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

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.