Tony Bates interview: Geek cred, Cisco lessons, and Skype’s core values

SkypeJournal.Banner.logoCross-published guest post by Phil Wolff, Editor and Publisher, Skype Journal.

Phil’s interview with Tony provides significant background about what Tony brings to Skype as both his technology expertise and business management experience, the four key values that are the foundation for his leadership focus during his first year as Skype CEO and where he sees Skype moving ahead at a high level.

Skype Journal: How did you come by your geek cred?

I was part of the team, the very small team that ran the ARPANET gateways in the UK, I call it the right place at the right time. And my story about how I’m self-taught is that I’m from London and I lived at the end of the Tube line and it took roughly an hour and twenty minutes to come in every day and an hour and twenty minutes to go home. That’s a long time where you’re kinda sitting there and so I immersed myself in manuals and texts. Strange story about that, back in those days, manuals were a lot better then they are today. I self-taught UNIX through basically DEC manuals.

And I really got involved in the infrastructure side of the Internet and so when people say a bit about being a geek, you’re seeing a bunch of RFCs around things like route reflection. Route reflection is an esoteric thing but it’s one of the things along the way that kept the Internet going.

There were some other jobs after that. I helped start RIPE which is the main name registry similar to the Internic and so on. I wasn’t the first guy there but I was like number four and I worked on a thing called a route server. But I always knew I wanted to build product. And so after that I did Internet MCI which is how we transitioned the NSFnet which was a lot of fun and it was all different then. It was when in those days the nexus of the Internet was actually in Virginia, So PSI was there, UUNET was there, Sprint was there, MCI was there. And we actually used to meet, a bunch of kids, geeks and we would actually trade SLA agreements. We would go to the Tortilla Factory once a month and I would buy a circuit, you’d buy a circuit and that was how it worked. And in those days there was no settlement and all the discussions we have today.

But I always kinda felt that the missing thing was how were these things going to evolve and scale.

When I joined Cisco I worked in the CTOs group and we had these guys called “consulting engineers,” very smart people mainly more pragmatists who had been building. And I kinda ended up being the de facto product manager for the high end router space and we were redefining it and there were a lot of people involved. But my first big project was working with a thing called 12000. The twelve-thousand was the real first carrier class box.

And then to cut a long story short so this doesn’t go on forever, the real big thing I got involved in was this thing called the CRS1 and what was brilliant about that was all aspects about building a system: which was hardware; we created this new operating system called IOS XR, which I drove and led and this you know; put it this way, pretty much any time that someone connects to your website you get sent one of these packets, it comes across one of these devices so it’s part of the infrastructure.

And the only other bit that may be relevant for this is that along that way I got really enamored with video. I was asked to integrate Scientific Atlanta because we’d acquired Scientific Atlanta, and now we got bigger and I was general manager and I had most of the carrier business, a big portfolio, and what I loved about the technology was the complexities of it and the complexities of the multiple forms of capture to display. And I also loved the fact that it took me to a place that I hadn’t been before. I had been basically a plumber, I had been selling plumbing, building plumbing. But when we acquired Scientific Atlantic at Cisco, the dialog changed – we now were actually in the home. We were in the ARPU part of their discussion.

And the other thing that happened because of that passion around video and the fact that I had been so focused onto the early generation of the Internet I had the opportunity to be on the board at YouTube. And that was my first real shot into that kind of “consumerland,” consumer Internet. Loved it, it was over before it started, it was great fun. Founders are fantastic people, Chad and Steve. If you ever get a chance to meet them, they’re wonderful guys.

And from there, I was just building my portfolio, growing my leadership, and John Chambers asked me to take on enterprise 18 months ago, and this opportunity came up.

SJ: And out of the all the companies – Why Skype?

Well, it’s a great story. I’m very goal-driven. My wife will tell you that we…

SJ: In terms of personal career goals?

Goals in general. I’m just being very candid. Some career, some material, some more social. I mean, I believe that goals work. I think that it’s a myth that there’s some Harvard study that wasn’t empirical that said that they did a measure of people one year of one graduation class and those who had goals, who had wrote down goals were more successful than those who didn’t write down goals. Now again, goals are different for different people. But three years ago, I wrote down a goal that I would like to be a CEO before I am forty-five and I wrote down three companies and this was one of them.

SJ: Really?

And I’m not telling you who the other two are. But I will tell you is that each one of those was not in the infrastructure system space, was in the consumer internet space, because I think that the consumer internet side is the most disruptive space and continues to be. I was in the transition at Cisco where it was frankly academic-led to enterprise-led and it transitioned to consumer-led and I got to see that.

And the other thing, just for what it’s worth, I hope it doesn’t come across as cheesy, but I’ve been a big user of Skype for a long time and…

SJ: A little cheesy.

Yeah, but let me tell you the story of why it’s less cheesy. When I went to Tallinn. Have you ever spent any time in Estonia?

SJ: No.

You’d love it. Actually, a big part of the history is the disruption of what they’ve done. One of the questions they’ll ask anyone is – how long have you been using Skype? One way you can tell how long someone has been using Skype is asking if you have a unique handle, that maps to their unique handle. My Skype ID is TBates. I started using Skype in March 2004. There’s a great story here. So the guy who runs the database who has all the secrets, Asko, they asked him to run it, cause I was asked this question myself, and the answer came back – he goes wow that’s before I started using it. So yes, you can say that it’s cheesy but the reality of it is that I used it a long time ago.

I met Nicholas a long time ago. I developed an idea of putting p2p inside routing protocols at Cisco. We have a patent on that. And I pitched it to them and they said it wasn’t a great idea. ‘Cause of their core values. So I’ve been involved in that technology.

SJ: Skype vs. Cisco?

Just to give you a perspective, I was at Cisco for 15 years. So I was there when they were kind of in the low billion dollars which is slightly bigger than this and actually it’s kind of interesting, when I came to Skype, there’s a lot of similarities in culture. Right? We can discuss what Cisco is today but back then it was highly product-centric. There was a belief system in this case, that you can kind of equalize the world by making IP the center point of it.

In Skype’s case, it’s saying we’re providing a communications services platform that breaks down barriers on a global basis. And they used a very powerful disruptive technique to do that. One – it’s low cost, but two – it’s highly scalable. And so there are similarities there.

Culturally, there are also similarities, in the early days of Cisco there was a belief system that you could do anything if you had the right talent and the right engineers in place. Now that scales to a certain level and then you have to put processes in and so on. And Skype I think is at a very similar point in its life cycle. So for me, I was sort of lucky enough to go through that, so when you ask what’s the value I can bring, I have been through that.

I think there’s two other pieces which is leadership as you go through these transitions is critical and I learned that from John. And John created a bunch of cultural values that stick with the company. Those values are different, but the importance of those cultural values are very critical as we went through different parts of that long term journey.

And so I am in the process, and it’s an internal thing but I have to share it. It’s sort of establishing a bunch of cultural values that I think are very important to Skype. Different to the ones we had at Cisco. At Cisco we had “Customer Success”: customer is always right, no technology religion, results driven. So there’s a bunch and there’s a badge you get at Cisco.

I’m trying to focus on four key things:

Number one – product engineering led company. The way Skype will be successful is its products must speak for themselves. Its products and its services. And you know, I think we have some wonderful products. I think what we just did with the iPhone launch, just to bring you up to speed, we did the New Year’s Eve event with 11 million – 10 million upgrades, 1 million new users — in less than a week. And just the pure use cases are just unbelievable. And I think why? Because they’re multi-platform and they’re going to lead to more platforms. Just takes it to the next level. So that’s one key thing. But product engineering – that must lead. I don’t want to talk about the past. I want to talk about what I want to do. But that’s number one.

Secondarily, understanding that we’re truly a global company. One of the things that attracts me to Skype is that we were founded in the East. We were founded in Eastern Europe. Maybe we should do this at some point – maybe we should do this at some point, you should come with me; the energy and the way they think about life is just amazing. It’s not just that they disrupt – they see this as a platform that could change the world. Now to change the world you need a big platform. So you have to keep investing and so on.

But we also need to grow. And at some point you have to look at that talent pool and say if you go to Estonia and you get in a cab and you say Skype, you don’t have to say any more. And I’m saying Estonia, I’m not just saying Tallinn. So this is a population thing. So we’re sort of bringing East to West. Now why I like that concept is that we actually have the infrastructure and the capability to do it. The way people use Skype internally is they’ve already embraced “globalization” but not necessarily really realized the full power of it, so that’s number two: Truly global like no one else. Really be a global company. Most global companies today are headquartered in The Valley and they outsource. That’s not what I’m talking about. Completely distribute the company. That’s the second cultural value.

The third one is we’ve got to, one thing that I think is really important is incredible ideas. [And you’ve got some great ideas by the way. And I do want to mention, we are going to take up your Heartbeat idea. I think that’s a good one. Not committing right now! But I absolutely think that heartbeat not a good one right now, we have to put more data and status around it.] There’s probably ten things that you would like to do in the Skype product, probably five or six [of mine] are the same. If you go to Tallinn and you say to them, we should do this, I don’t know: ring tones, as an example, it’s been done. But what happened was for some reason the processes and things to get it to market and really get it to take off, so they just moved on. So cultural concept number 3 is ideas to real users much quicker. And I think I know how to do that. Because I’ve been through that process. Last year I helped develop 400 new products at Cisco. Different types of products Software products as well. Android tablet, business social software, obviously switches and routers and so on, so that I think picking up that pace…

Last one I think is a bit high level, but understanding that the role Skype plays is that we’re in a highly dynamic world, much more dynamic than it used to be. There’s a bit of a sense that it’s static – you win VoIP and then you win the next one. I think all those things are blurring – and so that’s the 4th concept. This notion of dynamics – what’s happening in the marketplace with the competitors and so on, I think we can translate internally and really move much quicker.

SJ: What does Skype need to become?

Look, I think there are a couple things. One is Skype in my opinion is the only truly global communications services company already.

One of the things that’s going to come out tomorrow is a Telegeography report. Wait, let me ask you a question, what do you think the numbers are going to be for 2010?

SJ: For international minutes?

For us, as a percentage of total.

SJ: 16?


SJ: Congratulations.

What’s that really about? That’s still mainly people with good broadband, mainly people in the developed world with PC architectures. You’ve got to move to mobile, you’ve got to get to the third screen, I would say the living room, really. I think the world is made up of three, increasingly, three modalities of input and receive communications. These guys (holding up iPhone) for sure – that wave’s there and we’re in the heart of that right now with what we’re doing with our products. This, and I think the desktop is still a metaphor for what we’re doing – mainly for the web and the browser. And increasingly the living room. And that’s the other thing we’re going to be talking about tomorrow – is continuing partnerships around what we’re doing with TVs, and SkypeKit as a generalized kit can now be put into a lot of different devices.

So when you say what I think we can become, I think we can service a billion people quite candidly. I think offer a rich set of communications services in a way that leads to more wonderful experiences obviously. There are so many stories of the way people use it in terms of whether it’s outreach, in terms of education to kids, and so on or whether you’ve got someone who’s at war trying to get back home.

But I actually think that the broader play for us is that it can also start to become much more useful. The way people collaborate is becoming more video based. It’s much more immersive, people actually want to talk to each other. Customer service, there’s so many different examples of where video will become the next frontier. I think we’re leading in that. But I think we need to be multiplatform. That’s really what we’re doing in the next few years.


Word cloud from transcript via Wordle.

Thanks to Jenifer Caukin, Skype PR, whose voice you’ll hear about two-thirds of the way through the video.

See also:

What do you think of Tony Bates’ past experience, fit for the job, or his plans for Skype? Email Chat with me on Skype. Call me at +1-510-316-9773 (my mobile), follow on twitter @evanwolf(everything) and @SkypeJournal (just the posts). Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats, where we’re talking about this right now.


About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.

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