Build - Tony Fadell

This book is an absolute reference for anyone who is building products, either in a startup or within a larger organization. What I liked about the book is that it is written partly as a biography, partly as what a mentor would say to a mentee.

Tony Fadell is one of the creators of the iPod, later the iPhone, and finally the Nest company. He started his career at a startup that failed, then joined Philips and it didn't work out, and finally he joined Apple, where his career took off.

The book is written from an extremely american perspective (only path to success is "work hard, sacrifice family time, earn a lot of money"). The culture around management is also quite americanized, but nonetheless worth a read, there are several topics worth learning from.

This is the type of book that one should check periodically for inspiration, especially if you get stuck in your career, are uncertain about what to do, or how to deal with different situations.

The books is built into parts addressing different professional phases.

1. Build Yourself
   • When you are young you need to learn as much as you can. Risks are minimal (if you are lucky the largest risk you have is moving back with your parents). You should find jobs where you can learn the most of the topics you care about.
   • Meeting your heroes can be disappointing. In the end, they are just people with their own failures. Don't focus all your energy on working for them, but on what they can provide you.
   • Once in a while, don't only look down at your tasks, also look sideways. Learn from other aspects of the job, ask around, learn from departments you are not involved with. That's how you'll develop leadership skills for later on in life, by learning a bit about everything.
2. Build your career
   • Are you sure you want to be a manger ? Success is defined through many different things, becoming a manager is not one of them, that's only a career choice. In this perspective you are either a manager or an individual contributor to a project.
   • When you become a manager, you'll stop doing what you were good at (for instance, programming, designing, etc.) Are you sure that is the correct career step?
   • Managing is discipline, not a skill. How to manage is learned, it is not a talent. You can learn by checking online resources, books, podcasts, etc.
   • Decisions can be based on data or on opinions . If the first is available, then opinions have no place, and the role of the manager is to follow informed decisions. If there is no data and is a matter of opinion, then decisions must be taken by the manager swiftly. Doubting will undermine your authority.
   • The world is full off assholes . There are mostly 3 types: political assholes , controlling assholes , assholes assholes . Then, the fourth type are the "good assholes", called mission-driven assholes (like himself). Controlling assholes are the worst. The way to move forward is: 1. kill them with kindness, 2. ignore them, 3. try to get around them, 4. quit.
   • Quitting should be immediate if you are no longer passionate about the project. On the other hand, if you are passionate but the company has let you down, you must do what you can to stay: talk to your manager, to HR, to other teams, to senior leadership... If nothing changes, stick to the mission you believe in, but in a different place (this really resonates to how I felt about Dispertech ).
3. Build your product
   • Make the Intangible Tangible . This is a great insight from someone actually developing hardware. Importantly, what you should prototype is not just the product itself, but the entire customer journey. How do they get to know you, how do they ask for help, how do they interact with your company as a whole. This is explained as the customer journey and touchpoints
   • Storytelling is a crucial skill for everyone building a product. The product itself should have a story. And it should have these elements:
     • It appeals to people's emotional and rational side
     • It takes complicated concepts and makes them simple
     • It reminds people of the problem being solved (focusing on the why: Start with Why ).
     • There is a very clear example: Steve Jobs explanation of the iPod, "1000 songs in your pocket" is a marvelous synthesis of what the product does without any jargon, without any technicalities. It takes continuous practice, and it does not come out like this at first (not even to Steve Jobs).
   • Storytelling is not only for customers, it is also how you attract people to your team, how you onboard investors. And later, storytelling will become crucial when dealing with boards in your own company.
   • Products have 3 phases: "Disruption", "Evolution", "Execution". If you are starting something, V1 should be disruptive. V2 and V3 can be evolutions of V1, but the very first one needs to be unique, a fork in the branches of technology. Importantly, don't try to disrupt everything at once . Focus on disrupting one, maybe two things, and do it right.
   • You need to keep your vision straight, you need a leader for V1. Importantly, most decisions will be opinion-driven since without customers, there is no way to generate data to inform what to do. This will naturally come for V2, V3, etc...
   • Hearbeats of a company are those moments that serve as natural alignment points. They can be external (a conference, the holiday season, etc.) They can be from the project, engineering and marketing sync, and they sync with the external sources. And they also happen at individual team levels. I liked this idea, because it does not require careful planning on time allocation, but forces the entire team (the entire company) to align efforts.
   • Regarding the economics discussion, I am not completely sure I follow the advice. V1 is not even remotely profitable , V2 focuses on gross margins , and V3 is where you focus on net margins .
4. Build your business
   • Spotting a great idea means that you found a "why" (as discussed in Storytelling, or in Start with Why ). It solves a problem many people have (see: problem-solution cycle ), it follows you around, meaning you can't stop thinking about it. The secret is to practice delayed intuition .
   • Good ideas are painkillers, not vitamins.
   • Be careful with exposure bias regarding who looks like an entrepreneur. We hear too much about kids in garages, but most entrepreneurs are well past their 40's and into their 50's. Various experiences make for great entrepreneurs.
   • Getting VC's onboard is like marrying for money. Be sure you are ready to do it, and are willing to get in bed with those specific partners for the rest of the foreseeable future.
   • There is a chance you will lose the investors' money. Be sure you are prepared for it. If you take money from friends and family, it can break relationships, and it can act as a handcuff for how much are you willing to risk and explore alternatives.
   • You can only have one customer . Companies have in their DNA an archetypical customer. Focus on them, don't try to be both a B2C and a B2B or B2B2C company. Once you fully map out your customer, their needs, their journey, once you have full product-market fit , then you can satisfy others. The example with the iPhone is as follows: the product was 100% built for customers, not corporates. It was much later that Apple introduced the App Store as a way to appease the people who wanted iPhones for their work. But it was only through fully capturing the B2C space, and fully satisfying end consumers that they themselves pushed it as a requirement for their business, they wanted to work with an iPhone.
   • Being smart about balancing life and work. Acknowledge you may be obsessed about what you are building and you may find yourself thinking at all times about your project.
   • Steve Jobs was a workaholic who used holidays to think about what to do. He was calling people in the company every single day to pitch ideas. That is devastating for everyone, not only for the person, but for the team. You can't take a break from your boss even when he's on holidays. What does he expect from you?
5. Build your team
   • There is quite a lengthy discussion on how to keep the culture of a place while it grows. Fundamentally, it comes down to growing smartly. If you hire too quickly, the culture will be watered down. Established practices will not be kept because new hires will have no one to learn from. You should also establish processes to ensure new people get used to the work culture and adopt it from day one.
   • Hiring is challenging, especially as you grow. Interviewing candidates must be done in a smart and organized way. Don't let the burden fall on too many people all the time, or they'll resent the responsibility, and don't let a single person make all the decisions. At Nest they had a 3-person approach: the hiring manager and 2 managers that would be "internal customers". Collectively they would pick a candidate for the role.
   • As a leader, you need to show up to the people in the team, regardless of who they are. Perhaps organizing informal lunches with small groups of people who get to ask questions directly from the top leadership. That is a nice opportunity to discuss about the teams' goals, company plans, and expectations, and also to get questions directly, without managers, without execs.
   • In small companies, a person can manage 8-15 people. In larger companies, the number shrinks to 7-8. Be prepared for those changes, make promotions ahead of time and explain to your team what is coming up. Adding management layers can break communication, and if that happens, the company will break apart.
   • "When you have a team of 6, then 6 days of the year is someone's birthday. Bring cake and enjoy. When you have a team of 300, then every day is someone's birthday." When you engrain these elements in the culture of the company, growth can take you off guard. Removing the cake tradition will be met with strong opposition, so be prepared ahead of time.
   • Regarding marketing , there are some interesting insights. First, marketing can't be figured out at the end, it must be part of the process. Marketing can be used to prototype the product narrative. The narrative should feed the product development and the other way around, it's not a 1-way street. Marketing is also how the customer interacts with the product (and perhaps the most important one). The entire experience needs to be designed together (see customer journey and touchpoints ). " The best marketing is just telling the truth ". There is an example about it, when they had to recall some of Next products: don't just make a vague claim that something went wrong , explain what actually happened and how you are to remedy it.
   • Product managers are the representatives of customers within the company. They should bring the customer voice inside, and based on that inform developments, prioritize features, make sure marketing and execs are aligned. Depending on the context, PM's can be extremely technical (especially B2B). "The superpower of a PM is empathy".
   • Changing the sales culture is a chapter I particularly enjoyed. It reflects on the needs of sales teams to have performance bonuses tied to the sales they close. The book argues that this is very short-sighted, since the value of a customer lies in the long-term. What happens if someone signs-off a large customer that becomes impossible to support? The approach proposed does not replace commissions but changes how they are distributed over time, depending on the customer value. In this way, sales has to think in the long term of the company as well. And it should include other departments, such as support, to be sure everyone's objectives and capabilities are aligned. Moreover, commissions payed right after sales means that at every small downturn of the company people will just leave and go for another company, there is no loyalty built up.
6. Be CEO
   • This chapter focuses on Tony Fadell's experience building Nest, the smart thermostat company.
   • It identifies 3 types of CEO's: babysitter CEOs , that protect companies and act as stewards. Parent CEOs , who push the company to grow and evolve. Incompetent CEOs either inexperienced or founder who are ill-suited to run a company.
   • As a CEO you don't need to be an expert on everything, you don't need to have an opinion on every single thing. You need to care enough to ask the right questions at the right time. That's why you have a team.
   • When interacting with the Board , CEOs are so well prepared that they know the outcome of the meeting even before they come in. They develop the message, next milestones, and have a convincing story to tell. There are different types of boards (dictatorial, operational, etc.)
   • When selecting people for the board, pick the following: seed crystals, a chairperson, the right investors (who would sit at the table), operators, experts.
   • There is a section about being bought (when Google bought Nest). It is not a very fun chapter, since things didn't work out as he was expecting. But it points to some interesting ideas: the overhead that large companies have (the cost per employee skyrocketed), the internal bureaucracy and struggles. From his perspective, Google seems to be managed at a whim, and the teams are just complacent to the structure. Tony Fadell ended up quitting Google/Nest after disagreements on how the company would be managed.
   • Unbecoming CEO , this is a powerful chapter for anyone who is a founder and at some point decides to step away from the management role. However, founders will always be founders, and they will have a weight in the company for some time. It is a tricky transition, and founders need to take it graciously to help the company achieved what it was set to do. He also mentions that it may take up to 18 months to understand what do you want to do, with whom, etc. He acknowledges the stress of losing money while not working, but he also comments on the importance of taking time off to regroup.

What I am missing in the book are insights to the innovation process, which are not discussed at all. When Steve Jobs appears and says: the iPhone should have a glass (and not plastic) screen, how do they validate whether it can be built? How did they source technology, how come they could deliver on the iPod in just 7 months if they were starting from scratch?

The book is a guide field guide in an abstract sense. It has some smart and clear insights into how technology is developed at the rhythm of Silicon Valley.

Tags: #reading-2024 #books #management-books