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tv   Studio 1.0  Bloomberg  May 25, 2015 10:00am-10:31am EDT

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emily: he is known as tech's turnaround guy. blackberry ceo john chen has spent more than 30 years working in enterprise technology. famously taking the enterprise software maker sybase from the verge of death to $5.8 billion powerhouse. now he is taking on what some say is an impossible job, leading blackberry's comeback. can he prove them wrong? and just how did he become the tech industry's fixer? my guest is today on "studio 1.0" is blackberry ceo john chen. thank you for joining us. john: thank you for having me.
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emily: even though you're running blackberry in canada, the bay area is where you call home. john: yes. emily: you technically live here. john: i live here. my family lives here. i live all around. it is our headquarters in waterloo, canada. emily: how much time do you spend here versus waterloo? john: i try to spend about one week every month in waterloo. we still have 5,000, 6,000 people there in canada, between waterloo and mississauga and ottawa. we are building a site here in silicon valley. so that is -- i spend about a week or so every month here. the rest of the time i go around the world, seeing customers, meeting with analysts, investors, partners, distributors, and so forth. so that is why i do that. emily: part of the reason you are opening the office here is the talent, right? john: part of the reason of opening an office here is so we can get much closer to all that is happening. at silicon valley, there are a lot of great ideas. 90% does not go anywhere. but the 10% that go anywhere
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become the google of the world. you have to pay attention to what is happening in our industry, so we are not so insular or focused on our own thing. we have a lot of great technology, but you can't just say, this is it, this is the universe. so i intend to broaden it and hire a lot more people here. emily: you were born and raised in hong kong? tell me about your upbringing, your parents. john: ok, well, actually, i came from a relatively poor beginning, because my parents, although my father is quite educated, they were refugees from china. postwar, when the communists were taking over before the curtain got drawn. they escaped from shanghai to hong kong. emily: you lived in a one-bedroom apartment? john: yes, we lived in a one-bedroom apartment for a long time. we did not even have a dining table, so to speak.
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a refugee, we put two suitcases on top of each other and a piece of cloth over it. that was our dining table. emily: what kind of kid were you? what did you want to be when you grew up? john: i never thought about what i wanted to be. i mean, i just thought that -- everybody at the time, because of the war and because of what happened historically to china and so forth -- everybody wants the kids to be scientists. that is the hong kong way. everybody becomes an engineer or mathematician, doctors, just professionals, so you can have a good life. i started off doing a lot of math. i liked math. i ended up studying engineering, and have done reasonably well. emily: you went on to boarding school in massachusetts. how did that happen? one bedroom apartment, boarding school in massachusetts. john: by the time i was thinking of my education, the higher education, my family is already
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in kind of a middle income family. my father was able to study english at night, and accumulated some wealth. he invested in the silk business. he said, have you thought about what your are going to study? i said, probably engineering. he said, hong kong really isn't great in engineering. have you ever thought about going overseas? that's when it piqued my interest. i wanted to go to the ivy league. if you go to one of those, it enhances your chances of getting into the ivy league quite a bit. a lot of bit. i went to prep school. emily: that must've been quite a transition, hong kong to massachusetts prep school. john: i went from no snow to a lot of snow. it was quite a transition. it was great. it was the best thing that ever
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happened to me. emily: when did you learn how to code? john: i learned it in high school. this is one of those things that a lot of americans do not understand, the resources this country offers are dramatic as compared to every other country around the world. i do not know if it is still true or not. but when i was in hong kong, we would never -- we might have heard of a computer, we had never seen one. we had never touched one. emily: you never saw a computer until you got to massachusetts? john: not until i came here. that was the first time i learned how to code. my last year of high school, my first year in the united states. emily: you ended up going to the ivy leagues. brown university. john: i went to brown. emily: electrical engineering? john: yes, electrical engineering. actually, i started my career as a manufacturing engineer. i started pretty much on the ground floor. i went to caltech for my master's degree. and then i started working with this mainframe company called burroughs. my first job was to fix things. emily: you started your career learning how to fix things. i am sensing a theme. you worked your way up. 30 years, you became ceo of
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sybase. how did you do it? i mean, along the way, what did it take? john: i like fixing things. i think it's both a challenge and an opportunity to learn stuff. because i am kind of the old-school, loyal, stick-with-it type of person. today's young people are a little bit more entitlement oriented. when we were growing up, we never thought about it that way. we thought that you have to create opportunity yourself. i tried to go and learn different areas. my first job is in fixing manufacturing hardware. then i went into writing software. helping run factories. i have done a lot of different things throughout my career. emily: you took sybase from a $362 million company, on the verge of failure, to $5.8 billion. how did you do it? john: first of all, you have to have a good team of people. i spent a lot of time recruiting, building a culture. you focus on things you do well. you focus on value you could add to the market.
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you stick with those for the long haul. you build it a step at a time. and at sybase, we were literally at the verge. but we came back. emily: you bet on mobile before mobile was big. john: i bet on mobile in the year 2000. it's funny, i have people calling me, investors calling me, telling me that the money that you have, company money, belongs to them. it didn't belong to me. and then for me to invest, and waste it in areas like mobile, i may as well dividend it back to them. but thank god we did it. at that time we were stuck at a value of $2 billion. mobile took us to almost $6 billion. emily: what was the hardest thing you had to do at sybase? john: the initial rounds of letting people go, refocusing the company, and being able to convince the remaining employees and the people you try to
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recruit that there is a future. emily: and you eventually sold to s.a.p. john: eventually. long time. what, 13 years later? emily: people are telling you blackberry is already dead. john: yes. emily: why did you take this job? john: i think i flunked retirement. ♪
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emily: you came out of sybase looking like a hero. with great ceo's and executives, there is often a myth about them that is boiled down to legend. what is the myth of john chen? and what is the reality? john: i actually think i'm a pretty simple, straightforward guy. i like working with people. i like focusing on objectives and results. most people ask me, why are you doing this? the company is already dead. to me, it is just, i am just trying to take one step at a time and do better every day. eventually, we will break through. i am more relaxed than most
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people think. emily: people are telling you that blackberry is already dead. john: yes. emily: why did you take this job? john: that is a great question. i think i flunked retirement. [laughter] that is probably the real -- there is a bunch of reasons. i could give you this reason about it being iconic in the industry, and it's a great company that has a lot of technology with a lot of potential. all of that is true. but that does not automatically answer the question about why i am doing it. i started as being the chairman of the company. i was going to find the management team and formulate a strategy. i thought i was a little too old to run around the world and play cowboys. but, you know, once i got into it, i find that it is hard just
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to guide without doing. and we really do not have a lot of time to just find a team, and then a person, and think about the strategy. and all that. we just kind of have to get it done. right, wrong, indifferent, i decided to become the ceo. emily: so you are not crazy? john: i am not crazy. i think there is a lot of good potential here. it is not a done deal. but i think we have made a lot of progress in the past six months. emily: is this part of your personality? you like to feel needed, to fix things? john: it is probably the negative part of my personality. i am a little paranoid about not being needed and wanted. i guess, i think it is important to -- what i do every day, i know that it means something to people. emily: history has been cruel to phone makers, nokia, motorola, palm. what makes you think you can change history?
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john: well, by not following the same play. we try to broaden ourselves way beyond the device, just a phone. i don't sit there and think, i could make another really great phone and somehow everything will be well. emily: but you did vow to keep making phones. john: yes, of course, this is part our strategy, end-to-end mobile computing for the enterprise. i mean, you can say, i am so committed that even if i lost my .committed that even if i lost my shirt, i will do this. it does not make sense. but i thought i could make money on the phone. i hope that, by now, the industry realizes what i'm talking about. we have some great phones coming out, very cool. but it is kind of our first point of entry, or one point of our big strategy of everything secure. that is our big strategy. and so the phone is part of it. i mean, our phone is the most secure phone because of the way we make it, and the software we have. both hardware and software. and so i would like to continue to do that, but if i can be successful in it, i'm ok to work with somebody else to do it. emily: blackberry's global smartphone market share peaked in 2009 at 21%. it is less than 1% now. idc predicts blackberry market share will fall another 50% this year, down to 0.3% by 2018. are you going to change the direction of that? john: i hope so.
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can i change it immediately? no. in many, many markets around the world, blackberry phones are still the preferred phone. i will admit that, in north america, with the banks, some of the hospitals, and the governments, outside of that, we don't do well. i do see people in the professional world still using our devices. it is my job to recapture that interest and that loyalty. i think we have a shot at it. emily: in a future where chips are embedded everywhere, in our clothes, in the walls, do smartphones matter? do these numbers matter? john: smartphones will not matter in the long term. i think smartphones will -- i think devices will matter, how things talk to each other. the whole internet of things is really real. it will be real. the question is how and who will make money out of it. it is not clear whether it is the traditional handset people. emily: you sold sybase to s.a.p.
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are you going to sell blackberry? john: there is a standard answer for public company officers. emily: give me the nonstandard answer. john: the nonstandard? i would prefer to build a lot of value before i contemplate that. emily: as the ceo, you owe it to shareholders to consider offers. john: absolutely. it is not only fair. it's not only the shareholders, it's also the employees. one thing i am proud of about sybase, is that the people who slaved away with me for so long, although selling to s.a.p. was not my desired outcome, i was hoping to build a big company. it was the right thing. they gave us an offer that was very hard to refuse. emily: if you got a good enough offer? you would sell? john: if i got a good enough offer, i would. emily: what kind of offers have come across your desk? john: no, i don't have any offers. emily: no? john: people like to talk. talk is not an offer. emily: would you sell to a chinese company? john: the answer is i would probably be unable to do that. one of our biggest install bases
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is the government. in countries where government shares intelligence. i think there will be a lot of regulatory issues and concerns. and i appreciate that. emily: what do you think of the current state of u.s.-china relations, given the new regime in china? john: i try to become a very constructive bridge between the two, if i can. i think the current status -- like every -- u.s.-china relations are always full of challenges and opportunities. emily: when it comes to security, and cyber security, and the privacy of american citizens, who is more of a threat, china or the united states? to our own security. john: i think everybody is spying on everybody. i would think it is equally a big threat inside our country as outside our country. emily: what the nsa has been doing, as far as we know, fair or unfair?
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john: if the intentions are truly for national security, i think it is fair. because we don't want another setback. now, this is only a personal view. this is not a blackberry view. emily: if the nsa wanted a backdoor to blackberry, would you open it? john: we don't have backdoors, but we would not do that. from time to time, the government wanted information from us, ok? first of all, we don't keep it around. that is number one. you need to know that. if we do it, it has to be under court order. emily: have you ever had a moment where you thought, what did i get myself into? john: twice. not just one time. yes, i have. ♪
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emily: since you are the tech industry's turnaround guy, i would like to ask you about how some other turnarounds are going. yahoo!? john: from what i can read, they seem to be doing well.
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yahoo!, they would look at it from the growth, revenue, and all that. if a company guided that way, that is one thing. but the question needs to focus on, if the company's fundamentals become stronger in the long term, i would focus on that. from that perspective, it feels like they are doing the right thing. emily: you think marissa mayer is doing a good job? john: i think it is a reasonable job. i don't know her very well. met a couple of times. yes. emily: you are also a father. you have four kids. what kind of a parent are you? john: i'm close to my children, and i always enjoy time with them. i do not spend a lot of time with them, unfortunately, because of the nature of the job, running around the world. thankfully, they all grew up pretty good. i feel good about it. emily: how do they feel about you living half here and half in canada?
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john: i think my wife loves it. we have been married 34 years. you know, i think she is, the time she does not want to see me every day. it is good. if i go home early, she always says, what's wrong? you are not feeling well? i say, i just want to come home early. i am serious. i am not making any of this up. anyway, they support me. if i'm happy, they're just fine. emily: what's an app you can't live without? john: e-mail. emily: facebook or twitter? john: neither. emily: why not? john: i tried it. i got so hooked on it. i'm spending an entire living moment of my life on it. i can't do it. i need to stop. emily: smart watch or no? john: no. i'm a traditionalist. emily: but you want your chips and everything. john: i am still a traditionalist. by the way, i want a chip in everything. i did not say i want to be tracked like that. i did not say that. i think there is a certain amount -- there is a certain place for that, and then i want
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to have my own private moment in my own private life. emily: if you were not doing what you are doing now, what would you do? what would you want to do? john: it would never happen again, because i am too old for it. i would love to go to law school. actually, i wanted to be a lawyer at a certain point in time, but my father thought it was not a good profession. emily: when is the last time you were nervous? john: i am very fortunate. i think if anything would happen to my family, i would be nervous. outside of that, there is nothing to be nervous about. emily: what is your guilty pleasure? john: cigars. everybody -- everybody -- i love having a cigar. one time, i played golf with my doctor. i finish a round and pull out a cigar. he looks at me and says, being your physician, i must advise you against it. i say, i only smoke after i play golf, or getting a drink with some friends. he says, does it help your golfing? i say, not really, no. he said, ok, fine. emily: now that you have been doing this blackberry thing for almost a year, what would you give your own chances for success? john: if you are talking about being able to create value, i think i can do that. emily: 100%?
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john: i would say better than 80/20. how is that? i am comfortable where the company is today with how we manage our technology, business, margins, distribution channels, all the new product coming out, the strategy that gets into communicating in a secure manner. all that stuff over time. i think there is enough runway here for us. and we scale our expenses to a level that allows us to stay back, invest, and make money. i am comfortable with generating more value. whether it will be good enough to be iconic again, that is something i need to chew on. i don't know the answer to that question. emily: being completely honest, have you ever had a moment, a single moment, where you thought, what did i get myself into? john: twice. [laughter] more than one time. yes, i had. after the first 30 days, i said to myself, this is -- i am running against time on so many things. but then i did not dwell on it for too long. i started putting a plan together and recruited a team and said, just do one thing at a time. do not try to fix everything at the same time. that was once.
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and i could feel when i am kind of, my mind starts, not very focused. i could feel it. right now, i am quite at ease with the plans we are working on. emily: how do you want to be remembered? john: somebody who could generate results. i would like to be remembered in the future that i did something that made a difference, that a lot of people benefited from my effort. if i can feel that, i'm good. i'm good. i don't need to be called anything. emily: john chen, thank you for so much joining us on "studio 1.0." john: thank you. emily: great to have you. ♪
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emily: he made his name as a top tech analyst on wall street, leading coverage of the amazon ipo. then, bill gurley made his way to the promised land of silicon valley, launching a venture capitalist firm, joining benchmark capital in 1999. almost right away, the bubble burst. bill gurley rode the market up and down, along the way making his early bets on some of the best names -- twitter, uber, snapchat, instagram. joining me today on "studio


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