CEOInterviews.AIHow A Narrative Shift Created 89% More Value, with Qualcomm CMO Don McGuire

S

Seth0:00

It's like Cristiano puts it this way. It's really funny. He said, you know, there's a chat room set up for all the AI data center people are in the AI cool club, right? The mag seven, whatever. And then you have to get admitted into the chat room. And so there's people waiting to get in, right? And we were one of those companies waiting to get in and we weren't in. And then all of a sudden after this earnings call, we were let in and now we're in the chat room.

So this week, it's my pleasure to introduce a Vox Media studio first, my co-host for the day, my dog Oscar. I only allowed Oscar to join after he promised to keep his questions strictly on brief, which he more or less accommodated. Sitting across from Oscar and me today is one of the tech world's leading CMOs, Don McGuire, who's EVP and global CMO of Qualcomm. Today, Don's both a B2B marketer and a B2C marketer as in addition to the Qualcomm brand and portfolio, he also stewards marketing for the company's Snapdragon brand. Over his career, Don has seen waves of value creation and destruction, having held senior leadership positions at Intel, Kiasera, Leap Wireless, and Sprint PCS. Don tells me that from his point of view, the most significant destructive force in tech is complacency. Companies who are wary of disrupting short-term profits who wind up completely missing critical technological inflection points. And he points to former industry leaders like BlackBerry and Nokia to make his point. And for case studies in how market dominance and value can be destroyed when you don't adapt. So how does a company avoid this fate and continue to drive growth and create value? For Don and Qualcomm, it starts with a culture of innovation, R&D of course, and continuing to iterate on products and the way you bring them to market. But it also requires keeping the commercialization cycle top of mind and understanding what to do with all the things you've created so that they create value in turn.

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So, Don, before I get into my first question in particular for those who are watching us, not just listening to us, let me introduce everybody to our special co-host, my dog Oscar, who is here on an emergency pet sitting basis. Oscar has agreed to only ask questions your comms team has approved. We'll see how it goes. And I've been told that this is a Vox Media first and the first time that an animal has been in studio and I corrected and said it's probably the first time a K-9 has been there. But with that, let us get into it.

D

Don McGuire3:17

Sounds good.

S

Seth3:18

You've been in the tech industry a long time. Not to age you, my friend, but a long time. Arguably, there's no industry that has created more value certainly in the last couple of decades than the tech industry has. And as it continues, I'm wondering what you've witnessed, what you've learned, what you've experienced about what threatens and destroys value creation. I want to start with the negative side because there's so much upside, but what leads to value destruction in this business?

D

Don McGuire3:59

I think it's a combination of things. There's really two main vectors. I'm sure there's a lot of noise around each of these, but for the first vector, I'll talk about the inability or the lack of understanding of technology that leads to regulation that probably is not appropriate or productive with regards to the advancement and innovation of technology.

S

Seth4:31

So if I understand what you're saying, it's kind of regulation as a threat to value creation?

D

Don McGuire4:37

As a yeah, as a because I think a lot of politicians and governments, legislators tend to jump to regulation as an answer to keep control over technology versus understanding technology and innovation cycles and trying to encourage cooperation and collaboration and standardization to achieve whatever outcome they want to achieve through regulation. But to only understand regulate at the expense of innovate, I think can be a blockade to value creation and also could be destructive.

S

Seth5:19

I want to bring the question kind of back inside the companies. What's really interesting to me about your answer and about your point about regulation is the way it ties to the show's thesis, which is there are those things within and without your control. And one of the things we say in the show's description is that every decision a company makes either contributes to value creation or destruction. And that includes its lobbying decisions, that includes its corporate affairs decisions. Now some of those go beyond the company's ability to control them for better or worse I suppose. But if I ask you that question again, which is what have you witnessed across tech companies that exploded, went up and to the right, and maybe we don't even know their names anymore. What led to some downfalls?

D

Don McGuire6:14

There's a couple examples especially in our space or where we have historically been. If you go back through decades, you think about who was on top of the tech world 10 years ago, 20 years ago, 30 years ago, and to your point, some of those names have changed. If you look at mobile as an example, the mobile industry, when the cellular phone was first invented and became a tool, there were the titans of the initial cellular boom and the mobile revolution. And some of those titans are not even spoken about anymore.

S

Seth6:48

I mean, Motorola was my client back in 2004 when I was at CA. Motorola, Nokia, Ericsson, BlackBerry.

D

Don McGuire6:59

BlackBerry.

S

Seth7:01

So, is the value destruction that we saw or that we see as we look at those companies, is that a function of not keeping up with consumer interest, demand, technological ability? What if you had to tie a red thread through those four examples?

D

Don McGuire7:15

Sure.

S

Seth7:16

What would it be?

D

Don McGuire7:17

I would say complacency and literally missing inflection points where technology trends shift or behavior shifts or the technology itself is able to do something different, and because you're happy with where you are, you don't see the forest through the trees. That's a little bit of the complacency. Hey, this is never going to change. It's as good as it's going to get. So we're just going to keep doing what we're doing.

S

Seth7:46

I'm sorry to interrupt, but do you think that we're really saying this is never going to change? This is as good as it gets? Like complacency inside businesses built on innovation is such an oxymoron.

D

Don McGuire7:58

It's an oxymoron. I think it's sort of like clinging to your guns and religion sort of thing, right? Where we don't want to change because we created this thing. And so if we change this, then we risk short-term profitability disruption or we have to invest more in something that we don't either know how to do or we're afraid of or whatever the reason might be. There's several examples of companies just missing key pivotal points in technology or the evolution of technology that then sent them down a path of maybe stabilization for a while but then eventually erosion.

S

Seth8:42

Yeah.

D

Don McGuire8:43

And you know we mentioned Nokia, we mentioned BlackBerry, even Intel. They completely missed the pivot from the PC not being the center of people's digital life anymore and the phone becoming that center. And they had opportunities, all these companies had opportunities. Xerox owned the personal computer right before they sort of just gave it up.

S

Seth9:01

Mhm.

D

Don McGuire9:02

Yes. I'm old enough to remember when they asked somebody to Xerox something.

S

Seth9:05

Right, and so there's you know, Motorola had the television set.

D

Don McGuire9:12

Oh, is that right?

S

Seth9:12

Oh yes, if you go to their museum and I used to work for Motorola back in the day. If you go to their museum in Schaumburg, they were the first literal incarnation of a television set, but they just didn't see what that would be doing or could do in the future, and they just passed on it.

So, it's interesting. I think about it a lot. Going back to about that same period 20 years ago, I'm pretty sure I have the distinction of being the first person to lose money on Yahoo's stock because I bought it at what was a high and like 14 minutes later it was down after nothing but growth. And I remember thinking at the time Flickr, which was this amazing acquisition, I think it was an acquisition. I think it was Stewart Butterfield if I remember correctly who went on to do Slack and other things. Flickr should have been, could have been YouTube, but they had a bit of a myopic lens on what it was that they were interested in having and allowing facilitating the sharing of. And I'm wondering, as CMO at Qualcomm, how do you all ensure, what can you share with the audience about how you all ensure that you're not being complacent because that's a cultural attitude, but that you're not missing inflection points because it's easy to miss them. It's harder to capture them.

D

Don McGuire10:47

Yes, you're right. It is. Well, first of all, I think cultural, you mentioned cultural DNA. I think that's really important. If you have a culture of innovation, that gets you so far, right? It doesn't get you all the way. But at least it gives you that mindset of, hey, we like to tinker. We like to play with things. And if things tend to go in a different direction, we're okay with that. That is a culture of innovation. You have to iterate to innovate, right?

S

Seth11:12

Do you create gates around an innovation practice, which is to say everybody's responsible for innovation, but for true innovation? It's hard to be involved in the day-to-day and be truly innovative at the same time. Are there skunk works teams that you guys deploy to look at the future and invent the future?

D

Don McGuire11:30

Yeah, we have a worldwide R&D group of course as part of our engineering organization.

S

Seth11:34

Sorry, that was a dumb question. Audience, you can mock me. I'm fine with it.

D

Don McGuire11:39

I mean, it's part of the history. We're the biggest IP patent holder and application filer in the US. We have over 200,000 plus patents. If you come to our headquarters in San Diego, there's a patent wall in building N, which doesn't have all of them. So we are historically this patent machine where we encourage our people and we have so many super smart people at Qualcomm that I can't even have a conversation with because they'll, it won't go very far. But they just create things, they invent things. In fact, during COVID, because people were at home by themselves or in their basement or home offices, our patent filings actually went up and accelerated by like 35%.

S

Seth12:28

That's a really interesting insight, isn't it? As to what it takes to create a culture of innovation, which is, I'm going to mock myself, R&D obviously, but R&D requires even the R&D of folks who are in the day-to-day, all of whom want to be inventing, many of whom want to be inventing the future, it requires distance and perspective and negative space. And then you have to understand how you take something from an innovation cycle into a commercialization cycle.

D

Don McGuire13:06

Yes.

S

Seth13:07

So, and not everything makes it, right?

D

Don McGuire13:09

Of course.

S

Seth13:10

And that should be okay.

D

Don McGuire13:11

Yeah. It has to be.

S

Seth13:12

It has to be okay. And as you get older as a company, I think keeping that spirit becomes very difficult because the pressures of short-term profitability, quarterly earnings, causes or could cause shifts in behavior, especially at the leadership level to stifle some of that.

D

Don McGuire13:31

Yes.

S

Seth13:32

That creativity, that innovation, often causes that.

D

Don McGuire13:34

Often causes that. And we've been, I think we're guilty of it as well. I think that we are not the freewheeling, laid-back San Diego surf mentality, just go with the flow company we were 20 years ago. We're 40 years old now as a company, which in company terms is like we're a teenager. But we are obviously more disciplined. We've had to mature and grow up. It's just part of getting big, right? And going public and having to answer to shareholders and stakeholders and board members and not having total control of what you can and cannot do. Balancing that with but we still need these smart people to tinker with things and come up with ideas so that we can create that next inflection point. We've done a really good job when it comes to the generations of wireless, the G's. We're in the 5G era right now. And in about four or five years, the 6G era will begin. We invest in each generation of wireless inflection 10 years before it happens.

S

Seth14:54

Right. And so we started researching 6G at the beginning of 5G. And you have to do that. And that's billions of dollars of investment. It's something that is not going to manifest itself or materialize possibly for 10 to 12 years.

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Has 5G become what those who invested in it thought it would be?

D

Don McGuire16:22

I think it depends on who you talk to.

S

Seth16:24

Okay.

D

Don McGuire16:25

I think the mobile operators struggle with the fact that they invested a lot of money in building the infrastructure.

S

Seth16:32

Yeah. And there's a narrative out there that the killer app never came for 5G because when you look at 4G, which really enabled the shared economy, it really enabled apps to exist and for people to get access to those on a pretty consistent basis. We like to say where 4G created the ability for you to stream music everywhere no matter how crappy the coverage was, right? You could listen to Spotify and it'd be okay. It wouldn't buffer. 5G really created that for video.

D

Don McGuire17:03

But the killer app for 5G is not a single application or an Uber or something you can point to and say, "Wow, look at that innovation." The killer app for 5G is the ability to handle the massive amount of data going through the pipe on a daily basis. So it succeeds technologically but hasn't necessarily succeeded in the mind of the market, right?

S

Seth17:28

Which is it's done what infrastructure is supposed to do, right?

D

Don McGuire17:31

Provide the capacity and the bandwidth for people and for businesses and for the world to do what it needs to do. It's not sexy, right? But if we didn't have it, we would not be able to do things we do with these devices today. We would not be on the verge of AI like we are today if the 5G transition did not happen. So it's not like I said, it's not sexy and you'll see a lot of skeptics still write about it, and a lot of mobile operators still a little bit bitter about the fact that monetization of 5G they feel has not realized or materialized in the way that they thought it would. But I think again, they're looking at it the wrong way. If they hadn't transitioned to 5G, if they made the decision, well, we're just going to hang back and wait, they'd be dead.

S

Seth18:27

Right.

D

Don McGuire18:27

They wouldn't exist anymore.

S

Seth18:28

So, if their premise is, hey, great for infrastructure, but we haven't created or seen as much value creation from it as we anticipated, value creation here being monetization of it. Why? Is that a function of actions taken that were the wrong ones or actions not taken or just expectations that weren't reasonable?

D

Don McGuire18:54

I think a little bit of both. I think what they might say, I don't want to speak for them. I used to work for mobile operators in the beginning of my career, so I have that experience. But I would say that there's a feeling that the hyperscalers and the OTT, the Netflix of the world, have extracted the value out of the infrastructure because of 5G. Netflix exists. The ability to Netflix and chill wherever you are exists and they're capturing that value.

S

Seth19:22

Just a brief digression. I remember I was at CA probably 2005, 2006, and Netflix is still distributing DVDs by mail, right? And that was the great innovation at that time.

D

Don McGuire19:34

Amazing.

S

Seth19:35

Ted comes into CA for some reason. I get into this meeting or I'm invited to this meeting and it's really not quite an introductory meeting, but they hadn't done original content yet, right? Like this is how nascent they are. And I remember at one point somebody asked a question and he looks at them he's like we didn't call it Netflix by accident, which is to say they saw the innovation cycle, the 4G innovation cycle that was going to allow them to build this. I've never forgotten that. Like we didn't call it Netflix by accident, right?

D

Don McGuire20:09

Yeah. Well, it's true. I mean, so I think there is a perspective from some of the mobile operator community that they missed the value creation opportunity or it was stolen from them so to speak because they have been commoditized in this process. Which it's hard to argue with that to a certain degree. How do they extract value out of the fact that they're providing a pipe for others to then build on top of?

S

Seth20:38

Yep.

D

Don McGuire20:39

And it used to be where they had all the control and all the profitability. They were extracting all the monetization out of their networks when they were just providing signal, right? And all you could do with that signal was make a phone call or even send a text message. The mobile operator was extracting because they were the ones providing the messaging platform as well as the voice platform. But when they're not providing the solution platform anymore for what you can do on this network, that's where they started to lose the value.

S

Seth21:12

So if before we move on, I'm wondering if you were one of them or maybe all of them, in retrospect, is there something you think they wish they'd done or organized for differently to be able to have created more value?

D

Don McGuire21:32

I think you could in retrospect obviously look at maybe the speed at which some operators have diversified themselves and become hyperscalers in their own right.

S

Seth21:44

Mhm.

D

Don McGuire21:44

And some operators, there's examples from around the world, unfortunately not really in the US with the exception of T-Mobile. I think T-Mobile's sort of on their way to achieving a more diversified play as a company and you can see it in where they sit in the hierarchy of mobile operators today. But if you look at operators like Etisalat in the Middle East and others, they actually, and all the Chinese operators, they became hyperscalers.

S

Seth22:13

And for our audience, when you talk about being a hyperscaler, what do you mean?

D

Don McGuire22:17

So they're a combination of mobile operator and AWS.

S

Seth22:20

Okay.

D

Don McGuire22:21

Right. Or Microsoft Azure, right? So they built the data centers, they built the infrastructure as part of the services that they offer both for consumer and for enterprise. And so they diversified themselves and it's already happened. All the mobile operators in China are also hyperscalers in their own right. And you see other examples of mobile operators who saw that and started to go down that diversification path, which is going to set them up really well for 6G because 6G is really going to be the first AI native network where AI is actually built into the network architecture.

S

Seth23:03

And so from a...

D

Don McGuire23:05

It's a chance to take value back.

S

Seth23:07

Take value back.

D

Don McGuire23:08

Absolutely.

S

Seth23:09

That's a really interesting and I think important framing, one that hasn't come up on the show so far, which is value creation isn't a straight line.

D

Don McGuire23:20

No, it's not.

S

Seth23:21

Right, as is my R&D comment, like okay thanks Seth you're a genius. But sometimes those decisions to take it back require going back to one of the first things you said, require putting certainty aside.

D

Don McGuire23:41

And planning for a future that you've got to invest in to accrue and monetize that value later.

S

Seth23:50

That'll be the title of my book, Master of the Obvious.

D

Don McGuire23:53

So, and it's not easy, right? I sit, luckily enough, on Cristiano's staff.

S

Seth24:01

Your CEO's staff.

D

Don McGuire24:02

Yeah. And every Friday he has a staff meeting and we debate a lot of things and it's always this constant battle and this constant tension between we have to do this. Oh, but we've got this OPEX pressure this quarter or we have this this quarter and it's this constant balancing act of how much can we do and how much can we play whack-a-mole, right? And often times there's lots of spirited and healthy debate. The good news is at the end of the day, leadership really has to stand for something. And when there's competing forces, what side of that is leadership going to stand on? If they're going to stand on the safety conservative short-term focus side of it, the risk is going to be greater that you will miss an inflection point, that you will start destroying value over the long run. If you're on the other side, chances are you're going to free yourself and be able to whether it's reinvention or keep up or innovate or iterate, you're going to err on that side, which is in my opinion a positive. Cristiano squarely sits on that side of the fence, which is super helpful in guiding the rest of us in how we avoid those pitfalls of value destruction.

S

Seth25:28

While the capital markets obviously create a lot of value for institutional and individual investors, do they also threaten value creation because of their myopic focus on the next three months?

D

Don McGuire25:45

Yes. I mean, I think not too long ago there was this idea that maybe companies should only report annually.

S

Seth25:53

Yeah. I mean there was a fair amount of positivity around that. I think a lot of companies would say yes, thank you. It would shift the narrative to your point, right? The short-term focus, what have you done for me yesterday and what are you doing for me tomorrow? It is crazy and it really messes with the minds of organizations. I'll give you a perfect example. Even with Qualcomm, we had I think seven or eight maybe over 10 straight quarters of record earnings. Maybe it's not 10, maybe it's something less than that. Where we had announced record earnings and we guided above consensus and our stock dropped 10%.

Yeah, I mean we've seen a lot of that over the last few months in particular at least in my portfolio. Why is there...

D

Don McGuire26:44

Is there a reason why?

S

Seth26:46

Well, you know, like what's the say the market runs on emotion? Yes, there's lots of noise, ghosts in the machine, so to speak. But I don't, I mean it's hard to figure out and I'm not a finance person but it is interesting. To me as a marketer and as someone who's looking for what is in the mind of these people that's driving their behavior, to me it's all about belief in where value is created. And I think for us, just our situation, even though we were succeeding at what we do today, we were being viewed as a certain type of company and even with our success that we were not part of the value creation group because of our heavy, not dependency, but our heavy sort of mobile focus and mobile bent to what we've done historically and what currently drives our business today. And I don't think we were doing a very good job of signaling to the market. What we do today is important and it drives that short-term financial results that everybody wants, but our eye is really towards the future. And we weren't signaling forward. We weren't signaling where we're headed. We were focused on today and what we just did and what we're going to do next quarter. And that's on us to a certain degree that we weren't signaling where we were headed. The IR narrative and the narrative is super important.

It's fucking marketing, right? The oversimplistic Seth take on it is it's like why every coffee company wasn't we're not a coffee company, we're a tech company that sells coffee. They just wanted tech multiples. That's right. And those multiples are...

D

Don McGuire28:37

Yeah. Albert's such a good example. Like we're no longer a jew company. We're an AI company. We're a data center. Stock just pops, you know, like whatever. It's crazy, but that's narrative. That's narrative. And what narrative can do for you, and we'll take it. We did a horrible job up until this last earnings call.

S

Seth28:57

And what shifted internally? A new head of IR, right?

D

Don McGuire29:00

His name is Brett Simpson. He's amazing. And we looked at how we communicated to that audience not only what was important of what happened in that quarter but where we were headed.

S

Seth29:18

Yeah.

D

Don McGuire29:19

And for the first time talked about sort of the new new, the next new.

S

Seth29:24

Mhm.

D

Don McGuire29:24

And that signaled to the people who get on those calls every quarter and listen to what we have to say something different, something's changing at Qualcomm. And we were, it's like Cristiano puts it this way. It's really funny. He said, you know, there's a chat room set up for all the AI data center people are in the AI cool club, right? The mag seven, whatever. And then you have to get admitted into the chat room. And so there's people waiting to get in, right? And we were one of those companies waiting to get in and we weren't in. And then all of a sudden after this earnings call, we were let in. And now we're in the chat room. And now we can interact with this group of companies and people.

S

Seth30:06

You got the pass. But it's too right. So we were granted permission to enter.

D

Don McGuire30:14

Right, the secret password was granted and then you've seen what's happened over the last several weeks. I mean our stock is up 89%. In what period of time? Like two weeks. 89% in two, at like 238 today. We were like 137 just about a month ago or whatever.

S

Seth30:33

Well, this explains the Tom Brown check.

D

Don McGuire30:36

No, no, no. I got a good deal on this. But it is interesting the shift now. We have to deliver, right? It can't just be about narratives. We have to deliver and we are very confident we can.

S

Seth30:49

A promise made undelivered against is the fastest way to value destruction. But the fact that we've been working on all this stuff and we are doing it, but we weren't talking about it. Right.

D

Don McGuire31:00

At least signaling the right things at the right time is a little bit of a miss. But that struggle, that constant struggle I mentioned in the Friday staff meetings, how much do we say, how much do we not say, are we being too conservative, are we being not conservative enough, that's the constant tension. And I think what was happening is we were leaning a little bit more towards conservatism because we like to be sure of ourselves when signaling things especially to the financial community.

S

Seth31:29

Yeah. Because they don't like anything less than, they like a failure to manage expectation.

D

Don McGuire31:35

Absolutely. And we're the new sort of maybe not by actions, but by perceptions, we're the new kid on the AI data center block. And so we've got to act accordingly. So we don't believe we have maybe that credibility to just stand on a stage and say unlimited TAM and everyone goes, "Oh my gosh, it's amazing." Right? Some companies have that ability today.

S

Seth31:58

Yeah. I mean, if you look at speaking of sociopaths, Elon and all the promises he's made about robots and Tesla and whatnot, the stock has typically and over time been rewarded while he's delivered against none of that because he's given the permission to promise and often times not deliver or just set a very broad narrative that doesn't necessarily attach itself to his business. And it's not just him, right? It's others.

D

Don McGuire32:30

No, no, no. And when you're dealing in quarter over quarter exponential profits, right? Nvidia is a perfect example of this, you're going to get the credibility. Right. Because you're talking about up and to the right. And so you can stand on a stage and say unlimited TAM and everyone just goes, "Oh my gosh, this is amazing." Right. And they're going to give you that automatic credibility. We have to earn that. And that's also part of our DNA, right? Because we've been this sort of great enabler, open ecosystems, open platforms type of company because democratization of technology for us is really the great equalizer as well as the great enabler. And some companies don't operate like that, right? They like vertical organizations and vertical value chains. And so it's a philosophy thing which is its own form of value creation which I tend to, and I talk about this on the show a bit, think leads to less value creation over time because if there's no horizontal in your vertical, then going back to what we were saying about the capital markets myopia sets in and you're optimizing for what you do rather than what the market needs, wants, and what the company's actually capable of. But you've brought something up a couple of times that I want to use as a segue to this next question, which is you've talked about the choices that senior leadership, that Cristiano has to make and the conversations that take place in those Friday meetings.

Sure.

S

Seth34:09

In your role at Qualcomm where you're both CMO of Qualcomm and CMO of Snapdragon, right, which is a B2C play, you oversee and operate across both B2B markets and B2C markets simultaneously. And as we were saying about IR, your job is to tell similar stories, different products and services, but similar stories to multiple stakeholders, whether it's OEMs, investors, policy makers on the one side, consumers, maybe creators on the other. And I'm wondering, in a world where you have to make choices, are there times when you found that the value you're creating for one audience is actually in tension with what another audience needs? And if so, how do you reconcile that?

D

Don McGuire34:59

I would say yes, but I would also add to that and say another challenge, I don't know if it's equally as big or maybe smaller, is how do I bring the two or all of them together so that they're accretive to each other.

S

Seth35:19

Yes. Back to what we were just saying about the vertically oriented, right?

D

Don McGuire35:23

So that's one of the areas where we are really starting to take a deeper look because Snapdragon has sort of taken off and we've built this momentum towards a brand and a product that lives inside of something else. Yeah. And we'll talk about that in a sec.

S

Seth35:47

Sure. It's taken sort of the Intel Inside playbook which I ran for six years when I was at Intel and turned it on its head a little bit. And so because the opportunity with Snapdragon is much broader, but that's kind of been on its own track and we made a conscious decision to separate the two in 2020. The brands were the Qualcomm master brand company name and Snapdragon were locked up together prior to 2020.

D

Don McGuire36:14

Oh, is that right? But which was a strategic decision or kind of a default.

S

Seth36:20

It was a strategic decision based on data and issues that were preventing us from telling the Snapdragon story and really achieving that growth with consumers and building sort of a hopefully iconic consumer brand, culture brand. The problem was, or there were several problems, but one of the problems was it was a very long brand to articulate visually, verbally. The number of characters, the size of the logo lock up, Qualcomm Snapdragon and a fireball. Oh, by the way, for those listening, not watching, I'm pointing to the backdrop which has the show name Create or Destroy: Reimagining Marketing. And we had a lot of conversations even for an enterprise not quite as big as Qualcomm, although the wisdom company is on its way. Just you watch, my friend. The number of characters in the title for something that's going to show up in a thumbnail in a podcast queue, right? Like it's real. And we had massive issues with the size of the footprint that it took up in co-marketing for example with our partners. They're like too much space.

D

Don McGuire37:38

Yeah.

S

Seth37:38

Right. Your logo's too big.

D

Don McGuire37:39

And just for the audience who may not yet know though, I'm going to dig into it in a second. When you talk about co-marketing with partners, let them know who you're talking about.

S

Seth37:48

Oh, so this would be device makers across various product categories whether it's smartphones or PCs.

D

Don McGuire37:55

It's Microsoft, it's Samsung, it's Xiaomi, it's BMW, right? It's Meta, it's Ray-Ban, it's so many different brands.

S

Seth38:08

Snapdragon on somebody's eyeglass stick.

D

Don McGuire38:10

Right. Exactly. 37 characters or whatever. And a fireball. And another problem was that in certain languages one word translated and the other didn't. So that was problematic especially in our Asian markets which is where we started to build the brand. And so having Qualcomm Xiaolong together didn't really work. There was translatability problems, size problems. And so we did research when we separated the two. There was a thought I think at first that having Qualcomm attached would actually create more value for the brand and would lift the brand in our audience's minds.

S

Seth38:57

And sorry to interrupt, but when you say in our audience's mind, it was a brand new audience unless you were in fact talking to the capital markets, right? Because for the first time to my knowledge, a consumer audience, different relationship with the OEMs, but the only people I would think because consumers are probably less aware of Qualcomm because it's a B2B brand. Like what audience would that create more value for?

D

Don McGuire39:23

Well, we had a certain amount of awareness affinity in Asia for the brands.

S

Seth39:28

Oh, is that right? Okay. I'm so American.

D

Don McGuire39:32

That's okay. So, Snapdragon has existed for 16, 17 years and it started percolating in Asia. The brand was created with Asia in mind, right? The color red, the fireball, which is sort of a yin and yang symbol. Snapdragon being a flower and obviously having the word dragon in it. Dragon obviously in folklore in Asia is a very powerful and well-liked symbol. So a lot of that work prior, by the way, way before my time. I didn't create the brand or the logo or the ethos for it originally. That was already done when I joined Qualcomm. But kudos and bravo to whoever did it. But so there was a certain amount of awareness, but what we found when we went out and studied with those consumers was that not only having Qualcomm on top of it or stacked on top of it didn't add value or didn't bring more value to the brand, it actually created more problems and actually created destruction.

S

Seth40:30

Yeah.

D

Don McGuire40:30

And so because we tested them separately and we tested them together, we decided to separate and that was in 2020, 2021. And we basically decided that Snapdragon needed to stand on its own, be its own thing, and we were going to build it in the context of the product categories where it lives on the path that we've taken and where we are today with it. So one thing I will say is when we made the decision, we looked at examples of who's done this before or who has a similar challenge, and we really sort of used the Microsoft Xbox example as the example that sort of guided us towards the conclusion that we went to.

S

Seth41:22

Xbox is Xbox.

D

Don McGuire41:24

Yeah.

S

Seth41:24

Don't mess with it.

D

Don McGuire41:25

Yeah.

S

Seth41:26

Right. It's got its audience as opposed to PlayStation which is Sony PlayStation where master brand does provide that value because you created PlayStation under the umbrella of the Sony brand ethos.

D

Don McGuire41:38

Xbox was Xbox.

S

Seth41:40

Yeah.

D

Don McGuire41:40

Or was Microsoft Xbox.

S

Seth41:42

Yeah. It was not of a kind.

D

Don McGuire41:45

Was not of a kind. And so the attribution was really Xbox Microsoft attribution at the very end of a message whatever that might be verbally or visually. And so that's the path that we went down. We kind of used the Xbox Microsoft example. And so we started building Snapdragon on its own. And we have audience separation. We have brand architecture. We were a branded house, now we are more of a house of brands. We have now two product brands underneath the Qualcomm umbrella with Dragonwing being our second one and we're about to launch a third for our data center products in about two weeks. So we will have three product brands that sit under the Qualcomm umbrella. And what we've done with Snapdragon, which I would argue we've had a certain amount of success with consumers and creators and those audiences, Dragonwing is more B2B and more of a business to human sort of brand, it's industrial, it's robotics, it's manufacturing, it's retail, it's logistics. It's really about solutions to business and enterprise. Whereas the data center brand really is meant for the hyperscalers and the data center ecosystem audience. And so each of them will have their distinct identities and the struggle that we have now is how do, especially with Snapdragon and as we nurture Dragonwing and we introduce our new brand, how do we make sure that all of them are accretive to Qualcomm?

S

Seth43:25

Yes.

D

Don McGuire43:26

As a company.

S

Seth43:27

Yes.

D

Don McGuire43:27

I don't think we've done a good job there yet.

S

Seth43:29

Why?

D

Don McGuire43:32

Well, I mean it's not without significant challenge strategically and executionally. But if you were to answer the question what will it take to do a better job moving forward, what's required? I think we need to figure out a way across multiple vectors of building association between the two, the goodness that we've built into Snapdragon, the fact that we showed up on BrandZ for the first time last year.

S

Seth44:02

Very cool.

D

Don McGuire44:02

And I've heard a little rumor that we made it again.

S

Seth44:07

And BrandZ for the audience who may not know is...

D

Don McGuire44:12

Oh, it's Kantar's global valuable brands list ranking. And it's similar to Interbrand, but it's more focused, I think, on more consumer-facing brands and it measures brand value. They use different measurements and vectors and things like that.

S

Seth44:29

I'm not going to lie, I tend to find the methodology of some of those companies, I'll keep which ones quiet, just so full of shit. Like it's just hard to figure out sometimes how they're measuring to be honest with you.

D

Don McGuire44:40

I mean, it's just like in what world, and with apologies to my friends at some, I think I can think of T-Mobile. So, sorry Ulie, sorry Mike. Like in what world is the T-Mobile brand more valuable than the Coca-Cola brand and McDonald's brand cumulatively? Like only a world where your methodology is stupid as shit.

S

Seth45:04

That's true. That's true. But the fact that we even showed up for me it's like okay wow there is recognition there.

D

Don McGuire45:11

Yeah. No, it's great. And then on Interbrand, Qualcomm showed up on Interbrand for the first time in 40 years in 2025.

S

Seth45:18

Do you think some of that's a function on the Qualcomm side of the shift you guys made that let you get past the velvet rope of the AI?

D

Don McGuire45:27

Well, it happened before that, but the shift preceded getting past the rope. Yes. The shift preceded us being let into the chat room.

S

Seth45:36

Yeah.

D

Don McGuire45:36

And Interbrand saw that, right? Because what drove that, they look at a company for three years prior to considering them for the list and they watch what's going on and they actually broke it down very logically for me. They said 60% back to the question of how do I build better association between Snapdragon and Qualcomm and in the future Dragonwing and etc. About 60% of the value of what drove Interbrand in their measurement structure to place Qualcomm at number 39 was Snapdragon and the work that we had done there and the value we created there. The other 40% were things like our diversification strategy, our partnerships with major other brands and companies, there were more company type of metrics, more Qualcomm types of things, and then of course our financial performance and things like that. So those things coming together landed, because they only do the company level at Interbrand and since we don't report financials on Snapdragon as a separate company or entity, it all ladders up and that's how they came together to assess our brand value as a company and then where we would land on the Interbrand 100. And so that was very interesting to me and we did a deep dive with Gonzalo and the team on that. I tend to think that their methodology is very solid. And I understand why we wouldn't have appeared prior. So based on their methodology and how they measure, but that's one signal to me that was like, okay, they saw it, they picked it up through how they measure, but Wall Street isn't. So I need to do a better job. We need to do a better job there. And so one of the things I've got my team working on now with IR as well as agency partners etc. is how do we in telling the Qualcomm story, how do we tell the Snapdragon story in the context of Qualcomm? We were so focused on making sure Snapdragon was Snapdragon and I think we erred on keeping Qualcomm out of that story. And it's great as a standalone consumer-facing brand, consumers don't need to know both, right? They don't need to know that this amazing chip that powers this amazing device that is called Snapdragon necessarily comes from a company called Qualcomm. But they may not need to know that, but the people who are measuring us, they need to know. And so bringing that together, we rarely mentioned it, for example, in our earnings scripts. We really mentioned the Snapdragon products that were driving the results by name. We talked about our business lines. We talked about categories and industries, but we didn't say, "Hey, the launch of the Snapdragon 8 or X series for the PC space drove this."

S

Seth48:33

Well, that's a great segue to one of what will be our last questions, which is in not branding that part of the business line, right? There was value didn't accrue to the brand either the parent brand or Snapdragon. And it's a context of brand value that I don't know that I've given a ton of thought to and it's super interesting. But on the topic of brand, you've talked about how brands need to have a soul and you said purpose isn't optional, especially for younger generations. But of course, a lot of CEOs and CFOs, especially of the world's biggest companies, they hear soul and they hear purpose and they think, give me a break. It's soft. It's unmeasurable. It's squishy, a distraction from the engineering in the product. So I'm wondering what advice, I don't want to make it about what you do internally at Qualcomm, but what advice would you have both to the CMOs and marketers in the audience but also the CEOs and CFOs in the audience? I guess to the CMOs, understanding how to communicate the value of soul, let's just use that word, the enterprise value, the accretive value. And for the CEOs and CFOs, what do they need to better understand about this so that they can realize the value upside?

D

Don McGuire50:08

It's a great question. I would say because I think at the Snapdragon level, we're fairly new on this journey. One of the things that we've learned and you can't ignore it if you're looking at young millennial, Gen Z, Gen Alpha, not only do they want their products and the brands that they associate themselves with to deliver a value proposition that is important to them. So, deliver the goods to them at a functional level. But they also want to know that the company behind this product is also doing good. And for other, so it's not good enough to have a good product. You also have to be perceived as also doing good.

S

Seth50:52

And what as you talk about doing good, what's your definition of that? Is that the eradication of negatives, the creation of positives? Is it philanthropic efforts or is it just making the world a better place and sometimes putting a smile on someone's face is doing good?

D

Don McGuire51:07

I mean, I think it could be all of the above or a portion of those based on where you naturally fit. I think what we do as a company and our philosophy, engineering human progress which is our master tagline, in its sense is doing good. We are making the world a better place because of what we do every day. We're allowing people to communicate and connect with each other. We're allowing people to have access to information, to friends and family, to their healthcare providers. We're creating access and we're democratizing access to technology which in itself is a good thing. But so how do you, if you've got that, if it's a layer cake approach and you've got that sort of foundational cake there, how do you sort of dress it up and how do you add layers to it and frosting and all those types of things so that you can put an exclamation point behind that or in front of that? And I would say that first and foremost, it's find areas where you can intersect where your product or your company can actually provide value to whatever that purpose is. Don't force yourself into something. It's easy to throw your logo on a cause and feel good about that. But I think people see through that.

S

Seth52:25

Yeah, with no reason to feel good about it because it don't mean shit.

D

Don McGuire52:28

It don't mean shit. And so we are very purposeful, speaking of purpose, in how we accentuate or build that layer cake. And I'll give you two examples with Snapdragon. As you look at the brand ethos, we're like great product check, right? Amazing technology, check. Cool brand, great ethos, color, visual identity, right? Check. All these emotional attributes were in really good shape. Soul was a little empty.

S

Seth53:02

And by soul, do you kind of mean emotional depth and resonance?

D

Don McGuire53:06

Emotional depth. And yeah, I get it. The technology, it's amazing. If you took it out of my device, my device would just be stupid and not really do what I wanted to do. That's cool, but what else? And so we when we started to ask ourselves that question, what else? We went and looked at, okay, so how do we then put that exclamation point behind that? And so we looked at really where we could leverage what we do in the spirit of and in the service of a cause that a) resonates with people, b) is brand safe for us. Because I think that's really important. People talk about brand safety all the time in the context of making decisions in the business in narrative, but you also have to make those decisions with regards to who you associate with and what types of organizations you associate with because it's easy to alienate, you've talked about this, it's easy to alienate upwards of 50 plus percent of your audience at any given time.

S

Seth54:11

Yes.

D

Don McGuire54:12

And if you're okay with that, given your global purview, is that particularly true in America or is it really a global phenomenon?

S

Seth54:24

Oh, I think it's a global phenomenon. I think it's worse in some places. I think you can alienate like 70% of your audience in some countries just by the actions that you take. And I'll give you an example of how we went through this process with Red.

D

Don McGuire54:40

Product Red.

S

Seth54:41

Product Red. So Product Red obviously organization has been around for 20 years this year, it's its 20th birthday, started by Bono and Bobby Shriver, and it's with a simple purpose, right? Bring private enterprise into the global fight against HIV and AIDS. After Rock Hudson and in the 80s and the stigma sort of faded with regards to...

D

Don McGuire55:03

I mean I should probably ask you to explain who Rock Hudson is for our audience but I'm not going to. Google it. He was an actor.

S

Seth55:12

Yeah. And after the stigma had faded around the disease, its simple purpose is to eradicate it. Especially when it came to where it was spreading rapidly in Africa. And so the Global Fund is the more public sector part of that effort where they go around to governments and get governments to commit to this fight. Bono and Bobby Shriver on a ski slope in Davos decided, hey, how do we get companies involved? How do we get the private sector involved? So they founded Product Red.

D

Don McGuire55:45

And do you remember in the 80s, him and Oprah walking down the streets?

S

Seth55:52

80s or maybe the 90s.

D

Don McGuire55:54

It launched in the 2000s.

S

Seth55:56

Yeah. Sorry. Launched in the US. Sorry, I'm thinking way too far back. But it launched with much fanfare.

D

Don McGuire56:03

Yeah.

S

Seth56:03

As a brand.

D

Don McGuire56:04

It was huge.

S

Seth56:05

Right. Huge. And there were red products popping up everywhere and then over time the machine got started. They were generating upwards of almost a billion dollars now towards the Global Fund through their efforts, which is amazing to eradicate and fight HIV and AIDS, and they've expanded into other things like vaccination and women's health and other things like that. So it's even gone broader with its mission. So when we were looking at who we could associate ourselves with and who we could help actually, we looked at Red's mission which is the broader mission of eradicating health injustice, right? And we said who on this planet, maybe there are some people, but for the vast majority of people, who would disagree with that? Getting people healthy, keeping people healthy, eradicating a terrible disease. Well, arguably Bobby's cousin might, but it's pretty safe.

D

Don McGuire57:10

Yeah. Right. And it's come so far, right? And it's a brand safe place to play and we could actually help.

S

Seth57:26

And so that's why it made sense for us. What then is the counsel to the CEO and CFO who views this as soft and squishy and a dilution of resources?

D

Don McGuire57:35

So I would say it's not just a matter of associating yourself to a cause and hitching your wagon to a cause horse, but how you bring that to life and how you activate it in service of the brand and the products that you sell. In the case of Red, we came up with this amazing plan with them where we took one of the assets that we have as a marketing asset, which is the front of shirt for Manchester United, which that piece of sports marketing real estate each time it showed on a home match is equivalent to one Super Bowl ad in AV. And we gifted it to Red. And then we built a whole activation plan around that. And the Red match is played once a season with the men's team and the women's team. And the amplification and the global awareness we're bringing back to Red is amazing. But for us, we've measured that that match where we take our brand off the jersey and put Red's on it, and this just happened a couple weeks ago on the Monday Night Football match in the UK, more people were talking about Snapdragon during that match than on any single match during the season where our logo was on the front of the jersey.

S

Seth58:53

That's interesting.

D

Don McGuire58:54

Because of what we did.

S

Seth58:56

And what you didn't do.

D

Don McGuire58:57

And what we didn't do.

S

Seth58:58

Yeah.

D

Don McGuire58:58

And so the sentiment analysis, the chatter on Reddit and on Instagram and on TikTok was this amazing, more people are talking and then we had people coming out of the woodwork saying this is an amazing example of someone doing something because it's the right thing to do, taking that risk, and the benefit being that the credit is coming full circle. We're doing it because we want to help Red build awareness with a whole new generation of people. And that's why we're doing it. So the purpose and the rationale is pure. But the result and the impact that we're having, not only for Red, but for ourselves, is exponentially more positive than if we hadn't done it.

S

Seth59:49

But let me ask you a question. I would think there are two purposes because if you were doing it without commercialization and commercial upside in mind, you'd do it through a different part of the organization than marketing. You do it through the foundation, right? And I think, and I've been in the quote unquote purpose space since day two of my career. Started the purpose practice at Endeavor and it just really amazes me that putting aside the very real realities of divisions and being mindful, and by the way I think it's okay to alienate someone as Bill Bernbach said, the late great, if you stand for everything you won't mean, some version of if you stand for everything you'll mean nothing to anyone. A lesson that I think Target has learned to their destruction of value. But you do well by doing good. Absolutely. Doing good is done well.

D

Don McGuire1:00:53

That is done well. Yeah. And I think that's the other side of the coin, right? You have to execute it well.

S

Seth1:00:57

Yes. As with everything.

D

Don McGuire1:00:59

As with everything. And I think this is the second season we've had our partnership with Red and I think it was phenomenal. And it will manifest itself in more people feeling positive about Snapdragon and when they're out there looking for their next device, if it comes up in their minds that beyond asking the product has Snapdragon inside of it because of what we bring to the table for them personally and selfishly, but I'm going to buy it also because I saw this match and I saw what they did for Red and personally I had a friend, family member, cousin, whatever who was afflicted with this or is having an issue that's related to this cause and so I'm in.

S

Seth1:01:41

Well, what's so interesting is you talk about them feeling good and so many a CEO and CFO and board for that matter understand how important it is for the capital markets to feel good and yet they dismiss it as a soft squishy thing when an end user feels good.

D

Don McGuire1:01:58

Right. Likability is very valuable.

S

Seth1:02:00

Yeah. And look, no matter who you're talking to, whatever community or audience, people age out.

D

Don McGuire1:02:08

Yeah.

S

Seth1:02:08

And you have a whole new crop of people and these people's attitudes are different. Right. You look at the analysts of tomorrow, the financial analysts of tomorrow sitting right here around us in this studio are in their 20s right now. That's such a good point.

D

Don McGuire1:02:23

Right. And they have different attitudes and different behaviors than 20 years ago. And so you can't ignore that, right? This doesn't stand still. It moves constantly. So understanding that and moving with it is super important, which ties perfectly to where this conversation started, which then brings me to the end of the conversation. And the question we ask everybody as we end every episode, and I should ask if Oscar has any questions for you.

S

Seth1:02:54

Oscar, what do you think?

D

Don McGuire1:02:56

He did yawn a couple times. I'm just going to say, did we bore you?

S

Seth1:03:00

Yeah, he's easily bored. Easily distracted. He looks pretty, he's feeling good right now.

D

Don McGuire1:03:04

Yeah, he's the definition of feeling good.

S

Seth1:03:06

Okay. So, you don't have to answer this through a business lens, any way you want. The only requirement is that you think about tomorrow, right? Which is not a year from now, but tomorrow. If you could have all the power in the world and you could create anything tomorrow, what would it be? And then of course the other side of the coin is what would you destroy tomorrow?

D

Don McGuire1:03:30

Tomorrow I'm going to start with create. I thought about this a little bit. I would create a solution, and I don't know how to put this, but I would create the ability to not have jet lag.

S

Seth1:03:44

I mean you do travel more than anyone I know. And I know a lot of people who travel a lot. Yeah. And I try with routines and things like that, but if you could just eliminate that whole gravitational pull thing as you're driving, it would be amazing.

D

Don McGuire1:03:59

Remember Armand Hammer, who is probably dead for decades now, but was CEO of Arm and Hammer.

S

Seth1:04:06

Yes.

D

Don McGuire1:04:07

Did a lot of business around the world, and he never changed his clock, right? So no matter where in the world he was, he had a meeting at 9:00 in the morning on his body clock, even if it was 2:00 in the morning in that market. And that was the way he did it. Those days are gone. And with all your success, your name's not on a package. So I don't know that you can pull it off, but all right. What about destroy?

S

Seth1:04:33

I would destroy the ability for AI to reach superintelligence.

D

Don McGuire1:04:40

What?

S

Seth1:04:40

I don't think it's needed. I just don't think, I think doing something just to do something, I'm going to reference Oppenheimer here for a second. Doing something just to do something is very dangerous. And look, we're in the business of AI, right? So, but I think augmented intelligence, I think it's helpful. It can be helpful if done right. Who doesn't want some help, right? I'll take all I can get. And sometimes getting help from something that's synthetic is better than getting help from something that's human because it doesn't judge. But I think superintelligence for the sake of superintelligence is very dangerous.

D

Don McGuire1:05:21

So it's not so much that it's not needed, it's that it's not needed and it's very dangerous.

S

Seth1:05:26

Yes. I think human intelligence has gotten us for better or for worse this far. And I think it will continue to. So why pursue something just for the sake of pursuing it?

D

Don McGuire1:05:43

Do you think it's being pursued for the sake of pursuing it or because...

S

Seth1:05:46

I think some people are.

D

Don McGuire1:05:47

Yeah, just listen to them speak, right?

S

Seth1:05:50

Yeah, it's a little scary.

D

Don McGuire1:05:52

Yeah, it's a lot scary. Well, on that note, my friends, Oscar and I want to...

S

Seth1:05:57

The jet lag thing for sure. You had a great jet lag.

D

Don McGuire1:06:00

I mean, by the way, if that was a stock I'd buy in.

S

Seth1:06:02

Me too. I'm all in, man.

D

Don McGuire1:06:05

I mean, I'm just tired all the time.

S

Seth1:06:08

Don McGuire, thank you so much.

D

Don McGuire1:06:09

Thanks. Thanks for having me. Thanks, Oscar.

S

Seth1:06:14

Before we go, consider this. If you've ever been to a party, the odds that you've consumed a beverage out of a red Solo cup are crazy high. And rare is it that something so cheap, utilitarian, ubiquitous, and disposable become so sustainably and culturally iconic. The cups, which are made by the aptly named Solo Cup Company, come in a host of colors, but red makes up about 60% of sales. And despite red being the color of so many iconic brands from Coca-Cola to Lego, Adobe and Marvel, the red here came to be not because of anything anyone would call a marketing decision, but because in the mid-70s, one of the company's packaging executives, a gent by the name of Robert Hulseman, brought four colored cups home to his kids, and they voted for the color they liked best. While he preferred blue, his kids chose red, beating out his blue, yellow, and peach. And peach just seems like a terrible idea. With a quick note to those CEOs listening, this does not mean your kids who aren't the audience should be voting on the work your CMOs and agencies are doing because this too is a terrible idea. Back to the cup for the cup's white interior, that was an engineering call. And the ridges the internet has come to swear are pourine markers aren't. They were designed for grip. So through a sequence of decisions few would consider marketing but all of which were cultural, brand, and monetary value have accrued across decades. Cheers to that. Today's episode was produced by Art Chung, Julian Jim, Mila Moreno, Brandon McFarland, and Ashley Futterman from the Vox Media Podcast Network and the Wisdomist Company. Thanks to Canva for supporting Create or Destroy. The best marketing organizations move fast and stay consistent, but most tools force you to choose between the two. Canva Enterprise is the platform where large teams come to create, collaborate, and publish at scale without sacrificing speed or brand. One platform built for the way modern marketing teams actually work. Learn more at canva.com/enterprise. That's canva.com/enterprise.

How A Narrative Shift Created 89% More Value, with Qualcomm CMO Don McGuire

About Don Mcguire