Build – Tony Fadell
An Unorthodox Guide to Making Things Worth Making
[bq] "The world is full of mediocre, middle-of-the-road companies creating mediocre, middle-of-the-road crap, but I've spent my entire life chasing after the products and people that strive for excellence."
Part I: Build Yourself
Recounts his massive failure of trying to build an iPhone-like device in the early 1990s at General Magic
1.1. Adulthood
[bq] "Early adulthood is about watching your dreams go up in flames and learning as much as you can from the ashes. Do, fail, learn. The rest will follow."
[bq] "Throwing yourself out there and having everything blow up in your face is the world's best way to learn fast and figure out what you want to do next."
[bq] "I realized there was a whole world of thinking needed before a line of code should be written."
1.2 Get a Job
[bq] "If you're not solving a real problem, you can't start a revolution."
[bq] "If you're passionate about something – something that could be solving a huge problem one day – then stick with it."
1.3 Heroes
[bq] "The only thing that can make a job truly amazing or a complete waste of time is the people."
[bq] "It's easy to mistake navigating processes, red tape, job leveling, and politics for real personal growth."
1.4 Don't (Only) Look Down
Talk to people who work parallel to you in other teams and functions and do it with both curiosity and generosity. You miss a lot of things when you always just focus on the work immediately in front of you.
Part II: Build Your Career
Describes his time at Philips building one of the first handheld devices for business people, and his departure to Real Networks which promised him he could build his own team to create a portable music player. But they eventually went back on their promise and he quit after just two weeks.
2.1 Just Managing
[bq] "You do not have to be a manager to be successful."
[bq] "Honesty is more important than style."
[bq] "A truly great IC [individual contributor] will be a leader in their chosen function and also become an informal cultural leader, someone who people across the company will seek out for advice and mentorship."
[bq] "One of the hardest parts of management is letting go. Not doing the work yourself."
[bq] "Helping people succeed is your job as a manager."
2.2 Data Versus Opinion
[bq] "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."
Decisions should be informed by data, but not made by the data.
[q] "It's not data or intuition, it's data and intuition."
2.3 Assholes
Types of assholes:
Political assholes
Controlling assholes
Asshole assholes
Mission-driven "assholes"
[bq] "There's a world of difference between emphatic and passionate to benefit the customer versus bullying someone to appease your own ego."
Steps to take when dealing with a controlling asshole:
Kill em' with kindness
Ignore them
Try to get around them
Quit
[bq] "[Political assholes are] like the mafia. But instead of killing people, they kill good ideas."
2.4 I Quit
"Stick-to-it-iveness" is important, and making things you deeply care about requires it, but sometimes you also need to move on. That's the case when either
You're no longer passionate about the mission
You've tried everything.
[bq] "I want to make it very clear: hating your job is never worth the money."
[bq] "Once you're committed to a mission, to an idea – that's the thing you should stick to. The company is secondary."
Part III: Build Your Product
[bq] "Screw it. I'll do it myself. The words that launched a thousand startups."
[bq] "I was inspired. Determined. Nothing could stop us. And those, of course, are the words that launched a thousand startups right off a cliff."
3.1 Make the Intangible Tangible
[bq] "Your product isn't only your product. It's the whole user experience."
[bq] "You should be prototyping your marketing long before you have anything to market."
3.2 Why Storytelling
Every product should have a story, and a good story has three elements: it appeals to people's rational and emotional sides, makes complicated concepts simple, and focuses on the "why," reminding people of the problem being solved.
The "why" is the most important part and should guide everything else. "What" comes later, both in product development and in the marketing message.
[bq] "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."
[bq] "You should always be striving to tell a story so good that it stops being yours – so your customer learns it, loves it, internalizes it, owns it. And tells it to everyone they know."
3.3 Evolution Versus Disruption Versus Execution
[bq] "Whatever you're disrupting is going to be the thing that defines your product – the thing that will make people take notice."
[bq] "Disruption makes enemies."
Disruptions usually fail for three reasons:
You focus so much on the core disruptive thing that you forget it needs to sit within an overall great user experience that solves a problem.
The disruption stays an idea/promise but you never actually build it into the product.
You disrupt too many things too fast and people won't understand all the massive changes.
[bq] "When you're evolving you need to understand the quintessential thing that defines the product."
3.4 Your First Adventure – And Your Second
The tools you need to build v1 of your product are, in order of importance, vision, customer insights, and data. For v2, this order reverses.
Writing a future press release is a great tool to crystalize your vision and have a guide as you are actually executing on it.
3.5 Heartbeats and Handcuffs
[bq] "You need constraints to make good decisions and the best constraint in the world is time [...] The external heartbeat, the constraint, drives the creativity, which fuels innovation."
One big announcement and three to four smaller ones per year seems to be the right cadence to keep people interested without overwhelming them.
3.6 Three Generations
Three stages of profitability:
Not remotely profitable
Making unit economics or gross margins
Making business economics or net margins
[bq] "Learning takes time. For your company and your customers."
[bq] "Until you optimize the business, not just the product, you can never build something lasting."
[bq] Many successful tech companies "created a V1 product, scaled it for V2, then optimized the business in V3."
[bq] "You make the product. You fix the product. You build the business. Every product. Every company. Every time."
Part IV: Build Your Business
Recounts his time of founding Nest after leaving Apple
4.1 How to Spot a Great Idea
Great ideas all have three elements in common:
It solves for "why".
It solves a problem that a lot of people have in daily life.
It follows you around. You can't stop thinking about it.
[bq] "The more amazing an idea seems – the more it tugs on your gut, blinds you to everything else – the longer you should wait, prototype it, and gather as much information about it as possible before committing."
[bq] "The best ideas are painkillers, not vitamins."
[bq] "Throwing darts at a wall is not how you pick a great idea. Anything worth doing takes time. Time to understand. Time to prepare. Time to get it right."
[bq] "Big, great, new ideas scare the living crap out of everyone who has them. That's one of the signs that they are great."
4.2 Are You Ready?
You'll never be completely ready to start your own business, but here's how to get as close as you can:
Work at a startup
Work at a big company
Get a mentor
Find a cofounder to balance you out
Convince people to join you
4.3 Marrying for the Money
[bq] "Every time you raise capital you should think of it as a marriage: a long-term commitment between two individuals based on trust, mutual respect, and shared goals."
[bq] "Remember, once you take money from an investor, you're stuck with them. And the balance of power shifts."
[bq] "It will take longer than you think to get money. [...] Always start the pitching process when you don't actually need money."
4.4 You Can Only Have One Customer
[bq] "Understanding your customer – their demographics and psychographics, their wants and needs and pain points – is the foundation of your company."
[bq] "Any company that tries to do both B2B and B2C will fail."
[bq] "If you cater to both, your marketing still has to be B2C."
4.5 Killing Yourself for Work
[bq] "Humans cannot survive on stress and Diet Coke alone."
[bq] "Once you have a way to prioritize your tasks, you need to prioritize your physical and mental well-being."
[bq] "Your startup or project you're leading is your baby. And babies roll down stairs, eat extension cords. They need constant attention."
[bq] "Look at your calendar. Engineer it. Design it."
4.6 Crisis
[bq] "Every failure is a learning experience. A complete meltdown is a PhD program."
Part V: Build Your Team
5.1 Hiring
[bq] "Different people think differently and every new perspective, background, and experience you bring into the business improves the business."
Retaining your culture as you grow is a difficult challenge and needs to be approached very thoughtfully and with as much human to human transmission as possible.
[bq] "Under normal circumstances nobody should ever be shocked that they're getting fired or have to ask why it's happening."
[bq] "What you're building never matters as much as who you're building it with."
5.2 Breakpoints
[bq] "It's always a mini-crisis when you have to stop having all-company birthday parties for individual employees. Growth can catch you off-guard like that."
The key break points where you need to update your company structure, org chart and communication style are:
up to 15-16 people
up to 40-50 people
up to 120-140 people
up to 350-400 people
At each of these stages you probably need to add an additional layer of managers.
Breakpoints don't only mean change for the org, but also for you as a CEO or leader.
5.3 Design for Everyone
[bq] "At its core, designing simply means thinking through a problem and finding an elegant solution."
[bq] "Literally the only way to make a really good product is to dig in, analyze your customer's needs, and explore all the possible options."
Everyone is a designer and everyone should design, it's not just "professional" designers.
[bq] "You can't solve interesting problems if you don't notice they are there."
[bq] "You just have to notice the problem. And not wait around for someone to solve it for you."
5.4 A Method to the Marketing
[q] "The best marketing is just telling the truth." - Steve Jobs
[bq] "Your message needs to fit the customer's context. You can't say everything everywhere."
5.5 The Point of PMs
The role of the PM is often misunderstood, and also varies from company to company.
[bq] "A product manager's responsibility is to figure out what a product should do and the create the spec [...] as well as the messaging [...]. Then they work with almost every part of the business to get the product spec'd, built, and brought to market."
[bq] "The product managers sole focus and responsibility is to build the right products for their customers."
[bq] "Your messaging is your product. The story you're telling shapes the things you're making."
PMs should also be the ones responsible for the messaging, not a separate product marketing manager.
[bq] "If a product manager is making all the decisions then they're not a good product manager."
[bq] "[Good PMs are] incredibly rare. Incredibly precious. And they can and will help your business go exactly where it needs to go."
5.6 Death of a Sales Culture
[bq] "Rather than focusing on rewarding sales people immediately after a transaction, vest the commission over time so your sales team is incentivized to not only bring in new customers, but also work with existing customers to ensure they're happy and stay happy."
Traditional commission based sales compensation creates a huge split between sales and the rest of the company, with completely different cultures and incentives.
Sales should focus on relationships, not transactions.
5.7 Lawyer Up
[bq] "A 'no' from legal isn't the end of the conversation – it's the beginning. A great lawyer will help you identify roadblocks, then move around them and find solutions."
Part VI: Be CEO
[bq] "People have this vision of what it's like to be an executive or CEO or leader of a huge business unit. They assume that everyone at that level has enough experience and savvy to at least appear to know what they're doing. [...] But some days, it's like high school. Some days, it's kindergarten."
Recounts his time when Google acquired Nest, then integrated it into Alphabet, then threatened to sell it – which made him leave – and finally reabsorbed it.
6.1 Becoming CEO
Generally there are three types of CEOs:
Babysitter CEOs
Parent CEOs
Incompetent CEOs
[bq] "The CEO sets the tone for the company."
[bq] "You don't have to be an expert in everything. You just have to care about it."
[bq] "It's poison to think great ideas can only come from you."
[bq] "In this job, respect is always more important than being liked. You can't please everyone. Trying can be ruinous."
6.2 The Board
[bq] "A board's primary responsibility is to hire and fire the CEO."
[bq] "There should only be good surprises in a board meeting. [...] Everything else should be a known quantity."
Three categories of bad boards:
Indifferent Boards
Dictatorial Boards
Inexperienced Boards
Things you want in a board:
Seed crystals
A chairperson
The right investors
Operators
Expertise
[bq] "The best board members are mentors first."
6.3 Buying and Being Bought
[bq] "Fifty to 85 percent of all mergers fail due to cultural mismatches."
6.4 Fuck Massages
[bq] "Once you set the precedent and shift people's expectations, it's almost impossible to claw your way back."
[bq] "Perks are frosting. High-fructose corn syrup. [...] Just as dessert shouldn't come before dinner, perks shouldn't come before the mission you're there to achieve. [...] The perks should be a sprinkle of sugar on the top."
6.5 Unbecoming CEO
[bq] "The job and responsibilities of an early founder and later-stage CEO are polar opposites. Not every founder is cut out to be a CEO at every stage of a company."
Conclusion: Beyond Yourself
[bq] "In the end, there are two things that matter: products and people. What you build and who you build it with."