Ethernet inventor Bob Metcalfe on selling, ego, and building 3Com

Executive overview

Bob Metcalfe invented Ethernet at Xerox in 1973, then left to found 3Com — a company that reached $5.7 billion in revenue before he exited. The core insight he returns to repeatedly is that inventing is easy; selling is the hard, underrated skill that actually creates value. His biggest career regret is not learning to sell earlier, a gap that cost him IBM as a customer and prolonged years of existential uncertainty for 3Com. He also traces how Steve Jobs — a decade his junior — mentored him on the importance of recruiting experienced leaders ("adult supervision") rather than trying to run everything himself. Now in his eighties, Metcalfe endows professorships at MIT, sits on its board, and is still searching for his next ten-year project.

Inventing Ethernet and leaving Xerox

• Ethernet was invented on 22 May 1973 while Metcalfe was a Xerox employee in Palo Alto.
• Xerox owned the patents; Metcalfe later negotiated an open license so Ethernet could become an industry standard rather than a proprietary Xerox product.
• He left Xerox twice: four years in research, four years in development, then departed in 1979 to pursue entrepreneurship.
• The wealth came not from the invention but from selling Ethernet — "I've been to every Ramada Inn in the world selling Ethernet."
• 3Com's name stood for Computer Communication Compatibility; its founding goal was connecting incompatible computer networks.

Founding 3Com and the Steve Jobs connection

• 3Com was founded in 1979; five days later Steve Jobs called Metcalfe to join Apple — Metcalfe declined.
• Metcalfe had tried to pitch Jobs a product called "Orchard" (a network for Apple II computers); Jobs ignored the pitch entirely.
• Despite the rejection, Jobs mentored Metcalfe throughout the 1980s without any obligation to do so.
• The key lesson Jobs modelled: he did not become Apple's CEO until 1996, twenty years after founding it — he valued "adult supervision" and brought in experienced operators early.
• Following that model, Metcalfe recruited Bill Krauss as CEO once venture capital was raised; he acknowledged he did not know how to run a company.

Building the business and learning to sell

• 3Com began as a profitable consulting firm, but competitive pressure from Ungerman-Bass pushed Metcalfe to raise venture capital ($1.1 million for one-third of the company in 1981).
• When the company was near collapse in 1982, Metcalfe was moved from CEO to head of sales and marketing with zero revenue — and grew it to $1 million per month within two years.
• Two IBM presentations ended with Metcalfe winning the argument but losing the sale: he never asked for the order or researched the decision-makers.
• IBM's rejection forced 3Com to spend roughly two decades fighting IBM's competing networking standard.
• "You can win the argument but lose the sale" is the line that defines his key regret.
• Metcalfe recommends Xerox Selling Skills (still available today) as a formal course worth taking.
• He distinguishes marketing (mostly incoming) from sales (mostly outgoing) as a foundational business concept.

Leadership transitions and the role of a board

• The 3Com board chose someone other than Metcalfe as CEO twice — in 1982 (Bill Krauss) and again roughly a decade later (Eric Benamu).
• Both times Metcalfe recruited the board members himself and credits them with making the right call.
• His last three years at 3Com he was actively hurting the company — his main work had become arguing with regional managers over brand guidelines.
• The board's primary function, in his view, is to fire the founder when they are no longer the best person for the role.
• After leaving, 3Com's revenue peaked at $5.7 billion in 1999 with a market cap briefly touching $52 billion; Cisco (founded the year 3Com went public) was the competitor that eventually surpassed them.
• "We had to kill two monopolies — AT&T and IBM — in order to build the internet."

Money, ego, and avoiding corruption

• Metcalfe watched a $100,000 windfall destroy a young engineer through drugs — a warning that shaped how he thought about wealth.
• His ego test: in a group introduction, did you say your own name or assume everyone already knows you?
• Before 3Com's IPO he sold shares directly to all 35 employees (including the receptionist, who syndicated); the proceeds were $250,000 — enough that he went to an ATM just to confirm the money was real.
• He bought a house, a Corvette, a summer home in Maine, and a boat; the silliest purchase was a 50-knot speedboat he nearly wrecked on a granite ledge.
• Best use of money: private schooling for his children, eventually in Boston.
• His current goal is to spend all his money before he dies; he has endowed three professorships at MIT and calls the professors to hear about their research.

Career reinvention after 3Com

• After leaving 3Com, Metcalfe became a journalist writing a weekly column for one million readers, then a venture capitalist for ten years, then a professor for eleven years.
• Each transition was opportunistic — "like attempting to dock; you keep trying until one clicks and locks in."
• He now wants a less abstract role, possibly hands-on research rather than professorship or VC.
• His children followed a curious family pattern: his wife, son, and daughter each spent exactly eight years at their first major employer (Sunset Magazine, Apple, and Facebook respectively) before moving on.
• His son and daughter now co-run a startup studio called The Working Team, building MVPs for early-stage companies.

Lessons and regrets

• The single change Metcalfe would make: learn to sell much earlier in his career.
• Hard work and sacrifice were worth it — "my life is so good, I am reluctant to imagine it working out better."
• Success requires selling yourself, your ideas, and your product — not just building technically superior things.
• Relying on a strong board and hiring people better than yourself at specific functions is the structural move that separates founders who scale from those who stall.
• Bill Gates's observation that giving money away well is harder than making it resonates with Metcalfe's own philanthropic focus on timing: donate while alive so you can see the impact.