6 Temmuz 2023 Perşembe

Notes from the book “Build”

Dear readers, today we will be discussing some of the notes from the book called Build. The book was written by the father of iPod who is Tony Fadell.

The book is starting with the quote “The only failure in your 20s is inaction. The rest is trial and error.” 

Tony Fadell claims that all the business life should be in a cycle of “do, fail, learn”

The 20s of a young person is very important since he is only responsible for himself for that period. But in your 30s and 40s, your decision can no longer be entirely your own. The people who depend on you will shape and influence your choices.

If you’re working in a company that is likely to make a substantial change should have the following characteristics:

- It is creating a product or service that is wholly new or combines existing technology in a novel way that the competition can’t make or even understand.

- This product solves a problem, a real pain point.

- The novel technology can deliver on the company vision. It is not just within the product but also the infrastructure, platforms and systems that support it.

- Leadership is not dogmatic about what the solution looks like and is willing to adopt to their customers needs.

- It is thinking about a problem or a customer need in a way you have never heard before but which makes perfect sense once you hear it.

“If you make it they will come” doesn’t always work. If the technology isn’t ready they won’t come for sure. But even if you have got the tech, do you still have to time it right. The world has to be ready to want it.

If you’re not solving a real problem, you cannot start the revolution.

The CEO and executive team are mostly steering way out on the horizon - 50% of the time is spent planning for the fuzzy, distant future months or years away, 25% is focused on upcoming milestones in the next month or two, and the last 25% is spent putting out fires happening right now at their feet.

If you’re thinking of becoming a manager there are six things you should know:

- You do not have to be a manager to be successful.

- Remember that once you become a manager, you will stop doing the thing that made you successful in the first place.

- Becoming a manager is a discipline.

- Being exacting in expecting great work is not micromanagement.

- Honesty is more important than style.

- Don’t worry that your team will outshine you. If someone under you does something spectacular that just shows the company that you have built a great team.

At least 85% of your time should be spent by managing. If it is not, then you are not doing it right. Managing is the job. And managing is hard.

Examining the product in great detail and caring deeply about the quality of what your team is producing is not micromanagement. When you get deep into the team’s process of doing work rather than the actual work that results from it, that is when you dive headfirst into micromanagement.

There are two kinds of decision-making. Data driven and opinion driven.

All the companies want to rely on data to make a decision. However, sometimes requiring more data by forcing your teams will not lead you the best path. Because there are many variables and unknowns in the process of decision making. 

Most people don’t even want to acknowledge that there are opinion driven decisions. They demanded to be shown ahead of time that the unit and business economics of the product will sound. But that was impossible. They were asking us to predict the future with near 100% confidence. They were asking for proof that a baby could run a marathon before it had even learned to walk. 

In your first journey you will not have advantage of using data. You will need to make opinion driven decisions without the benefit of data or experience to guide you. But, in your second journey after the first launch of your initial product you have the following tools with you. Vision, customer insight and data.

To make the intangible (opinion) tangible (product) is critical in building the products. Fadell used to produce a thermostat under the company Nest which is used to level the inside temperature of the apartment. 

This process required a close understanding of the customer journey. According to Fadell, 10% of their customers experience was the website, advertising, packaging and in-store display. 10% was installation, 10% was looking at and touching with the device, and the rest of the experience was on peoples phones or laptops although it was a tangible product. 

Every minute, from opening the box to reading the instructions to getting it on the wall to turning on the heat for the first time, had to be incredibly smooth. Buttery, warm and joyful experience.

The company Nest also produced a screwdriver which can be distinguished from all other ordinary screwdrivers. This has increased the customer experience because they have seen it as a marketing tool rather than a hardware tool. It has helped the customers to remember Nest.

Storytelling is very important to explain why the product needs to exist and how it solves the customer’s problems. A good product story has three elements:

- It appeals to people’s rational and emotional sides.

- It takes complicated concepts and makes them simple.

- It reminds the people the problem that is being sold.

The product story should involve its design, features, images and videos, the quotes from the customers and also the tips from the reviewers. This is the answer for the question what. However, the product story should also give the answer to the question why. Why does it need to exist? Why does it matter? Why will people need it? Why will they love it?

When you get wrapped up in the “what” you get ahead of people. You think everyone can see what you see. But they don’t. They haven’t been working on it for weeks or years. So you need to pause and clearly articulate the “why” before you can convince anyone to care about “what”.

Analogies always help in storytelling. A great analogy allows a customer to instantly grasp a difficult feature and then describe that feature to the others. This is why “1000 songs in your pocket” was so powerful in the launch of iPod.

When you first launch a product the competitors do not feel the stress on them. This is the denial stage. But soon, as your distruptive product, process or business model begins to gain stream with customers, your competitors will start to get worried. They start to pay attention. At the end, they might sue you. If they cannot innovate they litigate. The good news is that a lawsuit means you’re officially a accredited. 

When you work on the disruptions you’ll see that there might be some failures at the end. The followings may be one of the reasons of them. 

- You focus on making one amazing thing but forget that it has to be part of a single, fluid experience.

- You start with a distruptive vision but set it aside because the technology is too difficult or too costly or doesn’t work well enough.

- You change too many things too fast and regular people can’t recognise or understand what you have made.

The companies become too big, too comfortable, too obsessed with preserving and protecting the first big innovation put them on the map, will eventually die.

Microsoft can be a very good example for this. The company stopped looking to MS Windows to be their cash cow and turned office into an online subscription. They have concentrated on different businesses such as Hololens and surface products. Otherwise they were about to fail. 

Most start-ups are born from people getting so frustrated with something in their daily experience that they start digging in and trying to find a solution.

The world of investment is cyclical. The funding environment is always shifting back-and-forth from a founder friendly environment to an investor friendly environment. It is like the housing market which is sometimes good for sellers and sometimes for the buyers. In a founder friendly environment there is so much money flowing into the marketplace that investors will fund just about anything because they don’t want to miss out on any deal. In an investor friendly market there is a lot less capital to go around investors are pickier and founders get worse terms.

You will also encounter a crisis eventually. If you don’t you are not doing anything important or pushing any boundaries. The following is a brief playbook to encounter with a crisis.

- Keep your focus on how to fix the problem not who to blame.

- As a leader you will have to get into the weeds. Don’t be worried about micromanagement as the crisis unfolds your job is to tell everyone what to do and how to do it. 

- Get advice from mentors, investors or your board.,

- Your job once people get over the initial shock will be constant communication.

- It doesn’t matter if the crisis was caused by your mistake or your team. Accept responsibility for how it has affected customers and apologise.

In an interview I am always most interested in three basic thing. Who they are, What they have done, why they have done it. 

Fadell says that he always ask what was the main reason quitting the last job. Is it because of a bad manager? Why didnt they fight harder?  

When you bring in new employees dont worry about not giving them enough freedom. At first this should be done. 

 When a compny grows, it reaches to a breakpoint. Breakpoint usually come when you need a layer of management, leading to communication problems, confusion and slowdowns. 

The company either grows or die. When you come to a people of 120, you should change the organization. At around 120 people, you need directors or managers who manage other people. Directors should think about a CEO than an individual contributor. 

Here is the new set up for the sales 

- Sales performance bonuses of additional stock options that vest over time. 

- If the customer leaves, the sales person loses the remaining portion of their commissions.

According to the brain functions, the entrepreneurs see their startups as their children.

85% of all marriages (mergers and acquisitions) end up with failures.

The motivations of the employees should not be routine basis. Otherwise the influence of the incentive will gradually become less effective. Free always decrease the quality of the product. Steve Jobs never give Apple products free to his employees. however, google did it. After a while giving out Google products had very limited motivational consequence on the emloyees. 

If you have one or a few of the following characteristics on you, you should give up your CEO role.

- The company or market has changed too much.

- You have turned into a babysitter CEO. You just try to preserve the position of the bank.  

- You are pushed to become a babysitter CEO.

- You have a clear succession plan and the company is doing well.

- You hate what you are doing.

 In his experience, it takes most people about a year and a half before they can start thinking about something new. At the end two things matter, products and people. What you build and who you build it with. 

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