Welcome to Stewart Squared podcast with the two Stewart Alsops. In this episode, they explore why consultants often fail in the tech world, how leadership skills are (or aren’t) taught in business schools, and the historical tension between technical and non-technical CEOs. They trace the evolution of Silicon Valley’s culture, from the idealistic hackers of the PC revolution to Amazon’s strategic rise with AWS and its CIA contract, and discuss whether institutional knowledge should be centralized or decentralized inside corporations. The conversation ranges from the origins of corporations and supply chain mastery at Apple, to predictions with LLMs, IoT security challenges, and even why Google struggles to innovate beyond its search monopoly. Show notes include a recommendation to read
Apple in China for deeper insight into Apple’s role in training millions of Chinese factory workers.
Check out this GPT we trained on the conversation
Timestamps
00:00 – Opening with Stewart Alsop III teasing topics like why
consultants fail in tech and the theory that
post-founder CEOs rarely succeed, leading into the history of
McKinsey and the
Big Five consulting firms.
05:00 – Critique of
MBA programs for focusing on analysis over
leadership, discussion of
Stanford GSB and
Harvard HBS networks, and whether
leadership can be taught.
10:00 – Exploration of
technical vs non-technical CEOs in Silicon Valley, examples like
Steve Jobs,
Larry Ellison, and the early
PC industry’s bias against consultants.
15:00 – Deep dive into
Amazon Web Services, Andy Jassy’s startup-first strategy, and AWS’s
CIA cloud contract, plus
Oracle’s legal battles over DoD’s JEDI contract.
20:00 – Debate on
AI prediction limits, the
MIT SEAL framework for updating LLM weights, and
real-time adaptability in AI models.
25:00 – Examination of
corporations as knowledge bodies, historical roots in
Dutch East India Company, and the tension between
centralized vs decentralized knowledge.
30:00 – Focus on
institutional memory,
Apple’s supply chain with Tim Cook, United Airlines’
IT transformation, and
IoT security risks.
35:00 – Insights on
device authentication,
Device Authority’s IoT security approach, and vulnerabilities like
Stuxnet.
Key Insights
- Consultants often fail in tech leadership because they lack deep domain expertise and tend to focus on analytical frameworks over practical execution. The Alsops argue that consultants are great at creating presentations and identifying what companies should have done but struggle to navigate the messy realities of running large, complex organizations—highlighted by the Webvan example where a consultant-turned-CEO helped drive the company into bankruptcy.
- Business schools train analysts, not leaders, equipping graduates with skills in spreadsheets, case studies, and presentations rather than fostering the hands-on leadership required in startups and tech firms. While MBAs can be valuable for networking and strategy roles, they often fall short in preparing executives to scale companies or inspire teams in rapidly changing environments.
- Technical and non-technical CEOs shape companies differently, with early Silicon Valley favoring technical founders like Gates and Wozniak. However, leaders like Steve Jobs and Larry Ellison thrived without deep technical skills by surrounding themselves with strong technical co-founders, showing that vision and communication can sometimes outweigh engineering chops in the CEO role.
- Amazon’s AWS strategy illustrates effective knowledge transfer and scaling, starting with a focus on startups and evolving to win contracts like the CIA’s cloud infrastructure. Andy Jassy’s ability to scale AWS from an internal tool to a dominant cloud service underscores how decentralized initiatives can later become centralized strengths when aligned with leadership vision.
- The SEAL framework represents a breakthrough for LLMs, enabling models to update their weights post-deployment for real-time learning. This adaptation could blur the line between static and dynamic AI systems and marks an early step toward meta-learning, raising both exciting possibilities and existential concerns about machine autonomy.
- Institutional knowledge must balance centralization and decentralization. Centralized databases simplify operations, as seen in United Airlines’ customer system, but decentralized human knowledge prevents organizations from collapsing when key people leave. Apple’s reliance on Tim Cook as its operational brain is cited as both a strength and a cautionary tale about knowledge bottlenecks.
- IoT security remains a critical and under-addressed challenge, with billions of devices running outdated software and exposing organizations to risk. Companies like Device Authority are working on real-time device identification and updates, but widespread implementation lags, creating vulnerabilities that even nation-state hackers have exploited, as in the Stuxnet incident.
What is Stewart Squared?
Stewart Alsop III reviews a broad range of topics with his father Stewart Alsop II, who started his career in the personal computer industry and is still actively involved in investing in startup technology companies. Stewart Alsop III is fascinated by what his father was doing as SAIII was growing up in the Golden Age of Silicon Valley. Topics include:
- How the personal computing revolution led to the internet, which led to the mobile revolution
- Now we are covering the future of the internet and computing
- How AI ties the personal computer, the smartphone and the internet together