Lenny's Podcast: Product | Career | Growth
00:30:21 · Tony Fadell
Not everyone uses it, but it is a big feature for certain professionals who really want that, and artists and hobbyists and stuff. So sometimes you have to have those skunk works things that even if the opinion- based leader doesn't like it, you're like, "That seems like the right thing." Maybe not right now, but you can see it on the horizon so you just keep working on those things. But we had to, like I said, the iPhone wasn't a hit right away. It was like a, "Oh yeah, it worked on AT&T and it was two and a half G and it was this and that." It only worked in the US. So we had to get multiple versions till we got out. And that's in my book, it's called, I think it's three generations. Everything needs three generations. Yes, Bill, there it is. Three generations. I've learned, you make the product, you fix the product, then you fix the business. I've never seen anyone get it all right the first time. You would like to, but you get close. But make the product, fix the product after you get customer feedback and then make the business, which means make the margins. Like on the first iPods, we weren't making any money. First iPhones, we weren't making any money. The second iPhone and second iPod, okay, we started getting a little bit better numbers, but we got more or less the features dialed. Third one was like, okay, Windows, we got the margins, we're getting up the volume, we got all the right [inaudible 00:31:48]. And like go. Reliability, whatever else it had to be. So you need to stick with your idea even if it's not necessarily going the first time, unless your brain-damaged about whatever it was, you have to restart. But sometimes you have to hang in there. And same thing with Nest. We had to hang in there with two generations of the smoke detector and a few generations of thermostat before we made the business work, not just make the product work.
00:32:16 · Lenny Rachitsky, Tony Fadell
[00:32:16] S1: There's so many directions I can go here. One that's interesting is how often Steve Jobs was actually wrong and how many times you had to [inaudible 00:32:24]. [00:32:24] S0: We all were wrong at certain times, but it's when you hit those, when you hit it big, when you get the right ones, they overshadow all the other stuff, but that's how you have to try and iterate. Jeff Bezos says the same thing. I believe in the same thing. You got to fail a few times until you find your way, but you only fail if you stop. If you keep iterating and keep going, well then that's not failure. That's called learning. [00:32:54] S1: The other interesting part of the story you just shared here, it was one of my favorite stories in your book actually, the fact you implied this, but basically the first iPod was you had to have a Mac to use it. And the idea is you want to sell Macs. This is a way to get people to buy Macs. The way you tell it is basically this ended up saving Apple eventually, not selling Macs, but people buying iPods. And that became the big part of the business.
00:32:54 · Lenny Rachitsky, Tony Fadell
[00:32:54] S1: The other interesting part of the story you just shared here, it was one of my favorite stories in your book actually, the fact you implied this, but basically the first iPod was you had to have a Mac to use it. And the idea is you want to sell Macs. This is a way to get people to buy Macs. The way you tell it is basically this ended up saving Apple eventually, not selling Macs, but people buying iPods. And that became the big part of the business. [00:33:18] S0: Yeah. The mantra was, "Steve, if we don't have Windows connectivity, the iPod doesn't cost $349. It costs $3,000 because you got to buy a Mac, and you got to move all your digital life over to it and everything else. People are not about to take a risk on this company that's almost bankrupt for $3,000. So how are we going to do that?" Okay, let's make sure it is only $349 and that they can try it. And once they try the brand, they go, "Ooh, that's pretty interesting. Maybe I should try other products from this company and give them a shot." Because that was just such a sublime experience and that's how it all changed and that's how iPhone was able to be created, because without the iPod, I'm pretty sure there would've been no iPhone. There would've probably been no Apple because it was close to bankruptcy. [00:34:07] S1: Wow. That's crazy how close it was to that if some of these decisions went the wrong way. [00:34:12] S0: Yeah. Very close. Remember, there was no retail back then. Apple retailers, none of that stuff. Most people don't know how on the ropes Apple was back in 2001.
00:34:12 · Tony Fadell, Lenny Rachitsky
[00:34:12] S0: Yeah. Very close. Remember, there was no retail back then. Apple retailers, none of that stuff. Most people don't know how on the ropes Apple was back in 2001. [00:34:22] S1: So many stories, but I want to come back to the customer journey thread that you touched on, which I think is really, really important for people listening to this podcast to hear, something that you kind of reinforce again and again in the book. And you have this awesome image that we're going to show of the entire customer journey. And your point that you make is so many product builders focus on building the product and think, build the best product we're going to win. And you have this very important advice of there's so much more to it. Especially the marketing piece, talk about what you think builders don't really get, even though they hear this advice in many ways.
00:34:54 · Tony Fadell
[00:34:54] S0: When we build products, we define products when we build them. We have a good sense of the context when we are defining those things. We're living in that world. And so we're like, "Oh, we're like this and these are our issues and this is who we are." And maybe you put on personas. We would strip out and figure out who our target customers were with their personas. Is it a single mom with kids or is it a dual income, no kid family, or is it senior citizens or whatever? And we would come up with these personas and we would live inside them as we're thinking about the product. But you have to also remember that these people, they live in the context, but they're not aware of your product in their context. And so you have to bring it home to them and meet them where they are. And so your marketing, your website, your Instagram ads, your whatever, your owned and earned and owned media that you do, you really need to put your product in their context and make the visuals and make the words and everything sing to them. And if not, they're not going to get it. And so too many times we just say," Well, if we just make the perfect product." No, you have to put all for a consumer thing specifically, and it's also really good for a B2B product as well, is make sure you understand your customer. And when you say the right word, they go, "Oh, they get me. Oh, I want to listen to these more." And this is before they ever got the product. You need to get them to convert in some way and they need to hear that you've already thought about their issues, or you know and you're living in their shoes. And they're like, "Yes, yes, yes. More of that." Is this an emotional point? Is this a rational point? And you're weaving this tapestry to get them to come to some kind of trial or purchase or conversion or something of the product. And the best way to do that is word of mouth by other early adopters, but you got to do the same thing for the early... and I mean not the earliest early adopters, but the early adopters who other people trust to talk to. Because a lot of other people who are late adopters, they know, "Oh, that's wacky George, he tries everything and then [inaudible 00:37:20]. No, no, no." But if so-and-so's tried it, oh, I should take notice to that.
00:37:28 · Tony Fadell
And so what you want to do is make sure you understand the gestation of your customer and where they are and where they are in the thing. I also updated the crossing the chasm graphic in the book saying how we go about this in your product developments. Because you really have to think about who your target user set is and your target marketing based on the version of product you're in and how you're going to get those higher and higher volumes. And it really means about speaking the context. So maybe when you first ship, you can speak to those early adopters and you can put it in enough words that they're going to convert. But then the second version of the product, you're getting these later adopters. And you've got to speak in their language. And the third set of adopters who are really laggards, you've got to really speak to them and go through that and it could be totally different. And so this was a very interesting story that it was so emblazoned in my mind. Back in 2001, '2, '3, still when Apple had no presence outside of the US, Apple was really, it was selling in the US, some Canada, and some in Japan, but that was it and that was the max. So we were selling iPods into those areas. And so we had the early adapter, and then we had some other language. And then by the third, fourth version of iPod, we had some really refined language for those late adopters. So then we said, "We're going to go back and get a push into Europe." Because iPod hadn't taken off in Europe, so we're going to push iPod into Europe. And so we're on, I think the fourth generation or something like that. And so what did we do in Europe? We ran the same marketing as we were doing in the US in Europe. And the thing is it didn't resonate with the early adopters. It didn't resonate with the later adopters because we didn't have the same messages. We were going for a different set of people and we're like, ding, ding, ding, ding, ding. Sales aren't working. We got to change the marketing. We got to meet those Europeans where they're at, because they're slower to adopt technology. Versus it starts with the coast and goes inward in the US.