Father of the iPod and iPhone on building taste, judgment, and creativity in the AI era

You still need humans in the loop. Don't surrender to the machine. We can use the machines, but don't cognitively surrender.

Because it's so easy to build, the things that stand out are the things that are really well thought through.

Today in the AI world, I can just make a prompt and all of a sudden it gets spit out. You're building on a really crusty foundation. You're getting short-term gain for very, very long-term loss. If you're going to build a real company, can't be throwaway.

One of your colleagues, Hermann Hauser, that asked him how he decides what is worth building.

I always start from pain. Are there new technologies to solve that pain, bring innovation in, revolution, and redefine the space?

What's the threshold? What's a sign of, okay, this isn't big enough?

Oh, the iPod wasn't big enough. It took 3 generations of the iPod before it became successful. You gotta fail a few times till you find your way.

You are so into marketing, that piece of building that I think a lot of builders don't think about at all.

The technology is in service of the customer, not we're going to jam the technology down the customer's throat. A customer only sees what they see through the lens of marketing.

You often back to the value of storytelling for product builders.

Too many times when we're technology-led, we talk about the what, we don't talk about the why. The why is storytelling. When I watched Steve, he was honing the story of the iPhone every day. And so when you saw him come on stage, it was just— because he had done it 100,000 times.

Today my guest is Tony Fadell. Tony doesn't know this. But ever since I started this podcast, he's been near the top of my wishlist of people that I've dreamed to have on this podcast. And that's because Tony is the epitome of what most people listening to this podcast want to become. He co-created some of the most innovative and beautiful and popular products in history, the iPod, the iPhone, the Nest thermostat. He's also famous for being part of the legendary team at General Magic. He's co-authored over 300 patents. He also wrote one of the most important and valuable and inspiring books for builders called Build. Tony is currently an active investor and advisor to deep tech startups with his team at The Build Collective. He was recently named the inaugural designer in residence at the MIT Morning Academy of Design. There's so much gold in this episode. I could go on and on. I'm going to leave it there. Before we get into it, don't forget to check out Lenny's Product Pass.com for a free year of some of the hottest and most well-crafted AI products in the world, available exclusively to Lenny's newsletter subscribers. With that, I bring you Tony Fadell. Tony, thank you so much for being here and welcome to the podcast.

Thanks for having me.

I appreciate it. I have a bazillion questions I want to ask you. I feel like I could fill 4 hours of conversation with all the things that I want to get out of your head. I want to start with, uh, with the BlackBerry. I was just watching the BlackBerry movie recently, and it's kind of this journey of the BlackBerry founders and their story. And then at the end, they're like, oh, and this iPhone thing launched. And they're like, nah, this is dumb. It's like no keyboard and it's not serious. Can't do anything with it. I've always wondered, just being on the other side of this, being within Apple building the iPhone, uh, how much did you guys actually doubt that? Okay, maybe they have something. Maybe we need to add a keyboard.

It was the most heated conversation and it dragged out the longest. There was one, one way of looking at the BlackBerry, which was, that is the market we want to go after and we want to win. And then there's the other side, the flip side of that argument, which is only 1% or 2% of mobile phone users at the time had a BlackBerry, knew what a BlackBerry was. So what about the other 98% of the people? What would they want? What would they need? Why are we going to go after winning this, this very loyal and, and, and, you know, incredibly passionate user base and try to pull them away from something? And so there was this basically head-to-head competition between a display keyboard or a virtual keyboard and a physical keyboard. I had been doing virtual keyboards for a while since General Magic in the '90s. And I knew what handwriting was and keyboards were like on these touchscreens. And, but I was only doing it on a, I was writing software and calibrating them and making, trying to make them work with a single-touch display, resistive or what have you. And so I knew what the limitations were of those kinds of things. So I was like, this is really gonna be difficult. And we hadn't, you know, multi-touch was, was just, you know, was on a big ping pong table. It, like, it hadn't been scaled down. So it wasn't like something in a consumptive form where you could really do user tests with it. And so we set out a set of tests, like, okay, how fast can I type this text? How can I, how fast can I do this on a hardware keyboard? And then how can we do this on the virtual one with multitouch? And it was a hardware-software integration challenge. Of how we could get this to work. So we were going back and forth and back and forth. Oh, that doesn't quite work in the software. Oh, we need to change this in the hardware. And so this was a, over a set of months would, okay, the hardware keyboard's here and, you know, and depends on how pro, you know, how much you've been using it, but there's this margin error and we could really understand it. This over time was started way down here and it started to get it, you know, and it got a little faster and a little faster and a little faster and how many errors, not just how fast, but how many errors and how do you correct the errors and all of all of those things. And at the end of the day, I was able to convince myself it wasn't going to be a hardware issue. And I was convinced at some point that we were good enough. Were we as good as a hardware keyboard? No. But were we good enough? Yes. And then other people came to that conclusion. But at the same time, there were other people who were adamant that the hardware keyboard has to be there, and they were unrelenting. And so it came down to So this was a, you know, classic, like I say in Build, the data versus opinion-based decision. And if you think about it, you had data that said there was pros and cons on both sides. And what happened was the data was not clear that we should choose one over the other. And Steve said, we are going this way. Enough other people kind of said, yeah, that seems like that's the right thing to do. We're going to get close enough to get there. And then other people were like, no, my opinion is this. And guess who wins at the end of the day? Steve Jobs' opinion does. Steve Jobs. And he was like, if you're not gonna get on board, get outta this room and you can go work on another project, but you're not gonna work on this one.

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When you're doing a 1.0 of anything, when you're doing, if you're doing anything that matters and it's a 1.0 and it's a new category or it's a new device the world hasn't seen before, you have very few analogs that you can use to make data-driven decisions. And so if most of your decisions are gonna be opinion-based decisions for a 1.0, you have to have one or two or a very, very small set of people who are charged with making the opinion-based decisions and can actually get you from point A to, from a, a white paper, or, you know, white blank, blank sheet of white paper or whiteboard to an actual 1.0 spec. Because if you try to do data-driven decisions all the way along, you're, you're either not doing a differentiated product because you're taking data from another thing, or you're just getting just bullshit data. Right? So you're going to have to figure out how to get opinion-based decisions to happen. And that means you have to have, you know, for lack of a better word, tastemakers. This is what we are doing. We are the person or the team who is going to make those opinion-based decisions. Of course, some people aren't going to like it. And it's to me like, I'm sorry, this is a benevolent dictatorship. This is what's going to happen. And this is the vision. And we don't know what we don't know until we ship it and we get opinions from the, you know, the, the, the users. Now it's very different when you do this in a, in a B2B context versus a B2C context. And so the hardest environment to work with it when, when you have these opinion-based decisions is in a B2C context because you have to see these decisions in the full light and you don't, a consumer does. They have to see it in from the marketing, from how they discover it in the marketing, the key, the key feature sets, the, the ability to use the product, all of these different things for them to actually come up with an opinion of what they like and what they don't like and being able to critique it. And if you don't, and if you're doing a 1.0 and the world hasn't seen, you're not gonna get that from consumers ever. You have to ship it and you have to build the entire kind of ecosystem so those consumers see it in the fullness so that when they do the evaluation and they spend their own money, then you're getting real feedback. When it comes to consumer, hard, atoms-based products with services or not, whatever it is, you have to build the entire thing and visualize the entire thing to be able to make those, uh, uh, opinion-based decisions. And so you need a small team who's looking at the marketing angles, the engineering angles, the, the sales angles, all those different things to go, okay, that's the way we're going. And there's only so many ways you can do it because the rest of the team doesn't see this either. And so you have to be very articulate about how, what that opinion-based decision is made for, why, how it might affect marketing, how you do it, and make sure the team understands it. Now, if the team is just fully against it, well then maybe it has to be Ed and Kind. But hopefully if you've done a good job and you really, you know, have an informed gut. And you can articulate that, you can get everybody moving in the same direction, even if it is, and it's going to be risky. You're right. You got to know that you got to take risk because most people in those other functions, they don't want to take any risks. And so there's someone who's got to be the target, right? And today, you know, in many contexts, people go and hire consultants, right? They go and hire, okay, we're going to do a user study or we're going to do all this. And they don't have. The user studies and have the full context like I was just describing. They don't go buy the product and they don't what have you. And then they get data. And that's because the leader or whoever's in there, a board maybe, it's like, we need data to make sure this 1.0 is going to be a success. And I saw this so many times at all these major corporations. So they're just kind of covering their ass with bullshit data and not really doing the hard work of saying, I'm going to make this decision and we are going to select this and Yes, I might be wrong, or we as the opinion-based decision makers are wrong, and we will correct it later, and we'll take the heat for that. So that's the, you know, a great product manager, a great person who's leading this thing has to understand that's what they have to do if they're really doing something innovative.

So what I'm hearing here is just the power, especially in a consumer product, of a singular vision, of a singular leader that drives it, that is basically relies on their instinct and their taste and their experience.

And a lot of, but again, a lot of informed judgment from all the experts around, asking questions, refining, prototyping, these kinds of things to then make a decision. So it's not just like I woke up one morning and, you know, this is, you know, now it's, we're going this direction. No, it's, it, there's a lot of work to get, to get there.

I want to come back to the idea of micromanaging, which a lot of people, like to a lot of people, that word is, is bad. Don't be a micromanager. You advocate for, for creating great products, you need to actually be really micromanaging. Can you speak to that? What people you think miss about the importance and power of micromanaging as a, as a leader?

You know, we've heard the term sweat the details. It's micromanagement of certain details. And then there's the kind of hands-off of other details. You have to really understand the blend of which things really matter, which things don't. When I was early on my career, I thought everything mattered and I drove everybody nuts, drove myself nuts, the people who hated, like, and you know, the, and it became my, it became like everybody's gotta do it the way I would do it. It's like, no, no, no, no. There's only a few key things, mostly for the customer or maybe some certain things for manufacturing or cost or something where it needs to really be very clear or a long-term vision. But then you can delegate other things, but certain pieces of it. You really need to, and when I mean micromanage, it means micromanage the decision, not necessarily the operations of doing it, making sure you're getting the data like we did with the keyboard on the iPhone to make sure we're getting the right data to help us get the informed gut to make that opinion-based decision. And so, so it's, it's the, the, the, the micro-specification and delivery of those certain data pieces that you need. And, and maybe it's also to get out of a crisis, or maybe it's a, it's a system level thing where you have to worry about this thing at the low level changing up here and here. And like, like we could do that, but only if they do this. And it's like, okay guys, we're going to fix all of those things at once. And you have to micromanage it because everybody wants to find excuses why they can't do that or they can't do that. So you have to ask why a lot. So it just, and, but it's all in service of some really key detail that needs to get delivered or some innovation that needs to be delivered. Just like, like I said, the keyboard, we had to do the hardware, we had to do the software, we had to do the fil— filtering, you know, we had to do how it was, how the graphics were done on the screen. So you had all of these layers that had to keep constantly changing and adjusting and, and, and sometimes you have to micromanage that because there's just too many variables and Someone has to be the orchestrator of this, of this huge orchestra of many different components to kind of make it all come together and be harmonious.

I want to go in a slightly different direction. I want to talk about the Nest.

The thermostat, I'm assuming?

Thermostat.

Yeah.

What versus what? The bird? Well, there were many other products, right? Yeah. I, yeah. Uh, man, the, uh, smoke alarm. Is that discontinued by the way? The smoke alarm? Yeah. I just, oh, okay.

Sorry. You just, what do you, why you want to stab me in the heart? Like, it feels like a That was one of the toughest products I and our team and Nest and other people who were on the team have ever made in their life. Because it's so hard to make something like that. That's, there's so many constraints. Like, that's an ultimate constraint kind of product to actually innovate in. So yes, it unfortunately is discontinued, but it was the best product in the space for a decade. And no one changed it. No one invested in it. It's, It is so crazy. It's, it like pains me and it pains everyone. People are like, they're expiring around me. What do I do? And I'm like, I wish I could tell you there's something better. No one replaced it with something better. I, it's, it's mind-boggling that the number one product with revenue and everything, you're just gonna toss it away.

Why do you think that's happening?

Because it was an orphan.

It's an or— it's just not a big enough business within Google.

It's a stepchild. No, no, it was. Yeah, it was. Yeah, it was a stepchild. They, you really had to pour a lot of love, a lot of, a lot of attention, a lot of love to make something that was that crystalline. And, and it had to be well-formed and nobody really wanted to put in the effort. So they probably like, who want to do this? Who's excited by it? Nobody was probably excited. And they just said, yeah, okay. We'll just, it's not that big a deal in the end of the day where if it was invested in, I think it would have been a critical piece of the next generation AI assistant in your home.

I want to hear more about that. And just on the smoke alarm point, my favorite feature, I was at an Airbnb once and it just started, instead of just like straight to beeping, it was just like, I'm about to make a loud noise. Like it's just warning you that it's gonna get—

Heads up. We call it heads up.

I love that feature so much. It's like, it's about to get very loud. Thank you for telling me. Oh, that's so good.

You know, it's so you don't get PTSD every time. 'Cause you know when a smoke alarm will, you're like, ah, okay, everyone calm. We're going to do this now, especially when we're doing tests and stuff. We're like, you know, when we're— because people are supposed to test or are supposed to test itself. Like, you know, like, everyone stay calm. It's going to be good, children. It's just we've got to do this one thing. You know, we'll get through it. Don't worry.

That's so good. I was like, thank you so much for telling me.

There was a lot of love and care poured in that thing.

So I was going to ask specifically about the Nest. Like, the Nest thermostat is still the best thermostat out there. I use it everywhere I go. It's just the best. The app hasn't evolved. Nothing's changed for a long time. Is it the same reason you just described? It's just not a priority. Stab in the heart.

Yeah, it, you know, it, it, the, the whole organization was a stepchild for whatever reason. You know, there was cultural mismatch. There was, you know, probably a business mismatch. Um, I think if Nest was, uh, around and alive today like it was, it would have a whole different thing when like Google and Gemini and Google I/O was what yesterday or the day before. Um, you know, it would have been one of the, I think some of the centerpieces of what you could do because AI needs context. AI needs a lot of context. And in a home, you want to make everything very seamless. Um, and the way you get best context is by having sensors properly placed around the home that don't necessarily invade privacy, but allow you to pick up a lot of comings and goings and who's who in the room and your voice and these kinds of things. Uh, audio, I should say, not voice. Um, to be able to give AIs context so that you can have an Anywhere assistant that really knows what's going on.

Is there space for someone to launch the new Nest, do you think?

Oh, for sure. For sure. People keep asking me, when are we going to get it? It's like, no, absolutely. It's now's the, I, now's the time if it isn't already happening. I'm actually getting business plans of people who are like, hey, you know, is this interesting to you? Want to invest in it? You want to come and help us, you know, build it? This is like Nest 2.0. So, you know, they're trying to do stuff like that at Ring. I don't think very, you know, not very privacy-focused, but that's what they're trying to do. That was our vision in the beginning, to tell you the truth. That's how we, we were like, you're going to need lots of context zone. Because we remember, we, the Nest Learning Thermostat wasn't the Nest AI Thermostat. It could have been called that, but we couldn't call it that in 2011 because people would have freaked out. Now, you would have called it the Nest AI thermostat, right? And people would have bought it. And so we knew what AI was, right? So since 2010, that was one of the, one of the foundational pieces of the company was AI. And so that's how we were able to do a lot of the things we were able to do, but it was much, you know, obviously not LLMs, but smaller stuff. And we said, okay, we can see this world growing and this AI assistant, then voice assistants came, then Then there was Alexa and all that stuff that happened later on in 2013, '14, '15. It's like, okay, and that was Gen 1, but we could see this kind of blossoming. And, you know, unfortunately in the fullness of time, it takes 15 years more, uh, you know, from the time Nest launched, um, for that vision to come to fruition, but it is there now. And it, and if Nest was, if we pitched it that way, we were just too, we were just too early.

Let me follow this thread around how to know what to build and what— how you come up with ideas. So I emailed a bunch of people that know you, asked them what to ask you. One of your colleagues, Herman, Herman Hauser.

Herman? Oh, Herman Hauser.

Yeah, Herman Hauser. So his question he wanted me to ask you, he said, ask him how he decides what is worth building.

Okay. Well, Herman's— I've known Herman since 1987, probably before any— most of your listeners were even born. But Herman, just for context, Herman was the creator of Acorn Computer, which was the Apple II of the UK back in the '70s. And then he created, uh, with his team, the ARM processor. So Acorn RISC— so ARM means Acorn RISC Machine from Acorn Computer. And so he was the founder of, uh, one of the founders of ARM. And so I was talking about processor anyway. So that's, so how do, so, so Herman and I go way, way back. So the, the thing is, how do you solve or figure out what is worthy to be built and what's not? So, the first thing is I start from pain. I, you know, some people start from other different directions. I always start from pain. That's what I learned is what are people's pain right now, or you can see it on the horizon, they're going to have pain and, and not too far away. but how do you solve for that pain? And typically those pains were because when those products were created, either it was unintentional consequence or it was a limitation of the technology at the time it was created. And it kind of just, it evolved, but it never revolutionized itself. And so it just evolved in that same pain kind of was it, but it gave you enough of a, a painkiller for the other problem. That having this new pain was worth it. And so I always kind of start with, okay, where's our current pain and are there new technologies to solve that pain? And like in the thermostat case, Nest was, we could use AI to learn so it can learn when you're there, when you're away, what you, temperatures you like, so you don't have to program it so you can save energy. So the big pain was get being either comfortable or saving money. Because 50% of your energy bill was in this heating and cooling unit that you had, you hated the interface, you didn't know what it was, you just paid the bill. And so it started from that pain and said, okay, well programmable thermostats weren't innovative, but they weren't used. Like everyone, a lot of them had it because, you know, uh, the, the energy company would give you rebates for it, but no one knew how to use it because it was arcane. It was programming of ECR. And so what I said was, oh, wait a second. What if it could learn your patterns? And that was AI. And so now let's put that together in a much cooler looking, attractive package that costs 5 to 6 times more than the, the things that you're buying today. But that was the, that was the crazy opinion-based decision was, okay, yes, it's gonna cost $249, but it's gonna save you $800 to $1,200 a year. So it could pay for itself literally within a, you know, a year or two. So that was the kind of, that was the big idea. And AI was brought to bear on that old problem and, and hopefully solve it in a new way. So, so it starts with the pain, longtime pain, maybe habituated away pain that you have to discover and new technology bonded with that to then, to then, uh, bring innovation in revolution in and, and, uh, and then redefine the space in a way, which is what we did, which is not with just the product, but how you installed it. You know, it was always installed by third-party installers as opposed to yourself. How you bought it, which was you bought it through the installer. You didn't buy it in Best Buy or somewhere else. So it was, we had to reinvent many different pieces of the puzzle to get Nest to be the Nest. It wasn't just the product. It was all the other things. Just like the iPod wasn't the iPod or the iPhone wasn't the iPhone. IPhone. It was, it was the iPhone plus the App Store, iTunes plus, uh, iTunes, uh, yeah, iPod plus iTunes, and then the iTunes Music Store. So you have to think about the full, the full thing you're trying to build, not just the one piece, even though that's what you might remember. You have to remember it's, it's just, it's a system that you're going to innovate with.

So these two-part kind of formula you shared here, the pain and new technologies. The second part is really interesting. Essentially, it's like, what's the why now? What's like the new tech that has emerged that now allows us to solve this pain? It feels like that's a core part of it.

Okay.

It's 'cause it's interesting 'cause when you talked about the iPhone keyboard, it was a similar story of like, okay, we can actually sort of do this virtual keyboard for the first time in history.

Right, exactly. It could because of multitouch. That's really what it was. And then we were just on the verge of having fast enough processors, right? And we were just on the verge. So it wasn't, you know, if you look at the iPhone or you look at Nest, iPhone, or iPod, you can see where all these technologies were just coming to light. So in the iPod, it was just now mass storage that was portable and battery operated. That was really what it was. And it was also MP3s or digital music, right? Those were kind of— and we also had, um, high density for— we were the first products to have lithium-ion or lithium prismatic polymer cells. So it was new battery technology, new, new mass storage, portable mass storage and this new generation of digital music. And we had ARM processors, right? And so, and the really, really low power. So all of those things had to come together to do that. Um, and then on the iPhone, it was the, it was multi-touch, but it wasn't just that. It was also the fact that now we had Wi-Fi everywhere and we knew that 3G was coming because we always only 2.5G when that was, and that was very slow, but we had Wi-Fi. So it was, and we had cameras, right? Digital cameras. We had the digital camera, we had digital video, which was, we had YouTube at the time. So it was all of those things just on the verge to say, this is what's going to be very different than what just came before it, like a BlackBerry, which was really just a texting machine and nothing else.

I wanna close the loop on the, on your advice on finding a great idea. I'm curious about kind of the flip side of, when it's still, when it's not good enough? So there's like so many gadgets out there that are solving some pain level. Maybe there's a new technology that they integrated, but they're still like, it's not a big business. It's not a real company. What's kind of, what's the threshold? What's like a sign of, okay, this isn't big enough?

Well, you know, the iPod wasn't big enough. It took 3 generations of the iPod before it became successful. Everyone, you know, well, anyone who knows, you know, if they remember iPod before iPhone, because iPhone swallowed everything. It's like the black hole of everything. But You know, iPod, the first generation was only successful with the Mac geeks and the Mac geeks were less than 1% of the market. And then the second generation was also that way. So when we, we get, we, we'd sell everything, we'd sell everything we could for the most part in the first quarter and then it would die because it was just the Mac aficionados, the loyalists. Who'd come and buy everything. And it wasn't until the third generation where we made it work on Windows, did it actually, and we had the iTunes Music Store, did it actually start to take off. So sometimes you have to say, we're on the right thing, but we need to make some changes to get this market going. And that was a real opinion-based decision to, you know, we, the team at, the team, um, that I was running, we were really clear that we had to have Windows connectivity out of the gate. Or not out of the gate, but just after the first iPod shipped. And Steve said, over my dead body, no way. This is going to help us sell more Macs. So, and then, and then, you know, we're like, okay, we're making the second one. Oh, we're going to keep it with Mac only. We just got to fix a few of these things and then all of a sudden it'll take off. And it was like, it didn't take off. So then it was, there's a long story about how that, about how we finally got Windows connectivity, but there was always this skunkworks thing project behind the scenes doing that. I did the same thing with, um, stylus. Steve never wanted a stylus on the iPhone or the iPad. He never wanted, he never wanted it. He's like, the finger is good enough. When we can't do it with the finger, it's like, and I'm like, but we're gonna have a B2B context and we're gonna have forms filling and people are gonna write. And, and he's like, I don't care. That means we're gonna get to like Windows Pen. 'Cause he thought it was gonna be like Windows Pen, which was you had to use the pen for everything as opposed to using your finger. So it was like, I want it instead of pen dominant, I want it finger dominant. But it, that's what he was saying. But then when we added the stylus, which was another skunkworks project, all of a sudden it came out and it was like, well, we had to have stylus, right? And now it's a, a big feature of the product. Not everyone uses it, but it is a big feature for certain professionals who, who really want that and artists and hobbyists and stuff. And so sometimes you have to have those skunkworks 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 it's going, you can see it on the horizon. So you just keep working on those things. So, but we had to, like I said, the, the iPhone wasn't a hit right away. It was kind of like a, oh yeah, I worked on AT&T and it was 2.5G and it was this and that. And, you know, it did, it only worked in the US. So we had to get multiple versions till we got out. And that's in, in my book, I have the, and, it's called, um, 3, I think it's 3 Generations. Everything needs 3 generations. Yes, Bill, there it is. 3 Generations. I've, I've learned you make the product, you fix the product, then you fix the business. So you have, there's no, I, I've never seen anyone get it all right the first time. Like, you want to, 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. Right? The second iPhone or second iPod, okay, we started getting a little bit better numbers, but we got more or less the features sort of dialed. Third one was like, okay, Windows, we got the margins, we're getting up the volume, we got all the right, and like, go. Right? 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 there's something really severely, you know, brain damaged about whatever it was, you have to restart. But sometimes you have to hang in there. And I, same thing with Nest. We had to hang in there with two generations of the, the smoke detector and a few generations of the thermostat before we made the business work. Right? Not just make the product work.

There's so many directions I can go here. One that's interesting is how often Steve Jobs was actually wrong. How many times you had to, uh, you're like, it takes you years to like, okay, finally.

We all were wrong at certain times, but you know, it's when you hit those, when you hit it big, when you get the right ones, they over, they, they overshadow all the other stuff that, but that's how you have to try and iterate. You know, Jeff Bezos says the same thing. I believe in the same thing. You got to fail a few times till you get to, until you find your way. And, and, but you only fail if you stop. If you keep iterating and keep going, well then that's not failure. That's called learning.

The other interesting part of the story you just shared here, which was one of my favorite stories in your book, actually, the fact you, you kind of implied this, but basically the first iPod was, oh, you had to have a Mac to use it. And the idea is it would, we want, you want to sell Macs. This is a way to get people to buy Macs. And it's like the way you tell it is basically this ended up saving Apple eventually, not selling Macs, but people buying iPods. And that was like the, became the big part of the business.

Yeah. The mantra was Steve, you know, 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 gonna do that? Like, 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, you know, give them a shot because that was just such a sublime experience. And that's how it, you know, it all changed. And that's how iPhone was able to be created. 'Cause without the iPod there, I'm pretty sure there would've been no iPhone. There would've probably been no Apple. Because it was close to bankruptcy.

Wow. That's crazy how close it was to that if some of these decisions went the wrong way.

Yeah, very close. Remember, there was no retail back then, Apple retailers, none of that stuff. You know, most people don't, don't know how on the ropes Apple was back in 2001.

So many stories, but I want to, I want to come back to the, 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 gonna show of the entire customer journey. And the kind of your point that you make is so many product builders focus on building the product and think, build the best product, we're gonna win. And you have this very important advice of there's so much more to it. Talk about especially the marketing piece. Talk about what you think builders don't really get, even though they hear this advice in many ways.

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, we are, we're living in that world. Okay. And so we're like, oh, we're like this and these are our issues and this is who we are. And, you know, maybe you put on personas, you know, you, we, we would strip out and figure out who our target customers were with their personas. You know, is it a, a single mom with kids or is it a, a dual income, no kid family, or is it senior citizens or whatever? And we would come up with these personas and we would kind of live inside them as we're thinking about the product. But you have to also remember that these people don't live in those, that 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 in and meet them where they are. And so your marketing, your website, your, you know, your Instagram ads, your whatever, your earned owned and, and earned and owned media that you do, you really need to put that, 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. Right. And so too many times we just say, oh, if we just make the perfect product. No, you have to put all for a consumer thing specifically. And it's, it's also really good for a B2B. Product as well, is make sure you understand your customer. And they go, you know, and when you say the right words, they go, oh, they get me. Oh, I wanna 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 are, 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? Is it? And you're, You're weaving this, 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 my, is word of mouth, right? By other early adopters. But you gotta do the same thing for the early, you know, and I mean not the earliest early adopters, but the early adopters who other people trust to talk to. 'Cause a lot of other people who are late adopters, They know, oh, that's that, that's wacky George. He tries everything and then, uh, like, no, no, no. But if so-and-so's tried it, oh, I should take notice to that. Right? And so what you want to do is make sure you understand your, the gestation of your customer and where they are and where they are in the thing and who, who you're trying to, I, I also updated the cross the chasm, uh, you know, crossing the chasm graphic. Um, in the book saying how we go about this in our, in, in, in, uh, 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 you, 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 gonna convert. But then the second version of the product, you're getting these narrow later adopters and you've gotta speak in their language. And you, and the third set adopters who are really laggards, you've gotta really speak to them and, you know, go through that and it could be totally different. And so this was, this was a very interesting, story that I, it, it, it was so emblazoned in my mind back in 2001, 2, 1, 2, 3. You know, 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 kind of the early adapter and then we had some other language and then, and by the third, fourth version of iPod, we had some really refined language for those kind of late adopters. So then we said, we're gonna go back and get a push into Europe. We're gonna get, we're gonna get, 'cause iPod hadn't taken off in Europe. So we're gonna push, we're gonna push iPod into Europe. And so we are 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 gotta change the marketing. We gotta meet those Europeans where they're at. 'Cause they're low, they're slower to adopt technology versus it starts with the coast and goes inward in the US, right? And so we're like, oh, we gotta change things up. And so, you know, sometimes it's when you get to new, new areas, you have to rethink your marketing for that area and remember to meet them where they're at and where the, if it doesn't have an installed base for word of mouth, you're going to have to get that word of mouth started. So work with those people to get that going. Now it's different with all software products and all these things and many, many, um, many, uh, products can go global right away. But marketing, you, you still gotta tell a story and you gotta, you know, so it's, it, it just reminds me that even though we've maybe compressed the time for some pieces of the adoption puzzle, you know, because we can distribute faster, doesn't mean we can, the, the, the, the, the awareness can get accelerated and that we can get people to intelligently understand what this product faster. Faster if we just say the words of somebody who might have known about the product for 3 years.

I gotta ask about maybe the most famous, uh, I don't know, tagline of all time when a product was launched, a thousand songs in your pocket.

Songs in your pocket.

Uh, is there a story behind that?

Back in the day at Apple, and I think it's still that, maybe it's changed now, but back in the Steve days. There was the different functions of Apple. And because they were all lean, because the company was only 4,000, 5,000 people, and it was already doing Macs and everything, each function was kind of very, very functional. And so the marketing, the marketing didn't get into the engineering and the design folks. It was like separate. Like Steve was the, it was the hub and he was in each of them putting them together. Like I said, the, The, uh, the, um, you know, opinion-based decision maker. And so when we heard the tagline for the first time, I was like, that's genius. Now, how long that happened, how, what was the behind the scenes? We were so, we were just a tiny team, you know, and we were getting this done in 10 months. So everybody was just running for it, right? Versus iPhone, which was, we had discussions of it. Should we call it the iPod phone or should we call it? The iPhone, because Cisco had the iPhone back in the day, and there was copyright issues and trademark issues. And so we were into that because it was also a 2.5-year development, and we were in so many, and it was betting the farm, and we were going to cannibalize iPod, right? So there was a lot more discussions, but in those early days of 1,000 Songs, it was everybody running in literally not 8, it less than 9, it was really 5 to 6 months, everything got done. Um, cause we really started it in April and it shipped in end of October.

So I think one of the core takeaways from what you shared here is even if you may have the perfect product, the marketing may be the gap that if something isn't working, it may.

Absolutely. And, and the thing is, I think, I think we're starting to see that the cracks of it, uh, it might be more than cracks now with like OpenAI. What is it? It's like, oh, it's your answer machine, whatever. You're like, well, what does it do for me? And now I gotta keep paying you? Like, it was fun as a demo, but what am I using it for every day? And like, oh, Claude, it does Claude code and it does, you know, code, you know, and then what happens, OpenAI is like, oh, we have Codex now. But then they were Sora and they were, you know, this and they were that. We're gonna do sex chat. We're gonna like, What are you? And so it's like, oh yeah, you're the great first, you know, like Netscape. Everyone went out and bought Netscape Explorer or whatever it was called, like Netscape Navigator. And then all of a sudden it evaporated. Like, well, what do I use the net for? Like, I got the tool to get onto it, but what do I use it for daily? And what's that? And it had to develop. And so OpenAI is now shifting like, oh, we got to get product teams and we got to start thinking about product marketing. We got to, so. So, you know, that is, to me, that's, it's marketing. But if you start, if you are already thinking about the marketing, you're already going to start thinking about the product. And that's the thing is when you're just thinking about the product, you're like, and it was really just a technology demo that went, you know, viral. And they're like, oh yeah. And they still keep winning on that. They never put product in till it was too late. Now Anthropic's where they are and valued more and higher revenue and all that other stuff. So. You know, it, it just, it just, even if it's a software-only product, yes, there's lots of hardware and servers and all the other stuff. You need to think holistically and you need to think about the entire customer journey, the marketing, the, you know, the sales pieces, the distribution pieces, the product definition piece, the messaging, the target markets early on. You can't leave it till later and then get it and then back calculate it.. And that's why I say you should, you know, you should really make the press release before you, you, before you more or less start the project.

Yeah. There's a whole chapter on that. Uh, we had the found the, um, like Amazon's also very famous for that. There's a whole book on Working Backwards that goes really deep on this approach.

But the weird thing is it's Working Backwards. See that the, the, the thing saying Working Backwards, I would a movie be created that way? Is it called Working Backwards when you say, I'm gonna make a script and I'm making the treatment and I'm gonna really know what it is. I'm gonna know what the, I know what my characters are and how I do character development. Comment, like, is that really working backwards? It sounds like it's backwards. It's like, no, that's the way you do it. It's just because it's so technology-led and technologist. And this is what I thought when I was 20. I was like, yeah, we're, you know, now it sounds backwards. It's actually, no, that's actually insane. It's not working backwards. It's just an insane way of working. Like, come on, let's really think through this.

It says so much that you, as one of the, I don't know, most successful, insightful builders. Are so into marketing. I think that's a really important takeaway for people, just how obsessed you are with that piece of building that I think a lot of builders don't think about at all.

Well, when you live in that world and you live in the customer, 'cause you're coming from a customer point of view, so you have to see the lens and the customer only sees what they see through the lens of marketing and sales, right? And so you have to be in their shoes and you go, okay, like when I do the, when I do the press release, I can only have 3 or 4 key features. After that, it becomes gobbledygook for a customer. So you're like, okay, what are those 3 or 4 things? Okay, what is that? That's what we're gonna focus on. And so no, we're not gonna add 5 more features. That's not gonna make it sell better, right? Or, oh no, we're gonna cut these 2 features and ship it. It's like, well, wait a second, we cut out 2 of our 3 key tentpole features. How are we gonna sell that anymore? So it's, it's, it, it's a holistic design. It's not, uh, uh, You know, like, because we think the technology, the technology's in service of the customer, not we're going to jam the technology down the customer's throat and they're going to figure out how to use it. There's too much noise that you've got to make it frictionless and you got to fit it in their world and see from their point of view, go, oh, that's why I need it. General Magic was the perfect story for that. You know, I don't know, your viewers should definitely watch the movie General Magic because we made the iPhone 15 years too early. And that was a classic case where we were just making the things that were really cool, but nobody needed it.

Yeah. That documentary is incredible. It's like such a, like the very young version of you. Uh, yeah.

Very different than probably people will recognize me.

Yeah. You have a whole chapter about just like not overworking in your, in your career based on that experience.

Which General Magic was for me.

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Well, the discipline of product management sits between all of these functional roles.

Okay.

Whether that's marketing, sales, uh, distribution, uh, sometimes manufacturing depends on what the product is. Um, engineering, obviously. Um, and so, uh, customer support. So when you sit between all of these things, you know, maybe those roles shift or change, especially depending on what it is you're building and, and that kind of thing. But you have to interpret, you know, what's going on between all of them and stitch them all together to make this, this thing sing. And what we're saying, and you know, is, oh, I can just, today in the AI world, I can just make a prompt and all of a sudden it gets spit out. And you don't know what all those little functions are. If you are not aware of each of those functions, even in the AI world of what those things are. They are very clear definitions of certain points of view for the customer, and you have to consider them. And to say that they're going to get washed away and an AI is going to come up with it, it reminds me a lot of how software coding is getting done with, um, like something like Claude today. You know, I don't know, maybe it was a month ago. When the Claude source code leaked, right? Claude source code leaked. And everybody's like, oh my God, it leaked. And then if you, and at the time, and I'm sure, I don't, maybe they changed it, maybe they didn't. But at the time, Dario was saying, you know, 90 to 100% of all our code's written by, you know, our, you know, Claude. And, you know, we just monitor it and watch it. And we're like, oh, well, that's really interesting. And then the code leaks. And then if you looked at the code, anybody who looked at the code, who's a real software architect and engineer, threw up. They were like, it made what? They're like, this stuff is brittle. Engineers were looking at it like, this should be layered in 4 or 5, you know, actually 12 or 15 different sub-functions. This is the main loop of code. Of, of, of, of, of Anthropic's Claude. The main loop, not, not just something off in the corner. This is the main loop. And people are like, how can you do this? This looks brittle. There's like, it's unreadable. It's unreadable. And they're like, well, the AI knows it. But when you think about it and you have to maintain it, you can have an agent make code for you and it could work and it could test, but is it secure? Is it maintainable? If there's something going wrong, can you roll things back and understand what's going on? Like, there's so many other aspects to writing code and delivering a product thing that you still need humans in the loop. And so when I think of product design, I think of software code with AI. And when you look at AI, and if it's not architecting things and it's not segmenting things and looking at each of those things, like I was saying, you know, like there's software architects. And then there's software optimizers, and then there's just general coders, and then there's security reviews. And if you don't have those different mixture of experts around the code, structuring it so that subsequent generations can get better and better, and it just kind of devolves into this mass of things you don't know, you're getting short-term gain for very, very long-term loss. And that's, you know, that's called software debt, right? Technical debt. Everybody hates technical debt. So it might be fixing something, but it might be— it most likely is giving more technical debt, especially when you're at the high level. So now, how does that map to product management? So if you're a product manager and you type this in and you get some result, but you don't have a really good marketer, a really good marketing communications person, a really good salesperson, a real good channel salesperson, a really good You know, architect a really good, so, a manufacturing manager, all these different things in this thing that you're getting, you're not gonna be able, you might be able to make the first one, but when you go to version 5, 6, how does that work? You're building on a, a really crusty foundation and people think, well, my AI is gonna be smarter. It's not proven to do that. What's proven is if you properly architect and have co— Claude code go into certain subsegments, or have Claude help you build the architecture, you modify, refine it, lock it in, and say, just work on these few things. And you know, when these more limited scoped things, yeah, you can make that work. And I think that's the way we have to consider how we use these tools in a product management capability as well. To just say it's all abstracted away, it's all gonna be better. And when you ask specific pointed questions, you want this thing fixed in your marketing thing or whatever, And then they're gonna like, well, the AI should just figure that out too. It's like, you have given up so much. Like, that's, to me, sure, you can write code, but there's gonna be the difference between, you know, it's like the difference between H&M and a luxury brand. You can go get certain things that look like that and copies that and like edit, but it doesn't last more than one washing or one season. And it's this and you throw it away and it's cheap and blah, blah, blah. Or you go to the luxury thing and you pay more and it's crafted, it's handcrafted, it's da da da, and you know it's gonna be around for a while. Like, oh, there is this dichotomy of like fast and throwaway. So, you know, like it's called fast fashion. We got fast software, but software, if you're gonna build a real company, can't be throwaway. Maybe it can, but I don't think it can be if you're really gonna do this. 'Cause you get just technical debt and you gotta start over again. So you've gotta really understand how you're using these tools. And a lot of these things that these AI coders can do, agent coders can do, can keep, make you incredible prototypes. Do more prototypes, do more of those things to help you get that informed gut to say, we're going this direction, architect that in, and then work on the subsegments below it and, and, and, and all the expert systems that expert things that you need in each of those domains.

Yeah. And I think what you may also be saying here, which I think is really, really important is that because it's so easy to build, people can just build all these features and additions and the value accrues to build something awesome. And the product mind becomes more important to help push this stuff from just a sloppy, every feature, every checkbox to something awesome that people actually use.

Because at the end of the day, if you're building it for yourself, whatever, go have fun. But if you're going to build it and you want to sell it, And like, you know, and you only need 3 key features to sell it to someone. Like, it's going to have to be boiled down. It's going to have to be figured out because you're still selling it to a human who needs to understand it. Now, do you think you could vibe code Flighty?

Hmm.

Probably. Maybe now that Flighty exists, you could. Right.

Copy that.

Like, you could do version 2 of Flighty, maybe vibe code it because you say, look at Flighty. But the original Flighty? Like that's, to me, that's luxury software, right? It was understood how the pixels are done. So you gotta remember, is it version 1 or is it version 2, 3, 4? Because an opinion-based thing on highly innovative differentiated stuff, it doesn't have a model for that. There's not that stuff in there. You coulda, you still need the very version 1 to be done. So, and maybe you can prototype with these things. So I just, you know, I could go on for hours, but whatever. That's just one old guy's point of view.

I think it's really important, this insight that as it becomes easier to build, the things that stand out are the things that are really well thought through and great and luxury almost as you described.

And you can feel it, right? And you go, oh my God. And you know, I'm like one of the biggest proponents of, I'm like telling them flighty, flighty. Cause I, you know, all the people in my in my sphere, they're all flying all the time. Like, have you tried it? It's insane. You know, so it's, you know, and then you get the word of mouth and, you know, things take off because there has been that level of care and craft to it. And yeah, maybe a lot of the subfunctions of Flighty could be built and whatever from Claude code or whatever, but the whole thing and the architecture and everything, I don't think so.

And if someone hasn't tried Flighty, clearly download it and play with it. Uh, this is, yeah, yeah, I love that. This is the example of an amazing product. That's like a really cool, yeah.

And it's all software. It's all software.

Yeah. Something along these lines, as people hear you talk, uh, clearly you are an amazing storyteller and in your book you often come back to the power of storytelling, the value of storytelling for product builders. What's, I guess one is just why is that so important, do you think? And two is what's like one tip you could give people to get better at storytelling?

Storytelling, that's how we've passed information down or, or got people to commit to doing something like, eh, stories are so who we are. We go to the movies for stories. We have books, we have all this stuff. It's just so essential to who we are because we like to be taken on a journey. We like to, you know, and hopefully when you're buying a product or, you know, licensing one or whatever it is, you're subscribing. You're taking on a journey that meets your expectations or out, you know, is better than the, what do your, you know, your, the expectations were set. It's much, it's outsized that. And so, you know, Dave Chappelle is, he just, you know, when it comes to comedy and storytelling, the way he weaves it, he can weave a story for 20 minutes to get to the punchline. And you're just, you're, you know, just in it. Right? I just love his comedy as opposed to the punchline guys who are just, you know, are extremely— the short ones. Um, I— it's something in our nature, human nature. You know, we were told stories when we were a kid. You know, we read the same or watched the same movies 100 times when we were kids. There's something about being taken on that journey that we love, and people love to be educated that way. Right? Your best, your best college professors, high school teachers, whatever. They taught you why you should love, you know, certain math or certain physics or whatever and took you a journey of why it mattered. And then you're like, oh, now I get it. You know, you can learn all the basics of, you know, how to do something, but that doesn't really tie it into something that's meaningful. And so when you tie it to something that's human, Right? That's when it becomes, uh, inaccessible for humans and it's relatable. That's when it goes and it can be for anything. And that's when great marketing, great sales, um, um, happens, you know, and, and great storytelling through the product design. That's even better, right? Because it wasn't just perfume this pig and you put some, you know, on this bad product and you, you say, oh yeah, try it. And you're like, oh, and then it doesn't meet the expectations. But when it sings from the depths of the product, like you were bringing up with, you know, the Nest Protect, the thermostat, or the, the smoke detector and stuff. When we had all that and that you could feel the love and care, that's when people go, oh, I love this and I want more from that brand or from that company or that team. That's what they want. And so to get better at it, I've learned it because I watched my dad. He was in sales, right? So I watched how he would sell Levi's. And I would watch and he would be like, and it, he wasn't always selling to sell. Sometimes he was convincing them not to buy something because that wasn't the best product they had. Buy this one instead. And actually go to my competitor down the street. 'Cause he was building a relationship and storytelling. 'Cause he, these people loved what it was. So it sometimes is not just setting expectations and telling a story, but it's also saying, Hey, maybe I'm not for you. And that's truth. That's also truth. And so like Steve always said, the best marketing just tells the truth. Now, might, might put nice words around it, you know, nice creative and everything, but it's telling the truth. And so when I watched Steve prepare for, and like I said, when we did the 2.5 years with the iPhone, he was honing the story of the iPhone every day. He didn't give it to marketing. He knew what that thing was and what those key features were, like we talked about, like, and micromanage those features because he knew those were the kind of things gonna— the world's gonna take, uh, take notice to. And he would refine the story and then tell other people who were unwashed by it, like friends who are really smart, and say, I'm going to give you the pitch, and give you the pitch. And he would refine, refine, refine.. And, um, and so when you saw him come on stage, it was just, cuz he had done it, you know, 100,000 times or at least 10,000 times, right? And he, he knew it like boom, boom, boom, boom, boom. Just, you, it just came off. And so I watched and I learned from that. And that's what we did for like the Nest Learning Thermostat. That's what we learned, you know, we did for each of those things. It was just that same storytelling over and over. What does it matter? What, why does it matter? Why does it matter? And because too many times when we're technology led, we talk about the what, we don't talk about the why. And the why is where the storytelling is. Because you want to take a journey of why it matters to you. You know, if you're talking about the what, you're just talking to another geek. Love geeks, no problem, I'm one of them. But, and we can relate on that level. But general, most people who are not in the technology world, They want a story and they want something that, that touches them in some way.

One lesson I'm hearing from what you just described is telling the story over and over and over and refining it over time is where the best stuff comes from. Not just here's, I just came up with this and it's gonna be amazing.

Yeah. Oh, absolutely. Cuz you, you need, and, and telling it to other people who don't, who don't, it's to see if it resonates. I remember, I remember the number of times I told the Nest story before Nest came out because I was like, this is crazy, this thermostat thing. You know, I'm like, okay, let me set up the virus of doubt, which was, do you know how much you spend on your energy bill every, every year for your heating and cooling? Don't you hate your, you know, thing? Now there's an, there's another way. There's another way to look at the storyteller. And this is, I put this in the book. Oh, I know I didn't put this in the book. We all have seen infomercials, right? You know, those ones that drag on for half an hour, an hour at late night TV, you know, on some random, on every channel now, right? And they just sit there and they tell you the story from all the different directions. They give you the virus of doubt. They're like, oh, here's this cheese grater. And you know, when you, you have this bad cheese grater here and your knuckles bleed and you know, whatever, and it's hard to clean and, and they overexaggerate everything and they show you all the pain points of it. And then they show how wonderful, easy it is to use in this, whatever they're selling. And then it's easy to buy and then it's easy to return. And it's overly dramatic. And we all know, you know, it's like wrestling. It's all an act and whatever. It's not, you know, there's probably no realness there, but it is storytelling in a way. And if, and not that you should do that because they, they overhype the expectations., but look at the techniques that are used, the psychological techniques, the emotional techniques to get there, and then dial it back and go, okay, I'm gonna do that, but with truth. And that's when things start to go pop, pop, pop, pop, pop, pop. Or at least that's what I've seen. And so I always use that as another metric. Uh, and it's not just telling the story over and over, it's what, what story you are telling. And so I try to think of that as well, but not, uh, obviously clowny and cheesy and everything else, but it is a caricature of, of doing good marketing.

I feel like this is a really interesting lens into the press release first or working backwards idea is create the infomercial first and just do a stream.

Sure. You could. Oh my God. No, which you don't want to do for sure.

But it's like a cool lens to go really far and then kind of pull back the best parts and make it honest. I think we just came up with a really good idea here. Um, I want to come back to the iPhone. So I think it came out like 20 years ago almost at this point, right? It launched 2007, 2007.

Yeah, 2007.

So it's crazy as people are still trying to build the next iPhone, especially with AI. Everyone's just like, what's this? We've had this thing forever. What the hell? Why has nothing changed? I'm curious. I imagine people ask you this question. I'm curious just like what you think the next iPhone may look like with AI. What's like the device that you think emerges over time? Do you have a vision?

Okay. There's the, what it could look like long-term and there's what it could look like soon. And so a lot of people like, okay, there's the long-term thing. And, and when we can trust the models and when they have memory and when they do this stuff, man, then we're still going to need a display because sorry, people, unless we're plugging it into our brain, like a BCI brain computer, or there's some laser thing going into our retina, we're going to need a display. So, so barring those kinds of technologies, we're going to need a display. And so the best display that we have is a smartphone-like thing. Okay. It's not going to be this tiny thing. We saw what happened with Humane, all the other stuff. So you're going to have some kind of, because the best way to visualize visual information is with a display, right? So we're going to have some kind of small slab, maybe it's foldable like we see today, whatever, so that you can access it. You, maybe many things you don't need a display for, but a lot of things you still do, right? Because you might not be tapping and swiping and all this stuff. So I am of the opinion that long-term, if you look at how a device is layered today, and this is many, many devices. And iPhone specifically started this, which was, you know, tapping and swiping, right? That was, that was the first thing is, you know, you use your finger. Then after that was keyboard. And then after that, the tertiary thing was a voice input. We need to flip it. We need to absolutely flip it. And we have to say, and this is what I always wanted to do at Nest, which is I want to remove displays and we need to have voice as the number one primary feature. And you build around voice. Then we have keyboard if necessary, and then we have tapping and swiping. Okay? It should go exactly the opposite. And the problem why we know most of us don't go around talking to our phones and everything, and we saw this also happen with cars, there was tactile buttons and then there was the touchscreens, and then they also added the voice in, but nobody really uses voice in the car unless it's some accessibility thing, right? Because voice was always added at the end because it was always like, well, it sorta works and it's, it's a gizmo, but it's, you know, it's like, uh, you know, like Alexa was for version 1.0. Siri was, whatever. But when we actually have really good voice input with not just— understand, it's like Whisper Flow or something, because that's great. What I'm saying is the intelligence behind it with memory and everything else. So it's— then we can start to say, and, and, uh, we can start to use that much more specifically and then deprecate those other things. But we've always have to have them there as a crutch for voice because voice has never been able to deliver. So that's the long-term thing. So it'll have some kind of display, but it's going to be much more voice primary. And then you're going to have the other things as secondary and tertiary. In the middle now, or sometime soon, it's going to look much, much like the smartphone is because we're not going to get away from the all-app interface anytime soon. We're not going to get You know, we're gonna remove some things, but we don't trust it yet. It's gonna take a while till we trust it. And we are literally turning over a lot to this trusted thing, right? Because tapping and swiping, we know what that is for the most part. We know that we can trust ourselves when we're tapping and keyboarding or whatever. This other thing we don't know. And so it's gonna take a lot of time. It reminds me of kind of General Magic in a way. For us to be able to get en masse to trust it. And we're already seeing this with coding agents and everything else, you know, oh, they deleted my source code. And again, I'm not trying to be an old guy who's saying it's not going to work. Sure, it's going to work in certain things. I'm saying for consumers every day in the things they want. And it's cheap enough so it doesn't cost them a lot, right? Today people are like, yeah, I'm going to try ChatGPT or whatever it is, $20 a month or $200 a month. That is unsustainable for if you think consumers are going to pay that. There's just no way. Unless it's incredible, but they're not going to, you know what I mean? Like they tried it and now they're getting kind of their Siri. A lot of them are getting their Siri 1.0 with this. Like I paid for it, but it's really not all that yet. And it's like full self-driving. Like I paid for full self-driving. It's 15 years later. I'm still waiting for full self-driving. So I think we, again, understand what we think we want, but where the technology is and the social adoption and the social trust that needs to be created around that is going to take a lot of time and it's going to take a lot of iterations to get there, especially if you're going to have to pay for it.

It's really interesting to hear you say that long-term even we're going to need a screen. Uh, because I think a lot of people are trying to go to just, just like an AirPod or like some kind of magical.

Sure. How are you going to look at a map? If you want to look at a map, you're going to just— you're going to listen, like put on the voice stuff in your car and never look at the map on your car and say, oh, turn left in 200 feet, turn left in 100 feet. You're like, shut up, I can't hear you anymore. Like, I just want to glance over. So I, I don't buy it. Like, unless you have it jacked into your brain or into your eye or some other way it's getting into your cortex.

That is so interesting. And you're not a fan of like the Humane approach? I think it was like a little projection on your hand. As a screen replacement, right? Was that part of it?

Yeah. Why? What? It's just, it's different, not better. Hmm.

So funny. I guess the advantage obviously is it's like a small little device you could just put somewhere versus like a screen, but yeah.

Yeah. And you're like, oh, it's like, you know, it's like, uh, the, the hologram projections of Star Wars or something. You're like, yeah, that's cool. But You still need to just, you still need a, you know, a screen or something to project on. So it is a screen at the end of the day. You got to still project it onto something.

Yeah. It's wild because everyone keeps saying, how is it possible that the end ideal product is a piece of glass that we look at? And you're, what you're sharing here is just like, that's actually maybe the ideal product.

Yeah. And like I said, you fold it up, you put it in your thing and it rolls out or whatever else, but I still think there's going to be be that thing. If you look at Her, if you remember the movie Her, they had, they had glass. There was glass there for certain, for certain things.

Wow. I didn't, I completely don't remember that.

Yeah, you have to go back and watch the movie.

It's there. Oh my God. That movie. I nailed it. Oh man. Go Spike. Hmm. Spike, Spike Jonze, right? Yep. Um, I wanted to ask also just, it's interesting that basically everyone is getting to hardware now. It's like you've been at this for so long building hardware in AI, and now it's just like the hottest thing. Everyone's building hardware. So funny thoughts. I don't know. How does that feel?

Look, I was building hardware when it wasn't in vogue in 1995 and '96. Everyone's like, Tony, you're— and this was in the valley— Tony, you're crazy. It's all about the internet. We don't need any hardware. And then iPod comes like, and I was pitching new businesses in '99 and 2000. They're like, Well, it's the stupidest idea ever. Then the iPod comes out. Tony, you want to leave Apple and start that business you wanted to do with hardware? You know, and then, and then it was like, yeah, okay. Then it was all software mobile stuff again. Like, okay, we don't need anything because, but we, we can't get to the next level of software if we don't make the next level of hardware. And it has to, the revolution has to happen completely. Like you got to have the mobile network and the mobile network software for the mobile network to work. Work. You had to have the MP3 player and the MP3, you know, format bits to make that work. We're seeing with AI, we got to have AI plus all the data centers and edge compute to make that work. So, and then over time, the hardware becomes less, it becomes more mundane, like, okay, it doesn't change as much, but all the software starts to then, you know, so I've always just been continually going through The things that I love to do and doing the things at the, the, the, the, the full stack level, because that's where I know is innovation. That's what we had to do at Nest. We had to innovate at the software level, the hardware level, the network level to get the first thermostat out and then the Nest Protect and all that stuff. If we look now going on, people are like, uh, if you're a SaaS company or if you're a software only company, your software company's worthless. Because anyone can vibe code it into the thing. And, and now they're like, we're only funding companies that have atoms in their business plan with software. I'm like, duh. Like, like, where, where have you guys been? Like, so it's just, it's just funny to watch these cycles go and happen. And it's like, okay, all right, you guys can go chase your tails. I'm gonna just keep here doing these full system kind of products and businesses. Yes, they're a lot harder and Yes, they cost more money and yes, they're going to take longer to scale and adopt and blah, blah, blah, but they have staying power for years, right? And, and they bring, and they bring new, new features that you could have never had if you just did software only because you need, especially let's say in robotics, I mean, you need new sensors and you need this and you need that, what have you, right? Look at Waymo, you know, it's like, it's an electric car, you know, electric car with tons of sensors and, and everything. It was a, it's a hardware platform. Maybe it doesn't look as streamlined as maybe a smartphone., but it's an incredible hardware platform with an incredible software platform. And that is something that we're going to be able to innovate on and it'll become a platform for something else. I'm sure, you know, delivery or this or whatever else.

When Evan Spiegel is on the podcast, Snapchat founder, he said exactly this. This is why they're, they've spent so much money on these specs. And he's just like, this is the only way to survive in software is you need to have a hardware component now.

Yeah, just very interesting. Everything old is new again. And And, and, and, you know, I've been in this game 35, 40 years. So just, you just see it and you're like, okay, I was there at '99 when the bottom fell out. And, you know, AI is different, but it's, there's a lot of similarities. And, you know, we're going to have the Gen 1 companies, the Gen 2 companies. And, you know, when people really understand product instead of selling technology platforms that people have to figure out for themselves. So, you know, it's, it's, it's fun to watch. It's a game.

Okay. Maybe one more question before we get to our very exciting lightning round. What do you, what are you most excited about these days in terms of, I don't know, gadgets or hardware or technology that's emerging? Is there anything you're like, oh, pay attention?

I've been doing this AI plus hardware thing now, not just at Nest, but in many of the startup companies that we funded at Build. And so company like Simby Robotics, you know, it's Simby Robotics. We were doing robotics way back. Now it's not a humanoid. But it does inventory, inventory of retail stores. And we've been at it, I don't know, 8 years now, 7 years. And now it's just taking off, right? And it does have AI and it has a robotic platform and it's like, and it really solves real pain points for the retailers of inventory. And the workers hate doing inventory, counting everything on every shelf and all that stuff. So it really works. And like, I love seeing that stuff. You know, I, we're doing the same thing at Grey Parrot with AI and tech and, uh, recycling. Like, it's literally figuring out what things should go in this recycling bin versus that and doing it really fast with cameras and, and all this stuff. It's like, and we've been at that for a few years. And we have AI plus textiles. Like, most textiles, you know, are, have, uh, you know, uh, weaving errors and, and, and, and color errors and defects and things like that. And so people still make all of these these products, but then they have to incinerate them because they're not perfect at the end because we, they don't catch the quality problems early enough in the, in the, in the product, product. And we're doing AI plus cameras to, to spot all this stuff. And again, another thing, and we're doing this, we've been doing AI and drug, drug design now for 10 years at Orionis and that's taking off. And it's like, so I'm really interested in not just these frontier models and this whole thing is. Really good AI that you can trust scoped correctly with this solving real problems every day as opposed to pipe dream AGI, you know, okay, you can go solve that. I'm gonna go and build all these businesses that really matter right now. And we're finally getting traction because people are like, what AI? And, oh, we're robotics and, uh, and now all of a sudden we're in vogue and we've been here really working on our product market fit. Working on our marketing, working on version 3.0 of the device and everything, and people are adopting them. And that's what's wonderful to see. And so I'm excited by all that. We have, we have another one like AI infusion, you know, and doing that or, or, um, finally doing, um, tons of software with chemical reactions. And now we're, we're turn, we have a agricultural, uh, clean agricultural a fuel and oils company that is cleaning up farms all around Central America. So like, and we're almost all Atoms plus software in some way. And so it's just nice to be sitting here and, and knowing that we made these bets a long time ago and we're doing it now. We're not necessarily, you know, I was early on in Groq that, you know, Right. Because I was like, and it was cheap then. And it was like, yeah, that's the right way to go. And, and, and my friends were in Cerebris and I got into that. And then, you know, it's like, but these are long-term plays and they're finally coming to fruition. But we did invest in it, not when it was hyped and it's, you know, we were doing it back when unicorns valuations were billions of dollars. Today, if you don't have a $5 billion round raised, you're not anything. It's like. Okay, well, that doesn't work from a venture perspective. Like with those kinds of, you never get the venture returns. You can't invest in things when the valuations are already 9 digits or 10 digits and you think you're going to have a small portfolio that's like, uh-uh, that's not the kind of game I want to play. So I'm glad that we have well positioned in the, all these companies that have real good product market fit that came in the right valuations that. That we can really help and make big change and deliver painkillers. And we'll let everybody else over there play. So that's what's exciting to me.

Oh man, there's this quote that I, I used the other day on a different podcast, um, that I think applies to you. It's a quote from the Bible that you are made for a time like this. Feels like all the things are converging around the things that you have been doing for so long, and the technology is finally getting Exactly as described, actually something amazing.

The same thing happened to General Magic, right? General Magic iPhone too early. And then I just kept at it and at it and then, then doing the iPhone. So it's just, you just, you stick with it. Like there's too many people who chase their tail and chase whatever the hottest thing is. When it's already hot, it's already too late to be in it.

For people that don't know what you do these days, you talked about all these companies you work with, help people understand what, what it is you spend your time on in case they may want to try to work with you on this stuff?

I think the, the first thing to know is that I'm, uh, we invest in, um, deep technology. So that could be hardware, it could be software, software plus hardware, it could be chemical, it could be all kinds of different stuff. But remember we talked earlier about what's the pain and is there new technology that comes out to solve that pain in a new way or And so what, what we do is I've learned that I invest in the deep technologies that are going to unseat the incumbents because it's going to change the market or the product in such a dramatic way that customers will choose this. So we're not, we're not just feature competing on features or better marketing or whatever. We're fundamentally a different product. Now it might take longer to get the market to shift to it, but it's fundamentally different, just like I brought up Groq and Cerebras and these kinds of things. It's fundamentally different. And so at Build, what we do is we invest in those technology companies that can be that seed that can unseat things. And maybe they go the distance, or maybe they are the key enabling tech that allows another startup to go to the distance, that kind of stuff. And so that's what we invest in. And we do it in, in the environment, in societal benefits and health benefits. That's where we focus. And, you know, at times we've had a portfolio of over 200 companies and we do that, but we don't just invest when we get involved. Many of the companies we advise and that we come in, help them with product management operations. We help them with financing. We help them with org development. Uh, you know, just all kinds of different ways that a lot of times in marketing and communications, right? Because we talked about storytelling. Storytelling's really important. And a lot of deep technology people, they're incredible, you know, engineers, scientists, researchers, what have you. They have a really good idea, but they don't necessarily know how to form the product around it or form the marketing around the product they're building or help the marketing to inform the product and vice versa. And so we try to encapsulate that and, and really bring that to bear so they don't They don't hit it on the fourth version. They try to get very close to the first or second version so they can get on that three, that three version cycle to get to a great company. And so that's what we do. So we get to have a lot of fun. We get to work, play in all these different places, spaces, health, medicine, drugs, robotics, you know, chips. These kinds of things. So that's what's, that's just what's wonderful to us. And we get to just be kids in the candy store and work with all these incredible smart entrepreneurs and everything. So that's one thing I do. The other thing I do is I'm a designer at residence at MIT. So I just finished up my first year there with the MIT Media Lab in architecture and design and help to, you know, give lectures and, and and work with, work with students, amazing, amazing smart students on, with the great technology, but help them with the customer journey. Like try to make sure that they see this stuff early on in their career, not after 10 years and then they finally understand, oh, wait a second, what am I really building? Who is it for? Not just what is it I'm building, but why am I building it and for who? And so trying to get that into the, into some of the later undergraduate and graduate students. So we can, you know, watch them change the world more quickly.

Incredible. I love just all the levels of ways you are helping people. There's the investing, there's this book, there's MIT, there's these conversations.

It's fun. It's just so much fun.

You know, I love, I love how much fun you're having. Is there anything else you wanted to share that we didn't cover?

We should really just talk about ethics and morals and your your point of view on that. And as a product manager, as a product designer, you need to really consider these things. I understand we have lots of big questions about AI and is it going to be a disaster for the, for the, you know, for the next generation and for societies and all the other stuff. But I think that you really need to be well grounded and have real principles when you're designing something. And don't let those things go astray, just like you wouldn't go astray with a bad user interface or something like that. Make sure you're not trying to addict your users. And if anybody is, there's always other jobs and there's always other better companies. And don't chase the money for tearing apart what it is, the fabric of this society that we've built. Obviously, there's going to be innovation and there's going to be change. And, but when it, you're really doing it and you can see that you're doing it. And you're like trying to get people hooked or you're like, oh, I get more dopamine or what have you. That's when, you know, you have to start really looking at things. And a lot of times people are young and they, they think, oh, that's great. That's what I want. But when you start to have kids and you start to have families and you start to see the, and you're not just about you, you're, you're, you're not trying to just get out of your family, you know, uh, out of your, when you were growing up, you know, I'm an individual and I want what I want. You know, you really need to start thinking systemically about how, what the benefit that you're bringing to the society as a whole, not just to the business that you're in and trying to bring in whatever revenue you're trying to do. Um, because at the end of the day, users will feel that. And then I think, and will, will reward that as we see with Apple with privacy, right? And people say, oh, they're behind because they're so private and there's this. But it's a double-edged sword. You know, I remember when we had a very pointed discussion when the iTunes Music Store and when it was turning into video, um, was being specified and when we were thinking about it. And everyone's like, oh, this is going to be great. We're going to do movies. We're going to do TV shows. That's going to all be great. We're going to make a lot of money with this and the studios, everybody's behind it. And then somebody goes, yeah, when we should have porn, of course. Steve was like, what? Is that the kind of world you want your kids to grow up in? And Apple is related with that. And Apple's about the, is that what we want to do? And it was very clear, it was shut down. And we need leaders like that. You know, we need leaders who are very clear as opposed to, I'm going to make a huge service for everyone and they're all sex chat, sex chatbots for everyone. I just think, you know, when you start normalizing those things and you start telling other generations that's a value and you start, and I understand that everyone has their own what's right and what's wrong. And here I am, the old guy, you know, again, uh, I, I think we, you know, we can go a little too far. I'm for individual rights, I'm for everyone to be a thing. But when major companies are, are doing this in the guise of certain kinds of behaviors, they're trying to achieve. You know, when we're selling, we're turning personal connection into a product with AI chatbots and making them really, you know, devolve, you know, social interaction to the point where I'm going to have a perfect interaction with this thing because the world is so messy. It's like we're losing humanity with that. And we're just for for, for gain. So I, I wish that the other product designers out there really take it to heart. Not saying you got to be lily white and, you know, being in a, in a, in a church every weekend and Bible banging. I'm not saying that. I'm not MAGA. I'm not any of that stuff. Just saying, hey, think about it.

A lot of people look at the iPhone as this like thing now that everyone's hooked on. It's like gotten, it's so good. We're just like It's too good. Uh, and there's all this data showing all the impact it has on people and things like that. Just like, how do you think about that and the impact the iPhone has had on people?

Well, the first thing is the iPhone wasn't set out to be that. We, you know, there's unintended consequences and the unintended consequence was social, social media happened and social media, Apple's not a social media company, right? But it does distribute the apps or make available those apps, right? And so the way I think about it is, you know, we have lots of junk food and we have an obese nation or obese world because of all the junk food. And it takes us to regulate our, our, our consumption to do that and, and get healthy tools. And, you know, and, and, and, you know, there's nutritional elements on the back of things. And if you want to make a better decision, you can. And I hope AI and these assistants will help people be able to get better control of those kinds of things where our lizard brain is being, you know, stimulated in a way that like consume more, consume more of physical food, right? And now the same thing's happening in digital food, but we have digital food that doesn't have the nutrition labels, doesn't have the warnings, doesn't have the regulation that it needs to have, just like we do with our physical food. Because, oh, we can't, you can't let innovation, you know, whatever, uh, you know, be slowed down. I think, I think there's, I'm not saying again, being a nanny and all the other stuff, but we gotta have some balance and it's just swung too far. And I still think that the platform companies like Google and Apple could be doing a lot more around digital consumption tools and information to help people make better decisions for themselves, for their families and what have you, because you know, you could go to the refrig— get an iPhone, it's just a refrigerator. You can put in junk food or you can put in good food. And even if you put in good food, you could go to the good food every 5 seconds, right? You have a refrigerator in your kitchen. You can put good food or bad food. You can open it all the time and keep consuming. So we need to learn habits. We need to teach habits. We need to put in regulations. We need information. We need tools to help us monitor and manage that stuff. And they need to be supplied. And we have, just like we have rules around, you know, who can buy something when they're 21 or under 21. We need all those kinds of things. And, uh, it needs to happen. Um, because, because why? Sure, you could have a short-term gain and no customers, but if you make your customers unhealthy, you're not going to have customers.

Let me just say for folks that haven't read your book, I just want to communicate how great it is. There's very few books that are both tactically useful, that give you like, here's how to do a thing, and also just inspire you to build and make great things. And Bill does that in such a great way. I think everyone knows about it. I don't know if everyone's read it, so highly encourage you to read it. Two final questions: where can folks find you online if they want to maybe learn about the stuff you're up to now? And how can listeners be useful to you?

Great. Well, let's see. Well, thanks again. This was Fun interview. I really enjoyed it. I think if you want to interact with us, we're at buildc.com. So Build Collective, but we're Build C, B-U-I-L-D-C.com. You can go and see the companies we invest in and you can find ways to contact us there. Um, and how can, uh, viewers help me, um, or help us? I think learn about the companies, see if you can model whatever you're doing in some of the learn from insights. You know, there's a lot of websites that we help to create. A lot of the marketing we created for deep tech through those investments we made. So you can see some well-done marketing. I hope you like our website for BuildSeed to show you how, what we think is a really great website that, you know, only doesn't sell things necessarily. You know what I mean? Uh, like, you know, point and click and, and purchase. But, um, uh, I, I just, I, it just get the, get the, rebuild and apply it. You know, that's the, I think that's the most thing is rebuild, read other things like that. Um, and really hone your craft, make better products, make a better world because the world only gets better by the things we make and how, what we bring. And so that to me, that's the, that's the most important way to help me is by making other cool products like Flighty or other things that are like, I love this thing. So make great stuff, people, and don't think the AIs will, you know, use them for the, the tools that they they can help with, but don't have cognitive surrender. Don't allow your, don't surrender to the machine. We can use the machines, but don't cognitively surrender and make better stuff, make better stuff than myself or any of the teams that we back can make because we do have better tools now. So please do.

Amazing. Tony, thank you so much for being here.

Hey, Lenny, that was great. Really appreciate it. Uh, looking forward to seeing what your, what your audience creates.

Same. Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenny's podcast.com. See you in the next episode.