Honesty Is The Best Policy

This quote from Joe Nocera’s piece on Steve Job’s health in today’s NYT shocked me:

This is Steve Jobs,” he began. “You think I’m an arrogant [expletive]
who thinks he’s above the law, and I think you’re a slime bucket who
gets most of his facts wrong

I’m personally with Joe on this one. Steve Jobs is an arrogant fuck who thinks he’s above the law. He’s also the most amazing technology CEO/entrepreneur working right now. He’s way better than Bill Gates (who isn’t working anymore) and the Google duo in my book.

Apple and Steve are at the top of their game, pushing the envelope in so many ways. But Steve is wrong to try to hide his personal health from the media, the market, his customers, and his employees.

Steve’s health is not a private matter as much as he’d like it to be. Apple’s stock is off between 15-20% in the  past 45 days in the midst of one of the most powerful product cycles (iPhone) we’ve witnessed in the tech business. You can blame it on the fact that they are going to take macbook prices below $1000 shortly and take share in the laptop market, but the stock market will love that because it can do the DCFs and value that move. The stock is weak because the market thinks Steve is sick.

The technology revolution that Steve has had so much to do with has changed a lot of things and one of them is transparency. You can’t hide stuff anymore. So honesty is the best policy. And calling influential reporters "slime buckets" should be avoided as well.

Disclosure: I am long APPL.

#VC & Technology

Comments (Archived):

  1. Dan Cornish

    Steve Jobs has many scars on his back. The press for years has criticized him, the business community has dismissed him, he was fired from his own company, and his imminent failure has been predicted continuously for years. He now has fuck you money but more importantly he has a fuck you place in business as truly one of the best CEOs. Jobs has learned that the first job of a Prince is to keep his power. He lost sight of that lesson and paid the price the first time. By not talking about his personal life, he removes a weapon from his enemies arsenal. The world loves to take down people at the top and even more so when they are arrogant. If he had told the world about his cancer when he first heard about it, the demands for his resignation would have risen to such a loud noise, that he probably would have been forced from his job a second time and the stock would have taken a much larger drop. So I argue it is in the stock holders interest that he NOT reveal any details about his health.

    1. terra210

      “the first job of a Prince is to keep his power”This is smart. And I agree, Jobs has probably learned something about how to do this.Maybe I am cynical, but I don’t believe that just because someone says they are disclosing facts, that they necessarily are doing so. Many people in a position of power or authority speak about their honesty; but when the facts come out we learn this was not the case.And yes, it is human nature that when someone is perceived to be arrogant, (whether they are or not), they will be attacked, and attempts will be made to break their position. Jobs is doing the right thing. His attitude is even good. It builds his myth; and myths are synonymous with the strength of a brand.Stock prices will ebb and flow. The AAPL brand is so vital in the culture at this time, it will maintain the uptrend, even after dips. I was walking by an AAPL store yesterday, and they had posted people to give people numbers to enter the store, as too many wanted in; how often have you seen this with other brands?But, sometime in the future, the market will reach the end of its life cycle, and the brand will begin to fade. But this will not happen for a while. It can’t with this much interest. Traders do not control the world; they merely impact the market temporarily.Health care “transparency” is very dangerous. We are not a benevolent species. Information will be used as deemed necessary by those who can control it.And, I hope Steve Jobs is well or well soon. I for one have enjoyed his contribution in the culture, even though at this time I do not own any AAPL products.

  2. gregorylent

    we seem to be in a culture of dishonesty … airlines afraid to actually raise the price, so they nickel and dime with hidden costs … isp’s offering unlimited service that is not, but afraid to tell the truth about the limits ..we are also in a cult-of-personality culture … apple is a corporation, mr. jobs doesn’t have all the good ideas, he manages them … that the markiet hero-worships him is not his fault, though he may use it for his company’s gain.i agree that his health is not my business. if mr. jobs has hiv or cancer, what would that actually matter? he can do his job.the man is not the company.

    1. Eric Rice

      What if Bill Gates came out of retirement to replace Steve Jobs? Or even better, replace Steve Jobs with *Steve Ballmer*.:)

  3. Jim Parsons

    I just wonder who’s been shorting APPL stock lately… and I find it deliciously ironic that, with the current melt down well underway, Wall Street is actually screaming at someone else for more honesty 😉

    1. gregorylent

      lovely comment .. 🙂

  4. Dave Martin

    Fred,Given that we are all terminal (it’s a design flaw), the most important question would seem to be is Jobs performing? Jobs’ health becomes an issue when it impairs or changes his ability to perform. The board should take the long view and begin succession planning. Having a plan to move the company forward after Jobs is an important part of the board’s responsibility and it faces the inevitable what next question should any health issue become public. Agree with you concerning transparency, my sense is privacy is increasingly a myth. Disclose or pay the price of discovery. Finally, Jobs needs to take the high road and measure his speech. Perhaps he would be better served avoiding all contact with the press outside company scheduled events.

  5. awilensky

    Love the references to Machiavelli below! Mr. Jobs was not just fired from his company back in the day, he was fired by THE GUY HE HIRED!So, I can kinda sorta get behind his defensiveness. And, all issues regarding mortality, and the near misses, and the final realization that even the near misses bring no ultimate respite – well, I can see how he might not want even an award winning slim ball to write it up.

  6. tim

    The stock is weak because the market thinks Steve is sick.I find no basis in this comment. AAPL stock goes through periods of overhype and then falls back to reality because its a very secretive company and is heavily monitored. The current weakness has nothing to do with Job’s health.

    1. fredwilson

      That’s debateable. When analysts all over the street are talking about it in their research and calls with customers, its impacting the stock. How much is another story entirely. We’ll only know if Jobs comes out and says something definitive and then the stock will tell you

  7. Druce

    Why is it so hard for Apple to say SJ is cancer-free? If the story is important enough to try to quash with an off-the-record phone call, why isn’t it important enough to level a little with shareholders?Two words: control freak.Same reason he’s been so successful will eventually be his undoing. Hopefully not because chooses fruitcake quackery over medical advice.

  8. Gerald Buckley

    We’ve all heard there’s a succession plan under way led by Al Gore. Cool. That’s the right and responsible thing to do.I worked for Apple under the Amelio and Spindler days as one of the large business systems engineers. Worked on the Newton product line as well. I even still hold some AAPL. As a shareholder, a customer and one who cares a great deal about a great many of my friends who work closely with Mr. Jobs at both Apple and Pixar… Mr. Job’s health is as private a matter as he wants it to be. As are his taxes. His investments. His DNA. Etc.Mr. Wilson, I totally respect YOUR choices to want to live a more transparent life… posting your medical records, DNA, etc. Some people won’t choose that path. Don’t have to and simply won’t. Yes, he’s amazingly gifted, driven and peculiar. Yes, he heads up one might fine company and steers a couple of others directly and indirectly. I hope the best for him and his family.There may be GAAP. But I don’t think we’re to the point of having a Generally Accepted Wellness Disclosures (GAWD). I don’t think we’re to the point of SarbOx requiring health disclosures of the D&O set. Hope we don’t get there either.

  9. Class V

    If one could draw a correlation between Jobs’ health and the performance (innovation, revenues / profits, customer satisfaction, etc.) of the company, then perhaps his health is everyone’s business. Otherwise, we are talking about a father and husband who may have every reason to keep his health a private matter.

    1. fredwilson

      That’s a decent and persuasive argument but I don’t think its right. If he were to have to leave the company for any reason, it would crush the stock. Investors want to know how to handicap that risk. And they won’t stop trying until he levels with them

  10. markslater

    sorry to nit pick – but when was honest not the best policy – i read this like – ‘oh now there is this transparency paradigm – we have to be honest’

    1. fredwilson

      I used that title because my mom used to pound it into my head as a boySo you are right, nothing new about that advice

  11. danhau

    but calling him a slime bucket was being honest

  12. Max

    This is rich, a journalist and a VC making judgments about the integrity and character of a very successful entrepreneur. The fact of the matter is that most journalists in today’s media ARE slime buckets that are out to make themselves the story (hello Walt Mossberg). You can generally assume two things (and yes, assumptions are dangerous) — 1) if a VC is opening his/her mouth and sound is coming out then they are likely lying; 2) most of today’s journalists are sleazier than VC’s.I could give a fuck if Steve is sick, but a VC saying “honesty is the best policy” — now that is hysterical. In the next post Fred will write about how much of an upstanding guy Henry Blodgett is.

    1. gregorylent

      i kind of like the comments today, rather feisty, and funny too

      1. fredwilson

        Agreed but some of them pissed me off

    2. fredwilson

      This blog is all about honesty and I don’t really appreciate the implication that I am a liar

      1. danhau

        I don’t think you’re a liar but…”I’m personally with Joe on this one. Steve Jobs is an arrogant fuck who thinks he’s above the law.””So honesty is the best policy. And calling influential reporters ‘slime buckets’ should be avoided as well.”Don’t you think calling super influential CEO’s “arrogant fucks” should be avoided too?

        1. fredwilson

          Yes you are right about that. But I was playing steve’s words back

      2. Charlie Crystle

        Well, the blog isn’t all about honesty, but as a longtime reader I can say you seem very honest and open. Max, it’s easy to spit on someone but it takes truly paying attention to understand. I don’t think you’re paying attention enough to suggest Fred is dishonest. Biased for his companies, naturally, sure, and he’s open and honest about that too.

        1. fredwilson

          Thanks CharlieI didn’t mean I write about honesty. I meant that I try to be as honest as I can be when I write

          1. Charlie Crystle

            I think you’re an honest blogger, and I think I’ve been reading you since you started, and from all accounts you’re an honest VC. Good VCs can only be honest. Now, some might use their leverage for the best possible deal for their LPs and themselves, but that’s not about honesty, it’s about restraint.

    3. markslater

      wow – tell us more abut yourself please

  13. Chuck

    Fred, you are likewise in a position where you are obliged to play with someone else’s money and play well. Your openness to shareholder concerns is certainly admirable, but where does it end? Should you also provide investors information on the health of your family, children etc? That can affect your ability to perform just as much as a personal health issue. This is perhaps why it is best to invest in companies with strong management TEAMS, not just one person.

    1. David

      Fred,I’ll play devil’s advocate on this so you can clarify your definition….Many ordinary folks think RSS numbers from Feedburner = actual daily blog readership Does this mean you should add a disclaimer that about your 135K RSS figure to be fully transparent so that some people aren’t misled?Or does it mean that an uneducated market gets inferior information due to a lack of thorough research and certain knowledge and that’s always the way it’s been?

      1. fredwilson

        i think i’ve mentioned the feedburner thing about 5-10 times already on this blog.yes, i belive in total and complete honesty and transparency with any information that is mine to share.i posess plenty of information that others have asked me not to share and i don’t share it.

        1. Drew

          Careful Fred one day you are going to buy CSCO rather than SYY

          1. fredwilson

            What is SYY?

    2. fredwilson

      My family’s health could affect my performance and if something bad happened, I’d absolutely inform my partners and investorsMy health is an even clearer obligation. If anything happened to me, I’d disclose it immediately to my patners and investorsFortunately I don’t run a public company. But I would never opt to do that. Its steve’s choice and he has to understand what comes with it

  14. Anne H

    It seems people are viewing this as a black and white issue. If I were to look at it from an investor’s angle, I would agree and want to know about Steve’s health. The main reason is I’m not convinced Apple has seriously thought about a succession plan. Steve Jobs is different than most CEOs. His absence would be felt more than a typical CEO. Even the average investor realizes this since his name is so widely recognized. Who knew corporations had “franchise players” other than people like Charles Schwab where their name is on the door ;-).The flip side is I understand the need for privacy on health issues. It’s not so much that people find out, but the dynamics and how they change. Once you tell people that you’re ill, even if not terminal, many will change their behavior towards you. No doubt people will be concerned and want to help, but the actions they take may make things worse. They may think the individual is more vulnerable and may try to protect them. A good chunk of getting through a health issue has to do with control and personality. I don’t think there are any absolute rules on this and honesty comes in degrees.Does this mean I think Steve is correct in his actions? No, not necessarily. But as Terra pointed out earlier, the first rule of a prince is to keep his power. I think there is a second rule which is never let them make you feel weak (even if that is not their intention).

  15. Glen Campbell

    Repeal HIPAA

  16. Wizeguyztees

    Great post you have here about honesty. I am a believer of this in a big way. I gave this a stumble review and subscribed to the feed.If u would like to get me back I am athttp://www.wizeguyztees.com…

  17. BEN

    You are conflating honesty and disclosure. Not the same thing. I can be honest and private. Your suggesting that keeping health issues private makes someone immediately dishonest vs well, protective of their privacy, makes me question yr critical thinking skills.

    1. fredwilson

      They said he had a “common bug” when he had something much more seriousThat’s not honesty

  18. Eben Thurston

    I can see Steve, as a human being, not wanting his health to be the subject of public discussion, but he is Steve Jobs, so they need to find a way to strike a balance. AAPL should probably have done a press release stating a few facts, ie: cancer has not returned, non-life threatening digestive issue has caused weight loss, nothing that will impact his ability to run AAPL, etc. I’m no PR expert, but you need to fend of the short selling rumor mongering hedge funds. Silence is just asking for trouble.

    1. fredwilson

      I should have asked you to write my post for me. You said it much better than I did

      1. Eben Thurston

        Thanks Fred.

  19. LIFTr

    Since I don’t really know what happened with this situation (to be honest) and also understand enough about witch hunts to be cautious, I’ll just add that I’d be glad he doesn’t have cancer.

  20. Charlie Crystle

    Apple is the most interesting public company today. If Jobs is the primary driver behind everything–design, platform, marketing, etc, then they absolutely need to find a way to instituionalize his contribution and start developing other potential leaders–if they care about the long term future of the company. And who’s to say they aren’t already doing this?Steve Jurvetson once told me that while he was at NeXT, Jobs would come through and point to one guy and call him a hero and point to another and call him an asshole “You’re a hero, you’re an asshole”. To him the world was black and white. Arrogant.And so what? Is it arrogance if it’s true? So what! Great products, great hype, cool platform, hugely profitable, and positioned to significantly shit on Microsoft in a beautiful way by releasing the crown jewel as open source OR at least as a generic PC version. (What and lose the design of the $2799 MacBook Pro?–yeah.).Jobs’ health really isn’t any of our business unless it gets in the way of Apple’s goals. But a long-term succession plan is incredibly important. Do they have one? Do they have “Mack truck” contingencies? Does Apple know its asshole from a hole in the gorund without Jobs? I think it’s very shortsighted for investors to think that the rest of the company doesn’t know what it’s all about.BTW–on my way to the Knopfler show I stopped at the Apple store in King of Prussia last night to pick up a cable. It was packed, yet I got personal attention and was able to purchase and check out without standing in a line because of the handheld/mobile POS thing. I’m not a Mac guy, so that was new to me–perfect customer experience. Paying $20 for a bullshit $.30 monster cable wasn’t, but the experience itself was terrific. Now, Jobs leaves Apple and does that go away? People need to give the Apple board, management, and employees much more credit.Jobs rocks. I hope he’s well or able to get well, but so what. He’s great, and part of that is he’s created an amazing legacy in Apple.

  21. vruz

    whoever profit mightly by taking a risk buying AAPL know the material they’re handling.you can’t return that stock saying.. “but I didn’t know Steve was so secretive and so important to the company”you want the profits, you have risks, and Steve is part of the package, take it or leave it. easy as.on the legal aspects, here’s some more interesting commentary by Andy Updegrove:Nocera spends the bulk of the article expanding on the question of whether the health of a CEO is “material” under the securities laws, and therefore a subject upon which disclosure may be mandated by law. And he quotes experts that say, in effect, that if a CEO’s health prognosis is not such that it will have an adverse impact on the fortunes of his or her company that there may be nothing required to disclose at all. He never pauses to note, however, that he has learned that perhaps no disclosure by Apple may be necessary at all. Nor does he note that the greatest risk for a shareholder suit arises on the slippery disclosure slope between “no comment” and full disclosure of all details. Assume, for the sake of argument, that as a result of Steve’s most recent surgery he must wear a colostomy bag for the rest of his life. Is that a press briefing you’d like to authorize, if you were Steve? source:http://www.consortiuminfo.o

  22. Franz

    hi, i’m currently experimenting with this honesty stuff .and open up the figures of one of my pet projects in visual search. http://www.facesaerch.com/b… The thing is not about the figures but more to see what happens – if honesty produces more reactions than digg like headlines. i will see.

  23. BP


  24. michael

    it’s interesting to note how infrequently people are touching on the continuation-of-apple question. not to diminish the work of so many fine people, but the very real public opinion is simply that apple is steve, and steve is apple. no steve? well… this is a macabre exercise, but it is absolutely the best one. i, like many other people, have been told in no uncertain terms that the reality is far worse than we are led to believe.in the interim, yes, they have to find the balance to — at the very, very least — stave off the shorters.

  25. Dan Cornish

    At the risk of being a bit stale, I just saw this post about Tara Hunt and her breakup with Chris Messina. http://valleywag.com/503162…The part I really liked and though was appropriate to this post was the line “With openness comes vulnerability.” If I know your health information, I know what you are vulnerable to. I find out that an executive has a history of mental disease or depression, I can use that against him. I can start a whisper campaign against him. Steve Jobs learned how being vulnerable can give ammunition to your enemies.