Digital Competition – Avram Miller

“The power of the Internet is that you can experiment.”


You’re a player at one of the most powerful technology companies in the world at a time when the PC is transforming itself into a new medium. You’re responsible for millions of dollars’ worth of investments every year in communications, new media, and Internet companies, overseeing a $1 billion- plus portfolio. How do you become more influential?


How about quitting your job?

This year, Avram Miller, vice president and director of business development at Intel Corp., a self-styled “activist strategist” and “corporate kook,” left Intel to start the Avram Miller Co., based in San Francisco. “After working for 25 years for corporations, I thought that it would be nice to have them work for me,” he kids from the downtown high-rise overlooking San Francisco’s Chinatown where he now makes his one-man world headquarters. It’s a notable Silicon Valley irony: Only by leaving a $26 billion global corporation and going to work for himself has Miller finally landed a spot on the lofty 20th floor of a financial-district skyscraper, far from the anonymous cubes of the legendarily austere semiconductor company.

In the shift from cubicle to skyscraper, Miller has become a human node in the global network at the convergence of the communications, computer, and media industries. Today, Miller serves on the boards of major Internet players around the globe, including CMGI in the United States; World Online, the largest independent ISP in Europe; and European Technology Fund (ETF), a major European venture-capital fund.


“I’m busy stitching together a worldwide platform by developing relationships between those companies,” he says, “so that when I see an early-stage opportunity, whether it’s a technology product or a service, I can distribute it all over the world.”

At Intel, Miller cofounded the venture-capital arm of the semi-conductor company some 10 years ago, when venture investing was at most something that major companies might dabble in. At Intel, he was responsible for making investments in communications, new media, and the Internet, including the company’s investments in CMGI,, @Home, Covad, and GeoCities.

Today, Intel not only boasts one of the most successful corporate venture groups anywhere; it also represents one of the world’s largest venture-capital firms of any kind. In June 1999, shortly after Miller left the company, Intel held investments in 275 technology, e-commerce, and Internet companies, making its venture portfolio worth $3.5 billion. In 1998, the company did 130 deals with investments totaling roughly $830 million, including about $500 million in Micron Technologies alone.


But Miller is now convinced that the way to have the most impact on the future of communications, computers, and media is not by developing one company, or by nurturing the ecosystem of companies surrounding that company, but by knitting together a network of major companies from around the globe.

Fast Company sat down with Miller — an Internet deal maker, future creator, and accomplished jazz pianist — to listen to him riff on the future of business.

Deals are not about money.

To do a good deal, first you have to be a good partner. Every deal is made by adding value, not just by adding money. Money is nothing. Everybody has money. For any deal, you have to ask, “How do you add value to each other? How do you play fair? And how do you interface with many different people?”


Communication is a big part of making deals. One minute, I could be talking to three guys with pimples in a garage; the next, I could be speaking with the CEO of Deutsche Telekom. The most important thing is to get rid of all your prejudices. You have to open your mind. It doesn’t matter if the people you’re talking to are 22 years old or 57 years old. It doesn’t matter what their color is, what their gender is, what language they speak, how big their company is, or even if they were a success before. The playing field today is a lot more level than ever before.

Goodbye, company. Hello, value.

Corporations are becoming less important. The Internet is made up of companies that pop up, live for a while, and get absorbed. Take, for example,, a four-year-old company that Yahoo! bought for roughly $5.2 billion.

It used to be that people would join a corporation with the expectation not only that they would spend their whole career there but also that their sons and daughters would go to work for the company, and that the company would live forever. Now companies have a shorter life expectancy than a California marriage. Not only do you not expect to spend your whole career at one company, but the company might disappear before you leave it. You don’t even have to change jobs to change jobs.


Give up control. (Guess what? You already have.)

Companies used to be self-contained, vertically oriented. They did everything — designed products, manufactured products, and sold products with their own sales force. With the rise of the PC in the computer industry, we started to see the horizontal company: Companies tried to get good at whatever the one thing was that they did. This meant that they became dependent on each other. The product itself is market-driven: Nobody is really in charge of it anymore.

With the arrival of the Internet, corporate control has completely disappeared. Business today is about all kinds of companies participating to make something happen. Nobody knows anymore what the products will do and what the markets will be. Markets define themselves. You have to be able to react to them organically.

Intuition rules.

Today, when Intel builds a new factory, it’s investing $2 billion in products it hasn’t yet designed for markets that don’t yet exist. This is hard for American businessmen, and I say “men” because in order to do this, you have to give up control — and giving up control makes guys really miserable. Control is an illusion. I don’t think that it ever existed, but now even the illusion is gone. As a result, we’re experiencing the rebirth of intuition.


In our society, we often don’t want to admit that we know something if we don’t know why we know it. At Intel, I used to have a horrible problem. I’d go into a meeting, and I’d be very convinced about something, and people would say, “What evidence do you have for it?” And I’d say, “I don’t have any evidence.” They’d expect me to be analytical about it, and I wouldn’t be. Over the years, I learned to make up some bullshit story to convince them, but it had nothing to do with why I thought it would work. I just knew.

In Hollywood, you’re expected to be intuitive. In the entertainment industry, you have people who have intuition and people who imitate. Nobody there analyzes. But for the most part, in our society, if you know and you don’t know why you know, then obviously whatever you know doesn’t matter — which is stupid. If you have been right about things for 20 years, then you should be able to say, “I don’t know why I know, but I know.” If I’m hiring people, I don’t want to know how they know, I just want to know that they have a good record of being right.

Decide now. Analyze later.

On the Internet, you have to do things serially. You have to say, “Let’s do this. And then we’ll decide if it was a good thing to do.” I just left a board meeting where we made a decision to do a deal, and we’re going to do the due diligence after we do the deal. Because it’s simple: We can decide either to do the deal or not. We have a sense that it’s a good idea now. And we’ll go through the analysis process later to discover if we were right. When we look at it, it will help us to be better judges in the future — whether or not our intuition was right. With this deal, we didn’t have a choice of saying, “Wait a second. Hold everything! We’re going to take three weeks and do some analysis here.” That’s just not the way this world works.


Iterate, iterate, iterate.

The power of the Internet is that you can experiment. When you do something on the Internet, you find out right away whether people like it or not. The smart skill on the Internet is to be able to change course quickly.

The old way of doing business would have been to say, “They don’t like our product. How are we going to make them like our product?” Take Intel, for example. Say we just spent $2 billion to build a factory and three years designing a product. Then this is our dog food, and the dogs had better eat this food. If there’s a problem, then the marketing department has to figure out a way to convince the customers that they really do want the product.

On the Internet, if the customers don’t like the product, they’re right. Let’s change products. It’s a lot cheaper to change products than to convince them that they like our product. So the question is not “How do we make them like what we have?” The question is “What do they like?”


Change hurts. But indecision kills.

What American business is able to make decisions that might appear to destroy shareholder value for several years before they pay off? Let’s say that you give a CEO two choices. You say, “Here’s your business. It’s growing at 4% a year, and if you keep going in this direction, then it will flatten out. In five years, it will probably start declining.” Or you say, “Here’s another business, whose revenues will decline 3% a year for the next three years. In five years, it will be worth twice as much as it’s worth now.” I don’t believe that there is one CEO in the United States who would decide to take the second business. He or she would be convinced that “No, that can’t be true. I’ll figure out a way later. I’m not going to make this decision today that will really hurt me.” Most companies are unable to make decisions that would hurt them in the short term.

The best example is the music industry. Music companies are destroying themselves. It’s obvious what’s happening: technological discontinuity. We’re going to have a music-distribution system that allows customers to download music from the Internet. It’s a different model, and most music companies are fighting it. In the meantime, other new companies are coming along that are saying, “We love this model! Let’s go after it!” Why do music companies fight it? The margins aren’t there, and they’re afraid. But their companies are going to be changed — whether they like it or not.

Tap into the global brain pool.

The United States is very narrow-minded. We have this notion that we’re the center of the universe, but we’re only 4.5% of the world’s population. So 95.5% of the world is outside of the United States. People talk about the U.S. cable industry, and how we have the world’s best cable system. The largest cable network in the world is in China, where there are 75 million homes equipped with cable. Over the past seven and a half years, China has built a much better communications infrastructure than the United States has.


And all of these other countries have tremendous intellectual capital. There are all of these brains all over the world. Think of the United States as a big company, and other countries as little companies. Even if our brains have better output than the average brains, if the little companies have 10 times as many brains as we do, then maybe one of their brains is going to get the thing right. There are a lot of smart people in countries like Singapore and China who have never had a world market before. The Internet is the end of time and space. That’s a bit of an exaggeration, but it does reduce the importance of both.

Companies build their own coffins.

The real questions are, “Where is scale? Is scale today in having the best engineering team, as Bell Labs did? Or is scale in having the most customers? Or is scale being the best at doing venture investing? Or is scale in having the world’s largest reach? What is important?” Whatever is important, if you try to keep everything in your company under your own control, then your company has built its own coffin: It’s limited by itself in every direction. If you think of your company as a box, then there should be only one side to the box. The rest of the box should be open.

Individuals, not companies, lead.

When I was working at Intel, I was constrained by thinking about the world from Intel’s point of view. The conventional wisdom is that corporations are the leaders that make things happen. But I’m suggesting something fundamentally new: Can we imagine a world in which leaders can leave their corporations and continue to lead? Do I have to be part of a corporation to use the power of a corporation?


I don’t think of myself as a free agent, I think of myself as me. If I want to accomplish something, maybe I can better accomplish it without being part of any one company — by being part of multiple companies. I’m hoping that other people will follow this model. Then we could have some great minds working on problems — minds that are unconstrained by their companies’ agendas.

Katharine Mieszkowski (, a senior writer at Fast Company, is based in San Francisco. Contact Avram Miller by email (, or visit the Avram Miller Co. on the Web (

Sidebar: What’s Fast

Think fast. Here is Avram Miller’s quick guide to doing business in Internet time.


Give up control.

Or the illusion of control. Companies no longer determine the success of products and markets — if they ever did. Customers do. Control is an illusion, and the Internet has completely shattered that illusion. Nobody is in charge anymore.

Trust your intuition.


To make decisions, you can’t spend weeks doing analysis. Deals won’t wait around for that kind of due diligence. So you have to have a sense — an intuition — if something is a good thing to do, and then hone that sense through experience. Act now. Analyze later.

Follow the customers.

Companies are no longer setting the agenda of what customers want. They’re finding out where the agenda is being set and enhancing it. The customers decide what’s important. Your job is to listen and respond.

Steal this idea.

Imitation is not a crime on the Internet; it’s a given. Smart sites constantly experiment to see what people like. Embrace experimentation and imitate imitation.

Be open.

Companies will succeed by investing in the ecosystem around their products, and by building the markets that they want to serve. New technologies and products will increasingly come from brains outside your company and from around the globe. Don’t shut yourself off through prejudice about age, race, gender, nationality, or the size of the company that people come from — or even their past track record. Open systems and open minds are fundamental to the future.

Think like a VC.

The two most important ingredients in a technology company are distribution capability and investment capacity. Technology is cheap, and nothing is unique — not for long. Corporate development is the critical skill of technology companies.