By Philip Greenspun. Interesting throughout, but two items particularly interested me.
Why was Microsoft so successful? Maybe because of this:
What contributes to the success of MIT graduates? Maybe this:
Software products is a rough business because it moves fast and attracts smart people. Furthermore you have companies like Microsoft where people work nights and weekends backed up by a cash hoard of $20 billion and a global brand. As an investor, you never want to send your company up against the Microsofts of the world unless your managers are smart, hard-working, and have the right experience. If they don't, you need to look for a less competitive business. Maybe you can offer training or admin services for a Microsoft or Oracle product. Or maybe you should get out of the IT business altogether and apply your capital and employees to something like party equipment rental (you don't see too many table and chair rental companies with $20 billion in the bank and MIT PhDs working nights and weekends trying to put their competitors out of business).
For more tales of business failure see "33 Startups That Died Reveal Why They Failed".
But for most of this year Chip, Peter, and Allen didn't want to listen to me. They even developed a theory for why they didn't have to listen to me: I'd hurt their feelings by criticizing their performance and capabilities; self-esteem was the most important thing in running a business; ergo, because I was injuring their self-esteem it was better if they just turned a deaf ear. I'm not sure how much time these three guys had ever spent with engineers. Chuck Vest, the president of MIT, in a private communication to some faculty, once described MIT as "a no-praise zone". My first week as an electrical engineering and computer science graduate student I asked a professor for help with a problem. He talked to me for a bit and then said "You're having trouble with this problem because you don't know anything and you're not working very hard."