Wednesday, January 19, 2011

Of Builders and Traders

Andy Grove, ex-CEO of Intel and a recognized technology guru, was asked to comment on Steve Jobs the other day. “There are builders and there are traders,” he said, “and Steve is a builder.”

The builder/trader dichotomy has been with us for ages. In the last half of the twentieth century, the traders were ascendant. We didn’t call them traders, we called them venture capitalists, and they and the builders coexisted well. I worked for a bonafide builder, Alex d’Arbeloff, for many years. Alex was a good friend (and fellow Francophone) of General Doriot of American Research & Development, an iconic venture capital firm and an early investor in Digital Equipment and many other successful companies. General Doriot, a long-term holder, would never have thought of himself as a trader, but all venture-capital firms, including ARD, had exit strategies. Alex had no exit strategy; all his thoughts were on building the Company he cofounded.

Steve Jobs, when he was first told he had a serious medical problem, could have checked out and spent the rest of his years on Bora Bora. But that wasn’t in his DNA. Instead, he spent the next five years turning his Company into the most phenomenally successful story in the history of high tech. Today he could probably buy Bora Bora, but when his medical leave of absence ends, he will return to Apple, for he is a builder.

The American dream is based on creating a society that cultivates a steady supply of builders, people like Sergey Brin, Larry Page, Mark Zuckerberg, and of course Steve Jobs. If we have an edge on our global competitors, it is our capacity to produce and motivate builders. No other country approaches us when it comes to that. And the curious thing is, very few in our society object to the great wealth amassed by successful builders. “Americans aspire up and resent down,” The Economist editorialized once. When we start resenting up, that will be an ominous signal.