Another action packed evening at my Digital Media Marketing class at NYU Stern: after presentations by former Yahoo COO Dan Rosensweig and former Yahoo CEO Terry Semel, and with them, VC guru and former Yahoo board member Eric Hippeau, and former CEO of NBC Universal Jeff Zucker in the audience, we the class presented (in teams) our solutions for how to “fix” Yahoo. Dan and Terry spent half the class telling us their stories, walking us through their careers, and some of the honest truths about their Yahoo tenures (only after the class promised not to Tweet any of the secrets). Not surprisingly, the morals of their stories are exactly the same as those observed during this past weekend’s NYU Entrepreneurs Festival: passion and persistence.
Advice from Terry Semel
Terry recounted his Warner Bros. career, detailing how he started out selling WB movies to theaters in Cleveland, eventually making his way to becoming WB chairman. Terry’s poignant advice was to take risks, accept all offers, and don’t always listen to your wife! Terry also told us how he recruited Dan to Yahoo – every other day Terry would call Dan and say something akin to, “do you want to someday be an 80 year old Jew waiting his days out in Scarsdale, or do you want to come with me and change the world?” Of course, Dan eventually gave in, and in fact, his footnote to the night was, “whatever you do after graduation, follow your passion. Otherwise it sucks.”
The really great part of tonight’s class, however, was when us students got to propose solutions for how we’d fix Yahoo if we were CEOs to Terry, Dan, the rest of the class, and the other random and nameless people who seem to audit the class each week. The solutions were creative, well thought-out, and generally well-received; however Dan definitely had criticisms for all of us, though expectedly so! While most groups proposed fixes to certain Yahoo portal or Yahoo property features, Coleman, Dan et al were really looking for a bigger picture solution. The comments remind me of this scene from Adam Sandler’s movie Anger Management (not a WB title, as far as I’m aware) – just substitute Dan’s “but how would you fix Yahoo?” for Nicholson’s “but who are you?”
Solutions from NYU (to Fix Yahoo)
Nevertheless, the class did have some interesting suggestions (I think I’ve captured something from each group), including:
- Make the portal more “sticky” via social optimizations and more personalized content.
- Make sharing stuff more intimate a la Google+ circles – “start your day knowing what your friends are doing.”
- Become a data platform and use an expertise in data to increase the number of logged-in users by improving the logged-in experience.
- Create a professional services wing and use that as an internal form of promoting innovation.
- Simply build more content.
- Wait a few years, and then sell the firm.
- Focus on mobile, and in particular develop a specialization in mobile content aggregation and distribution.
- Acquire all sorts of stuff – anything of interest that the Board will approve, and start a VC fund.
My team’s suggestion was that rather than focusing on an external thing to fix, Yahoo should focus on internal issues first. Our argument, and what I pitched to Terry and Dan, was that talent begets talent, and if talented people keep walking out, it will only get worse. No amount of feature primping will staunch the corporate wounds that are currently hemorrhaging talent at Yahoo – the internals need to be fixed first (though it wouldn’t hurt if Yahoo realized it doesn’t have to send me Netflix ads given one tab over I’m streaming Weeds).
Yahoo vs Google
Software engineers (and as one myself, I’m permitted to speak on behalf of all per Seinfeld episode, The Dentist), especially top-tier engineers or talented compsci majors at top-tier universities are looking for one of three jobs: a tech start-up with awesome potential and permission to create cool stuff, a hedge fund that will pay a crap-ton of money (for giving up the freedom to create cool stuff), or a middle ground firm like Google, which has a reputation for having an innovative culture, but also pays a decent salary.
Yahoo is no Google. Y! does not have a reputation for having an innovative culture; or, it may have such a culture, but we don’t know about it. Yahoo needs to grab its top smart people, and give them a budget and carte blanche to innovate across Yahoo’s top properties, such as Flickr and Yahoo Finance. Even if these teams fail, that failure demonstrates Yahoo is willing to take a risk on creativity – that failure will create buzz and interest.
Failure is OK – Google Fails Too
People will check out an interesting failure, like Google’s Wave (assuming that link still works when you read this..). Most importantly, however, is that such risks will reposition Yahoo as a technology company, and not as an advertising distributor or a “premier digital media company” (what’s that even mean?) – a distinction that needs to be made if Yahoo hopes to remain relevant in the decades to come (in my opinion). I believe Dan and Terry agreed with my and my team’s conclusion, but with the caveat that unconstrained freedom to innovate would not necessarily lead to anything of use or interest; instead, the innovation needs direction, whether that be mobile, social, or local, as suggested by the earlier groups, or something new entirely.
All in all, it was a very interesting night and highly unique experience.
