| John Sculley | |
|---|---|
| Born | April 6, 1939 |
| Occupation | President of PepsiCo (1977–1983) CEO of Apple Computer (now Apple Inc.) (1983–1993) Partner at Sculley Brothers, LLC (1995–Present) |
John Sculley (born April 6, 1939) is an American businessman. 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.[1]
Sales at Apple increased from $800 million to $8 billion under his management.[2] 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.[3] He was ultimately forced out of Apple in 1993 as the company's margins eroded, sales diminished and stock declined.[4]
Sculley is currently a partner in Sculley Brothers, a private investment firm formed in 1995. He is best known for his marketing skills, particularly in his introduction of 'the Pepsi Challenge' at PepsiCo, which allowed the company to gain market share from primary rival Coca Cola, having used similar marketing strategies throughout the 1980s and 1990s at Apple to mass market Macintosh personal computers.
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Sculley was born in the United States, but within a week of his birth, he and his family were relocated to Bermuda, and subsequently to Brazil and Europe.[5]
Sculley 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 Business at the University of Pennsylvania [6]
Sculley overcame a stutter early in his life.[7]
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.[8] 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.[9] 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.[10]
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.[11] Within three years, the food division was making US$300 million in revenues and $40 million in profit.[12]
Sculley is 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, because Pepsi had a significantly low market share there 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.[13] Sculley himself took the taste test and picked Coke instead of Pepsi.[14]
In 1977, Sculley was named Pepsi's youngest-ever president.
Apple lured Sculley away from Pepsi because Apple wanted Sculley 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? .[15] 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 conventional business background and considerable recent success, would give Apple an image of greater reliability and stability.
Sculley raised the initial price of the Macintosh to $2,495 from the originally planned $1,995, using the additional money for higher profit margins and expensive advertising campaigns.[16]
The Lisa shipped in January 1983, and had disastrous sales. While the Macintosh shipped in January 1984 and sold well, it did not put the IBM PC out of business, and some of the privileges of the elite development groups were trimmed, and projects were subject to stricter review for usefulness, marketability, feasibility, and reasonable cost.
A power struggle between Jobs and Sculley had become readily apparent. Jobs became "non-linear": he kept meetings running past midnight, sent out lengthy faxes, then called new meetings at 7 am.[17] 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 that Jobs had been attempting to organize a putsch 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.[18][17]
Under the direction of Sculley, having 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.[17]
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. Also while at Apple, Sculley coined the term personal digital assistant (PDA) referring to the Apple Newton, one of the world's first PDAs.[19]
In 1987, Sculley published his autobiography, Odyssey. He gave each Apple employee a copy at Apple's expense, in the hope of inspiring "excellence". Shortly afterwards, Jean-Louis Gassée, Vice President of Product Development, gave each employee in his division a copy of Fred Brooks's book The Mythical Man Month, in the hope of inspiring good sense in planning and carrying out engineering projects.
Given his apparent inability to effectively manage Apple's product line, Apple's board ultimately forced Sculley out. He was replaced by Michael Spindler, who had been Chief Operating Officer.[20]
In the early 1990s, at enormous expense, Sculley led Apple to port its operating system to run on a new microprocessor, the PowerPC. Sculley later acknowledged this was his greatest mistake, indicating that he should instead have targeted the dominant Intel architecture.[21]
In 1987, Sculley made several famous predictions in a Playboy interview.[22] 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, not by Apple itself, but by the Internet and the World Wide Web during the 1990s.
Condé Nast Portfolio ranked Sculley as the 14th worst American CEO of all time.[23]
Sculley turned his attention to politics 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 fund-raiser 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.[24]
Only one business day after leaving Apple in 1994, Sculley signed on with Spectrum Information Technologies, a US$100 million wireless communications company. At the time Sculley 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.[25]
In 1995, Sculley became an investment partner of Sculley Brothers LLC, a private investment firm in New York City.[26] Sculley became the chairman of Live Picture, a California-based company, in 1997, to oversee its push into high-quality, low-bandwidth imaging over the Internet. Live Picture was best known for its work in network imaging and as the inventor of zoomable images for 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.[27][28]
In 1997, Sculley co-founded PopTech with Bob Metcalfe and several other dignitaries from the technology industry.[29]
On July 15, 1998, Sculley joined the board of directors of BuyComp LLC (now Buy.com), an Internet-only computer store. As of 2006[update], Sculley is not listed as an executive at the company.[30]
In 2000, Sculley 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.
In 2000, Sculley joined the board of directors at InPhonic, an online retailer of cell phones and wireless plans. His 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.
In 2003, Sculley helped in the founding of Verified Person Inc., an online pre-employment screening company. He currently serves on the board of directors. In 2004, Sculley joined the board of directors at OpenPeak, a maker of software for wireless consumer electronics, digital media, computers, and home systems.[34] 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.[35] 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.[36] 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.[37] 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.[39]
Sculley currently resides in Palm Beach, Florida.[40]
| Preceded by Mike Markkula |
Apple CEO 1983–1993 |
Succeeded by Michael Spindler |
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