 Okay, welcome back everyone to the special CUBE conversation. I'm John Furrier here in the CUBE's Palo Alto studios. My next guest is Dr. Tom Braddish, friend of the CUBE. Or I said, Hula Packard Enterprise heads up the IOT, general manager and vice president of servers, converged edge IOT systems. But we're here to talk about, not so much, not HPE, but really the work that Tom's done and a topic called First Mover, a book that he's writing. It hasn't come out yet, so we're going to get an early preview of what it's like to create a category, innovation and how to use process to your advantage, not make it your enemy. How to use creativity and how to motivate people and how to sell it through organizations, whether it's venture capitalists or managers. Tom, you get great experience. Thanks for spending time to come into the studio. It's great to be here. Thanks for having me and I'm happy to have this discussion. If you go back to the CUBE videos, if you're folks watching and that know you, you've seen all the videos that HPE discover, HPE discover back in the day, you had a great career. You were an engineer, built the first notebook computer with IBM. You've done a lot of groundbreaking things and I like the topic of your book First Mover because it speaks to your mindset. Entrepreneurial, innovative, breaking through walls, you probably got a lot of scar tissue. So I want to talk about that because this is the opportunity many entrepreneurs have. As you know in the CUBE, we really believe that renaissance and software development's coming. It's so obvious. Open source is growing at an extraordinary pace. The use of code. You got IoT, the area you're involved in. You got cryptocurrency, blockchain, all these new waves are coming all at once. So I wish I was 22 again because it's a great opportunity to innovate. But there's some proven things. What are some of those things? Let's jump in. What do you see as the playbook? What have you learned and what can you share? Well, sure. I've been blessed. I've had a career where I've been able to do a lot of innovation. But also I like to separate the notion of innovation from differentiation. And see it's possible to be innovated and not different. Like it's possible for you and I to have the same new suit. It's new, it's innovative, but it's not different. And differentiation is really where one can have a first mover advantage because differentiation by definition is new, is innovation, but it's not always the other way around. So I always tell my teams and I always focus on how can we be two things, both different and better. It's possible also to be different and not as good. You could have the highest failure rate in the industry, you're different, but that's not good. So the concept here is how do you be different, not just new and innovative, but how do you be different and how do you be good? And I've actually faced three risks in mostly the big corporate culture that we've had to innovation. And the first risk is of course the obvious one that people will customers buy it. That's called market risk. Is it something that's good enough to be purchased at a profit? The second risk is it can it be manufactured at quality and at a rate of consumption. And then the third risk is your own company. Does the company have what it takes actually to take on the risk of a brand new product category, not just a new product, but a new category of products that by definition have never been done before. And when one can do that, when one can figure that out, and I've had some significant experience with this, you can catapult your careers, you can catapult your company and your customers to new levels because you enjoy the benefits of the first mover. That's the name of the book, the first mover. Well, I'm looking forward to seeing it. I'm going to ask, this is super important because a lot of people, they're really good at something and they run hard, they break through a wall, but might have missed something. So you kind of bring up this holistic picture. What are some of the things that folks should focus in on? Say I have a breakthrough idea, I got a prototype up and running, it's in market. I think it's the best thing since sliced bread. I'm pushing it hard. People are just going to lap this off. This is going to be great. I know it's innovative, but no one else knows it. Right, what do I do? What's the process? What do you recommend? Well, what I like to do is portion the benefits into two categories. Their supply side benefits, that's to your company, right? Why is this good for your company to do this? And then there are demand side benefits, meaning why is it good for the customer? Most people tend to focus mostly on the demand side. Oh, it solves this problem and the customers will love it. And that's important. And I would call that a necessary but not sufficient condition. The other condition is why is this good for your company? And many times when it's a brand new product category, those inside a company aren't quite in tune with why it's good for the customer. Because again, it's a new thing. It's a new product category. Why is an automobile better than a horse and buggy, right? Why is a laptop computer better than a desktop computer? These are the ideas where it may be intuitive. It may be instructive to talk about that, but when you can get a business model first and start with that, well, the reason is we can enjoy this margin. The reason is we can enjoy this particular first mover advantage, the halo effect, the reputation of being the leader. The reason is because we can penetrate a new market. The reason is we can now overcome falling revenue in a shrinking TAM. Now we can accelerate in another TAM perhaps as well. So by coming up with both the demand side and the supply side, you have a better case to go forward for the support and funding inside a big corporation. There's always product market fit. I hear the buzz words. Oh, I got to get the cash flow positive break even. There's always a motivating force to get something done. How should someone organize the order of their operations to get something done to the market if it's innovative, groundbreaking, differentiating? Because a lot of the big challenges, some people call it landing span. I heard that buzz word too, but you get a champion inside a company and that champion embraces it. And most people think, oh man, I got that customer. But then that person has to sell it through and then it has to be operationalized, meaning people got to get used to it. These are real challenges. They are. What is your view of how an entrepreneur or a business executive or practitioner to get through that? Well, you have to get people on your side and it's really important. Somebody's got to believe in either you, not even understanding what you're proposing, but they'd say, well, you have a track record. For some reason, I believe what you're saying. And then secondly, getting customers. So I have personally never done anything major without a customer that I call an inspiration customer. That's a name I've just made up. So a customer, by the way, by definition is an end user that will buy something from you. That's the definition of a customer. And an inspiration customer is one that will help you that is okay with seeing your dirty laundry, okay with mistakes you might make because they see the value in it and they also see the value in them being a first mover. And I like to tell my team, we want to be a first mover and a trendsetter. So our customers can also be trendsetters in their business right as well. So therefore, by getting that customer support, and that's in the form of POCs or in trials or in just customer testimony, combine that now with a second dimension called the analyst community, which your team resides in as well. Also saying, well, I think this is good as well brings a lot of credibility because there's a saying a verse in the Bible that a profit is not without honor except in his own hometown. Now if you think about that, a lot of times your own company that you reside in has a lower point of view because it's very consumed with indeed what is next and doing the right thing by the way. I have to make this quarter, right? We have to protect the brand. We have to keep the cash flow coming in. These are all important things. So how do you get someone to focus on that? Many times it's not you anymore, it's outside. And I call that the second C, right? The first C is internal company. The second C is your customers and the community that also could include by the way analysts, the media, other experts, consultants, those type of season around there. Now the third C is the competition. This is a little bit controversial. What happens when the idea is now exploited by the competition first? Sometimes that is a motivator for a company to jump on it as well and make the market. But again, if you follow the competition, you're not the first mover. You don't enjoy the benefits of first mover advantage. Higher margin, the halo effect of being the innovator. And also learning, that's an important one. You're a first mover, you're out there learning so that you can respond to the second generation in a better way. I like this notion of differentiation and innovation as two different variables because it's super important. You can be different and not innovative, you can be innovative, not different. Again, it's all contextual, but I want to get back to the pioneering of the first mover. So statistically speaking, a lot of the best entrepreneurs are first movers and are often misunderstood you hear that all the time. Or being a visionary is the difference between being 10 years in the future versus an hour can make the difference between success. We are crazy on one end and you're brilliant on the other because the time to value catches up with that profit if you will. So a question is, is that how does first movers continue to win? Because I've seen situations where first movers come in, get a position and win and stay, keep the lead. Other times first movers come in, set the market up, create all the attention and then have arrows on their back. And a second mover enjoys the benefits. Yeah, so the second mover comes in bigger scale. So there's competition, competitive strategy overlaid on this, which even complicates it even further. Indeed, yes. So who your thoughts on that? Yes, indeed. Well, one way to look at this is the way to move forward is again, when you can get some momentum, that's not you. That's the number one, as a- Market growth, the number of subscribers throwing the internet at the trend, what mobile users- And a third party consultant who has highly respected agrees or an analyst. And I ran into an analyst recently in a coffee shop who agreed with some of this first mover work we're doing in converged edge systems, which is a new class of products as well. But it's really important that you can't be discouraged. Let me point this out. What I tell my team, and I tell students I lecture at universities and I've been an adjunct professor, those younger in their career is if you cast a vision and you have an idea and nobody gets it, don't be discouraged. That's a good sign. That sounds a little bit, you know, funny. Why is it a good sign? Because if everybody gets it right away, it's likely not that novel. It's likely rather ordinary. It's likely been thought of before as well, right? So by the very nature and definition that the average person might think is discouraging on, nobody understands me, nobody gets this idea, should be an encouragement, you know, and a motivation. Now the risk here is people not getting it is also a sign of a stupid idea. So usually when people don't get it, it's either really not good or really amazing that eventually they'll come around to it. I had a boss in one of my career opportunities told me to stop working on a product. I don't want to give too much detail, but he literally told me that. And I said, I don't want to be insubordinate to a boss. We all have them. And I said, you know, can I please just keep working on it, okay, but don't let it interfere with the other stuff, da-da-da. Today that market is a $9 billion market as well. Of that product. A very product that I was told by a very astute person, one of my colleagues, my bosses, said, I don't see the future in this, let's not do this, right? You know, as well. But being able to have a second thing. So number one is don't be discouraged by people not getting it, by definition that's supposed to happen when you have a new. Good point. Yes, yes. I just want to, if I may, at a second one. And as you're moving forward with this, right, as well, is seek out and find those who do agree with you and stick with them very, very closely. And I have, I can say a couple of names. There's one, we've created this new product class called Converge Ed Systems. Alon Andreole is a senior vice president at HB. Yeah, Cube alumni. Great. And he's a Cube alumni and I'm pointing him out because he has publicly taken on this idea that this product category can really, really work. Cloud nine. And he's worked. Is that cloud nine? The Converge Ed System called Edge Line. Okay, got it. The Edge Line product brand, right, you know, as well. So therefore, you know, when you have to, you find someone who has authority. Eagles fly together. You want to get a good beer group. Absolutely, yeah, absolutely. All right, so here's a question for you. So one of my experiences that I want to just get your reaction and add on to your thoughts is most entrepreneurs or pioneers have misunderstood. So I agree, don't be discouraged. But also keep validating and be a data seeker. Get the data. But a lot of times just getting something in the market or getting it going creates movement and inertia. You get rolling and sometimes the original idea isn't actually the big idea, it turns into it as you get more data. And you know, examples like Airbnb wasn't what it is. It was basically air mattresses and selling cereal. Yes, yes. That was the original story, right? And then it turned into, but conceptually it was the same thing. So you don't have to be 100% right on the semantics. It's well known that most startups don't end up being successful with the product they started with. That's well known fact. But that's true also in large companies with a product idea as well. So you have to have this interesting balance. It's very interesting as I've thought about this and studied. You have to have deep philosophical and conviction of principles. And here's why. If you don't, you will be swayed by everybody's opinion and you'll never get anything done because oh, well, that's a good idea. Maybe I should do this. Well, that's a good idea. Maybe I should do it. Now I'm not saying that's bad to listen to others, but if you don't have a grounding of principles. Example, we established the seven principles of the IoT over two years ago and we've held on to them and created the success we have based on those principles. Now that's not to say we didn't modify them a little bit, but the point is we were convicted with something and when somebody would come up with a counter to it, we had a way to defend our convictions, if you will, in internal debates and external debates as well. You know, as well, finding that. And then secondly, you got to be also okay with being the sole inhabitant of that field of discourse. Being a visionary can be a very lonely job because of that, right? And again, it's because you are, and your team is, it's not always a lone person, right? The team is actually creating something that literally nobody's ever seen before. Nobody understands before. What process is, do you wrap around this? Because you know, Dave Alonth and I always talk about this on theCUBE and after theCUBE is that process has to be your friend, not your enemy. I mean, it's got to work for you. I've heard he also says that as well on Amazon. But also, you know, Charlie Munger, Warren Buffett's partner always says, I'm not a big fan of master plans, meaning, because you become a slave to the plan rather than the opportunity. So these are process kind of things, right? So how does an innovator that's a first mover wants to create a category? Because category killers or category creators are huge opportunities financially, so they create a lot of value and wealth and opportunity. What process is best? Is there a view? Is it conditional on certain things? What's your thoughts on? Well, let me say, and I'm going to give you a big company or a medium sized company context, not a startup. I think they're distinctly different. I've had limited experience with a startup, but I've had significant experience in bigger, medium and large now, companies as well. You can't try to change the system because now you have two variables. You got this new product that nobody's ever heard of and now you're trying to change the whole system, right? Now again, this is just advice for bigger companies. So be careful how many things you want to change, how many things you want to stop. So you want to take this new thing and align it with existing processes and existing core competencies as much as you can, even though it's new, it has to have some alignment. I'll give you an example. When we built the Converged Edge Systems, the Edge Line brand, we aligned it with compute. It's not only compute, but we aligned it with compute. Why? Because HPE or HP at the time, right, was and is and now number one in compute when it comes to data center compute systems, when it comes to high performance computing and mission critical, right? So therefore that was easy to understand. So you're okay, you're familiar with this, but now let me tell you this new twist on it. And I would assume, and I don't know this for sure, but I would assume Steve Jobs and the Apple team that was thinking of this smartphone concept, the iPhone, as well, they had to align it with some level of compute capabilities, right? And you notice as it emerged, it also included something that already exists called the iPod, which was already aligned with their laptop computers and their desktops, right? Your music would be downloaded as an app to connectivity, but now you can take it with you. And by the way, now I'll add a phone to it. And so this incrementally built, and by the way, you ain't seen nothing yet. I'm going to add a GPS system. I'm going to add a camera, your flashlight, your wallet, right? I'm going to add all that in. So by, I think you're incrementally moving with not upsetting the system in a, like you said, in a large company. It really, really helps because you can't change everything too quickly. You got to be okay being alone, you're okay not changing the tools. I want to interrupt you there for a second because it's Peter Verst and I talk with him all the time. I love his quote, Peter Verst, head of Wikibon Research says, the iPhone was a computer that happened to make phone calls. Okay, and that's just smart for us. Category creator, and we know what happened, it derests its history. However, you mentioned talking to customers and having an inspirational customer. I love that concept because you need a muse as an innovator. You got to have someone you can trust that knows what you're trying to do that understands the mission. If Steve Jobs went into the marketplace and did market research, he would have probably had the customer feedback to build the best BlackBerry or a better BlackBerry or another device. Instead, he used his gut, was on his mission, and then he understood the inspirational customer, whether it was real or not, he was going down a different road. That takes guts, but also some discipline. I hear you and I agree with this 100%, 100%. When I had the great fortune of leading a team that created the first enterprise blade server or converged system, and today that is pushing about a $10 billion market opportunity, and not one customer asked me for it. Now that doesn't mean I didn't listen, okay? But I had to bring it to them. So here's the difference. We're not responding to trends. This is a key point. We're creating a trend. And what I tell my team is you must create trends, not follow them. Many of my competitors are, by the way, making good money and doing a good business. I'm not knocking it up, but I'm saying they're not creating a trend. They're actually following one. They're in an explosive trend. Very lucrative trend. It can be. Very mature, big market. Dave Thomas with Wendy's followed a trend called hamburgers, and he did pretty well. He didn't create the hamburger market, but he followed one. Now, this is really rather interesting. So when you come in and you're saying, well, I want to actually set a trend and create one, it really gives you this opportunity to redefine what is happening. So now, quick story. You may have heard this. Maybe your viewers have heard this. A manager of a shoe company sends two guys to an island. He says, I want you to sell shoes on this island. They get to the island, the first guy calls back and says, boss, this is terrible. Everybody's bare feet. Bare feet. There's no opportunity to sell shoes. This is terrible. I'm coming home. The second guy calls us says, boss, you're not going to believe this. There's not a shoe on this island, and I have a Tam. That's 100% of the market to sell shoes, right? I believe, as you pointed out, Steve Jobs didn't go and say, well, what apps do you run on your BlackBerry? What he did is reversed it, and this is what we're doing. We're reversing it. We're saying, if you could watch a full-length, high-definition movie in your hand, would you? Well, I can, but I can't do it on this device. But if you could, right? So now, in the IoT, I hear this all the time from my competitors and even some colleagues out in the industry. Well, oh, we ask them what apps they run at the edge. We ask them what they do at the edge. That's good. That's necessary, but not sufficient. You have to say, but if you had this product, wouldn't you, for example, run an entire database? Would you compile your machine learning models at the edge that you would do in the cloud now? Wouldn't you do that if you had it? Well, I never thought of that because I don't have that capability. Just like, well, I never thought of being able to take pictures and watch full-length, high-definition movies, because they never had it. But what if you did? So you've always got to be setting that trend, not responding to it only. That's awesome. Dr. Tom Bradich, writing a book called First Mover, really about props about being innovative, gives you the final word. Thanks for coming and appreciate sharing the advice. What's going on with HPE and your IoT work? Give a quick, take a minute to talk about what's happening at HPE. Well, thanks, pretty exciting. We've been able to move forward with some really great customer wins. I'm hoping to go public with them. We're in many ways, I know this is an abused term, but we're revolutionizing the industrial IoT in particular and manufacturing floors. We have a large auto manufacturer that has chosen edge line as the standard to produce more and more vehicles per day. That's their goal. How many more vehicles can I get into my customers' hands per day? We have a snack company making potato chips, looking at what we're doing with software-defining operations. We have even, we've talked about this before, space travel, engage with what the space edge is all about. In many ways, we're potato chips to space ships. Data centers on Mars. And data centers everywhere. And then also converging OT. Just like the smartphone converged a camera and a GPS system, we're converging control systems, data acquisition systems. It's pretty exciting. I've been fortunate to have a company and our new CEO, Antonio Neary, has been very supportive. I was with him this morning and we talked about that new first-of-a-kind product that we have at this auto manufacturer. So, as the engineer will let us come in and do an exclusive interview, since he's been a CUBE alumni multiple times. Yes, thank you, Chef. Tell him we said hello. I will, I will. Tom, great to see you. Thanks for having me. Tom Brads, great thought leader, really around category killers, category creators, being innovative and different. That's the key to success. Thanks for sharing. This is the CUBE Conversations here at Palo Alto. I'm John Furrier. Thanks for watching.