Transcript for E102 – Georg Petschnigg – – 2 of 6 – New Found Liberty
So one I had found like sort of my co-founders and just really want to spend more time with them, right?. They were the people that, like, constantly inspired me to do better work. They would raise the bar. The second one was like the type of working that we really enjoyed … which is like, you know, the brand centered product development. And the third one is also the most important one … its the ‘why’. Like we saw a huge opportunity in the creativity space. We’ve seen people build and make massive investments in productivity tools like the Office suites. We’ve seen great investments in entertainment, for music players to like, you know, video to gaming. Right. But, you know, but creativity really wasn’t well served.
Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups!
In this, episode 102 of 14 Minutes of SaaS, the second in our 6 part series with Georg Petschnigg, we hear about his work as an engineer in the world of video compression. And how an hilarious chance meeting with a Stanford professor in a dance class led to Georg discovering he had been a designer for years without knowing it, not just a great engineer. We also learn how the naming of the company Georg founded in New York, Fifty Three, related to the human body and the enablement of creativity.
Stephen Cummins: HP, Lucent, IBM, Microsoft … so you did… you did go through a few corporates
Georg Petschnigg: Yeah,
Stephen Cummins: … Over the years. Talk to us a little bit about that experience … and feel free to jump into other things where you’re taking us down the road.
Georg Petschnigg: Yeah. So you know. Given that I always, you know, had been working every weekend. Or such growing up like … You know, once I was in university, you know, I also had then the good fortune to do various internships. And that took me HP … Hewlett Packard at that time … into a fascinating field called semiconductor test. It’s a field very few people know about. But essentially, it’s equipment that test chips. So before you packaged chips … one of the most expensive things about making a Chip is actually packaging it.
Stephen Cummins: Yes.
Georg Petschnigg: So, you want to package a chip when you know it works. Not, you know, package it after … and then find out that it works. And so there’s semiconductor testers. And it was this really fascinating place, because at that time, you know, it was the first time that, you know … it’s very technical on the one side. But I was working in marketing there, which meant translating some of those stories about the semiconductor testers … and making them approachable.
Stephen Cummins: Which is maybe a hard thing to do,
Georg Petschnigg: It is.
Stephen Cummins: It doesn’t sound exciting on first hearing.
Georg Petschnigg: Yeah. So … like why this is interesting?… If you followed like the rise of intel and PCs… Why that is actually at that time a really interesting moment was that… we were testing new memory standards, in particular memory standards called Rambus that actually allowed for, like, higher throughput memory.
It was sort of a bottleneck problem in the computer industry at that time. And testers … we figured out how to do this. And the company was called Rambus. And I was writing sort of the case study and the marketing report about this. I ended up getting so convinced by my own writing that this is the future of memory that I took all of my like, you know, all of my internship dollars and like ended up investing, buying shares in Rambus.
Stephen Cummins: Okay.
Georg Petschnigg: And this was like the late nineties, right? So probably could have bought any type of company and it would have gone up. But Rambus did increase in value quite a bit. And ended up being able to, like, sell these shares and get out of college without, like, without any debt. So I was able to pay off my loans.
Stephen Cummins: Fantastic.
Georg Petschnigg: The crazy thing is many years later I ended up, like, you know, going to Stanford and studying computer engineering and computer graphics. And one of my advisors ended up being Professor Horowitz, who was the founder of Rambus. It’s one of those crazy things … it’s when I met with him, I was like, you know, ‘Mark, I’m here because I, you know, I bought…
Stephen Cummins: Because of you buddy.
Georg Petschnigg: …because I got to buy like some of those Rambus shares. And the first question he asked me was like ‘Well, did you sell?’ And I said “Absolutely!” So, I mean, it did shoot up and then..
Stephen Cummins: … of course ..
Georg Petschnigg: … it dropped. Like everything that ended up dropping.
Stephen Cummins: He was happy for you, right?
Georg Petschnigg: He was very happy for me. That’s right. So, it’s a funny thing how we are like … we are so connected in each other’s creations … even like in, you know, in different ways. But yeah, that was sort of HP.
And then Bell Labs and IBM, that was all about high definition television and HDTV … How to really bring forward like video compression/ image compression. It was like around MP3s and MPEG. And really translating that into television standards and seeing the launch of that. That taught me a really interesting lesson that, you know … We thought we were seeing the future. We were seeing these high resolution TVs. And they were there in the lab. And they were working, right. For the first time, right?
But yeah, it would take another eight to 10 years before that was like a consumer thing.
Stephen Cummins: Absolutely yeah,
Georg Petschnigg: So that’s… that’s one of those pieces, but it definitely …
Stephen Cummins: And why did it take eight to ten years?
Georg Petschnigg: Because you’re talking about, like, an infrastructure change. You’re talking about a mass protocol and infrastructure change, right? So…
Stephen Cummins: So, there are a lot more pieces … moving parts to that? Yeah? A lot of disruption.
Georg Petschnigg: Yeah, yeah. And it was interesting because at first like, you know, people were saying like you’re working on these thin TVs, right. Because, you know, people don’t understand that. No they actually have higher resolution too, but it was like the LCD … it’s smaller and thinner was like the bigger thing.
Georg Petschnigg: Yeah, yeah. But that’s something that … the image compression thing really like pushed me towards more, like, the computer graphics direction. Because I realised, like, you know, compression … it makes for a great show called “Silicon Valley” right now, right?. Compression it might be the hot deal, but it turns out that changes in compression just take a long time to manifest themselves.
So I ended up going more towards … from image processing over into the computer graphics. Because it allowed me to follow aesthetics as I mentioned, right? Because I was like ‘At some point you can’t squeeze out more bits out of an image, but you can definitely make a better image’. Right? And that has always been sort of… that’s launched me into the productivity tools direction.
For me the connection is like, you know, ended up then finally making my way to like Microsoft again, you know. Working my way through productivity tools there; first online version of Office and another version of Office. And then a stint in Microsoft research, doing more work in photography; computational digital photography there … developing a lot in new photography algorithms. But I always felt like, you know, there’s something … you know … the moment going back to this idea … the moment you’ve sort of mastered the product making, like, you really start asking yourself well “why?” What is the next product you want to build? And why are you, why are you doing it?
Stephen Cummins: I mean, you know, when we’ve chatted … I think I remember you saying something about the ratio between designers and engineers. The difference between a Microsoft and Apple in this… in this period?
Georg Petschnigg: While at… at… at Stanford and doing my studies studies in computer graphics I was exposed to design and a chance then to study under David Kelly … he’s the founder of IDEO, and he, at that time, was developing a lot of like more designed curriculum. Design thinking was, you know, sort of being popularised or started coming popularised. Entering Microsoft again, as sort of my second stint at Microsoft … like, then I started realizing that there is a huge design deficiency. Like it wasn’t, you know, it was manifest in that, like, for every, you know, designer, there were about 40 to 50 engineers. And it meant that, you know,
Stephen Cummins: It’s insane.
Georg Petschnigg: It’s crazy when you think about it today, right? But, you know … the way how an organisation would talk about this is like, you know, “This designer is just not good.” And I was like “Why are they not good?” It was, like, “Well they didn’t deliver their work on time” or “they didn’t think about this in great depth.” And then no need to understand that this one designer was not quote unquote ‘good’ … has like, you know, 40 to 50 type A, really brainy people around them, like, with their own objectives! Like, you start realizing that this is not, you know, all that tenable or sustainable as a job. And so I actually was doing the research in that area … “What’s really going on here?” … so I wrote a report; a ‘Think Week’ report called “Light Up Design at Microsoft,” Which was, you know, sent to Bill Gates for his Think Week to read through. But there was a chart in there that showed that, you know, the average tenure of a designer Microsoft, at that moment, was about 18 months. But it took 24 months to hire them! So, you know, the team was just desperately trying to hire designers, but it’s just super hard to do. And then, like, in the middle of that, like, you know, the iPhone launches.
Stephen Cummins: Yeah.
Georg Petschnigg: So now, you know, it became very… the iPhone at that time was just, it was the result of a different process, a different mentality … and of course … like Apple is a different company and Microsoft at that time. But it was, you know, the big difference there was actually the role that design played as the main integrator in a product experience.
Stephen Cummins: When I interviewed, Gary Tan, he talked about this. He interned, or worked for a year with Microsoft, and said that he’s the Type A engineer type guy. But also he’s a thoughtful type. He’s a VC now, and he also was a successful entrepreneur. He said that, you know, he knew it when he was there … they had all the things they needed to build an iPhone, all the components. But instead they spent all their time trying to copy the Blackberry. Build another Blackberry basically. And he said that this taught him that just trying to replicate something … and maybe do something iterative or do something cheaper was just a dead end in terms of putting something in the world.
Georg Petschnigg: Yeah. So the organization that it ended up joining was called the Pioneer Studio. At the time it was building, like, Windows Phone and Windows Mobile and there were several phones that were being developed … plus tablet products that were being developed. Like, I can with high confidence say that every major organization; the LGs, Samsung, like, you know, Microsoft …. Every possible permutation of cell phone existed in every company, right?
Stephen Cummins: Oh yeah.
Georg Petschnigg: The sliding thing … the Blackberry style one, you know, the touch screen one, right? Like Nokia had every possible permutation of phone. Like, Sony probably had every possible permutation of phone. Samsung had every possible permutation of phone. But Apple chose one very clear direction and made it work really, really well … like throughout the entire stack, right? And the way to do this is that you need to have a very strong brand identity, very clear brand vision around this. And you do need to have like a design team that can then integrate properly across hardware software and service, right?
And so what we ended up doing actually at that time … then also, you know, really empowering and elevating how design would work …
Once you actually needed a critical mass of designers, you needed to build brand and product at the same time. Right. Because, you know, you’re working with many different hardware vendors and multiple, you know, time zones. You’re working with software people. But you have then, sort of, the ability to translate the brand and the product vision across all those different disciplines and bring that together. But it all started by having just critical mass on the design side. And so that… that is something like, you know, ? would’ve sponsored in that… that team, ? had created the Xbox at that point and then… and that’s been really essentially… also then really drove a huge renaissance of design at Microsoft that is paid off now many… many years later.
Stephen Cummins: And, you know, I suppose all of that was formative in your decision to, at some point, jump ship…
Georg Petschnigg: … Start Fifty Three!
Stephen Cummins: And start Fifty Three. And I remember chatting with you in Berlin and there was something about dance as well. I remember you were incredibly passionate about dance and that was a big part of, so do bring that in at some point in the conversation.
Georg Petschnigg: Sure!
Stephen Cummins: Yeah, you know, because I think that was impactful as well in your life.
Georg Petschnigg: Yeah. So, I mean, the impetus to start Fifty Three was …. 1. You know, is, you know, we’re at a point when I had met some of my co-founders. Working in Pioneer Studios on a product called Courier which, you know, Microsoft recently actually launched as, you know, Neo and Duo. As the new Neo and Duo Surface, like, as a two screen tablet product. So …. One. I had found like sort of my co-founders and just really want to spend more time with them, right?. They were the people that, like, constantly inspired me to do better work. They would raise the bar and, you know, I mean it’s just, I just wanted to spend more time with them. Right. So starting a company is a great way to spend a lot of time with the people who you chose.
The second one was like the type of working that we really enjoyed … which is like, you know, the brand centered product development. And the third one is also the most important one … its the ‘why’. Like we saw a huge opportunity in the creativity space. We’ve seen people build and make massive investments in productivity tools like the Office suites. We’ve seen great investments in entertainment, for music players to like, you know, video to gaming. Right. But, you know, but creativity really wasn’t well served. And that’s sort of when we saw that essentially the iPad emerged, right? We knew, like, from an ergonomics perspective that this would be a different device. It was less than two cans of coke, which is important. It’s less than 600 grams, which meant people would carry it.
Stephen Cummins: Yep.
Georg Petschnigg: And… it’s instant on, right? That was super important because you could, if you had a thought, the software could be there to record it, right? And it has the large working surface.
Stephen Cummins: Yep.
Georg Petschnigg: So those were some of the really important conditions for us to then say, like, ‘You know, what? There is a huge opportunity here to actually think through how creation and mobile creation should look and work and that’s when we then started Fifty Three. And, you know, the name, you know, is very much inspired from like working with industrial designers, but also like being familiar with the body. The length of average arms reaches Fifty Three centimetres. That’s the space between head, heart and blank canvas. It’s in that circumference where, like, people do their best work. And we wanted to make sure that our tools, which are essential to us for creation, would fit into that space. That’s essentially where in one number, we essentially wrapped up, like mapped to the human body what we set out to with Fifty Three.
Stephen Cummins: So you had the ‘why’, and you had the core brand, and you had the team as well.
Georg Petschnigg: That’s right.
Stephen Cummins: In episode 103 of 14 Minutes of SaaS, the third in our 6 part series with Georg, he explains why he was compelled to take a huge risk in order to empower creativity. And how, in going against countless naysayers and the posthumous advice of Steve Jobs, he managed to make the stylus cool again.
Stephen Cummins: You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, and to Ketsu for the music. Thanks also to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and give the show a rating.