Unlike many of Silicon Valley's elite, Spence remains modest about his influence-and subsequent power-in the industry, says Bill Lipsin, president and CEO of Ironside Technologies Inc., a developer of business-to-business E-commerce software. Ironside is one of six companies for which Spence is director. "Here's this guy who received the equivalent of the Nobel Prize in economics apologizing to me when Tom Siebel rings during lunch," Lipsin recalls of a recent meeting with Spence. The prize Spence won was the John Bates Clark Medal, awarded every two years to leading economists by the American Economic Association. "He's a breath of fresh air in a very monetary-focused economy," Lipsin says. For Ironside, Spence adds a big-picture view of the business, balancing out the venture capitalists and short-term thinkers who often dominate.
Ironside recently joined the ranks of New and Old Economy businesses that seek out Spence's behind-the-scenes advice, network of contacts, and experience to help them run their businesses. Others include Blue Martini, General Mills, Nike, and Siebel, all of which appointed Spence to their boards of directors for the new millennium.
Siebel executive VP and co-founder Pat House counts Spence's senior-level connections to industry and educational organizations as the biggest influence on many in the company. "He's incredibly well-connected in the financial world, business world, and academic world," House says. Spence's personal relationships with executives at Siebel and Microsoft helped establish a strategic partnership that includes the bundling of Siebel software with Microsoft platforms and technologies, as well as the creation of the Joint Technology Solution Center.
All of the companies he coaches are looking for help wading through the New Economy's uncharted waters. "Earlier economic concepts were developed to help systematize the changes in business that we can observe," says Spence. "But with a huge change like the Internet revolution, business is no longer in the range of what we have observed." Before the Internet, companies never could do business in 40 countries simultaneously, he says, so concepts were never established in that far-reaching range. Now, the rules need to change.
Spence is a "guiding light" for untested startups, says Blue Martini's Scott Hanham, VP of product development and services. "We could be analyzing the merits of possible business strategies, going down one road of thought, and then he comes in and examines it in a totally different perspective."
Spence, 56, has a background in economics that began at Princeton University, where he graduated summa cum laude in 1966. His success there led him to Oxford University, where he received a master's of arts in economics, then on to Harvard University, where he received a doctorate in economics in 1972.
During the 1990s, Spence established himself as a mentor to executives and engineers alike. In his nine-year tenure as dean at Stanford's Graduate School of Business, he formed a global management program for MBA students, the Stanford Computer Industry Project-a joint research project among high-tech manufacturing firms, the business school, and Stanford's engineering school-and he saw the flood of applications for 360 spaces reach an all-time high of 7,000.
"Universities don't produce the lion's share of commercial ideas, but they do produce well-trained people," Spence says. He credits the "open system between private companies and the university" in this country with fostering the exchange of ideas and generating new ones.
While the economy might be displaying signs of a slowdown, Spence predicts the enormous leaps in technology innovation will continue-but at a price. "We haven't even seen the most interesting changes yet," Spence says, "and the inventions down the road will be so incredible we can't comprehend them now." Nevertheless, these advancements in technology "will be conducted with considerably more realism and circumspection" than in the past. "The high-flying, money-burning companies seen this year will fade away," he says.
Don't think Spence is about to slow down, either at work or play. Though he loves his moped-which he says cuts his commute in Silicon Valley traffic down to five minutes-he'll soon be stepping up his transportation plans with motorcycle lessons.
Recent pleasure trips:
Cambodia and Vietnam, France
Played college hockey
Will take motorcycle lessons soon