“Challenge the status quo!”

Because of all the money involved, that much is clear. But why else has Silicon Valley shifted from being a tech hub into an engine for innovation? A conversation with Satjiv S. Chahil, a top marketer there for four decades, who knows the answers.

Interviwe: Satjiv S. Chahil in conversation with Ralph-Bernhard Pfister (Photo Credits: Johannes Rodach an)

Apple, IBM, Xerox, Palm, Hewlett-Packard. The list of companies that Satjiv S. Chahil has worked for in the last 40 years reads like a cross-section of Silicon Valley’s history. Chahil has played a key role in various functions including founder of Apple’s New Media Division. Today he works as a consultant and speaker and was the opening speaker at the Innovation Day event by Serviceplan.

Mr. Chahil, let’s talk about Silicon Val-ley and why that region is so successful at marketing new innovations and creating markets for new products. How can a marketer evoke enthusiasm for some-thing that didn’t exist before?

Mr. Satjiv S. Chahil: It doesn’t work if you start with an explanation. You have to use your imagination and convey the “magic,” and you have to touch people’s hearts.

Could you explain that in more concrete terms?

SC:  Business leaders often focus too much on technical specifications. Product marketing people and engineers who created the innovations are rightfully proud of their inventions, but there are almost always superior ways to win over customers than to blast them with myriad specifications. Consumers find marketing more impactful when the messages are personally relevant, essentially conveying the excitement of what the product can do for them. I have been lucky to work with brilliant engineers and researchers who knew the power of great marketing and understood that the complexity within a product can be overwhelming – even off-putting. Once we align to visualize a product and its magic from the consumers’ eyes we can create marketing messages that grip the consumer emotionally. And then the rest can follow and fall into place.

So it’s about translating, about being the interface between the inventor and the public?

SC:  Exactly. Here’s an example from my time at Apple: two engineers once came into my office and showed me their idea for data transfer to many people simultaneously. They used lots of technical jargon and I needed several meetings with them until I understood what they were telling me. I said: “But that is like broadcasting.” And they said: “Exactly!” Then I re-plied: “But we’re doing it on the web so let’s call it webcasting.” That same afternoon I met a concert organizer who wanted Apple to sponsor the San Francisco New Year’s Eve party featuring Carlos Santana. I told him: I’ll give you half the amount of money you’re looking for, but we’ll promote the concert in a totally new and innovative way. We’ll webcast Santana live around the world. The organizer immediately realized the fresh approach and the global impact and jumped at the offer, but if I had shared the technology in the language of the engineers, we all would have missed out on a great opportunity.

A bold move.

SC:  Yes, it worked, and that’s how the Grammys found out about Apple and webcasting. And when you get a forum like that, then your marketing job is pretty much done! That’s also one of the strengths of Silicon Valley: having the intuition to find or create that moment. And you have to take into consideration who you want to reach. Apple’s original marketing guru and Steve Jobs’ marketing teacher was Regis McKenna. He developed a pyramid communication concept for Apple. You start with the product and those who are directly involved. And then create support from developers or content providers who help complete the product experience. From then on, business partners are positively influenced and the message is carried in its completeness from the news media to consumers. Unfortunately a lot of companies were doing this wrong.

To what extent?

SC:  Companies used to often rely on detailed press releases that they provide to the tech news media. The resulting press coverage is often disappointing to the company, and execs blame the press for not understanding the wonder of the new product. If the tech journalist can’t understand the news release, how on earth is the consumer supposed to? In the past, these individual steps followed one another in succession and from departments acting completely separately. Today you can tackle simultaneous outreach thanks to the digital world, social media and so on. The best and most integrated results come when PR and social media are all part of a single marketing organization. Too many companies still have silo structures with walls between PR, social media, and advertising.

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Companies or organizations of a certain size develop a life of their own and start using more energy to survive than to fulfill their actual function. Silo structures and mentalities are a good example of this.

SC:  All big brands and organizations have optimized the efficiency of their structures in an analog context. But in the digital age it works differently. The flow of information is very different.

You said that finding the right moment is one of Silicon Valley’s strengths. Why is that? Aside from the obvious point that simply a lot of capital is available: why does this little corner of the world push innovation forward?

SC: I n Silicon Valley you can sense the influence of Hollywood and a closer affinity to storytelling. People in Europe are quite technical and very intellectual, but sometimes the creative free thinking is restricted. In Silicon Valley everyone can talk to everyone. In Europe, you find more pronounced social hierarchies in addition to organizational silos. In California they have been completely broken down.

“In Silicon Valley you can sense the influence of Hollywood and a closer affinity to storytelling.”

You also have a different way of dealing with competitors. In Germany it’s unusual to have such good interaction with the competition. Competitors in Silicon Valley also put up a tough fight – but they talk to one another in the process.

SC:  Yes. I don’t know if I should say this here but whenever I meet a talented young person I say: “Come to California! You’ll be given an opportunity faster here, regardless of where you come from.” The ‘Old World’ doesn’t offer that. Of course, nations can set up fast internet connections and pro-vide office spaces free of charge. But that alone doesn’t create the right mindset and the environment. So it’s not so modern after all. My friend Sven Kielgas from Serviceplan says that Silicon Valley actually has a certain medieval ‘Old World’ side to it.

What does he mean by that?

SC:  That everything is very locally concentrated. Like traditional trading streets in the past, you’ll find yourself, for ex-ample, in a street full of venture capitalists. You need this physical proximity – in the digital business just as much as any other business. And there is a fundamental attitude of trust in people rather than mistrust. You might see two people sitting in a café, one of whom is a billionaire and the other who is about to drop out of doing a Stanford degree. And you won’t be able to tell the difference between the two.

So for you there are three main aspects: the spatial and conceptual proximity to storytelling thanks to Hollywood, the spatial proximity between similar people and fewer barriers in the way they deal with one another. And this also creates a shared, common identity. In turn, this connecting image can be projected into the world to attract similarly minded people.

SC:  Exactly. My wife came from Germany to Silicon Valley. At the beginning she was really surprised at the variety of people who come knocking on my door. From major tech CEOs to students with unusual ideas. In Silicon Valley, people talk to everyone as equals. Just look at Peter Thiel or Elon Musk – PayPal co-founders from difference continents. They are highly imaginative, successful people, and at the same time are well-rounded. I have worked with the big German car manufacturers and have a lot of respect for their perfection in engineering and design. Their business model has a seven-year cycle. And then along came Musk, who built an innovative and iconic car, Tesla, in three years. He has redefined the product cycle by simply thinking of it as a giant smart-phone with wheels while the automotive power players were trying to integrate the smartphone into the car.

And the most remarkable thing about Musk and Tesla is that from a technical perspective they haven’t invented any-thing new.

SC:  There might be nothing “new” in the components that make up Tesla but, the way every aspect is designed and integrated with a focus on creating the best driving experience is absolute-ly new. He has set a new standard in safety, acceleration and environmental awareness. From a marketing stand-point Tesla also broke new ground. They maintain communication not only with all their existing customers but with anyone who has ever taken a test drive.

Nissan, for example, builds better e-cars than Tesla. But Tesla is the topic of conversation when it comes to this type of vehicle – and that’s mainly down to Musk. He steps into the limelight, communicates with people, embodies the brand and conveys the ideas. That is actually a fantastic marketing example – it’s not down to the product.

SC:  Yes. But the product is also outstanding, and a great product is the best start for great marketing! The difference with Musk is that he also has the digital mindset to go with it – things happen in parallel. Tradition-al manufacturers think in an analog way; everything happens in defined steps. That’s why he can improve his models with a software upgrade. The others don’t have any fewer computer parts in their vehicles. But he is the one who is improving the most testosterone-laden feature at the touch of the button – how long does the car need to go from 0 to 60 miles per hour? He has also invested in batteries. And they want to redevelop batteries from scratch. People are having the courage to challenge the status quo. Silicon Valley is for the digital age what Florence was for the Renaissance.

Since all companies can’t relocate there: how can brands and businesses learn from them? We talked about how important culture is. In this case we’d be talking about corporate culture; as a company you can’t really influence the regional culture you’re based in.

SC:  Yes, that is an important point. As part of my work I assist companies to think about Silicon Valley and digital. The idea behind it is the management team of a company has to understand how the Silicon Valley mindset functions, and how it encourages innovation. Only with empowerment from the top can it be ensured that the team can work and think more freely. There should be no restrictions on questioning old conventions. The idea of maintaining small R&D and innovation offices in Silicon Valley is worthy of consideration by companies big and small.

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If we talk about innovative products and services and about creating markets: how important is it that the aforementioned marketing person is also sitting at the table?

SC:  It’s a matter very close to my heart. In my global marketing team the design representatives were just as important to me as those responsible for the marketing. My best friend in the company is the head of products. I believe that the best marketing is a hot product. My second best friend was the sales manager. My secret friend was the de-signer. But in a classic structure you have the problem that the person responsible for sales doesn’t like what the marketer is doing. Or to put it differently: as soon as there’s a slight drop in sales, the marketing department is, of course, to blame.

That takes us back to the silo mentality and the popular game of “Who can I blame?”

SC:  The marketer should always be very close to the product and on the search for the “wow factor.” That was the case at Sony in the early days: I have to bring the designer and the developer to the point where they deliver a truly “wow” product. Very good and very nice is not enough to make a big impact. All excellent brands and marketing campaigns focus on a great product.

But you don’t always have a wow like the first iPhone.

SC:  But you will often find one. At Palm, for example, back then we were the first to be able to transfer contact de-tails in a contactless way. An IR beam would create a “twin” of the original. That was the “wow”.

Even though that’s actually technology.

SC:  We made a commercial that shows a man and a woman who are sitting at a train station on opposite trains and happen to catch each other’s eyes. As their trains pull away from the station, they manage to exchange contact details. A sort of love story without a single line of dialog. We only showed this ad in a few countries – and it be-came a big story in the media. The understanding of this technology in-creased from less than 5 percent to 70 percent. Talk show host David Letter-man did a parody of it on his show. These days it would have gone viral via social media and reached an even broader audience.

For the wow, don’t you have to have a team that is as heterogeneous as possible and get the product designs out there early on? After all, these are decisive aspects in concepts like design thinking or lean approaches. Getting the design out fast to the potential clients, for as much feedback as possible. Is that not the faster way to find wows?

SC:  Yes. But it already starts with the marketing organization: today, companies appoint separate digital marketers. But in my opinion every marketer should be a digital marketer. The classic approach is to give the digital guy less than ten percent of the budget and to let him get on with it. That’s nonsense. When the marketing department plans campaigns, an integrated team should be considering all channels.

We are seeing this in campaigns in which the digital part isn’t interwoven with the rest. And in social media, in many cases you can see whether it was down to the marketing, sales or support. But getting back to the role of mixed teams: how important is that?

SC:  What lots of companies still haven’t realized is that women aren’t only the biggest drivers of fashion, but also of technology. Retail is dominated by women. Women and children are the tastemakers, i.e. the ones who shape trends and styles.

But lots of firms in Silicon Valley have a big problem with the fact that the work-force is not mixed enough.

SC:  Yes. They are also noticing that that’s why Silicon Valley is lacking a natural intuition for a lot of things – like fashion, for example.

This became apparent with Google Glass. When an agency presented the glasses, the nerds were obviously impressed. And then their female colleagues took one look and said: “I’m not going to walk around in those!”

SC:  Yes, and some media reports indicate that this is the challenge with the Apple Watch. I find the concept of the Apple Watch very intriguing, and was happy to learn Apple was reaching out to European designers to help bridge the style and fashion gap. They recently announced a partnership with Hermès where Hermès will not only create the watch strap but also design the watch dial. I believe Silicon Val-ley can only be enriched by European style and fashion.