Bruce McCarthy: Impossible Outcomes

The founder of FedEx, got a C on his economics term paper because the professor said his idea wasn’t “feasible.”

Tesla, Amazon, Dollar Shave Club, Netflix, WeChat – these organisations don’t just succeed, they redefine the rules of the game and achieve results once considered impossible.

As an entrepreneur, product leader, and coach, Bruce has worked with and for organizations that:

• Create 10x better solutions for customers
• Leverage an unfair advantage
• Establish a scalable business model
• Build self-propelled teams that make it all work

In this session, Bruce walks you through the cultures and practices of these organisations and help you think about how to tackle the big, scary challenges in your organisation with a few examples where the right vision, team, and plan have led to winning formulas.

Slides

Transcript

I want to talk a little bit about impossible outcomes, which I think is pretty relevant right now. I think a lot of people with everything that’s going on are feeling like everything seems impossible or at least extremely difficult. And they’re not sure what’s going to happen with their business. They’re not sure where things are going in the future, or how things are going to work out. But this situation is really not unique companies have been facing seemingly impossible odds, seemingly insurmountable obstacles all along

In context, maybe a different context, I think I’d like to talk a little bit about how companies have faced impossible situations before and come out on top. In 2015, Consumer Reports, reviewed the then new Tesla P85D, and it scored 103 points on consumer reports 100 point scale. A seemingly impossible score. It actually broke their rating system which they had to revise in order to take into account this car that was – according to their scale – of unprecedented value, and quality.

This seemingly impossible outcome has not only given us a terrific car. But Tesla’s Model S and Model X and Model 3 have single handedly driven a transformation in the auto industry. All the automakers even my favourite one – Porsche – are now hard at work on electric vehicles.

And that I think is kind of ironic given that 20 years ago, GM actually was a pioneer in this space. They had I don’t know if anybody remembers this car, but they had a car called the EV1. Back in 1996. It was out for about three years, it was leased to 1000 consumers in California for that time. And after three years, though, GM repossessed all the cars over the objections of the very satisfied happy owners, and crushed them, all of them, except for about 40, that went to museums. They concluded that it was a non viable business, that it was impossible to make a business out of electric vehicles.

What’s really interesting about that, is that actually, the technology, the essential technologies for an electric car, have not advanced much since the time of the EV1, the EV1 had 200 plus miles of range. It charged overnight from ordinary household current electric motors are, they’ve been around for over 100 years, they’re very simple. In design, the EV1 was really not much less advanced than a Tesla. At least this would be approximately the size of a Model 3. The electronics are fancier and a Tesla and so on. But in terms of the basic capabilities of the car, it was pretty much a Tesla, but 20 years prior, and yet GM decided it was impossible as a business. One wonders if maybe they were simply not really all that motivated. If maybe they were just not interested in transforming the world. But we’re simply responding to pressure from regulators. Well, now the world is transforming. And we have this we have this Chevy Bolt, and we have the Nissan LEAF, and we have every manufacturer seemingly pursuing electric cars. Now suddenly, it’s possible because someone did it. And I think that’s really the lesson. And it turns out that this story is not unique.

Fred Smith, the founder of Federal Express, described his model for an overnight delivery service that was national in nature, in his term paper in his economics class while he was in graduate school. And he got a C on it, because the professor said that, although it was a great idea, and it was well described and well worked out. He couldn’t give it better than a C because it was not feasible to have overnight delivery nationally. Now of course, they have overnight delivery globally.

Similarly, Apple, everyone said Apple was dead back in the day. My stock broker made me sell the stock back in the 90s. They went from a declining 4% market share in the PC business to reportedly about 80% of all the profits in the smartphone business. With one product: the iPhone. A seemingly impossible recovery. Porsche my favourite manufacturer, once again, back in the 80s, was facing record declines in sales of their first unprofitable years since the since the war and the cancellation of the 911. But they uncancelled the 911 they won Le Mans and the unprecedented seven years in a row, and they became the world’s most profitable automaker. So they were so successful that in their turnaround, that in 2008, they came this close to buying now parents VW, a car maker with 60 times their volume.

And I can’t help but throw in one more example from my personal background. Net prospects was a startup that I worked for. For three years, we built the largest, most accurate, most deliverable b2b marketing database of its day, and we gave it away for free to our customers. And yet somehow, we grew the company by 100%. For six years in a row. Impossible? No, we made it possible by changing the game by rethinking our approach to to business by not asking ourselves, what could we do, but what must we do to make our visions come true?

These companies that I’ve just talked about these four or five companies, they’re not alone, either. We see news of new unicorns, it seems every day. Some of them are new, some of them are not. Net prospects is you know, 10 years in the past, and Porsche there Resurgence is 30 years in the past. I don’t think it’s about something that’s brand new to the 21st century. I think, though, it’s about attitude, I think it’s about culture, it’s about not saying that things are impossible. It’s about saying that they’re impossible until someone figures out how to make them possible, because they have to.

Now a lot of the executives that I talked to, they feel like they’re working hard. They feel like they’re sweating. They feel like they’ve hired terrific athletes, and they’re working them as hard as they possibly can. And yet, somehow they feel like all of this sweat is not moving them forward. They feel a little bit like they’re working hard, but it’s a stationary bike. So they’re actually not going anywhere. They say, Well, we see all of these successful companies, all these moonshots. What are they doing? What, what are the tools? What are the frameworks? What are the structures that they’re putting together? And they hear, okay, well, you got to be agile, you got to be lean, you got to be customer driven, you got to use safe, you got to figure out your value proposition, you got to go digital native, you got to use the SVPD model, they hear all of this stuff, DevOps, Spotify, whatever. And they adopt these things, but nothing changes. They adopt these things, and yet they feel still like they are treading water, like they are spinning hard, but not getting anywhere. And so they’re asking themselves, I think, how does the impossible / the seemingly impossible / the previously impossible become possible? For many of these companies. I think that’s a good question. I had a conversation about this with one of my favourite people. Gibson Biddle former VP of product for Netflix. I call it a strategy workshop with him and Lisbon. And he’s a genius for strategy. So maybe the answer is product strategy. But I don’t think so. Because if you dig a little bit deeper into the success of Netflix, yeah, strategy plays a part. But what they say is their real differentiator is their culture.

Their definition of culture, there’s a deck on SlideShare that you can look up is what gives them the best chance of continuous success for many generations of technology, and people and probably strategy as well. It’s not about any particular tech, it’s not about a particular talented person. It’s about the underlying culture.

I think, having studied some of these companies, having talked to the people that work there, having worked at or closely with many of these companies myself, I think there is an essential recipe; a set of ingredients for the proper product led culture, that makes the difference that between impossible and possible. And that’s got three main ingredients.

First, you’ve got to have a compelling vision of a future world, where amazing people do awesome things, it’s focused, your vision for the future needs to be focused on people, your people and customers, as well.

Second, you need obviously a plan to get there. And I’m going to dig into some details on each one of these three. That plan is not a detailed blueprint. It’s not a set of features. It is a ladder of opportunities to deliver value, but one step at a time build toward that future that you envision.

And then you’ve got to have the right team. And this definition of a team, a group of people dedicated to reaching that vision is really important. You notice I didn’t say high performing or talented or efficient. It’s about dedication, dedication to the mission, to reaching that vision. Let me dig into each one of these three, and maybe you’ll see what I mean.

So that first ingredient is that vision of a future world where amazing people do amazing thing. I want to go back in time, actually and talk about one of those unicorns we forget about BlackBerry because they feel like a dead company at this point. But back in the day, actually, they were the darling of Wall Street of investors. They were growing like a weed. And they had taken over corporate America, everybody was on their Crackberry, right. Everybody was on their Crackberry it even became a fashion status symbol. Outside of business. There’s Justin Bieber giving his trademark peace sign with his BlackBerry in his hand. And BlackBerry became more than just a productivity device. It became a status symbol and a symbol of success and power. And it made people feel privileged to be able to have one. It made them feel like they were part of an elite group of people. Now, here’s the co-CEO of RIM back in 2003. He felt very strongly that according to a quote, I read in an article interviewing him,

“corporate users will reject camera phones.”

He thought, Okay, our customers, the corporate user, and our customer just wants access to corporate email. Right. So what do they want with a camera phone? What do they want with a phone that has a really big screen for browsing content on the internet? What do they want with a music player or headphones? I think they forgot that they were not just a producer of mobile phones. They were a producer of awesomeness for their customer. Everybody says oh, you know it was the iPhone that killed Blackberry. They failed to anticipate the consumerization of IT. I think that’s wrong. They actually benefited from the consumerization of IT. When people said I got to have a Blackberry.

When I was a young product manager, I petitioned my boss to get a Blackberry on the company dime. And I had to wait for the new fiscal year because there needed to be a budget there was an allocation of limited supply of plans for employees. And so I waited waited my time. Three years later, when the iPhone 3g came out, I shelled out my own money to buy a phone to put on the corporate network because it had become the ‘it’ device. I think what’s going on here is that what BlackBerry forgot was that the ultimate job to be done if you will, is to as a customer, elevate me, make me powerful, make me awesome. And let me into your elite group.

This is an mp3 player. It’s very cool. It’s from Philips and it’s got bright colours. It’s got an armband built into it and stripes on it. It’s got the swoopy earbuds built right into it. It’s very functional. It’s kind of cool looking. The product is cool, but I think they too have missed the boat. When you think about how Apple thinks about products. They don’t think about making a cool product. They think about making cool customers. They think about making the customer cool. They think about initiating the customer into their tribe. And people often buy products as a way of symbolising their desire to join the tribe, the BlackBerry tribe, the Crackberry tribe, and later on the the iPhone tribe. Now, that’s me telling you about what your vision needs to be like; your vision needs to be human centred, it needs to be a vision of making it possible for awesome people to do amazing things. How do you operationalize that in your business today?

Well, one key tool that Amazon another one of these highly successful companies doing things nobody had done before, is their habit of working backwards from the vision that they foresee in the world, they have this practice, they call writing a future press release, or they call it a PR fac an FAQ for the future. And these are the components that are supposed to be in it, they literally write a press release a fictitious one, not for when the product is going to be released. But from when the product is going to be successful and ubiquitous and changing things in the world. They describe the problem it will solve the solution and how it solves that problem. They even have fake quotes and a fake how to get started and how to buy the thing. And all the FAQ so that they work out a pretty detailed vision of what they think that future maybe in five years is going to look like. And that is critical because what it does is it forces them to think through the problems that they need to solve along the way, in order to make that future vision possible. They ask themselves not what could we do from where we are today, incrementally, but what must we do to make our future vision a reality? That’s the kind of rethinking that makes previously impossible things possible.

Instead of shying away from the high hard problems and saying well, we could add this and this and this to our existing product line, that would be easy. It forces you to face the hard problems, and see if it’s possible to do them where maybe nobody else has done them before.

Alright, I’m going to talk about the second component, the second ingredient, and that is to have a plan.

You know me, I’m the roadmap guy. I don’t mean a detailed set of deliverables or specifications. But a plan that shows the major steps, the major problems you’re going to solve along the way, and how you’re going to deliver value at every step. And I’m going to tell you a story about a company that actually failed to use that approach. There was a National Geographic movie, a documentary recently about the what they called the most influential Silicon Valley company that no one’s ever heard of, called General Magic. General Magic was founded in the late 80s. By a bunch of executives who worked on the Macintosh at Apple, and they described in 1989. This is a blueprint from 1989. The smartphone, they essentially described what is today, the iPhone in 1989. You can look at the diagram here. It’s a bar shaped phone. It’s got a touchscreen that is almost the full front surface of the device. It is completely wireless. And look, you can even see a bunch of icons of apps on the touchscreen. They described what was not shipped in the form of the iPhone until 2007. In 1989. They had it right. They knew what the future looked like. Unfortunately, they went into the lab for five years, and didn’t ship anything during all of that time. They put together a bunch of money they actually went public based on the ideas without having a product. They put together a partnership with Sony, with Motorola, with AT&T. And unfortunately, they were a little bit ahead of both the technology and demand with this advice the magic link when it finally came out in 1994. And no one bought it.

I think that the mistake that they made was that they spent too long in the lab trying to leap all the way to their final vision. Not only could they not get there in one step this is hardly what they drew in 1989 but they didn’t deliver anything of value along the way this thing they did ship it it’s sold you know to a few friends and family and nothing else. Apple learnt from that mistake and actually got eventually to the iPhone eventually to their vision, but they got there in a lot of small incremental steps, each one of which delivered value, they started with the iPod.

The iPod, we think about it, it was a wireless device, although it wasn’t connected to the WiFi even at first you had to plug it in to sync it with music. It only did one thing, played songs “1000 songs in your pocket”. It had a black and white screen. But then they gradually iterated on that and added capability, they added a colour screen, they added downloadable games and apps, they added WiFi capability, they added a touchscreen that became the iPod Touch. And from there it was a much, much smaller leap, both in terms of the technology, and in terms of market readiness. And in terms of the even the network’s readiness, AT&T for example, for for the iPhone, when the iPhone came out, it felt inevitable. It felt like the culmination of all the steps that had gone before. I’ll bet that the guys at Apple, since they all talked, had seen the General Magic blueprints. And when they announced the iPhone, it sounded like some brilliant thought that had dropped out of Steve Jobs’ brain the year before, and they went into rapid development mode. But I’ll bet that wasn’t it at all a bet it was the vision all along that they got there, step by step, delivering value, at every point, delivering something to sell that people wanted that did something for them at every point.

And Apple’s not the only company to do this. I don’t know, how many of you have seen Elon Musk’s secret master plan for Tesla, it’s been out on the web for over 10 years, the secret master plan is basically very simple. Create a low volume car, which would necessarily be expensive. Use that money to develop a medium volume car at a lower price. This was the Model S use that money to create an affordable high volume car, the Model 3 and here we are today. Each step builds on the other each step is a prerequisite for the one before and each step provides something of value that they can sell to their chosen market. And it’s working. Look at the volume of the Tesla Model 3, despite all of their throes of trying to get up to volume a year or two ago, they got there. The secret master plan not so secret been on their website all this time is actually working.

So that that in my mind is is a proper roadmap is a proper a proper plan. Describe the problems that you want to that you want to solve as you go. Dream big, but get there in small steps. If we’re going to do a roadmap properly, I’ll give one example today, it’s got to be a list of those problems that we’re going to solve one step at a time to achieve our our ultimate vision. Here’s the roadmap in a simple tool Trello for a company called empathy that makes a software for using your handheld device to understand your emotional reactions as you watch a video or a demo or go through an app or a game in order to do usability testing with real time reaction data. And each one of these cards in this Trello roadmap is a problem to solve. And each one is described exactly that way. Participant recruiting for research studies, this is hard for people. So the problem is described, the desired outcome for the user is described in three different ideas about how they might solve that problem, each of which must be tested and evaluated for whether it is effectively solving the problem before we can call this part of the roadmap done. That’s the right way to think about your plan. If you want to achieve your vision, it’s not about just shipping a bunch of features. It’s about solving the problem so that your awesome customers can do amazing things.

If you’re going to do that, I want to spend a little bit of time talking about the team because that’s the third ingredient and that I have a very strong opinion about how teams need to be put together in a product led culture in order to execute on the plan in order to achieve your vision. I’ll give you an example first. My friend and co author Evan Ryan works at Wayfair. He’s in charge of the team that makes all the product images for Wayfair, the online home goods furnishings, retailer, they have all of the pictures on the websites on their mobile apps, for couches, and artwork, and draperies, etc, all the home furnishings. And their job is to make the imagery as effective as possible. He has a team of product managers, designers, technology people, data analysts, etc. A fairly large team.

What’s really interesting though, is that they aren’t measured by how many images do they produce, or the quality of the images, or even outcomes like engagement with the images. Evans’ team’s success is measured by business outcomes, like add to cart ratios, and conversion rates, and return rates, especially where the returns are because the product didn’t seem as advertised. And even ratings, which could be similarly interpreted, they are measured on the business outcomes that they drive. And so everything that they do is an experiment, a tweak, and improvement to try to improve those business metrics. Evans title in Wayfair, is general manager. He’s the general manager of the imagery business within Wayfair. And his peers are the general managers of merchandise categories, like armchairs and couches, things like that, who are also measured on business outcomes. Now Evan is a product guy like me. But there is this new role that is emerging of a general manager that has grown out of Product Management. And I think if we look at teams, and we look at their work, the very simplest organisational structure that many organisations start off with, is the work team.

The team consists of experts who deliver work, let’s say it’s the database team, or the front end dev team, or the marketing team for that matter. And the measure of their success is that their assignments, their tickets may be in JIRA are done, they’re checked off, and they do them efficiently and effectively. And those kinds of teams are led by the experts in that discipline, right? The front end dev team is led by the most experienced front end developer. But if we ask ourselves, why are we actually doing this work? Usually, it’s because there is something we need to deliver. Project teams, they deliver features, or other changes to our products, our websites, our marketing channels. And the measure of success there is that the features are actually shipped on time and on budget. And that’s a good role for a project manager to lead. But if we ask ourselves, why are we doing this project? Why are we shipping these additional features or changes to our product? Well, we have a product that is supposed to make customers happy and successful and solve their problems. So the measure of success for a product should be not we did the work – well, we got to do the work. But not just that. Not we delivered the features, at least not just that. But we made the customers happy. We made the customer successful some measure of outcome for the customer, like their productivity, rather than our productivity. And that kind of team is best led by a product manager who can get to know the customer, and how the customer views success, and can try to measure whether the customer is being successful because of the product.

There’s one more layer to this, though, if we keep on building out this Russian nesting doll. Why do we have this product? And why do we want to make our customers successful? It’s because we want to drive an outcome for the company. We want to drive we want to solve a business problem like add to cart rates or conversion rates. And that’s what Evans team is doing at Wayfair. They solve business problems. They are an outcome team. And they are successful when those business objectives are actually met. And this new role is called a general manager. There are lots of companies out there doing this. It’s not just Wayfair; HubSpot has basically the same sort of structure. I know two people former VPs of Product who are now general managers of product lines at HubSpot, and the only difference between their old role and their new one is that they now have profit and loss responsibility along with product responsibility. Now this might sound like a kind of a broader than usual definition of product isn’t a product just the thing, you know, the the device or the software that runs on the device? Well, no. Radica Dutt says :

“your product is a vehicle for creating change in the world, it’s creates change for the customer. And if successful, it creates positive change for your business, as well. “

And that’s got to be the definition, ultimately, of success as you bring together all the work, all the features, all the products, and you make the customer successful, and you make your business successful as a consequence.

My favourite example of this is this tiny Finnish company called supercell. They have been called the fastest growing games company in the world, by their investors, their investors, who also invested in Uber and Facebook, and who should know what fast growth looks like. What’s really interesting about how they operate is that all of their games are produced by teams of five to seven people, and no more. And those teams are self organising, they come together, and they propose a game, the only only rule they have the only success criterion they have is make a successful game. And all they have to do is convince themselves that they have a good idea for a game. And then they can pitch it to CEO Ilkka Paananen. Ilkka calls himself the weakest CEO in the world, because he never says no to any of those proposals. And it’s just a formality. But it’s a forcing function to get the team to actually get their thinking together and to come up with a coherent proposal. He says yes, and the team starts, now they start developing a game. And when they get it to the point, that they are convinced that it’s a great game, and that it’s a lot of fun, and that people will want to play it, they allow the rest of the company to play it, and have access to it. And if the company believes at some point that it has gotten to the point where it’s great fun, and lots of people are going to want to play it, then they release it, not worldwide, but in the Canadian App Store first.

And if it does well with Canadians who are apparently the canaries in the coal mine for the rest of the world, then it gets released worldwide. These guys built Clash of Clans, Clash Royale, Boom Beach, some of the most successful mobile games of all time, and they got sold for $10 billion to some Chinese investors a few years ago. That that is a microcosm of owning the success of a business within a business of thinking of your product as an outcome that needs to happen for your customer who’s going to have fun, Ilkka says you’ve got to remember the fun aspect. And your business where you’re going to drive wild, unprecedented levels of growth for your business.

Now, maybe all of this sounds like science fiction to you. Maybe this all sounds like Well, that’s great for big successful companies like Apple or Porsche, or for high tech companies in Finland. But although many of these companies started off really small. But I want you to focus on making your teams as amazing. So that they can do as awesome things as your customers as well.

Most companies I find they work on a process that’s kind of like this, it’s like collect a million ideas, spread your resources over probably too many of them ship ship ship as fast as possible and then repeat. Right? They do this because they’re worried about falling behind. They look at the big successful companies like Supercell, like Tesla, and they say, God, these guys are moving so fast. We need to keep up. We don’t have time to do anything, but just ship the next thing ship the next thing ship the next thing and when I say to them, no, you should probably give your teams more autonomy to do a little upfront research on what the customer actually wants, and put something small out there and iterate on it. They say, Well, this process takes too long already. And now you want me to add more steps to it? Well, that’s not gonna work. That just sounds like it’s going to slow things down even more. I don’t even know when we’ll be done with this iteration that you’re talking about. And that’s actually not what I’m talking about. I’m not talking about adding more steps into a process that already takes too long. I’m talking about giving the teams the control necessary to pursue these outcomes directly. Instead of going through all of those steps, and having to coordinate activity along the way, I’m talking about a fundamentally different process that starts with identifying the outcomes you’re trying to achieve. Identifying the problems that must be solved, in order to achieve those outcomes for the customer and for the business, brainstorming solutions to those problems. And then iterating on those solutions, until the outcomes are met. If you give the teams the autonomy, to pursue things this way, there’s fewer steps, and fewer levels of coordination, and communication and permission and planning, and project management, and all of that, if you give them the resources within themselves to do all of this, they can move much faster.

Speed, speed in getting to market with something that actually works that actually solves the problem that actually gets the results you want is greater than the efficient use of resources, which is usually the objection that I hear. Let me give you an example. I worked with this company called shopfully. And they were worried that after rapid, explosive growth, that things were slowing as they hired more people. Sounds inevitable, right? You as you hire more people, everything slows down? Well, not necessarily. What we ended up doing was separating the teams into three different divisions within the company, each one of which had its own separate goals that were complimentary that added up to success for the entire business, and each one of which had a dedicated team. And it cut down so much on the coordination and asking for permission and scheduling of resources that their CEO Stefano said the new org had released new energies and clarified complex and ambiguities and allowed them to go much faster. They unlocked speed by unlocking ownership at the team level of the actual outcomes in the end.

TripAdvisor has a similar kind of divisional focus, divisional organisation, there are lots of companies that are going this way in the 21st century. And this is how the seemingly or the formerly impossible becomes possible. I think my sort of unofficial definition or my working definition of product culture is a summary of those three ingredients. It’s awesome teams pursuing big dreams, delivering value one step at a time. Now, let’s look, let’s see if the one of the early examples I started off with Netflix stands up to this model. Let’s go through the checklist of the three ingredients that I said.

So the first ingredient was the vision. And Reed Hastings is very public about Netflix’s vision of becoming the best global entertainment distribution service. Now I’d love it if his vision had a more explicit call out to the customer. But it’s implicit, The Best Global entertainment distribution service is all Netflix and chilling, right that’s there’s a reason that’s a phrase. And they have some additional details to it. But that’s their vision of just making entertainment available to us anytime, anywhere. And they arguably have set the standard changed the game, in terms of distribution of video, Amazon with Prime was a follower. Apple was an even later follower. They built a global and expanding business based on that vision. They also going back to my friend Gibb, had and this is from an 2019 strategy deck that Gibb shared with me. They had a strategy of building step by step to where they are today and into the future. Number one during the blockbuster era. They actually, even though they have a long term vision of being a global service, and DVDs did not scale globally. They wanted to ride the wave of everyone’s adoption of DVDs and get big there first and out-compete blockbuster by delivering via the mail and they did that. But then as bandwidth increased, especially internationally, they led the streaming business they were the first and the biggest to go with streaming and they were the first video streaming service that I signed up for. And that allowed them then to expand internationally because they were not going to ship DVDs overseas, it was just impractical. And now at the time it was the next thing we were gonna do. But now it is the thing that they’re doing original content. And I’ll let you in on a secret number five, according to that deck was interactive content. So that is maybe the next thing coming up from Netflix.

So okay, so I think they did a good job on two out of the three criteria, both the vision and the plan. What about the team responsible people, thrive on freedom and are worthy of being given that freedom, their culture minimises rules and maximises the authority of people on the teams, building the products getting to the outcomes to do what they think.

So that’s my recipe In summary, you’ve got to have a vision, a compelling picture of a future world that’s focused on amazing people doing awesome things. You’ve got to have a ladder of opportunities that you plan to have delivery of value, at steps along the way to achieving that vision. And you’ve got to have a team that is not just smart, not just effective, not just dedicated are not just hardworking, but is dedicated, dedicated to the mission. That’s where the impossible outcomes come from.

Mark Littlewood
Yeah, it’s true. So a couple of points of timing is everything. I’d love you to put your hand up. If you know someone who claims to have invented Facebook or a version of Facebook at some point in the past.

Bruce McCarthy
Yeah, I have one. I have a friend who invented Twitter.

Mark Littlewood
Yeah, everyone’s it’s like, it’s it’s, it’s amazing. I think, the great a great comment from Tim Burgess down in Australia that we’ll pick up on in a minute. But I think the other thing about some of these long term product decisions and these things is the apple, the iPhones a really good example have to say I was an Android person, and then people got very excited about the new iPhone and I missed the first one. And then the second one came out and I dropped my previous phone and I need to buy one. So I got one of these things. And it didn’t have things like copy and paste on it. And I was just staggered compared to what I was used to using a different phone and a different a different form and a different way of doing things. So this product was out there that people were absolutely raving about, but it actually had quite a few really basic missing features. So talk us through how you think about those are quite big, big coals to make if you’re producing a thing and I remember when there was the sort of another version of the iPhone that didn’t work because the aerial was part of the outside bit. Oh, yeah, that was to stick a rubber band around it and stuff. And that’s a you know, there’s those are those are kind of big, big things to talk your way out of, in a way.

Bruce McCarthy
I think that one with the the iphone four with the problem where if you put your hand your fingers in the wrong place, it dropped the call. I think that was just a mistake, an error. But the thing? Yeah, I mean, that that was that was a misstep. But the the first version of the iPhone without cut and paste, as you say, without exchange, integration, email, corporate email integration, was a deliberate strategy. They said, Well, should we wait for 3g? Should we work on a to get integration with corporate email, should we get cut and paste into the OS before shipping? And they said, no, they made a deliberate decision to take those risks. And honestly, I didn’t buy the iPhone until the 3g version came out, that was integrated with corporate email, because I wanted to be able to use it to access my work email outside of the office. But lots of people did. And lots of people did, because it was clearly the future, it was clearly the new ‘it’ product, it was clearly the thing that was going to be the successor to the Blackberry, because of the touchscreen, and because of how inspiring it was and how it made you feel like you were part of that exclusive tribe, that elite group of people who are on the cutting edge, even though on the specs, it was not as capable. If you go down the checklist as a Blackberry, I still can’t type as fast on my phone as I did on BlackBerry. And yet, I’m a dedicated iPhone person, you look at sort of the list of must have features. And then you look at the sexy features. The delighters the things that make the customer feel really awesome, and really amazing and really powerful and feel like they can do anything. It’s possible to actually skimp on a few of the must haves, or the what you think are the must haves. If you’ve got an absolutely killer one like the touchscreen, the full width, full length, touchscreen, you’ve got an absolutely killer delighter feature in there.

Tim Burgess
Bruce, the question I had was, when you’re when you’re setting these long distance decisions, there’d be a lot of tests you could have along the way, you know, pressure from things like your current clients and sales teams, I mentioned that your resolve would be tested an awful lot. I just can’t see how you’d succeed unless you had the folks at the top totally committed. Can you talk to that?

Bruce McCarthy
I think that I think that’s a really good point. You know, Netflix has made these long term bets, for example, and you see folks like Amazon doing the same. And top management is involved with those decisions, they are driving those kinds of strategy questions. Gibson, and Reed Hastings and the rest of the executive team were all in on the decision to go with streaming. And they were all famously in on the decision to separate streaming from DVDs, which they had to reverse, because they were thinking a little too far ahead. They were thinking, oh, yeah, this is so much the future, we’re just going to leave the DVD business behind. And that’s not what the customer wanted. The customer wanted to feel like Netflix was Netflix, and I could get either one or both. So it’s not like they’re flawless. But these are key strategy decisions that got to be made at the top level. One of the reasons I think that the Amazon future press release working backwards approach works is that allows you to not just get buy in from your little team, your little two pizza team that is just your cohorts and you’re all in this together. But from the wider organisation from top management Bezoes himself will sit in on these meetings where you read through, everybody reads through this feature, press release, and they all come to the table ready to say I think this part is wrong. I think this part is going to change, and the team has got to take that beating, and adjust their plans accordingly.

But there is another half of this, and that is the the companies that that succeeds like this, I think, trust their teams, Netflix says the the best employees need your trust and are worthy of your trust. And it’s the same thing at the at supercell. They give them the autonomy to work out the game for themselves. And then they test it they tested within successive layers of people. So in some sense, yeah, you’ve got to have buy in and permission from the executive team on down all through the organisation. And in some sense, it’s about having proof points at every step, to test against reality. You can’t just be constantly pursuing your long term vision without delivering value along the way. Otherwise, people are going to lose faith. I think you’re absolutely right, Tim. Did that answer your question?

Tim Burgess
Yes, gave some great extra context. Thanks. Thank you.

Audience Member
So, obviously, you’ve given some great examples of companies kind of working backwards from this vision of the future, identifying the different steps along the way. And then pursuing that over decades, often. It’d be interesting if you had any, sorry about that, if you had any examples of situations where somebody does have this glorious vision for the future. And as they work backwards, they realised you know, what, actually, we can’t, we can’t get there at the moment, we you know, step three, or four or whatever, is, is not something that either can be addressed by anybody at the moment, or we can’t address it, we can’t we can’t get started, or we’re gonna we’re gonna hit a roadblock somewhere along the way.

Bruce McCarthy
Yeah, well, I haven’t got any examples of the failures that failed, because nobody ever pursued them, because they, they did kind of work it out backwards. I think one of the reasons that Amazon does this PR fac a press release FAQ. I think one of the reasons they do that is to force you to work out all the steps and uncover your own gaps and thinking or a point in the progression that is just not feasible. And gives you of course, the incentive if you really like your long term vision to try to work out a possible way around that step. But if you can’t work it out, then you can’t work it out. And you’ve saved yourself pursuing a dead end by actually working out those steps in advance. Now, Amazon, they like to you to really work out the details of that future vision. The FAQ, part of the of the document is all the details about how that solution is going to work. But there are certainly people out there companies out there that pursue things in a much looser fashion. In a we’ll figure it out. When we get there. We’ll cross that bridge when we come to it kind of fashion.

I mean, you just look at Elon Musk’s SpaceX. We’re going to colonise Mars kind of kind of roadmap. He’s got a secret master plan for that too. And it involves building up reusable rockets, which they’re working on right now. And building a business or two, based on being paid by governments and by satellite makers to just deliver stuff to orbit. And eventually, that ladders its way up through the going to the moon and then eventually to Mars, to an affordable business where we can all afford to sell our houses and for approximately US $200,000 emigrate to Mars. But I don’t think he’s worked out what happens when you get there. Now that you’re out of money, and where am I supposed to live? Right? He’s kind of like, well, we’ll get there when we get there.

But um, if anybody else has, has an example, I’d be interested in hearing it in the chat or in in Slack of, of somebody working backwards and then abandoning or completely rerouting their vision because of an impossible step along the way.

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