Build Book Summary – Tony Fadell

Build Book Summary:

Build is an incredible book on entrepreneurship and business written by Tony Fadell who not only was on the team that created the original iPod but also the man who started the thermostat company Nest. So it’s safe to say he knows a fair few things about product building and entrepreneurship. 

This book goes through all the important lessons he’s learnt in his career and is a must read for any aspiring entrepreneur or product manager.

 

Solve Real Problems:

If you’re not solving a real problem, you can’t start a revolution. A glaring example is Google Glass or Magic Leap—all the money and PR in the world can’t change the fact that augmented reality (AR) glasses are a technology in search of a problem to solve.

Take Uber. The founders started with a customer problem—a problem they experienced in their daily lives—then applied technology. The problem was simple: finding a cab in Paris was next to impossible and hiring private drivers was expensive and took forever.

If you’re passionate about something—something that could be solving a huge problem one day—then stick with it. Look around and find the community of people who are passionate about it, too.

 

How to mange yourself:

The critical thing is to have a goal. To strive for something big and hard and important to you. Then every step you take toward that goal, even if it’s a stumble, moves you forward.

Your job isn’t just doing your job. It’s also to think like your manager or CEO. You need to understand the ultimate goal, even if it’s so far away that you’re not really sure what it’ll look like when you get there. That’s helpful in your day-to-day—knowing your destination lets you self-prioritise and make decisions about what you’re doing and how you’re doing it.

 

Systemise things early is how you can manage others effectively:

It helps to agree on the process early. To define it up front—here’s our product development process, here’s our design process, our marketing process, our sales process.

Here’s our schedule and how we work and how we work together. Everyone—manager and team—signs off on it and then the manager has to let go. They let the team work. Then they make sure everything’s heading in the right direction in regular team meetings.

If you’re a manager or leader or CEO, then your job is to be a manager or leader or CEO. You need to let go of taking pride in your individual daily accomplishments and start taking pride in the accrued wins of your team.

 

When to test and when not to:

Despite the fact that many companies now rabidly test every single element of their product and unquestioningly follow the clicks, A/B and user testing is not product design. It’s a tool. A test. At best, a diagnosis. It can tell you something’s not working, but it won’t tell you how to fix it.

You need a hypothesis, and that hypothesis should be part of a bigger product vision. So you can A/B test where the “Buy” button should go on a Web page, whether it should be blue or orange, but you shouldn’t be testing whether or not a customer should buy online. If you’re testing the core of your product, if the basic functionality can flex and change depending on the whims of an A/B test, then there is no core.

 

How data is misused:

If all you did was follow the data and you still failed, then clearly something else was wrong. Someone else screwed up. This is often a tactic of people who are trying to cover their asses. It’s not my fault! I just went where the data sent me! The data doesn’t lie!

That’s why some managers and execs and shareholders demand data even when there is none and then chase that imaginary data directly into the abyss. These are the kinds of people who won’t question their directions and drive their car right off a cliff. If at all possible they want to erase the human element—human judgment—from the equation.

So you can’t wait for perfect data. It doesn’t exist. You just have to take that first step into the unknown. Combine everything you’ve learned and take your best guess at what’s going to happen next. That’s what life is. Most decisions we make are data-informed, but they’re not data-made.

 

Designing the customer experience:

People are easily distracted. We’re wired to focus our attention on tangible things that we can see and touch to the point that we overlook the importance of intangible experiences and feelings. But when you’re creating a new product, regardless of whether it’s made of atoms or electrons, for businesses or consumers, the actual thing you’re building is only one tiny part of a vast, intangible, overlooked user journey that starts long before a customer ever gets their hands on your product and ends long after.

Prototype as much of the full customer experience as possible. Make the intangible tangible so you can’t overlook the less showy but incredibly important parts of the journey. You should be able to map out and visualise exactly how a customer discovers, considers, installs, uses, fixes, and even returns your product. It all matters.

Your product isn’t only your product. It’s the whole user experience—a chain that begins when someone learns about your brand for the first time and ends when your product disappears from their life, returned or thrown away, sold to a friend or deleted in a burst of electrons.

Remember, your customer doesn’t differentiate between your advertising and your app and your customer support agents—all of it is your company. Your brand. All of it is one thing.

The product is the brand. The actual experience a customer has with your product will do far more to cement your brand in their heads than any advertising you can show them.

 

Dissecting the phases of the customer journey:

There are bumps between Awareness and Acquisition, between Onboarding and Usage, between every phase of the journey, that you have to help customers over.

In each of these moments, the customer asks “why?” Why should I care? Why should I buy it? Why should I use it? Why should I stick with it? Why should I buy the next version?

A webpage can’t be approved until you know who will be routed to that page and what they’ll need to know and where the call to action will take them. Everything is connected to everything, so everything must be understood together.

 

Telling your product story:

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 people of the problem that’s being solved—it focuses on the “why.”

To find that “why,” you need to understand the core of the problem you’re trying to solve, the real issue your customers face on a regular basis.

Use a technique called the virus of doubt. It’s a way to get into people’s heads, remind them about a daily frustration, get them annoyed about it all over again. If you can infect them with the virus of doubt—

“Maybe my experience isn’t as good as I thought, maybe it could be better”—then you prime them for your solution. You get them angry about how it works now so they can get excited about a new way of doing things. Steve was a master of this. Before he told you what a product did, he always took the time to explain why you needed it. And he made it all look so natural, so easy.

 

Why disruptive ideas fall apart:

The tricky thing with disruptions is that they’re an extremely delicate balancing act. When they fall apart it’s usually for one of three reasons:

You focus on making one amazing thing but forget that it has to be part of a single, fluid experience. So you ignore the million little details that aren’t as exciting to build—especially for V1—and end up with a neat little demo that doesn’t actually fit into anyone’s life.

Conversely, you start with a disruptive vision but set it aside because the technology is too difficult or too costly or doesn’t work well enough. So you execute beautifully on everything else but the one thing that would have differentiated your product withers away.

Or you change too many things too fast and regular people can’t recognise or understand what you’ve made. That’s one of the (many) issues that befell Google Glass.

 

So, what defines your product?

When you’re evolving you need to understand the quintessential things that define your product.

What’s key to your feature set and your branding? What have you trained the customer to look for? With the iPod it was the click wheel. With the Nest Learning Thermostat it was the round, clean screen with a big temperature in the middle.

 

From Vision to Reality using press releases:

The lesson is about when and how vision and data should guide your decisions. In the very beginning, before there are customers, vision is more important than pretty much anything else.

Typically your vision is so much greater than what materialises in V1. There’s always another revision, always something else you want to do, change, add, tweak. When do you tear yourself away from what you’re making and just … stop? Ship it. Set it free. See what happens. Here’s the trick: write a press release.

To write a good press release you have to focus. The press release is meant to hook people—it’s how you get journalists interested in what you’re making. You have to catch their attention. You have to be succinct and interesting, highlight the most important and essential things that your product can do. You can’t just list everything you want to make—you have to prioritise. When you write a press release you say, “Here. This. This is what’s newsworthy. This is what really matters.”

 

Business isn’t as simple as people think:

That’s why so many Kickstarter projects have failed. They thought, “If I build it for $50 and sell it for $200, then I’ll make money. My company will be a success.” But that’s not how companies work.

That $150 profit gets sucked away with every new office chair and dependent on your employees’ insurance, with every customer support call and Instagram ad. Until you optimise the business, not just the product, you can never build something lasting.

 

How to organise a company with multiple products:

The problem is usually the people at the top—the team leaders can keep only so many projects in their heads. They can focus on three, four, five projects but by the time they get to six or seven their brains are fried. There just aren’t enough hours in the day. So those projects get sidelined for later, and later never comes.

You’ll need to break your org into product specific groups so that each product gets the attention it deserves.

Amazon, Square, Stripe, Twilio—pretty much every team with multiple product lines has had to re-org this way. Each product family gets a dedicated engineering team, a dedicated marketing person, a dedicated designer and writer. And that turns them into little startups inside the business—smaller, faster, more autonomous.

And make every team write down how they do things: What’s the marketing process? What’s the engineering process? What are the phases for how we make a product? How do we work together? It can’t just be left in people’s brains. People leave. New people join. If you’re growing geometrically—in all directions at once—then you need a strong, stable core at the center.

Everything that needs to be created needs to be designed—not just products and marketing, but processes, experiences, organisations, forms, materials. At its core, designing simply means thinking through a problem and finding an elegant solution.

Ask why at every step—why is it like this now? How can it be better?

 

How to identify opportunities:

Most people are so habituated to the problems in their home lives or work that they no longer realise they are problems. They simply go about their day, get into bed, close their eyes, realise they left the lights on in the kitchen, groan and grump down the stairs, without ever thinking: Why is there no light switch in my bedroom that turns off all the lights in the house?

 

Product management:

Finding the best, most honest expression of a product or feature is not easy. That’s why there’s an entire team devoted to it. Product management can create the messaging—the top features, the problem statement—but finding the best way to tell that story to customers is an art. It’s a science. It’s marketing.

Product manager or product marketing manager —  A product manager’s responsibility is to figure out what the product should do and then create the spec (the description of how it will work) as well as the messaging (the facts you want customers to understand). Then they work with almost every part of the business (engineering, design, customer support, finance, sales, marketing, etc.) to get the product spec’d, built, and brought to market.

Project manager — Coordinates tasks, meetings, calendars, and assets to enable individual projects to get done on time. It’s important to note that project managers are more than just glorified note takers. If the product manager is the voice of the product, the project manager is the voice of the project—their job is to alert the team to potential problems that could stall or derail the project and to help find solutions.

Program manager — supervises groups of projects and project managers, focusing on both long-term business objectives and short-term deliverables.

 

How to structure sales in your business:

Every sale should be a team sale. So if you have a customer success team (the team that actually delivers, sets up, and maintains whatever is sold to the customer), then it should sign off on every deal. Sales and customer success should be under one leader, in the same silo, being compensated in the same way.

The danger with traditional commission-based sales models is that they create two different cultures: a company culture and a sales culture. The employees in these two cultures are compensated differently, think differently, care about different things.

And nobody ever works a sale alone. During the sales process, the salesperson has backup from customer success or support or whoever will be working closely with the customer post-sale. And then those teams sign off on the deal.

Once commissions are vested on a schedule that prioritises customer relationships, a lot of the ugliness that usually defines sales cultures disappears.

 

What to look for in your lawyer as a business owner:

Most lawyers excel at two things: saying “no” (or “maybe”) and billing you. That’s not necessarily because they’re bad lawyers; it’s just how the system is set up. Law firms are generally all about billable hours. The first fifteen minutes they talk to you might be free, but they’ll charge for every fifteen minutes after that, or even every five.

When you’re hiring an outside law firm, you want a lawyer who talks fast and does not care about your children—at least not when they’re on the clock.

Lawyers are trained to think from the competitor’s viewpoint or the government’s viewpoint or that of pissed-off customers or irate partners or suppliers or employees or investors. Then they look at what you’re working on and say, “Doing it this way will almost certainly get you in trouble.” Or, on a really good day, “Doing it this way may turn into a lawsuit but we’ll probably be able to handle it.”

Anyone can sue you for anything—at least in the United States. Customers will sue you for changing something they liked. Competitors will sue you as a business tactic to shut you down. Merit may have nothing to do with it—they’ll hammer you with nuisance lawsuits just to drain your coffers and your will. If you’re moderately successful at something disruptive, you’ll probably be a target. If you’re really successful, you definitely will be.

You do not want your business to crumble because of a stupid mistake—because you screwed up your employment agreements or your terms and conditions.

But for the gray areas, for the tricky stuff, for the million nuanced opinion-driven decisions that will determine the direction of your company, always remember that lawyers live in a black-and-white world. Legal versus illegal. Defendable versus un-defendable. Their job is to tell you the law and explain the risks. Your job is to make the decision.

At the beginning , you’re not hiring for breadth. You need to understand what’s at the core of your company—what your business is ultimately about—and hire for those specific legal specialties.

At Nest, we knew from the start that everything would come down to IP. Nest’s special sauce was always going to be our technological innovations. And those innovations would have to be aggressively patented to keep them out of the hands of the competition.

That’s what you’re ultimately looking for. You don’t want a lawyer who thinks their only job is to point out the sinkhole you could fall into, to block your way. Hire someone who will help you find a new path. Hire someone who will build a bridge. Hire a lawyer who doesn’t just think like a lawyer.

 

Being a CEO:

People have this vision of what it’s like to be an executive or CEO or leader of a huge business unit. They assume everyone at that level has enough experience and savvy to at least appear to know what they’re doing. They assume there’s thoughtfulness and strategy and long-term thinking and reasonable deals sealed with firm handshakes. But some days, it’s high school. Some days, it’s kindergarten.

As CEO, you spend almost all your time on people problems and communication. You’re trying to navigate a tangled web of professional relationships and intrigues, listen to but also ignore your board, maintain your company culture, buy companies or sell your own, keep people’s respect while continually pushing yourself and the team to build something great even though you barely have time to think about what you’re building anymore.

You’re the top of the pyramid. Your focus, your passion, trickles down. If you don’t give a shit about marketing, you’ll get shitty marketing. If you don’t care about design, you’ll get designers who don’t care, either.

As a CEO you should realise that nothing should is your, even if the genesis was with you. It all has to be the team’s. The company’s. Your job is to jubilantly celebrate everyone else’s successes, to make sure they get credit for them, and hold little for yourself.

 

Paying attention to the customer experience:

That’s not a hypothetical example. Tony read most of the key customer support articles for all the products at Nest. Those articles were the first thing a customer having issues would see.

This customer would be frustrated, irritated, right on the brink of anger. But a spectacular experience with support could instantly turn that frustration into a moment of delight—into a customer who would be with us forever. He couldn’t ignore the importance of that moment because it was “just” support.

 

Acquisitions and how Apple do things differently:

You can’t assume acquisition will mean acculturation. That’s why Apple doesn’t really buy companies with large teams. They only acquire specific teams or technologies, usually very early in their life cycle when they’re pre-revenue. That way they can easily be absorbed and Apple never has to worry about culture.

All acquisitions come down to what you’re trying to do when you’re buying a company—do you want to buy a team? Technology? Patents? Product? Customer base? Business (that is, revenue)? A brand? Some other strategic assets?

Unfortunately, you can’t truly know a culture until you’re in it. It’s like dating—when two people are interested in each other, they put their best foot forward, keep up appearances. Things get much more real when they move in together and get married. That’s when you learn your wife leaves dishes in the sink to “soak” for a few days. It’s when you realise your husband always forgets to clean up his toenail trimmings.

 

Avoid too many employee perks:

Beware of too many perks. Taking care of employees is 100 percent your responsibility. Distracting and coddling them is not.

When people pay for something, they value it. If something is free, it is literally worthless. So if employees get a perk all the time, then it should be subsidised, not free.

If something happens only rarely, it’s special. If it happens all the time, the specialness evaporates. So if a perk is only received occasionally, it can be free. But you should make it very clear that this is not going to be a regular occurrence and change up the perk so it’s always a surprise.

Free will screw you every time. Getting a really great deal on something creates a completely different mindset than expecting to get it for nothing.

Subsidising perks rather than giving them away is obviously much better financially for your business, too. Companies that bubble-wrap their employees with tons of free perks are usually shortsighted and have no long-term strategy to sustain those perks, or they have an innately problematic core business and the perks are the cover.

It’s the same problem that the very wealthy face—a gradual drifting upward, away from the regular problems of regular humans. Unless you stay grounded—take public transit, buy your own food, walk the streets, set up your own IT systems, understand the value of a dollar and how far it can take you in New York or Wisconsin or Indonesia—you start to forget the daily pains of the people you’re supposed to be creating painkillers for.

 

Do something different:

Even if your product doesn’t change the whole world, even if it has a modest scope and a smaller audience, it can still change an industry. Do something different. Shift customer expectations. Set the standard higher. It can make a market, a whole ecosystem, better.

The thing holding most people back is themselves. They think they know what they can do and who they’re supposed to be, and they don’t explore beyond those boundaries. That is, until someone comes along and pushes them—willingly or unwillingly, happily or unhappily—into doing something more. Into discovering a well of creativity or willpower or brilliance that they never realised they had.