[SOUND] And this is lesson seven. Lesson seven is all about the ecosystem. So I think the main point here, that is, for our innovators and entrepreneurs, products are never, almost never, standalone. They're always part of a bigger system. And in order to create value, you have to understand this ecosystem really well. An ecosystem meaning your suppliers, the people who design the product, who market it, who deliver it. Sometimes for Internet businesses, a key part is the delivery company, FedEx, that actually brings the product. If they didn't bring the product, then you wouldn't be able to create the value through e-retailing. So, tell us about your own experiences in creating a product that was actually part of a much larger, complicated ecosystem and you actually didn't control most of that ecosystem. Other people controlled it but they were crucial to the success of your innovation. >> The two big lessons over here, you touched on this one. You never control everything, even if you are big powerful company, could be a Google, an Apple, an Intel. They don't control everything. We talked a lot about creating coalition and partnerships and other great things. But the other fundamental issue that many people fail to understand, that every innovation is not in a vacuum. It has to come with, you talk about the supply and the chain and everything. But you have a computer, but there's no application to run on the computer, who cares? And the reasons why computers became pervasive in our society only when it was easier to use. When only a few people knew how to program a computer, it was always in a back room, nothing else. When the application was driven by diffuse mods but it was easier for people to use, then it's ubiquitous. Everybody uses it. It's a classical story of an ecosystem. If you don't think it through, of who is going to use it, and how they're going to use it, and who's going to supply the way to use your innovation, it doesn't matter. People admire your wisdom, but nothing else. >> Okay, so, if you have an innovation, and if it has an ecosystem, if it's a complicated innovation, the chances are a lot of things can go wrong in the ecosystem. Let's take an example of Intel. Intel designed a microprocessor. People may not always realize, a microprocessor has a lot of software embodied in it. Part of developing a microprocessor is software engineers who do some really brilliant things, programming the software into that microprocessor. And at one point, and I think it's the Intel Pentium 4, there was a small bug in the math coprocessor. This bug meant that if you did calculations for 31 years, there was a chance you might have the microprocessor make a single mistake, once in 9 billion calculations, a really, really rare kind of mistake. But this was a big fuss in the marketplace. What it meant to people was, this is an unlikely event, it will almost never happen, but it could happen. And Intel actually acted really quickly to correct it and recall and replace these microprocessors at a very big expense. So point here is, [COUGH] you create a complicated ecosystem, you gotta get your product out there quickly, maybe there are bugs in it. Until you get your product out, you don't really know how people will react to it, how they'll use it, but you run the risk of it being not absolutely perfect. Can you tell us a bit about how Intel dealt with this crisis in a general, what do you do with a complex ecosystem that still has some bugs in it? >> Life is tough. >> [LAUGH] >> This one is an example of the crucial part of the ecosystem of the people who buys the product. >> Who buy the product? >> Who buy the product. There was a day you could have a wonderful ecosystem but no one really cares, then it doesn't matter. Buy, uses it. In this case, it's hard to avoid but the problem happened. You have to find ways to make sure that they are minimized, eliminated, but things happen. I think what they initially did was the classical interaction of a technological company. It's already there, you'll never see it, why bother? It took a very short time to understand it's not about the technology, it's not about rational explanations, it was about the trust. >> Trust? >> It's about the trust. We talked about Intel Inside or whatever, it is about the trust. People buy a product from Intel, they want to trust that the product is right. And if it's not right, the company will take of it. So what Intel did, a very simple program, extremely costly. Intel committed to replace everyone that had a Pentium processor Intel will replace it with a good corrected one. No question asked. >> And that cost many millions of dollars. >> Hundreds of millions of dollars. >> Hundreds of millions. >> Hundreds of millions. At the end of the day, it turned to be positive because people had the trust that the company stands behind its product, does not give them hand waving explanation. If the product is faulty, no matter how well the situation is, Intel will replace it, and I think it gained Intel a lot of trust. I think it made the Intel Inside program, which is all based on trust and confidence, even stronger. And Intel even went out as part of this one, that Intel will publish every problem they know that exists on the product. And if everyone has a big issue with them, we put them into testing with all the smart people in the world. And we add also explanation what will be fixed, what are the way to overcome, and we always fix things that cannot be overcome, they can't be overcome. Not every problem is unsolvable. But this one, something could be a software fix, an application fix or what have you. That was a very critical learning that it's all about the trust. And trust is an emotion, not something you fix with your brain. >> And I'm not going to mention names, but we have several cases lately of major companies, a big car company, and a company that makes airbags, and they basically have stonewalled us and destroyed trust of the consumer and their suppliers and caused huge damage. So it's such a simple basic lesson here. Be transparent, be upfront if you made an error or mistake, admit it and fix it, whatever it takes. It's so, so simple.
