Founders · Feb 19David Packard (Founder of HP)
Grew from an audio oscillator sold under $100 to $20 billion in computer sales by 1994, funded by reinvested profits with no long-term debt. It was profitable every year for 50 years and refused to be a me-too company.
Tips
- Packard defined HP's purpose as contribution to customers, with profit as the result▶ 0:05Packard left nearly all of his $5.6 billion estate to charity, and he and Hewlett gave Stanford as much, in present value, as the Stanfords themselves did.
- Packard and Hewlett refused long-term debt after watching Depression-era firms lose everything▶ 34:44They found they could finance 100% growth per year just by reinvesting profits, and kept this policy for more than half a century.
- Packard took a Wells Fargo banker's warning that more businesses die from indigestion than starvation▶ 26:15Packard said he saw the truth of the advice many times afterward.
- Packard and Hewlett refused to be a me-too company copying products already on the market▶ 36:06HP's computer sales reached $20 billion in 1994 from nothing 30 years earlier, built on differentiated products.
- Packard kept HP focused on complementary instruments for measuring and testing electronics▶ 29:36The Navy work taught them to manufacture instruments they had not known how to build before.
- Packard learned from Japan's 400 times better quality that his own targets were far too low▶ 44:14The Japanese unit's failure rate was 400 times better than HP's, and the division also grew faster than ever the following year.
- Packard and Hewlett let a defiant engineer ship a monitor they had told him to drop▶ 40:00HP sold more than 17,000 monitors, representing $35 million in sales.
- Packard built management by walking around from fixing exploding tubes at General Electric▶ 15:24Every tube in the batch passed its final test without a single failure.
- Packard and Hewlett used a Stanford honors program to hire the best engineers nationwide▶ 30:30More than 400 HP engineers earned master's or doctoral degrees through the program.
- Packard and Hewlett won Disney's order by undercutting competitors on price for a good product▶ 23:37HP's oscillator cost less than $100 against $400 for the incumbent's, which won HP its first big sale.
- Packard resisted Wall Street's quarterly earnings focus because cutting R&D buys profit at a later price▶ 35:35
- Packard and Hewlett followed their own interest in electronics despite GE's advice that it had no future▶ 13:53HP later became larger than all of General Electric was when he got that advice.
- Packard and Hewlett started HP before knowing what to make and were profitable from year one▶ 21:16HP was profitable from its first year and every year for 50 years after.
- Packard applied steady gentle pressure from the rear, as when moving cattle through a gate▶ 31:51
- Packard demanded customer satisfaction second to none and would replace leaders who could not deliver▶ 1:41
- Packard asked the Navy lab what else it needed and built new capabilities from the answers▶ 28:00HP built a range of new products for the Navy and gained manufacturing knowledge it lacked before.
- Charlie Litton treated HP as a compatriot, not a competitor, and shared his shop and ideas▶ 22:36
- Packard shopped around for credit after Bank of America turned HP down and a local banker said yes▶ 25:00
