Advice on Building Great Products w/ David Fradin, Author of Building Insanely Great Products

Hey everybody, this is Mike Belcedo, co-founder of Product Collective, and we're here for another edition of Product Launch. So thank you so much for joining us. I am really excited about today's session, but for those of you that haven't been to a Product Launch session in the past, I figure I'd give a little bit of a kind of an overview of what this is all about and what you can expect. Basically, twice a month, We get together for these chats with people all throughout product management. We've had a chance to talk with all sorts of folks, authors, practitioners. Today, our guest is both, a mix of both. I mean, he has published books in the past, is working on some books right now, but he also has very deep experience. We're going to talk about all that. So I'm really excited for it. Also, for those of you that come to our annual conference called Industry, which takes place actually next week, next Thursday and Friday. The workshops get started on Wednesday. Hopefully I'll get to personally meet you there. So I know for some of you, you join the product launch sessions, you're in our Slack channel on Product Collective. Hopefully it'll be a good chance to get to meet everybody in person next week. So just a couple of things before we get started. First, I have some questions for our guest David, But I would love if you contributed with some questions as well. So you'll notice there's a chat on the side. Actually, if you can, don't put the questions there. You could definitely introduce yourself there, let people know who you are, where you're from, what you're working on, and chat with others throughout the discussion. But there's a section, you should see it, called Ask a Question, and that's the place where I'd love for you to submit questions. So I will throughout, you know, sort of be perusing that, and I will get some questions, you know, sort of splice them in every so often throughout the discussion. And then I had mentioned in the chat as well, but if— I was gonna say if you have any issues or anything, usually a good restart and using Google Chrome, usually that works best. Of course, if you're having issues, probably aren't listening to this, but know that all these sessions are recorded. So you'll be able to watch them afterwards. If you need to cut out early, it's not a problem. But with all of that, I wanna get started and our guest today, David Fredin. David, how are you? Thanks for joining us.

Great, glad to be with you.

Yeah, now you have had very deep experience in product. It goes back to, I believe, the 1980s, you're working with major corporations like HP and Apple. That's awesome. And that's like not, I don't know anybody that has experience as deep as that and, you know, being in a place like Apple, you know, way back then. I'd love for you to maybe just give a little bit of a background, but, um, you know, just sort of the, the abridged version, if you will.

Yeah, I actually started doing services types of product management back in the early '70s after I started the flying club at the University of Michigan. And then, uh, when I came to California, Hewlett-Packard recruited me to work in corporate PR to handle the siting of new facilities. And Dave Packard's personal PR for his activities on the board. Then the nice thing about HP in those days, a lot like Procter Gamble, a lot like 3M, you could move horizontally in the company, and I had rolled out the first word processing program to be used within HP to the PR department because it was the only group in the company that knew how to type. And so I was able to transition over to office systems product management Got my training there pretty much by a fellow by the name of Fred Gibbons via videos that he had shot about product management, and Fred's now a professor at Stanford University. And worked on office systems product management on a database executive report, and on user interfaces. We were studying user interfaces and how they should be designed to be most effective and easiest to use. As a result of that, and since I was an HP-trained product manager, Apple recruited me to bring the first hard disk drive to market, and it was a fantastic product, and it was 5 megabytes in size. It only cost about $3,600, but most people couldn't understand why anybody would need 5 megabytes of space, and they also didn't understand the concept of directories. Folders and directories, and that took a while to persuade people its usefulness. They noticed that I knew how to manage since I had managed political campaigns before and large associations, so they asked me to be the group product manager for the Apple III product line. The Apple III at that time was the third most popular computer in terms of units worldwide after the Apple II and the PDP-11 from Digital Equipment corporation. After a few weeks on the job, Steve Jobs convinced the company to cancel the product line because he felt that he knew better than what the market was going to do at that time in his history, in his experience, and he felt that the Apple III, which was targeted at the business market, belongs to his beloved Macintosh, and so he wanted to get it out of the way. And Steve in those days was very— had a great vision. He could see what the world's going to be like in terms of personal electronics, like 7 years in the future, but he was too impatient because the Macintosh at the time could not get the job done that people needed to do for business activities. And that's one of the biggest mistakes, is to have a vision or a mission statement for your product that is so overreaching and so not reasonable or not realistic that you compromise yourself and the product of the company. And by January of 1985, sales of the Mac dropped to 4 units total, and Steve was in trouble. And eventually, since his division was losing money like crazy, the board decided to ask him to leave the company. And that was all about that incorrect mission statement for the product. So I then went on from Apple. They asked me to take over the product line I recommended that give me the authority commensurate with the responsibility for being responsible for the product line. So they gave me the esteemed title of business unit manager, or BUM, gave me a $4 million budget, 17 people, and said, go do whatever you want. So we sold 25,000 Apple IIIs, generated about $60 million in profits, and then when the company itself had decided that they thought there was also, there was no market for the product, which wasn't the case, because people were buying it, they loved the computer. We just gave up, we just couldn't keep pushing a wet noodle and fighting with the rest of the company to let us go out there and support it. So I left the company in 1985, and then have been associated with a number of startups and other companies and consulting. And most recently, I've started a whole series of courses and books based upon my experience with lots of examples for product managers and product marketing managers.

Yeah, well then actually that's one of the questions I want to ask you is actually based on one of your books. In fact, this session, right, it's advice on building insanely great products, but you wrote a book called Building Insanely Great Products. That's why I titled this session that way. I'm curious, you know, in that book you talk about 6 areas that must be focused on in order to achieve product success. I was wondering if you might be able to bring up one or two of those and just maybe give a couple of examples from your experiences.

Sure. You can use the, the MOMIC SPICES, S-P-I-C-E-S, and hence the name SPICE Catalyst, to remember the 6 keys to product success. S stands for systems, P stands for process, I stands for information, C stands for getting close and understanding the customer. E is making sure that your employees are trained on how to do it. And S is having the right systems and tools in order to get the job done. A couple of the biggest mistakes as to why about 40% of all products in the marketplace fail is because companies go to market without a strategy, without a plan. And there are about 32 elements to the strategy and a plan that should be developed before the product goes to market. And then the second major mistake they make is not having a repeatable mature process to getting it done. Or third, the product managers are the people responsible for product success. They don't have the information available in order to make decisions. And next is a failure to understand what the people want, what the customers want to do. And there's a big conundrum about trying to put together things like market requirements documents, product requirements documents, and guessing what you think the market might want to do, but I advocate the kind of approach that people from your area of the world, the Cleveland and Pittsburgh area, started doing many, many years ago at a company called Procter Gamble. They go out and observe, and former VP of innovation at Procter Gamble did a lecture for, I think it was either Carnegie Mellon or Case Western, about how they would go out like social anthropologists and observe what people do. And try to figure out why they're doing it, when they're doing it, how they're doing it, where they're doing it, what's getting in their way, and then you can innovate on that in terms of doing things faster and at less cost. And then the last thing is employees. I've identified about 130 competencies that a product manager needs to have at some level of competency in order to be successful. And if you don't have those competencies, then I strongly recommend you go out and get them. Otherwise, your products won't be as successful as they could be.

I have always, as a product person, I've always wondered what my few competencies were, let alone over 100. So I don't know if I'd pass that test, but I'm definitely interested in learning more about that. So that's great.

Well, I have under development now a competency testing tool that everybody can use, whether they're a product manager, product marketing manager, or want to get into it. And I'll help rate them on a scale of 1 to 5, how good they are. Then they could take the weak ones and, and go take courses, classes, and read books about it, come back and retest. And then if they want to find another opportunity, I could make their competency testing available to hiring managers who could then go into this tool and say, hey, I want a person in Cleveland that scores 5 in competitive research and a 4 and product positioning or whatever it may be. And then they'll get a list of people that they know for sure know how to do the job, because that's the biggest problem with hiring product managers and product marketing managers today is you don't know for sure if the person that you're hiring is going to be able to do the job.

Sure, sure. No, well, that's great. That's great. Oh yeah, one thing I did want to ask you, you know, you mentioned in part of your background being very early on at places like Apple and HP. And I'm curious just if there were, based on your experience, is there anything that you learned in your product career at places like Apple and HP that even though that was decades ago, still totally applies today? Those are much different companies now than they were back then, but I'm curious if there was anything in your product career at those organizations that's still just completely applicable today.

Yeah, there's quite a few things that are applicable. At HP, it was the concept of getting close to your customer with what they called the next bench syndrome. So as an engineer, you would build some instrumentation, and if the engineer next to you found it useful, then there might be a market for it. And that goes back to my observation of trying to figure out what to do. But the key overriding thing that was common amongst HP and Apple was a set of values, the HP Way and the Apple values, because everybody on the product team, when they go into a meeting, would know that those values are in the back of each person's mind, and all decisions in the team meetings would be based fundamentally on those values. For example, when I presented the business plan I developed for an independent Apple III business unit, to the executive committee, uh, one of the people on my team, a lady by the name of Maxine Graham, who was on Apple's values committee, uh, committee had helped write them. She suggested we compare the values of Apple versus the options that we were giving the executive committee in terms of, uh, what decisions to make. One of the options was shut the product line down right now, which is what Jobs wanted to do, and the second is, oh, by the way, Jobs, when he came back to Apple, that's exactly what he said. The reason Apple was spinning in the wind now for 10 or 12 years was because they lost their values. And he started implementing Apple values all over again. So, and then the second option was follow our values and let the market decide when we shut the product line down, not some executive or someone from marketing that doesn't conceive of a market segment, which the Apple 3 was targeted at, which later became known as small office, home office, small and medium business. So Floyd Quamby, who is the senior vice president, executive vice president for Apple, asked me if we made either of those two decisions, what would I say? I said, if you made the decision to let the product line continue as long as the market buys it, then we'll go out there and tell the dealers that, the customers that, we'll keep building it, supporting it. If engineering it. But if you make the other decision to shut the product line down and a dealer had called me, I'd give him your phone number, Floyd. And the executive committee laughed, and they realized that one of the Apple values is empathy for our customers. And by arbitrarily just shutting the product line down the way Steve wanted to do it at that particular time was not showing any empathy and compassion for our customers. And it was also a direct— that decision would be a direct violation to our values at several other Apple values. So that's why they asked me to head up the business unit.

Yeah, that's one that's super interesting to know a part of that history too, because sometimes people talk about Apple as a place where, you know, hey, Apple's not, you know, going out there and asking customers what they want. And of course, we all know you can't really ask customers what you want, but it's, it's not as a— I mean, even though they might be secretive with products that they're working on, it's not as if they don't have that customer empathy. It sounds like that was really baked into the core values at Apple. So I'm glad you brought that up. That's a cool piece of Apple history that we could all learn from. So thank you for that.

Another example is HP for 50 years from its founding in 1938 to about 1998 grew 20% a year every year for 50 years. And there are very few other examples in American or any industry, any place where companies have that level of growth rate. And one of the primary reasons that that was possible was because of the HP Way, the HP values.

Yeah, values, it makes and breaks a company sometimes for sure. And I've worked in companies where the values were known by everybody, everybody knew what the company stood for, and then companies where it wasn't, and it made a difference in terms of people wanting to work at those companies. So that's great. Thank you for sharing that. You know, I'm curious, oh, by the way, we had a couple questions come in from the audience on those core competencies. Is that something that, like, where can people find out those core competencies? Is that something that's baked into the books that, that are coming out, or is that something that, you know, have you written online about that, that people can read up on?

Yeah, there's also a chart with all the competencies listed on it on my spicecatalyst.com website in the blogs area. Awesome. Product management and product marketing. And the title of the blog is, uh, Entrepreneur is French for Product Manager.

Okay, that's great.

It shows the comparison of what competencies product managers should have, product marketing managers, and then entrepreneurs.

That's great. Awesome. Well, that's so answer to everybody, you can access that now. You can go right to the, to the blog on spicecatalyst.com. So that's awesome. Thank you.

Coming soon, it'll be my second book in the Building and Selling a Great Product series called Organizing and Managing and Selling a Great Product. Products, and they'll be targeted at group and VP-level product managers and group product managers, and also to the CXO of the C-suite and the president. And it will go into detail of what each of those competencies entail and what people should know how to do. Also, by building a Sailing Great Products series, there'll be 3 books in that series. The third one will deal with integrated marketing, including social media marketing. Those books talk about what needs to be done. My series of 7 books that Wiley has today in pre-press called Foundations and the Successful Management of Products will teach you not only what needs to be done, but also how to do it with workbooks and examples. So for example, if you go through the product market strategy, which is volume 2, You get a workbook with that. If you fill that workbook out as you go through the course, you end up having a product market strategy plan that you can take to market. Likewise, I have 5 of these courses up on Udemy as online on-demand courses, and they include these workbooks that enable you to put your plans together.

Awesome.

Very cool.

Yet some people launch one book at a time, and that's a, that's a hard, you feet to do and launching 7 at a time. So that's pretty incredible. That's awesome. One thing I did want to ask, so we, you know, the topic is advice on building insanely great products. So, you know, I'm curious, you have had a unique position in terms of being involved with, again, those companies like Apple, HP so early on, and those companies have evolved. And really what it means to be a product person has evolved since then. I'm curious for people that are product managers today, VPs of product, you know, in the world we're in today, but that want to evolve with the rest of product management. I'm curious if you have advice for them. You know, what kind of future evolution do you see in the field? You've seen what's happened over the past couple of decades. I'm curious to get your take on, you know, what do you see coming?

Yeah. Primary thing I think is the strategy, and people need to focus on making sure they have their strategy done first before they start development and start going to market. Some people teach that you could do the development and the strategy in parallel, but I've suggested to adopt the concept of personas from marketing in the product development area so that the engineering team can see and taste and feel who it is that they're building the product for. And that's just one example of that.

Yeah, that's, that's great. So I— for people that, again, like, they want to evolve with the field, I'm just curious, like, are there— like, what might you suggest to them? I'm sure you get asked for coffee all the time where people are like, what, what should I be doing to stay on top of things? Do you have a feed feedback for them on that too?

Yeah, there are a number of revolutions going on right now, huge disruptors. Artificial intelligence, big data, analytics, Internet of Things, autonomous vehicles, that's ground vehicles for not only passengers but cargo, but also airplanes that are autonomous. The robot drone deliveries that Amazon is playing around with. These things are gonna be huge disruptions. I heard that developers are buying up garages in San Francisco and they plan to convert it to housing as you don't need all the places to park your car once we have autonomous driving vehicles as Tesla has said we would have, Elon Musk has said we'll have within 5 years. So there'll be a substantial shift in capital. Instead of the cities and the bus companies and the taxicab companies having to buy all the vehicles, we'll buy our own vehicles, and then while we're in a meeting someplace, like when I'm teaching product management and product marketing at Cisco, they've got electrical— electric charging stations right there. I could tell my car, go out, make some money for me while I'm teaching there for an hour. So it's going to be a distribution of capital, very much like solar power and to some extent wind power started causing the distribution of these types of things. So that would be one thing. The second thing I think is important is when you first come into a job as a product manager or on a new product, go around and meet all the people at your level that you'll be working with on your team. Meet the people that are at a lower level and meet all the people above you and ask them, each of them, what do you want to do when you grow up? Because if you find out what their aspirations and goals and designs are, then when you're sitting in a meeting trying to make a decision, you'll know exactly what things to say in order to get their support for the position that you happen to be taking. And that's something I'm teaching in a course that I just wrote for LinkedIn Learning, which will be facilitating product teams. And they'll be releasing it in the spring on LinkedIn Learning.

That's great. That's great. And I love, I love that piece of advice to, you know, talk with folks at your level, but also above and below. So you're getting, you're getting an idea of how the entire organization actually works, even if you were to just stay at that level, even in a big organization, if you were to take a few people, the same stage above and below. So I really like that. I am curious though, for people that do come to you for advice, is there something that people often get hung up on that they actually shouldn't care about as much? Like something that people make a big deal about, people spend a lot of mental energy on, but at the end of the day, it just doesn't matter as much. It's sort of an overrated thing to worry about. What's your perspective on that?

Well, I have a slightly different take on that. The number one thing that I see is the lack of a lot of people to get things done. They say, okay, I'll do this, and I have an internship program where people can, uh, I'll give them my online training for free, I'll mentor them, uh, and then they pick a product of their own choosing, or they pick one of the products that I have in mind, and they work on that. And by the time they're done with the internship, they're and they'll have all of their plans put together, and then if they go out and interview for a job as a product manager or product marketing manager, they could show the plans to their potential hiring boss, and then I'll give them a letter of recommendation which they can also use, put it on their LinkedIn page and use it to help get a job. But I would say less than 10% of the people that I sign up for the internship program actually finish it. Which is quite surprising fallout rate, but it's a good test too. If you want to be a product manager, you have to figure out how to get things done, make the time for it, rather than thinking you're going to go for the quick buck. I gave a talk to, uh, uh, what was the name of it? It was Mysore Royal University in Mysore, India, and this is the place where Infosys has their training facility. They're training 10,000 computer science people every year, and the Mysore Royal Academy is funded by the, I think, the formerly the king of Mysore, of that district, and I talked to MBA students about the importance of product management, and with the hope that maybe we could get a curriculum started there. Well, they surveyed the people that were in the MBA school. They said, no, no, we want to go into finance because they think that's where the money is, is finance. But all finance is, is counting the money that we as product success managers have created.

Thanks. I know, I— it is interesting because going back to the getting things done, That's a product manager's job, right? Like that's— so if folks can't, you know, complete the course or folks, you know, they can't get to the point where they can actually do the things that they say they're going to do, I don't know if they would make for good product people. But I will say what somebody had just asked a question about, you know, again, for product people, especially trying to evolve over the next few years and based on what you've seen in the last you know, whatever, the last decade or so, there are those 130 core competencies that you've identified. But if somebody just were to focus on one thing or just a couple things, like, is there— are there any of those core competencies that are most important to focus on? Like, if somebody were to make their superpower be one thing, what should that be? Especially for, for, you know, thinking ahead the next few years, like, as things are evolving, what Do you have a specific perspective on that?

I think it's learning what the customer wants to do. And if you're in a B2B business, business-to-business business, learning what your customer's customer wants to do, why they want to do it, when they want to do it, where they want to do it, how they want to do it, so forth. And I've got a blog on that on my website, and I covered in detail in my books. And then I have a whole course called Do innovation, design, and value proposition. And if you really understand what your customer wants to do and what your product is going to do for that customer faster or a better quality, which is all that innovation is, then it becomes really easy to write your value proposition. And everything else then begins to fall into place in terms of the target markets, the competitive research. The product positioning is then done against the value position, not a couple arbitrary, um, XY graphs that you picked. And then everything else with the distribution strategy, the sales strategy, the marketing strategy, support strategy, the pricing strategy, all of that just falls into place automatically. But usually what happens is everybody skips understanding what their customer wants to do. They guess at what that is, they observe themselves, which is fine, but go validate that with empirical qualitative and quantitative research, market research, and then you can't miss with your product.

Yeah, yeah, that makes sense. Well, I'm looking at the clock. I believe it or not, it's— we're already close to the end of the sessions. It kind of flew by for me, but I will, I will close with one final question. And, you know, this will kind of be, you know, I would say aside from answering the question, feel free to share if there's anything we didn't cover that you feel feel like is really important for people to take away. But I was just curious if you could think back to the version of you that had no product experience whatsoever. And if you could go back in time and give that version of you just one piece of advice, right? You can only spend one minute with that version of you, you're gonna give just one piece of advice. As far as, you know, flourishing in a product career, what would that be? And again, if there's anything else that you feel like is, worth touching base on to close the session out? I'd love to hear it.

I'll give you an example. I joined a company called Digital FX and became the second product manager for the first desktop video editing product called Video FX. And everyone there, and the marketing manager is a former systems, operating system marketing manager for the Macintosh. And she decided that they were going to target this market at computer users that want to learn how to do video. And they spent a quarter of a million dollars on manuals. They thought it was going to sell like hotcakes, and they had $20 or $30 million in inventory of the video effects product on the shelves of Hitachi, the contract manufacturer, and the thing wasn't selling at all. So I went out and interviewed 20 of our customers in the San Francisco Bay Area. And found out without exception, they were video professionals. So the quarter of a million dollar book that taught them about lighting and trucking and audio and pan and zoom, didn't matter, they learned all that stuff. I said, well, why did you buy this? He said, well, this, with this little device as a machine controller switcher graphics generator, you cut the cost of my post-production suite from $150,000 to $75,000. That was the value proposition. But all those other smart people and the $30 million of venture capital that Kleiner Perkins put into it, nobody went out and did that basic research. The company went out of business a year after I left.

Yeah. Going back to the customer empathy, right? And being able to understand what the customer truly needs, it sounds like. Yeah. Yeah. Well, that's great. Well, David, I appreciate you spending the time with us. I know, you know, you shared some awesome resources. I know in the chat, people were sharing the, the link to the blog post and, and all that. So thank you for that. I'm excited for your upcoming books that are coming out too. And for people to keep tabs on those books when they're released and all the work you're doing, I assume they could go to the Spice Catalyst website.

Yeah, and sign up for my newsletter, which has that irritating pop-up that asks for your name and next of kin. And the Building and Selling Great Products is available now on Amazon in soft cover, Kindle, and audiobooks.

Awesome. All right, well, David, thank you so much for the time and appreciate you joining us for Product Launch.

Glad to be with you.

All right, bye now.

Bye-bye.