the Centrino success. So the story begins with the Israeli Intel design team working on a project called Timna. And the project was in the late 1990s, the project was to develop an inexpensive microprocessor that could help PC manufacturers make PCs for $1,000. At the time, they were two or $3,000 in price and the idea was, let's make a microprocessor, by Intel, that would be cheap enough so the PC companies could make and sell PCs for a thousand dollars, and still make a bit of profit. And so the design team in Israel worked on the problem, and after a lot of hard work, and a lot of sweat, tears, and blood, they failed. They brought the design to Intel headquarters in Santa Clara, to the marketing people. The marketing people decide, marketing people said nope, we can't sell it. You missed your cost target, the project is a failure. And this caused great consternation among the big design team of Intel in Israel, who had worked hard, put years into this, and they had failed and maybe their very existence was called into question. But they made a discovery in working on this microprocessor. In trying to reduce the cost, they found that if you reduce the processing power of the microprocessor by 10% you could reduce the area of silicon by fully half. By lowering the area of the silicon you reduce costs and increase profitability. So what Dadi Perlmutter realized was that, let's change direction, let's do a u-turn. Until then, Intel had sold microprocessors by selling megahertz. Most of us don't even know what megahertz is, but we know that more is better than less. So each time Intel would increase the computing power of the microprocessor and its megahertz number, its cycles per second. And Dadi's idea was, let's reduce the megahertz, let's shrink the microprocessor with hardware and software. Let's make it smaller, consume less power, less heat, take up less space in the laptop. And by doing that, let's increase the battery life of the laptop, which at the time was pretty short. So people can carry it along, carry it around wherever they go. They don't have to look for a wall outlet, plug it in. And at a coffee shop, they can do their email, provided there's WiFi hot spots. And this was what he pitched to Intel. Problem was, Intel was selling megahertz. How can you pitch a product where you have less megahertz rather than more. He did. It was a hard sell. The marketing people went along with the idea and the Centrino chipset was a great success for Intel. And it was based on the learning that came about because of a failure, the failed Timna project. In a sense, creative people understand there is no such thing as failure. Because by definition when you try something and it doesn't work you've learned something. So, it's not really a failure because you've acquired valuable insights and learning. As, Perlmutter did in the insight about the link between the size of the silicon and the megahertz cycles per second. There is no such thing as failure. If you try things, if you're not afraid of failure, if you're willing to fail and you have to be willing to fail to be a creative person because creativity means you have to do something. You can't just dream up ideas, you have to do something. And when you do something, and if it's really unusual, or radical and new, you may fail. It may not work. But there is no real failure, because you tried something. It didn't work, and you learned from that, and next time maybe it will work. Or the time after that. Creative people embrace failures and here's an example of how that works. The man in the slide was named Dov Moran. Dov Moran is a legendary Israeli entrepreneur. And he invented these things. And he called them disk on key, when his company M-Systems brought it to market. Today we call them memory sticks or flash drives, and he invented them because he needed one. [LAUGH] Because he had a laptop, he had failed to charge it, plug it in. He was making a presentation in New York, the battery died, he lost his presentation. At that moment, he decided I will never again be without backup. And he invented the memory stick, and the rest is history. He went on to found other startup companies. Dov began a company called Modu. Modu is a company that tried to build modular smartphones. Beautiful design, good idea, good product. Competing with a little company called Apple and their smartphone and for many reasons, I won't go into them, Modu failed. But, out of that failure came about 15 other start up companies that you can see on your screen. People who left Modu despite the failure the company failed, they lost their job, they lost their dreams of becoming perhaps very wealthy from a successful startup and exit. They went off and founded companies of their own. Why did they do that? They like the romance, the drama, the interest, the challenge of starting companies and creating ideas of their own. And the same day, Dove Moran did the same, went next door, opened the offices and started a new startup company called Kumiko the day that he closed the doors of Modu. Embrace failure, there is no failure. Failure is just one more step, sometimes really painful, on the road to success. End of session four. Please come back for session five. We'll continue with our discussion about how to discover great ideas.
