John Sculley Biography, John Sculley ceo apple Inc

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John Sculley
John Sculley

John Sculley, January 2014
Born John Sculley III
[1]

April 6, 1939 (age 75)
New York City
Residence Palm Beach, Florida, U.S.
Occupation
CEO of Apple (1983–1993)
Partner at Sculley Brothers, LLC(1995–present)
Co-Founder Zeta Interactive(2007-Present)
John Sculley III (born April 6, 1939) is an American businessman, entrepreneur and investor in
high-tech startups. Sculley was vice-president (1970–1977) and president of PepsiCo (1977–1983),
until he became CEO of Apple on April 8, 1983, a position he held until leaving in 1993. In May
1987, Sculley was named Silicon Valley's top-paid executive, with an annual salary of US$2.2M.
[2]

Sales at Apple increased from $800 million to $8 billion under Sculley's management, although many
attribute his success to the fact that Sculley joined the company just when Steve Jobs' visions and
creations had become highly lucrative.
[3]
However, his stint at Apple remains controversial due to his
departure from founder Steve Jobs's sales structure, particularly regarding Sculley's decision to
compete with IBM in selling computers to the same types of customers.
[4]
Others say that the "two
clashed over management styles and priorities, Jobs focusing on future innovation and Sculley more
on current product lines and profitability."
[5]
But Sculley ultimately was forced to step down as Apple
CEO because he was opposed to licensing Macintosh software and was talking to Goldman-Sachs
about splitting Apple into two companies. When Sculley left in May 1993, Apple had $2 billion in
cash and $200 million in debt.
John Sculley is recognized worldwide as an expert in marketing, in part because of his early
successes at PepsiCo, notably his introduction of the Pepsi Challenge, which allowed the company
to gain market share from primary rival Coca Cola.
[6]
He used similar marketing strategies
throughout the 1980s and 1990s at Apple to mass-market Macintosh personal computers, and today
he continues to speak and write about disruptive marketing strategies. Sculley is currently invested
in and involved with a number of high-tech start-up companies, including 3CInteractive, XL
Marketing (now rebranded as Zeta Interactive
[7]
), Inflexion Point, Mobeam, OpenPeak, x10 Credit,
Pivot Acquisition Corp., nextSource, and WorldMate. Through their family investment office, Sculley
Brothers, John Sculley and his brothers Arthur and David are investing in US health care because
they see innovation in healthcare delivery services as an opportunity for their marketing skills and
experience. Among their healthcare investments are Watermark Medical,MDLIVE, Audax Health
Solutions, Misfit Wearables, and Modernizing Medicine.
Contents
[hide]
• 1 Early life
• 2 Career
o 2.1 1967–82 : Pepsi-Cola
o 2.2 1983–93: Apple Inc.
o 2.3 1994–present
• 3 Personal life
• 4 In popular culture
• 5 Further reading
• 6 References
• 7 External links
Early life[edit]
John Sculley was born in New York City. Five days later, he was one of the first infants to fly the
Atlantic Ocean to his mother's home country, Bermuda, where his family first settled in 1624. John
and his brothers spent much of their childhood in Bermuda before moving back to New York. He
attended high school at St. Mark's School in Southborough, Massachusetts. He ultimately received
a bachelor's degree in architectural design from Brown University and an MBA from the Wharton
School of the University of Pennsylvania
[8]

Sculley overcame a stutter early in his life.
[9]

Career[edit]
1967–82 : Pepsi-Cola[edit]
Sculley joined the Pepsi-Cola division of PepsiCo in 1967 as a trainee, where he participated in a
six-month training program at a bottling plant in Pittsburgh.
[10]
In 1970, at the age of 30, Sculley
became the company's youngest marketing vice-president.
As vice-president of marketing at Pepsi, Sculley initiated one of the company's first consumer-
research studies, an extended in-home product test in which 350 families participated. As a result of
the research, Pepsi decided to launch new, larger and more varied packages of their soft
drinks.
[11]
In 1970, Pepsi set out to dethrone Coca-Cola as the market leader of the industry, in what
would eventually become known as the Cola Wars.
Pepsi began spending more on marketing and advertising, typically paying between US$200,000
and $300,000 for each television spot, while most companies spent between $15,000 and $75,000.
With the Pepsi Generation campaign, Pepsi aimed to overturn Coca-Cola's classic marketing.
[12]

At Pepsi, Sculley also took the position of managing PepsiCo's International Food Operations
division, shortly after he visited a failing potato-chip factory in Paris. PepsiCo's Food division was
their only money-losing division, with revenues of US$83 million and losses of $16 million. To make
the food division profitable, Sculley hired new managers from Frito-Lay and improved product
quality, as well as improving accounts and establishing financial controls.
[13]
Within three years, the
food division was making US$300 million in revenues and $40 million in profit.
[14]

Sculley was best known at Pepsi for the Pepsi Challenge, an advertising campaign he started in
1975 to compete against Coca-Cola to gain market share, using heavily advertised taste tests. It
claimed based on Sculley's own research that Pepsi-Cola tasted better than Coca-Cola. The Pepsi
Challenge included a series of television advertisements that first aired in the early 1970s, featuring
lifelong Coca-Cola drinkers participating in blind taste tests. Pepsi's soft drink was always chosen as
the preferred product by the participant; however, these tests have been criticized as being biased.
The Pepsi Challenge was mostly targeted at the Texas market, where Pepsi had a significantly
lower market share at the time. The campaign was successful, significantly increasing Pepsi's
market share in that state. At the time the Pepsi Challenge was started, Sculley was senior vice-
president of United States sales and marketing operations at Pepsi.
[15]
Sculley himself took the taste
test and picked Coke instead of Pepsi.
[16]

In 1977, Sculley was named Pepsi's youngest-ever president.
1983–93: Apple Inc.[edit]
Apple lured Sculley away from Pepsi in order to apply his marketing skills to the personal computer
market. Steve Jobs successfully sealed the deal after he made his legendary pitch to John: "Do you
want to sell sugared water for the rest of your life? Or do you want to come with me and change the
world?"
[17]
Also, Apple's president, Mike Markkula, wanted to retire and believed that Steve Jobs,
who wished to be the company's president, lacked the discipline and temperament needed to run
Apple on a daily basis. Sculley, with his solid business background and considerable recent
success, would give Apple an image of greater reliability and stability. From the time they first met in
1982 until 1985, Jobs and Sculley had what both acknowledged as an amazing partnership. Sculley
used his marketing experience to help keep the aging Apple II generating much-needed cash and
helped Jobs launch the Mac with the most admired consumer marketing campaign of its time. Jobs
was the product czar and made all the product decisions.
[citation needed]

The Lisa computer, an innovative model designed by a team initially led by Jobs, became available
in January 1983, and had disastrous sales. When Jobs' Macintosh, the first of a new series of
models with a pioneering black-and-white graphical user interface, shipped to stores in January
1984, Sculley raised the initial price to $2,495 from the originally planned $1,995, using the
additional money for higher profit margins and expensive advertising campaigns.
[18]
Macintosh sold
well, and received excellent reviews; however, it did not put the IBM PC out of business. Some of
the privileges of Jobs' elite development groups were trimmed, and projects were subject to stricter
review for usefulness, marketability, feasibility, and reasonable cost.
[citation needed]

At the peak of the Macintosh success, Apple made an attempt to move unsold inventory of Lisa
computers by renaming it to "Macintosh XL" and positioning it as a top-of-the-line pro Macintosh
model. Since it lacked the user-friendliness of the Macintosh, this idea had little success.
[citation needed]

At this point, a power struggle between Jobs and Sculley was becoming obvious. Jobs became
"non-linear": he kept meetings running past midnight, sent out lengthy faxes, then called new
meetings at seven am.
[19]
The Apple board of directors instructed Sculley to "contain" Jobs and limit
his ability to launch expensive forays into untested products. Rather than submit to Sculley's
direction, Jobs attempted to oust him from his leadership role at Apple. Sculley found out about
Jobs's plans and called a board meeting at which Apple's board of directors sided with Sculley and
removed Jobs from his managerial duties. Jobs resigned from Apple and founded NeXT Inc. the
same year.
[19][20]
After Jobs left, the company experienced a turnaround in 1986, introducing a faster
microprocessor and renaming "The Macintosh Office" "Desktop Publishing."
[citation needed]

Under the direction of Sculley, who had learned several painful lessons after introducing the
bulky Macintosh Portable in 1989, Apple introduced the PowerBook in 1991. The same year, Apple
introduced System 7, a major upgrade to the operating system, which added color to the interface
and introduced new networking capabilities. It remained the architectural basis for Mac OS until
2001. The success of the PowerBook and other products brought increasing revenue. For some
time, it appeared that Apple could do no wrong, introducing fresh new products and generating
increasing profits in the process. The magazine MacAddict named the period between 1989 and
1991 as the "first golden age" of the Macintosh.
[19]

Microsoft threatened to discontinue Microsoft Office for the Macintosh if Apple did not license parts
of the Macintosh graphical user interface to use in the Windows operating system. Under pressure,
Sculley agreed, a decision which later affected the Apple v. Microsoft lawsuit. About that time,
Sculley coined the term personal digital assistant (PDA) referring to the Apple Newton, one of the
world's first PDAs which, as it turned out, was several years ahead of its time.
[21]

In the early 1990s,Sculley led Apple, at enormous expense, to port its operating system to run on a
new microprocessor, the PowerPC. Sculley later acknowledged such an act was his greatest
mistake, indicating that he should instead have targeted the dominant Intel architecture.
[22]
After a
bad first quarter in 1993, Apple's board forced Sculley out.
[23]
He was replaced by German-
born Michael Spindler, who had been Chief Operating Officer, who was also ousted a year later.
[24]

In 1987, Sculley made several famous predictions in a Playboy interview.
[25]
He predicted that
the Soviet Union would land a man on Mars within the next 20 years and claimed that optical storage
media such as the CD-ROM would revolutionize the use of personal computers. Some of his ideas
for the Knowledge Navigator would eventually be fulfilled by the Internet and the World Wide
Web during the 1990s and others by Apple itself with the introduction of Siri.
[citation needed]

1994–present[edit]
Since leaving Apple, Sculley has invested in and assisted a number of successful businesses: He
was a founding investor in MetroPCS, formerly General Wireless, and helped guide the company's
brand marketing; MetroPCS is now a multi-billion dollar public company on the New York Stock
Exchange. He built NFO Research from $25 million to $550 million in revenue, and sold it to IPG for
$850 million. He helped launch and advised Hotwire.com, Intralinks (which was co-founded by his
brother Arthur), and InPhonic, Buy.com, and PeoplePC - each of which became billion dollar market
cap public companies in the 1990s. In 1995, Sculley and his two brothers, Arthur and David, formed
a family office they call "Sculley Brothers," which is a privately owned portfolio of family investments,
not an outside investor fund. Arthur Sculley is a former CEO of JP Morgan Private Bank; David
Sculley is a former CEO of HJ Heinz USA. Other successful companies that Sculley Brothers helped
create include Profession Sportscare, Intralinks, CreditTrade, Country Gourmet Soups, Buy.com,
NextSource, XL Marketing, 3Cinteractive, and OpenPeak.
Sculley went political in the early 1990s on behalf of Republican Tom Campbell, who in 1992 was
running in California for a United States Senate seat. Sculley hosted a fundraiser for Campbell at his
ranch in Woodside. Sculley had become acquainted with Hillary Clinton, serving with her on a
national education council. When Bill Clinton ran for president, Sculley supported him. Sculley sat
next to Hillary Clinton during the President's first State of the Union address in January 1993.
[26]

In 1994, Sculley signed on as CEO with Spectrum Information Technologies, a US$100
million wireless communications company. Unbeknownst to Sculley, at the time he joined the
company, it was under investigation for fraud by the Securities and Exchange Commission (SEC).
Four months later, Sculley learned of the fraud investigation and resigned, filing a lawsuit against
Spectrum president Peter Caserta for damaging his reputation.
[27]
In 1997, Sculley became the
chairman of Live Picture, a California-based company, to oversee its push into high-quality, low-
bandwidth imaging over the Internet. US$22M in venture capital was provided for the company.
Sculley later left the company, but remained an investor. In 1999, Live Picture filed for federal
bankruptcy protection as part of a plan to be acquired by MGI Software.
[28][29]

In 1997, Sculley co-founded PopTech with Bob Metcalfe and several other dignitaries from the
technology industry.
[30]
In 1998 he joined the board of directors of BuyComp LLC (now Buy.com), an
Internet-only computer store. Two years later, he partnered with Dennis M. Lynch to launch
Signature21. In its first year, the two-man firm provided marketing services to an array of small to
medium sized businesses. In 2001, Sculley and Lynch transitioned the company into a learning
program for rising entrepreneurs. Months later, Lynch left the company, while Sculley continued to
consult and work with small businesses, including InPhonic, whose board of directors he later joined.
InPhonic is an online retailer of cell phones and wireless plans. Sculley's early leadership and
enthusiasm
[31]
helped steer InPhonic towards its successful IPO in 2004. Sculley currently serves as
the vice chairman of the InPhonic board of directors. InPhonic filed for Chapter 11 in 2007.
[32]

In 2002, Sculley endorsed and invested in the Wine Clip,
[33]
a wine accessory product, which claims
to accelerate the aeration of wine by exposure to magnets. A year later he helped in the founding
of Verified Person Inc., an online pre-employment screening company. He currently serves on the
board of directors.
[34]
In 2004, Sculley joined the board of directors at OpenPeak, a maker of
software for wireless consumer electronics, digital media, computers, and home systems.
[35]
In
March 2006, Sculley was named Chairman of IdenTrust (formerly Digital Signature Trust Company)
a San Francisco based firm focusing on verifying identity and boosting financial security.
[36]
In the
same year, John Sculley became a Venture Partner at Rho Ventures.
Before speaking at the Silicon Valley 4.0 conference, Sculley was interviewed by CNET in October
2003, where he explained the mistakes he made at Apple concerning the Apple
Newton and HyperCard.
[37]
Also in 2003, Sculley was interviewed by the BBC for the television
documentary The World's Most Powerful episode Steve Jobs vs. Bill Gates, discussing his time at
Apple during the 1980s as CEO. In 2010, he was interviewed for Cult of Mac on the topics of Steve
Jobs and design.
[38]

Sculley has spoken at PopTech since its opening in 1997 every year except for 2005.
[dead link][39]

in 2007 Sculley co-founded the data company Zeta Interactive with business partner David A.
Steinberg, and in January 2014 the data analytics firm XL Marketing, rebranded and incorporated its
resources into Zeta, re-launching it as a Big Data-Driven Marketing firm. On January 30, 2014,
Sculley was a panelist at a forum organized by Zeta, which featured ad executives, marketers
and NFL executive to discuss the changes in the way companies market and reach consumers since
Sculley's time at Apple in 1984 when the computer company featured what became one of the first
iconic Super Bowl ads - the 1984 commercial.
[40]

Personal life[edit]
John Sculley has three children and six grandchildren. He currently lives with his wife, Diane Gibbs
Poli, in Palm Beach, Florida.
[41]

In popular culture[edit]
Sculley is portrayed by actor Matthew Modine in the 2013 film Jobs, based on the life of Steve Jobs.

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