The Hardware Lock Strikes Back     Why Molecular Modeling?

“Autodesk Arrogance”

Three years had passed since I cut loose with my last Jeremiad at a company meeting (see page [Ref] for the last one). Autodesk had continued to prosper in those years and, with growth, it's inevitable that many new people arrive at the company who haven't shared in the company's evolution and perhaps don't fully understand, therefore, the foundations of the company's success.

Well before the clash over the attempt to reintroduce the hardware lock in early 1990 (see page [Ref]), I had been picking up more and more signals that indicated that Autodesk was increasingly adopting a “big CAD company” outlook and distancing itself from the small customers who continued to account for the overwhelming percentage of our sales. The word “arrogance” kept cropping up; both from the dealer and customer community, applied to Autodesk's behaviour, and within the company, referring to old-timers who thought they knew better ways to compete in the CAD business than the way other CAD companies were operating.

I decided to grab a cinder block and take this head-on. At the company meetings of February and March 1990, I tried to bring the focus back to the customers whose purchase decisions were the underpinnings of Autodesk's success. February was the gentle introduction, March the gnarly climax.

Remarks for the February Company Meeting

by John Walker
February 9th, 1990

The end of January marks the close of Autodesk's financial year. It's a time devoted literally to summing up the results of the last twelve months' successes and failures, where the brilliant breakthroughs are added and bonehead blunders subtracted to yield a number that tells us all how we're doing.

The end of January is also the anniversary of the meeting, now eight years ago, in my living room where the idea of starting this company first took shape.

So about this time every year, I find myself looking back over this weird adventure we've lived through and thinking about what made it all possible.

For all of our success, our salaries, our bonuses, our recognition in the industry, our high valuation in the stock market, our exciting new technological ventures, our pioneering of new markets around the world, our innovative programs in education, our investments in emerging industries all stem from one common source.

Everything we've done, all we've achieved, and all we hope to do in the future is made possible by the customer who buys Autodesk products.

When you see those numbers with lots of zeroes to the left of the decimal point, it's all too easy to forget that they're nothing but the sum of a lot of individual little numbers. What is the reality behind those numbers?

Just this. The fundamental event that makes everything we're doing possible is a customer going to an Autodesk dealer, parting with somewhere between two and three thousand dollars, and walking away with a copy of AutoCAD.[Footnote] Who are these customers? Well, for all you hear up here month after month about Fortune 500 and the government, about 85% of them are individuals and small businesses. This shouldn't be surprising when you consider that all the creativity and vitality in the economy, however measured, is among the customers that overwhelmingly constitute our market.

Since only a small percentage of you here have ever bought a copy of AutoCAD, I want you think about what that involves. You are exchanging around three thousand of your dollars for a cardboard box filled with paper and rusty plastic that promises, after you've mastered its self-evident complexities, to repay your investment in it.

Now some deep-thinking analysts may tell you that customers are buying CAD out of fear of their competitors, because they want to appear technologically current, or other subtle and indirect reasons. What a pile of crap. I was a small businessman, and I can tell you then whenever I peeled a hundred and fifty twenty dollar bills off my anorexic wad to buy something, it wasn't without a lot of thought leading to a firm conclusion that it was worth it.

That's why our customers pay what they do for AutoCAD. Because it's worth it.

If we lose sight of this simple fact, and veer off into directions and priorities that do not put value and service to the customer at the forefront of everything we do, all this will end. We will fail, and we will richly deserve to.

If we continue, as we have done consistently for the last eight years to measure every proposal against the standard, “How does this benefit the customer?”,[Footnote] I believe the success we've experienced to date will be just the base upon which far greater achievements can be built.

The confluence of developments in several key technologies suggest that the industry in which Autodesk is now the predominant worldwide force will be at the center of a revolution in manufacturing more profound than the introduction of steam power that heralded the industrial revolution, or of silicon technology that ushered in the present information age.[Footnote] If we position ourselves properly for the discontinuous changes that I now believe are likely, I can envision no limits to our success in the era that is almost upon us.

But to achieve anything at all, even our next quarterly numbers, we must never forget our customers. It is the customer, ultimately, that we are working for, and it is the customer who we must always strive to satisfy. All the rest will take care of itself, in the fullness of time.

Remarks for the March Company Meeting

by John Walker
March 2nd, 1990

These meetings have a tendency to degenerate from the kind of open forum for airing important issues that affect our company into a kind of rah-rah, go-team pep rally. Hey, even in high school, the cheering and the bonfire were just the price you paid to get to the beer. So before everybody goes to sleep, I'd like to inject some controversy into this happy assemblage.

I think we need it. Badly.

I want to talk about arrogance. I will be brief.

Recently, several people have approached me and reproached me about “Autodesk Arrogance”. By this, they don't mean the self-destructive kind of arrogance where a vendor becomes insensitive to the needs of its customers and dealers—the arrogance that has led to the downfall of many a high-flying company—they mean something entirely different.

I have heard the term “Autodesk Arrogance” used to denigrate those who believe, as I do, that the practices and principles that built our company from a hard-scrabble start-up into an industry leader should continue to govern our growth from today into the foreseeable future.

I have heard the term “Autodesk Arrogance” applied to dismiss those who believe that continuing to focus on the most productive sector of the global economy, the individual and the small company, will continue to serve Autodesk as it has in the last 8 years.

If betting on the creative individual, against such brain-dead dinosaurs as General Electric, McDonnell Douglas, Ford Motor Company, and the United States Government is arrogant, then call me arrogant.

But what, indeed, is arrogant?

Is it not arrogant for people in an office building in Marin County, California to assume they know the needs of our customers better than the customers themselves? I think that's arrogant, and foolish.

Is it not arrogant to engage in so-called strategy based on five-year projections of the market when not a single so-called market analyst in 1982 predicted the dominance of AutoCAD a mere five years later? I think that's arrogant, and dumb.

Is it not arrogant for so-called strategists to decide what the market is “ready for” and “not ready for”, when history has repeatedly shown the market and the customers who compose it to be much wiser and more resourceful than any self-appointed analyst? I think that's arrogant, and shameful.

Is it not arrogant to insult any customer with the notion that he will choose a product for any reason other than a carefully arrived at and rational judgement that it's the best? I think that's arrogant, and dangerous.

Is it not arrogant to withhold tools, products, features, and information from our users, our dealers, our developers, and all the other members of the community assembled around our products because of a presumption that “they won't understand”, “they aren't smart enough”, or “it'll only confuse them”? I think that's arrogant, and counterproductive.

These are the kinds of real arrogance I think we need to guard against. They take root all too easily and quickly grow to the point where we become distant from the people responsible for our success: our customers and the dealers who sell them our products.

Now some people may hear this and say, “Right on! It's about time somebody told the truth about that other department!” Look closer to your own desk first. These problems are everywhere in our company.

The kinds of arrogance I mentioned are deeply ingrained in the business culture of the United States, particularly in the large companies. To a certain degree, they are taught in many business school curricula. People who come to Autodesk from other companies are usually aware that Autodesk is not a normal company. Normal companies aren't this successful. Ever wonder why?

I think it's this. We constantly strive to make the best products possible, to effectively communicate information about them to a wide variety of people, to make our products broadly available, to expand the market by delivering ever growing capabilities at prices people can afford, and to ultimately trust the judgement of the market to tell us what we should and shouldn't do—to guide the evolution of our products and our company.

Most places, you come up with an idea and the boss says, although not usually this directly or honestly, “I don't care what you think. What matters is what I think.” That's arrogant.

Around here, I've been known to say things like, “I don't care what you think. What do the customers think?”. That may sound arrogant, but to me it's just plain old common sense. The evidence that it works is all around us.

“But that isn't how they did it where I used to work!” Well if that place was more successful, more fun, and more rewarding than Autodesk, why are you here?

“Growth has to change how you do things. Large companies can't remain responsive.” Frequently they don't. Then we drive them out of business.

If refusing to discard a formula for success that built our company from nothing to a billion dollars market value constitutes arrogance, then call me arrogant.

I will wear it as a badge of honour.

The Hardware Lock Strikes Back     Why Molecular Modeling?