Joining the Board of Directors at Shift

ShiftToday, I’m happy to announce that I’ve joined the Board of Directors of Shift, a company that has spent the last 6 years reimagining the used car experience. Shift is a marketplace that buys and sells cars directly from consumers without all the usual shady tactics that run rampant in the industry. With Shift, buying & selling a used car is  simple.

In 1991, when I turned 16, I had my first used car buying experience. My father took me to several different lots where we looked at the almost random assortment of cars in our price range. As it turns out, my father is a surprisingly good negotiator and had no trouble walking away from a bad deal. Unfortunately, that meant we walked off each and every lot we visited that day empty handed.

Fortunately for me, my uncle saved us from having to do another day of traditional used car shopping, and I drove his used Toyota pick-up all through college and grad school. But for millions of people, buying & selling a used car is still too painful, expensive, and complicated.

A Better Way to Buy & Sell Used Cars

When George Arison & Minnie Ingersoll came to visit me to talk about the new company they had started, I was immediately impressed with their excitement for a truly mobile-first approach to buying & selling used cars. Over the years, I’ve been phenomenally impressed with the way the team iterated and expanded on their original vision. In 2017, I had the opportunity to sell a used car on the platform, and it was transformationally better than my previous experiences trading in cars to dealerships or selling the car directly through classified ads.

As a product leader & angel investor, I try to focus on products & companies that are working to reinvent a key customer experience. In 2014, I invested in just six companies; they included Gusto, OpenDoor, and Shift.

For many people, buying and selling a car is one of the largest transactions they make in their financial lives. The system has long been littered with opaque practices, overblown loans, and sleazy sales tactics. Taking the high road, Shift has made transparency their hallmark, listing out any fees, doing away with haggling, and making financing more user-friendly and easier to understand. They even built out a loan term predictor so customers can know for certain what they can afford before they even start shopping. 

The company is now slated to go public in the coming weeks, and has grown considerably on the West Coast, aided by its  first-class operations and Silicon Valley culture. Customers finally have a way to buy or sell a car for a fair price without leaving their driveway.

Joining the Board of Directors at Shift

I’ve spent my professional life working to build products that truly improve the lives of ordinary people: whether a working mom who uses eBay to earn a little extra income on the side, a young college grad beginning to build their professional reputation, or the up-and-coming eager to start saving & investing.

I felt fortunate to have been one of the original angel investors in Shift. I was delighted when we sold our car through the service. I’m now grateful for the opportunity to join George, Toby, and their team as they make the transition to being a public company.

If you are looking to buy or sell a used car, please get Shift a try. Reach out, and let me know about your experience. We’re excited about the road ahead.

Be A Great Product Leader – Amplify 2019

On October 8, 2019, I was asked to give my talk, “Be A Great Product Leader” to a huge audience at Amplify 2019, the product management conference organized by Amplitude.*

The talk is named after possibly my most famous blog post on the topic of product leadership from 2011, Be A Great Product Leader.

For those of you who have seen earlier renditions of this talk, this version was cut down to thirty minutes, and as a result has a subset of topics. All of the lessons in this talk started as blog posts:

  1. The Secret to Product Prioritization. Three Buckets
  2. Find the Heat. Don’t Be Afraid to Talk About Emotion.
  3. Einstein’s Razor. Make Things As Simple As Possible, But Not Simpler.
  4. Obsess About Your Non-Users. Growth Comes from Them.
  5. Solve the Product Maze Backwards. Think Back from the Future.
  6. Know Your Superpower. Product. Design. Engineering.

Over the past ten years, I’ve given versions of this talk at over twenty different companies and conferences, but there has never been shareable video of it. Fortunately, Amplitude captured the video and  posted full video of all of their talks, including mine.

Product leadership continues to be a hot topic in the industry, and I hope that these lessons will help inspire more people to become great product leaders.

 


* Special thank you to Melinda Byerley for making the introduction!

Three Types of Risk: Making Decisions in the Face of Uncertainty

Image result for risk

One of the fond memories I have of my first two years at LinkedIn was coming into the office almost every Sunday to spend a couple of hours with Reid Hoffman.

Our conversations covered a wide range of topics, but the time ensured that we were fully aligned on the strategy of the company and the priorities we were pursuing.

One of the topics that I was most fond of discussing was the nature of risk, and how to best lead teams when facing the various types of risk that are commonplace at hypergrowth startups.

Here, Reid never varied, and I quickly adopted his framework as my own. In the end, most of our productive discussion involved deciding which of three types of risk a particular decision involved.

Three Types of Risk

Categorizing the type of risk you face is incredibly useful in helping teams understand how much effort and consideration to spending on making various types of decision in the face of uncertainty.

For hypergrowth startups, risk can be categorized as one of the following types:

  1. Fatal Risk
  2. Painful Risk
  3. Embarrassment Risk

Fatal risks are true bet-the-company issues. They are not that common, but they deserve clarity and focus. If you get the answer wrong here, the company is dead. These risks are unavoidable in early-stage startups, but as companies grow they become more and more uncommon. In fact, most large companies lose the ability or even recognition of these type of risks as they age.

Painful risks involve decisions that have significant repercussions if they go the wrong way. You might miss a key goal, or lose key people. They are recoverable, but there are real ramifications to getting the answer wrong.

Embarrassment risks have no significant impact if they are missed. All that is necessary is to acknowledge the mistake, change course, and move on.

Embarrassment risks are particularly difficult for smart & ambitious people, largely due to insecurity and ego. People want to be perceived as intelligent and successful, and they incorrectly map that to always being correct.

Unfortunately, most people at hypergrowth startups spend far too much time debating embarrassment risk, and they don’t take enough painful risks.

What About Type 1 & Type 2 Decisions?

Jeff Bezos has more recently popularized a different framework, based on two types of decision. This framework is often described in the context of the decision to move forward with Amazon Prime, which at the time was mostly a judgment call versus a data-driven decision.

In his framework:

  • Type 1 decisions are irreversible. Spend time on them.
  • Type 2 decisions are reversible, like walking through a door. Make them quickly and move on.

Overall, this framework is helpful. Thinking through the reversibility of decisions helps prioritize speed vs. perfection. When it comes to execution, the perfect truly can be the enemy of the good enough.

The problem is that almost every decision at a company is reversible, so it tends to not provide that much insight into why some risks feel harder to take than others.

Lessons in Execution

In some ways, you could describe painful risk & embarrassment risk as two sub-categories of Type 2 decisions. The speed of execution depends on taking these type 2 decisions quickly and aggressively, framing them as risk, and clearly articulating what the team will do if it doesn’t play out as expected.

Leaders need to embody this type of decision making, to give permission to newer employees to take risks and communicate their decision making effectively.

Otherwise, a spiral of low expectations and low-risk options will quickly put you in a vice when faced with more aggressive competitors. Worse, you won’t be taking enough shots on goal to learn fast enough to have high odds of success.

Large companies trend towards this problem because decisions become increasingly about the personal positioning of individuals for their own advancement, rather than optimizing for the best results for the company or their customers.

Ironically, taking painful risks may be the only way to set yourself up for exceptional outcomes.

The next time you see your team facing a decision in the face of uncertainty, try to quickly agree on what type of risk you are facing and what type of decision you are making. In most cases, you’ll be able to make decisions more quickly and save your time for the rare, but very real, risks that you have to navigate with your product and your business.

 

The Future of Drone Safety

Every time I go to the CODE Conference, I learn something new. There is something about watching some of the most prominent technology executives and founders responding to questions from talented journalists that gets me thinking.

Four years ago, I wrote about the transition technology CEOs needed to make from economics to politics. Coming back from this year’s gathering, there  is no question in my mind that this insight turned out to be true. Responsibility was a significant theme this year. As the technology industry continues to grow and mature,  more and more people are looking to investors and technology leaders to think ahead about potential issues that will happen when their creations become ubiquitous.

It got me thinking about drones.

The Problem with Drones

The FAA projects that the number of drones will reach 7 million in just the US alone by 2020. The growth rates for both consumer and commercial drones continue to grow at a rapid rate. The FAA estimates that there will be over 3.5 million hobbyist drones in the US by 2012.

Over the past few years, I’ve made a few investments in startups in the drone space. But until last year, I hadn’t given significant consideration to all of the safety issues around drones, particularly as they fly over large crowds or critical infrastructure.

The problem is fairly simple. Large venues, like sports stadiums, and critical infrastructure are largely defenseless against drones. Whether it’s a music festival, a weekend football game or anything of that sort, most people don’t realize that event managers really have no solution to protect a crowd. Whether accidental or intentional, there is a real risk that a malfunction or crash could harm people.

The Need for Active Measures

Long term, of course, we can imagine a world where drones can be programmed to avoid these spaces, (Airmap is a great example of a company making this happen). However, We can’t just assume or depend on this to be universally true – that risks the mistake of being overly idealistic. There needs to be an active solution to protect critical areas.

There are a number of companies working on solutions that involve intercepting and disabling drones that enter space that needs to be protected. In fact, there are solutions like drone on drone capture (with nets) 🕷, projectile solutions (shoot it down) 🔫, even flamethrowers! 🔥

Unfortunately, these kinetic measures make little sense in cases where the drones are flying over areas that need protection. If the concern is a drone crashing into a crowd or important infrastructure, these solutions run significant additional risk of the drone or pieces of the drone causing damage on impact. While there is definitely a market for kinetic solutions in the military and related markets, but it seems like a bad fit for the majority of the simple but real threats out there.

A Software-Based Solution for Drone Protection

Last year, as the co-chairman of ICON, I had the good fortune to meet Gilad Sahar, the co-founder and CEO of Convexum. With the unique insight that comes from military experience with both the costs & benefits of active solutions, they have developed a non-violent, software-based active measure to help automate perimeter protection from drones.

The concept is fairly simple.

Convexum has developed a device that allows companies & governments to detect when a drone is entering a restricted space, take control of the drone, and land it safely. A cloud-based service ensures that all Convexum devices have up-to-date signatures for known drones.

Initially, they are seeing significant demand for this solution around critical infrastructure, like energy development, and sporting venues. Long term, I can easily imagine a future where a non-violent solution for drone protection would be highly desirable anywhere we don’t want to bear the safety risk (like schools).

Working with Government

Europe has already provided a clear path for companies and government entities to receive the permits & exemptions needed to deploy this type of solution. (In fact, Enel has already deployed a solution to protect power plants.) Congress & Senate debating this now in the US, but seems to be one of the few remaining areas of true bi-partisan alignment.

I’ve personally been so impressed with Gilad & Convexum, I’ve decided to help them by becoming an advisor to the company.

Let’s hope this is part of an increasing pattern of entrepreneurs and investors thinking ahead about safety and regulation, and supporting technologies early that can help solve these eventual problems.

 

 

Every Function Has a Superpower. What’s Yours?

Over the course of my career, I’ve been fortunate enough to work in a variety of different functions.  No matter whether it is engineering, design, product, or service, every role has its own unique set of requirements and challenges.

Maybe that’s why I have always believed strongly that software is a team sport. If you want to build exceptional products, you have to find a way to harness the unique and diverse viewpoints of a team of professionals across a wide variety of functions.

Unfortunately, even at great companies, there is a repeated pattern where people in some functions feel disempowered. This doesn’t need to be the case.

Every function has a superpower. Make sure you know what yours is.

Every Function Has Value

Hypergrowth software companies are relentless in their pursuit of efficiency. Everyone who joins a new company dreams of building something new, something better than the companies that came before it. As a result, startups are always questioning the breakdown of functions in older, more established companies. In addition, resources are always tight, as companies stretch to make every dollar of funding count.

Unfortunately, this also means that many startups repeat the same mistakes over and over again when it comes to recognizing the value of different functions in a modern software company. This can be compounded by having a founding team or early employees who have never worked in those functions before.

You don’t really know a function until you know someone who is exceptional at it.

Inevitably, most startups, even when they have grown to hundreds of people, have gaps in their understanding and appreciation of some functions.

Avoiding Decision By Committee

Besides the lumpy build-out of different functions at fast-growing companies, the need for fast decision making also tends to bias the product process.

Great companies tend to be opinionated in their decision-making process around product, and those processes can vary significantly. Some companies may overweight decisions from engineering, others might look to a strong product function. There are companies that are largely sales-driven, and others that rely on general managers. There are companies where decision-making is hierarchical, deferring to the CEO or founder for key product calls, and others where decision-making is distributed broadly to the teams.

This isn’t surprising, however, because there is a direct tension at companies between the speed of execution and the exhaustiveness of a process. As a result, almost every product-centric company seeks to avoid “decision by committee” by assigning decision responsibility to a function or a hierarchy.

No matter what system exists, there are always people and functions that feel disempowered by the process.

Know Your Superpower

While you may not be the one to make the final product decision, it is a mistake to feel disempowered. Your function has unique value, and you can dramatically shape any product decision through your efforts.

The key is to know your superpower.

Every function has one. Here are just a few examples:

  • Engineering. Every engineer has the ability to take what is and isn’t possible off the table. I’ve seen product strategy discussions completely changed in a single weekend by engineers building something that no one else had even considered. The power to create is an awesome one, and the best engineers use this power to open the eyes of their teammates to what can be accomplished.
  • Design. Most people can’t visualize the different options that are possible around a given feature or product, and design has the power to reshape discussions completely based on visualization. Design can eliminate theoretical options, define the choices available, and most importantly trigger a deep, emotional response to certain choices in decision makers.
  • Product. At some companies, product managers have procedural power to make decisions. However, the most effective product managers use their power to frame the discussion with strategy and metrics to help drive decisions. The power to define the framework for a decision often is the power to control the decision.
  • Client Service. If you spend your day talking to real customers about real problems every day, you have amazing power to bring issues to the fore. Sometimes a decision is swayed by the scale of the problem, other times by the severity. Never underestimate the power of narrative, driven by real customer stories, to shape decisions on product and prioritization.

Every function has a superpower and everyone has the ability to do the extra work necessary to tap the unique capabilities and resources of their function to use that power to shape decisions. It requires work, but no matter what your function or role is, you can heavily influence critical decisions.

You just need to find your superpower.

 

Joining Dropbox

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. Because believing that the dots will connect down the road will give you the confidence to follow your heart even when it leads you off the well worn path; and that will make all the difference.”

Steve Jobs, Stanford University, June 2005

In 2012, I was seriously considering becoming a full time investor.

I’ve always loved startups and venture capital, and I had been fortunate enough after leaving LinkedIn to have a chance to work for Greylock Partners, one of the most successful firms in the industry.

In May of 2012, my daughter was born. While on parental leave, I remember receiving a note about a Greylock company that was looking to add to its executive team. I had visited that company just the month before, to help advise on strategies for organizing and executing on viral growth.

The role itself wasn’t the right fit, but for some reason that company stuck in my head. Did I really want to become a full time investor? Or did I want to go help build a company?

As it turns out, the company that I couldn’t get out of my head was Dropbox.

First moments after the birth of my daughter, May 2012.

Opportunity at Scale

Over my career, I’ve had the good fortune to work at three companies that grew to reach over 100 million users. After spending the past six years focused on building new companies, I’m excited about jumping back into the challenges of designing and shipping features for the more than 500 million people who use Dropbox to get things done.

With the proliferation of devices and ubiquitous connectivity of the modern workplace, I think there is a unique opportunity, right now, to help teams unleash their creative energy and find more enlightened ways of working together.

Drew has done a great job of sharing the high level vision for Dropbox, and I’m excited to dive into a space that has so much product potential.  The era of walled gardens is over, and there has been an explosion of new applications and content types in the past few years. The challenge is to design an open ecosystem that helps bring all of those capabilities together in a way that doesn’t sacrifice simplicity in design.

Connecting the Dots

For now, I just want to say thank you John Lilly for reconnecting me to the Dropbox team, and thank you to QuentinDrew, and the entire Dropbox team for this opportunity. It is truly amazing how life connects the dots.

Index Funds: Good for Corporate Governance & Good for Crypto

On March 8th, Dick Weil, co-CEO of London-based Janus Henderson Investors,wrote an op-ed in the Wall Street Journal arguing that the SEC should prevent index-funds from voting on shareholder proxies. In it, he argues that index funds “have no interest in the performance of particular companies” and that index funds “lack a strong incentive to cast informed votes.”

Unfortunately, Mr. Weil misses some of the most important incentives that drive long-term equity holders, including index funds. In fact, index funds are likely to be superior to active funds for effecting good long-term corporate governance.

Index Funds Are Long-Term Owners

In October 2017, Jack Bogle gave an interview with Morningstar that addressed this exact issue. His argument, as usual, was clear and compelling:

Benz: How about on the governance front. I know you and I have talked about this over the years, about whether passive products are more limited than active managers from the standpoint of influencing corporate governance of the companies they own. What do you say to that assertion that passive products because they can’t walk away from some of these companies altogether don’t have that ultimate weapon that active managers do have?

Bogle: I’d say traditional index funds are the last, best hope for corporate governance.

Benz: And why is that?

Bogle: That’s because they’re the only true, long-term investors. Corporate governance should be based on long-term factors affecting the corporation, not a bunch of traders who want you to report higher earnings, gonna try and get on your board for a minute, and in a moment … I don’t know how they’re this smart to do it, but realign the entire company and then all will be well. It just doesn’t happen. In fact, the reverse is more likely to happen.

So, I don’t see … The old Wall Street rule was if you don’t like the management, sell the stock. The new index fund rule is if you don’t like the management, fix the management because you can’t sell the stock.

The critique of index funds and corporate governance comes from the mistaken idea that it is only by buying and/or selling a security that you can influence management and the allocation of capital. While there is no doubt that individual actions in the secondary market affect the price of a security, and the price of a security can affect capital allocation decisions, it is a relatively indirect link. Activist shareholders typically use these actions, but as a means to more direct control, either influence or direct membership on the board of directors.

Unfortunately, because discretionary investors have the power to walk away and sell a security, there is a weakness in their commitment to fixing a company. While some of the best activist private equity funds might spend years working to improve the returns of a company, most active investors show no such patience.

Index funds effectively operate as permanent owners of the business, so their incentive is to work to improve the performance of each and every company in proportion to their market capitalization.

Patient Capital Has Value

Perhaps one of the most compelling aspects of index funds as investors is their reliability as a patient source of capital. There is no doubt that the short-term focus of current capital markets is a problem for public companies looking to optimize their performance for the long term. Very often, significant changes in corporate strategy take years to implement, and can often result in negative short-term performance in exchange for the potential for significant long-term upside. Unfortunately, if most investors hold securities for short periods of time, management can be pushed for making decisions that are optimized for long-term value creation.

In fact, this problem is the focus of Eric Ries’ new startup, the Long-Term Stock Exchange.

For example, as of 2013, the average active mutual fund had a turnover of over 85% (according to Morningstar). This means their average holding period for a stock was barely over one year! They are not long-term investors, and their financial interest is incredibly biased towards short-term performance. They are not going to support any solution to a corporate problem that might hurt short-term performance.

This is not just a problem for active mutual funds. Private equity buyout funds, based on their structure, predominantly look for returns often within a relatively short number of years. Because they often use debt to leverage their buying power and maximize return on capital, their playbook also includes damaging short-term actions like the payoff of significant one-time dividends that can starve a business of long-term capital.

Index funds provide long-term, patient capital that is well aligned with the desire to see companies optimize their corporate governance for maximum shareholder value. The time frames of active investors are just too short to align with management changes and strategic choices that may not pay off for years, if not decades.

This Applies to Crypto, Too

One of the most exciting developments in cryptocurrencies has been credible initiatives around index investing. Bitwise Investments (currently available) and Coinbase (available soon) have both announced crypto index products and platforms. (disclosure: I am a private investor in both.)

Over the past few years, more and more investors are convinced there is an incredible opportunity for blockchain-based products and platforms. Though cryptocurrencies have the same liquidity as public companies, they are based on far younger organizations and will take time to develop. Index funds can act as a stabilizing force amidst the volatility, especially if index funds see continued net-positive inflows like their brethren in equity and debt assets.

Amidst all of the volatility, index funds will likely also have a role to play as aggregators of long-term holders of cryptocurrency. Index funds, given their incredibly long time implicit frames, are aligned to advocate for governance and development that will maximize the long-term value of the ecosystem.

Index funds may not control the marginal price of these assets, but they can provide a structure for a large pool of investors to have a long-term influence on the direction of these platforms. Whether the future belongs to proof-of-work systems, proof-of-stake, or other alternatives, my guess is that we’ll find that, over time, that access to long-term, patient capital is a huge benefit to products and platforms in crypto.

Long-Term Ownership Will Improve Governance

While there is no question that active investors can have a positive impact on the governance of corporations, it would be foolish not to see the additional advantages that index funds bring to the financial ecosystem.

Index funds may actually be the missing form of long-term, patient capital that we’ve needed in corporate governance to better align companies with the creation of long-term value for all of their stakeholders.

Solve the Product Maze Backwards

As the father of young children, I can tell you that there is a special place in my heart for restaurants that provide puzzles and crayons for small children to pass the time.

On a recent trip out to The Counter in Mountain View, Jordan (who is 8)  was really struggling with a large maze puzzle on one of these activity sheets. It was a fairly large maze, and he was frustrated by his inability to see the dead ends ahead, forcing him to retrace his somewhat tortured crayon path.

I told him to try to solve the maze backwards.

As you can probably guess, he began at the end, and was able  to find a path back to the beginning in just a few seconds . He was delighted, and a bit surprised, to see how simple the puzzle looked like from a different perspective.

Surprisingly, I find that both entrepreneurs & product leaders miss this important lesson when evaluating ideas for either their company or their products.

Three Questions in Product Prioritization

In my experience, there are three common questions that often come up when product features are being debated:

  1. Should we build this?
  2. When should we build this?
  3. How should should we build this?

Unfortunately, even highly talented teams can become  get bogged down in debate and uncertainty when all of these questions become entangled. As engineers & designers are professionally trained to answer the question of “How,” the worst debates tend to happen around the questions of  “Should” and “When.”

Too often, when debating what feature to work on next, debates around timing quickly devolve into debates about whether the feature is needed at all.

Solving the maze backwards does a fantastic job of disentangling these two questions. Simply asking the question of “If we are successful, will we have this feature in 3 years?” tends to illuminate whether the debate is about “Should” or “When.”

If the answer is yes, you will have that feature, then the question is simple. You are just debating priority.

Avoid the Local Maximum

One of the well known issues with iterative processes for delivering product features is the “local maximum” problem.

The assumption is that where ever you start with your product, your team keeps working on improvements. Each improvement is measured to ensure it is “better” than the product before the change. However, you can reach a point where every change you make hurts the metrics that you measure. The fear is that there is a better version of your product (the absolute maximum), but it requires a change bigger than you can get to from the current design.

It’s called a local maximum problem because of the similarity to the concept in mathematics when you are traveling along the curve. From the local maximum, every move is down, even though the curve ends up higher eventually.

Solving the maze backwards can help.

By asking the simple question about whether or not your product in the far future has a given capability, it can unblock your thinking about what leaps and changes will be necessary. Whether the limitations are in technical architecture or product design, clarity on your long term vision can help your team visualize a future not trapped by their current constraints.

Too often, the real limitation is not related to either technical or design constraints, but rather a lack of clarity and imagination about what might be possible. Just like a maze, it is easy to get lost in the middle. Thinking backwards from the end goal can help the team escape a Zeno’s paradox of minor feature improvements.

Founders Can Solve the Maze Backwards, Too

It may seem hard to believe, but in early 2009 when I took over LinkedIn’s mobile efforts, there was still active debate within the company about whether to dedicate significant effort to mobile. Why? Well, back in 2009, the Blackberry was still hitting record sales, the  app store was a year old, and from a web metrics point of view, mobile views represented less than 1% of LinkedIn’s traffic. Like every hypergrowth startup, LinkedIn had a huge number of initiatives it wanted to pursue around growth, engagement & revenue, and it wasn’t obvious that mobile would move any of these needles for the company in the next few years.

Solving the maze backwards helped.

What was fairly obvious in 2009 was that the growth rate of mobile engagement was compounding at a phenomenal rate. LinkedIn, as a professional use case, might have been slightly behind social use cases for mobile adoption, but it was fairly clear that within 5 years (by 2014), mobile should represent a majority (over 50%) of all visits to LinkedIn.

Thinking backwards helped give us the confidence to invest in both talent and technology that had little short term payoff, but would become essential to engagement over the next five years as those predictions came true.

Fast forward to 2017. I was recently meeting with a founder who was debating whether they should hire a Vice President of Marketing. As he walked me through his thinking, the argument wandered, and became more focused on whether or not the company “needed” marketing.

I asked him if there was any way, if the company hit their numbers over the next three years, that the company would not need marketing, or an experienced marketing leader?

The CEO quickly responded that marketing would be essential to hit the numbers they were looking for in three years. All of a sudden, the conversation changed. The question wasn’t whether or not to invest in marketing, but more a question of when they need to.  Was this a 2017 or a 2018 problem? Is this something they would need to hit the milestones to raise their next round of funding, or something that they would invest in during the next cycle?

It was now a question of when.

Questions of “Should” vs. Questions of “When”

“The essence of strategy is choosing what not to do.” — Michael Porter

Being clear about what your product will and won’t do is a critical element of product strategy. However, because it is so important, even well-meaning teams can turn almost any feature into an existential debate.

Thinking backwards can help differentiate questions of “should” from questions of “when,” and that can be incredibly productive in moving the discussion to prioritization.

This is not intended to be dismissive of questions of prioritization. Phasing decisions are some of the most important decisions start ups make. Financing for startups is phased. Small teams can only work on a few projects at a time. Customers can only absorb so many new features at once. As a result, prioritization decisions are incredibly difficult to make.

Greedy algorithms are very good, but can be traps if you are working against competitors and an ecosystem that is willing to make bets that lie across the gap from your product’s current local maximum. Thinking backwards can help illuminate long term goals that are across the gap.

When you are building a product roadmap, and get stuck on debates about a short term feature that doesn’t move the numbers, I encourage founders to take a moment and try to solve the maze backwards.

It worked for Jordan, right?

Helping People Save is a Job Worth Doing

“Every day stuff happens to us. Jobs arise in our lives that we need to get done. Some are little jobs, some are big ones. Some jobs surface unpredictably. Other times we know they’re coming. When we realize we have a job to do, we reach out and pull something into our lives to get the job done.” — Clay Christensen

In the summer of 1993, after declaring computer science as my major, I got my first high paying software development internship. Over that summer Hewlett-Packard paid me over $5,000, which seemed like an unbelievable amount at the time.

Unfortunately, like a lot of people, I was so excited by receiving this windfall that I promptly spent it. By Thanksgiving, I was shocked to find that my bank account was nearly empty. All that money, gone. It literally sickened me.

That was the moment when I decided to learn as much as I could about personal finance and I got religious about saving.

The Theory of Jobs to Be Done

For a lot of people, there is a moment they can recall when they consciously decided that they wanted to start saving.

When I attended Harvard Business School at the end of the dot-com era, I was incredibly fortunate to spend time with Clay Christensen, who at the time had just recently published the now famous book, The Innovator’s Dilemma. In his class, we studied his new theory of disruption, and how industrial giants filled with smart people would make seemingly smart decisions that would lead to their downfall.

One aspect of his theory, which later went into his book, Competing Against Luck, is the Theory of Jobs to Be Done. Quite simply, Clay believes that companies can go astray by focusing too much on the data about their customers and the features of their product. Instead, he argues they should focus on the end-to-end experience of the job that their product is being hired to do.

In the past few years, I’ve come to believe that saving is a job that a huge number of people want a product to help them do and help them do it well.

Saving Itself is a Goal

Our lives are filled with a large number of small financial decisions and problems, but there are only a few very large financial moments that warrant the creation of an entire companies to support. Spending, borrowing, investing and financial advice all certainly fit that description. I believe that saving belongs on that list as well.

Americans are in a terrible state when it comes to saving. 6 in 10 Americans don’t have $500 in savings. An estimated 66% of households have zero dollars saved. If you are cynical about small, one-off surveys, The Federal Reserve itself estimated in 2015 that 47% of households didn’t have the means to cover a $400 emergency expense.

Saving is a huge problem, so it isn’t really surprising that tens of millions of Americans seem to be looking for something to help them save. Enter Acorns.

Hiring Acorns

Over the past two years, it has been astounding to watch Acorns grow. An elegantly simple product, designed from the ground up for a mobile generation, Acorns has grown to over 2 million accounts in less than three years. In the first half of 2017 alone, Acorns added over 600,000 new customers. Their overall mission is to look after the financial best interest of the up-and-coming, something I personally care deeply about.

It isn’t really surprising to see why so many Americans have decided to use Acorns to help them save. 75% of Americans have a household income under $100K. Acorns simple features like Round Ups automate the process of making sure that as you spend, you save. Acorns has now performed over 637 million round-up transactions for their customers – each one an action designed to help people save more. I believe that on any given day, thousands of people decide to hire a product to help them save, and increasingly they are hiring Acorns.

When I met the founders of Acorns two years ago, we immediately connected over the common ground between their culture and Wealthfront’s (the company I was running at the time.) They are very different services, focused on different problems and audiences, but with a shared belief in the power of automation. This is a company worth supporting, and I feel fortunate to serve on their Board of Directors.

At a time when people continue to grow more and more frustrated with the solutions offered by incumbent banks and brokerages, I continue to be excited about the opportunities for new products that are built around automation and world-class software design.  As an industry, we can and should radically improve the financial solutions that are available to everyone. Acorns is proving that saving is a job worth doing.

Spend Time Thinking About The People Who Don’t Use Your Product

on-the-outside-looking-in

This is an extension to my original three post series on user acquisition.

Today, AirBnB announced that it had reached a settlement with the city of San Francisco on how to effectively register and monitor legal listings in the city. I am a huge fan of the company, and it seems like a positive outcome for both San Francisco and AirBnB.

For many, the issues around many of the sharing economy companies, including AirBnB, are examples of regulators trying to find a way to both control and incorporate rapid, disruptive innovation.  There is, of course, some truth to this point of view.

However, as a product leader, there is another important takeaway that seems to be too often forgotten. Most of us spend too little time thinking carefully about the people who don’t use our products. 

The people who don’t use your product often won’t show up in your core metrics. But if you don’t spend time understanding them, you will eventually feel the negative effects in your growth and your brand.

It’s Natural for Companies to Obsess About Their Users

When a startup launches a new product, it is natural to obsess with every user it touches. Every click, every tap, every piece of data is precious feedback about your features. The data is one of the most objective sources of information about what your users are doing with your product and when they are doing it. In the early days, before finding product/market fit, a huge amount of time tends to be spent on the people you touch but who don’t convert. In fact, that may be where most people at the company spend their time.

As consumer products find product/market fit and hit escape velocity, more and more engineers and designers spend a disproportionate amount of time on users. The people who work on growth & marketing will still often continue to look at the data on leads, trying to find ways of converting those non-users to users. However, as a percentage of the company, fewer and fewer engineers, designers & product managers will be looking at data from non-users.

This makes sense, of course, because as your product grows, almost all feature development is focused on your users. In 2008, when we established the Growth team at LinkedIn, we discovered that of the hundreds of features on linkedin.com, only three features reliably touched non-users. (For those of you who are curious, those features were the guest invitation (email), the public homepage (linkedin.com), and the public profile (in search.))

Customer obsession, of course, is generally a good thing. But as we learned at LinkedIn, if you want to grow a viral product, you have to spend a considerable amount of time thinking about the non-user, where they touch your brand and your service, and find ways to both reach them and convert them to users.

You Have More Non-Users Than Users

Few brands and products could ever claim that their conversion rate for everyone they touch is over 50%. It is even possible that Facebook, with nearly 2 billion users, still has more people in the world who have heard of the company than who use it.

In 2011, I remember talking to the great founders at CardMunch about a new email they were proposing to add to their service. CardMunch was a wonderful app that made it effortless to scan a business card and then have it automatically entered into your address book, with almost no errors. The proposal was to add an email so that the person whose business card you scanned (non-user) received an email from the CardMunch user with their business card in electronic form.

The team was ready to whip something together quickly and test the idea, and the concept was good in principle. But given some of the experience of Plaxo a decade before, it was prudent to ask the simple question: “How many people will see this new email?” Within a few minutes, we figured out that the number of people who would receive this email within the first three months would be 30 to 50 times the total user base of the application.

Some of you are probably thinking, “sounds like a great growth feature!” Others are likely venting about why we have so many emails cluttering our inboxes. Both reactions are fair.

The guidance I gave the team, however, was to consider the fact that, once they launch this feature, most people who have ever heard of CardMunch will have only heard of it through this email. The product and the brand. I asked them to spend a bit more time on the design on the email, in that context, to ensure that all of their hard work on a wonderful product wouldn’t be drowned in an avalanche of poor experience.

In the end, Sid Viswanathan & team did a great job brainstorming ways that they could show the value of a connected addressbook in the email, including LinkedIn features like people you know in common. Once framed properly, it was simple to think about what they wanted non-users to think about their brand and their product.

Non-Users Matter

Marketers, of course, have known this for decades. It is a brand marketing staple that it takes at least three touches of a brand before it will stick with a potential customer.

Somewhere along the way, software companies lost touch with the basic idea that every piece of content that contains their brand is a potential touch. It is not just the users of the core product that matter for long term growth.

Market research and customer development are often essential for discovering and understanding new potential users for your product. The case can be made that viral systems can, in fact, spread to these new pockets automatically. However, truly viral products are few and far between, and in most cases these new markets will not be in the data sets that your product & engineering teams are focused on.

Brand will also impact your company well beyond new user acquisition. With AirBnB, we now know the many ways in which their service and brand touch non-users. Neighbors, for example, have natural questions and concerns when a house or a unit near by is available on the platform.

Software companies, especially successful ones, tend to have passionate and talented designers and product leaders who are eager to find clever solutions to real user problems. Given the right data and focus, there is no question that these teams can also design and build features that address non-user concerns.

Tesla spends time thinking both about the feeling a driver has in the car, as well as the experience of a non-Tesla owner who is watching that car drive by.

Spend more time thinking about all of the people who touch your product & your brand, not just your users.

 

Product Leaders as Curators & Editors

Gallery Show

A few years ago, I wrote a few posts to outline the requirements for exceptional product leadership:

While I have been gratified that people continue to find utility and value in these posts, I’ve come to believe that product leadership, particularly the issue of prioritization and phasing of a product roadmap, remains daunting and challenging for most teams.

In particular, the need for organizational scalability and speed of innovation has driven the widespread popularity of small, independent teams building product and features. Unfortunately, the side effect of the explosion of small teams has also amplified user-experience fragmentation and the haphazard quality of many web-based and mobile software applications.

As a result, I’ve come to believe that there are two facets of  product leadership that have become increasingly important for delivering a high quality product experience: curation & editorial.

Curation Amplifies Your Product Experience

Around 2014, I remember first being struck by a product management job description at Pinterest which incorporated the concept of curation as a core responsibility of product management.

The dilemma of product prioritization is always simple to understand: most software teams, filled with talented people, have more ideas for great features that the capability to execute. As a result, there has to be some process for filtering down the ideas to answer the question of “what do we build next?”

Prioritization on metrics, customer requests and delight is not hard to operationalize, but it still leaves open critical questions:

  • How does the product & experience come together for the user after we ship?
  • How does the product communicate the changes to the customer in way they can easily understand and utilize?

I believe curation is the key to answering these questions.

Curation is an under-appreciated skill in software design. In the world of art, curation is a critical and valued function. A curator ensures that the pieces of art not only combine to amplify each other collectively, but also gives thought to the experience a viewer will have when engaging with the collection.

Users need some level of coherence in new versions of your product. With proper curation, features and changes amplify each other, and lead to a greater customer appreciation of your efforts through a product experience that is more coherent and easier to communicate.

Without curation, software feature prioritization tends to devolve purely into the line-item value of a given feature, rather than how it fits in general with the whole product, or the product release. Great curators won’t think twice about cutting a piece that doesn’t fit the theme of the show, even if it is exceptional.

Designers, not surprisingly, tend to intrinsically understand the value of curation, and valiantly attempt to connect features together into a coherent product experience. Unfortunately, they often are forced to incorporate together a hodge-podge of features that have been prioritized independently by different small teams.

This is not an argument against constant enhancement and iteration of code, or the constant shipping of bug fixes and small feature enhancements. But for user-facing features, teams need to be wiling to hear from product leadership that a great idea for a new feature is not enough to qualify it for immediate prioritization. Customers cannot endlessly absorb a haphazard array of changes and feature enhancements. The perceived quality of the product drops, and customers fail to perceive the value in the features that are shipped.

Every Creator Needs an Editor

Understanding the value of editorial comes easily to professionals who have worked in content & design.

In my experience, many otherwise talented engineers and product managers balk at receiving critical review of their work. Sure, most software engineers understand the value of pair programming and code reviews. But for some reason, when it comes to overall feature design, the sentiment almost always shifts to stubborn independence.

Unfortunately, just like in writing, having a great editor is essential for the overall quality  and consistency of the finished work.

Even the best writers benefit from having a great editor. J.K. Rowling may have written all seven Harry Potter books herself, but she had a team of editors ensuring everything from line level quality to the plot consistency of the overall series.

Why editors? In general, editors provide three levels of assistance to writers: proofreading (spelling, punctuation, grammar), copy-editing (phrasing, style), and developmental-editing (plot, character development, pacing, tone, and effectiveness.)

Most writers at first balk at the idea of an editor. They are professionals, after all, and incredibly skilled. Why do they need someone in between them and their readers?

The answer is two-fold: first, editors provide a more objective “second-pair of eyes” not affected by the sunk cost and confirmation bias inherent in any creative process, and second they are typically individuals who are exceptionally talented at finding errors and issues that will be perceived by the target audience.

The same applies to software products.

Even exceptionally talented engineers & designers become blind to their own work. While each function can have their own version of an editorial process, my experience has been that if product leadership doesn’t actively engage in the editorial process, the quality and the coherence of the product suffers.

Product Leaders as Curators & Editors

Most software companies have moved to a bottoms-up, distributed organization process for their engineering, design & product teams. Amazon, of course, is famous for their two-pizza team concept. As a result, the need for curation and editorial to keep the product experience coherent has become critical.

If you look critically at organizations that have a distributed culture, but still ship high quality product experiences, you’ll find that there is an accepted culture of curation & editorial in their product process, connecting all the way to the CEO.

If you are a product leader, think carefully about how you can incorporate curation & editorial into your process as you scale.

ETFs as an Open Platform

This post originally appeared on the Wealthfront Blog on March 20, 2014, under the title “Wealthfront Named ETF Strategist of the Year.” This post summarizes the content of the speech I gave at the ETF.com event in New York when accepting the award.


T
oday I am proud to announce that Wealthfront has been named the “ETF Strategist of the Year” by ETF.com (formerly IndexUniverse), the world’s leading authority on exchange-traded funds. We are especially gratified to be chosen for this award from among all investment management firms that use ETFs, not just new entrants.

At Wealthfront, we strive to build a world-class investment service and we’re proud to have assembled an unparalleled investment team led by Burton Malkiel. Over the past year, we added asset classes, released an improved and more diversified investment mix, delivered different asset allocations for taxable vs. retirement accounts to improve after tax returns, and launched the Wealthfront 500. In short, we aim to relentlessly improve our service to help our clients reach their financial goals. It’s gratifying to receive public recognition for our efforts.

Our success thus far has been predicated on a lot of hard work and a fundamentally different approach to building an investment management service. While we are different, our service owes its existence to the profound innovation generated by a relatively new financial product: The ETF.

Why ETFs?

Academic research has consistently proven that index funds offer superior returns, net of fees, over the long term vs. actively managed mutual funds. Despite this irrefutable evidence, index funds have grown their market share relatively slowly over the almost 40 years since Vanguard launched the first one in 1975. It wasn’t until State Street launched the first ETF, the Standard & Poor’s Depositary Receipts (Ticker: SPY), in January 1993 that passive investing had the proper vehicle to enable explosive growth. In just the past 10 years, ETFs have attracted almost $1.5 trillion, which now equals the amount of money attracted by index funds over the past 40 years. We believe the ETF’s success is primarily attributable to its role as an open platform.

The Power of Open Platforms

“We are especially gratified to be chosen for this award from among all investment management firms that use ETFs, not just new entrants.”

Open platforms have had an enormous impact on the technology landscape in recent decades. They enable a much wider variety of market participants, business models, features and services than closed platforms. By simplifying, standardizing & commoditizing the way applications & services interact, open platforms tend to provide far greater opportunities for diversity, innovation and lower costs.

ETFs As an Open Platform

John Bogle was extremely public about his distaste for ETFs when they first launched. By virtue of their ability to trade like equities, ETFs made it much easier to trade index funds. Active trading is the source of much of the under-performance individual investors experience in the markets — it raises transaction costs, tax-related costs, and possibly worst of all, results in market-timing errors. Passive investing was created in large part to minimize these issues.

Ironically, the primary danger of ETFs is also their most valuable strength. By providing a fund format that can be freely traded by any broker-dealer, index funds are not only released from the constraint of pricing and trading once a day, they can also be accessed by any client, from any brokerage firm. This has freed index fund issuers from the previous limitations of one-off distribution agreements with individual brokerage firms, and the associated myriad fees and subsidies. Not only can clients of any brokerage firm trade ETFs, but ETFs also offer significant improvements in transparency and facilitate much lower trading commissions.

As a result, innovative financial services can now be implemented over the custodian of choice, freeing up a new level of innovation that was extremely difficult before.

No single firm controls the creation of ETFs. No single firm controls the trading of ETFs. No single firm controls access to the ETFs that have been created. Fees have been simplified & standardized. ETFs for large common asset classes have become commoditized. Thanks to this environment we now have access to a broad, open platform of high quality, inexpensive financial products, with a far more competitive market of custodian platforms and pricing models on which to innovate. The emergence of brokerage application programming interfaces now make it possible for software experts to automate the use of ETFs in ways never before imagined.

The Future of Investing

Over the next decade, we will see increasing value created for both investors and market participants around automated investment services. With trading costs approaching zero, new strategies not only become possible, but practical.

Wealthfront is an obvious product of the ETF revolution. Despite launching just over two years ago in December 2011, Wealthfront now manages over $750 million in client assets. (In fact, Wealthfront added more than $100 million in client assets in February alone.)

Coming from the world of software, the benefits of open platforms seems obvious to us. As long as ETFs remain a relatively open platform for innovation, we’ll continue to see a broad range of new solutions for investors in the years ahead.

Make Things As Simple As Possible, But Not Simpler

It can scarcely be denied that the supreme goal of all theory is to make the irreducible basic elements as simple and as few as possible without having to surrender the adequate representation of a single datum of experience.
Albert Einstein

It has become fashionable of late, during the second coming of Apple, for a large number of consultants, executives and professional speakers to frame simplicity as an absolute good.  Simplicity, however, can have a number of negative implications for both design and usability, so I thought it prudent to highlight a few of its limitations as a guiding principal.

Ockham’s Razor vs. Einstein’s Razor

Before jumping to technology, it’s worth noting that this debate has origins in science as well.  Ockham’s Razor famously dictates that, given two hypotheses, the one with the fewest assumptions should be selected.  While not absolute, the principle is important because it shifts the burden of proof to the more complicated explanation.

Einstein (as quoted at the top of this post), pointed out the obvious: simplicity has its limits.  As a result, Einstein’s Razor is commonly stated as:

Make things as simple as possible, but not simpler.

Too many entrepreneurs and executives preaching the simple religion forget this.

Example: iPhone Home Button

When the iPhone launched in 2007, it was an extremely aggressive vision of the future of the smartphone.  Bucking the trend from 12-key numberpads to full QWERTY keypads, the iPhone debuted with just one button.

What could be simpler than one button?

iphone

Well, technically zero buttons would have been simpler.

iphone-0

Why the single button?  Apple decided this was as simple as they could get it without hiding a key function they felt people needed to be able to access with “tactile” accessibility.  Apple had decided to remove quite a bit of tactile access from the phone.  Feature phone users lost the ability to know that the “*” key was in the bottom left, or “3” was on the bottom right.  Treo & Blackberry users lost the ability, without looking, to know where keys like space and return were.

The answer? Apple decided that the importance of having a tactile method of accessing “home” was more important than enforcing that next level of simplification.  Simple as possible, but not simpler.

Wait? They Added a Switch?

Industrial design aficionados might have already spotted an issue with my previous example.  Apple may have reduced the keypad to a single button, but they actually were applauded at launch for adding a new physical control.

Apple added a hardware switch to mute the phone.

iphone2G

Along with hardware buttons for home, power, and volume up/down, the iPhone added a physical switch for turning mute on or off.

With most other dominant systems at the time (Nokia, Blackberry), turning off your ringer meant navigating from:

Home -> Settings -> Ringer (or Volume) -> Off

Now you could argue that Apple “simplified” the ability to turn off the ringer, but from an interface standpoint they added a control to their highest level of information architecture (the device) for this one function.  This is roughly the equivalent of a website adding this function to its primary header.

In the push to reduce the number of controls, simplicity gave way to an equally important design consideration: minimizing the number of steps to perform a high value action (with the added benefit of tactile access, crucial for a function you might want to perform sight-unseen, in your pocket)

Simplicity Can Lead to Overloading, Which Is Complex

Anyone who has worked on a design project around information architecture is familiar with the tradeoff.  Reducing the number of controls or number of entry points definitely simplifies the interface.  Fewer choices, less cognitive load on the user.

Unfortunately, if you have five branches at each level of a command structure, you can make 25 commands just two steps away.  If you have three branches at each level, you need three steps to reach that same number of commands.

No one wants to replicate the Microsoft Office hierarchy of thousands of commands littered across dozens of entry points.  But if your software honestly has four key functions, “simplifying” to one entry point can make the users job harder, not easier.

Wealthfront: Building Trust with Transparency

At Wealthfront, one of top priorities is building trust with guest visitors to our site.  Interestingly, we’ve discovered that over-simplification has another negative attribute: when people don’t readily see the answer to a key question, there is potential for them to assume you’re hiding that information.

As a result, our new user experience is a careful balance of simplicity, but balanced with providing crucial information to our visitors, even at the risk of some complexity.

We show our clients up front our investment choices, down to quick answers for why we’ve chosen each particular ETF.  We provide examples of both taxable and tax-deferred account allocations up front, even before the visitor has signed up for the service.

Screen Shot 2013-09-24 at 4.08.39 PM

To be sure, like all software interfaces, there are significant improvements that we can make to our new user experience.  But it’s worth sharing that our experience has been that blind adherence to simplicity can actually hurt the level of confidence and trust people have with your service.  This interface has seen the company to record growth in 2013, up over 250% for the year (as of September).

More broadly, it’s worth considering that when you bury functions and features, you may trigger emotions in your user that aren’t positive:

  • Frustration. They don’t know where to look for something they want.
  • AnxietyThey worry that the thing they need is no longer supported.
  • Distrust. They assume that you are hiding something for a reason.

So remember, when someone preaches the religion of simplicity, think carefully about Einstein’s Razor.

Make it as simple as possible, but not simpler.

My Letter to Starbucks Mobile

Dear Starbucks,

We’ve been close friends for years. I see you almost every day, some days more than once. I’ve visited you in over half a dozen countries, and there are probably half a dozen locations in Silicon Valley where you know me and my drink by name. I’ll be there for you when you need me, and I know you’ll be there for me when I need you.

My girlfriend at Starbucks, Cambride, MA in 2000

My girlfriend at the Starbucks in Harvard Square (2000)

That’s why we need to talk. About your mobile app and the app marketing it uses.

Starbucks Mobile is a Homescreen App

I use your mobile app every day. I love that it works in different countries. I love that it auto-reloads, and it (finally) gives me free drinks without the annoyance of postcards in the mail. And I will tell you, the Starbucks store-finder is a life saver in more ways than one.

Home Screen

It’s on the homescreen of my iPhone 5. Not in a folder. 2nd row. It’s #8 with a bullet.

I want you to know me

There are barristas at five different Starbucks who know the drink I normally order. The one in Los Altos actually knows the drink I usually order for my wife too. And yet, after over 1000 orders, you still don’t know my favorite drink?

The Starbucks app should:

  • Know what drinks I’ve ordered, and rank them by the number of times I’ve ordered them.
  • Know what I’ve tried, and what I should try.

Your best barristas try to know their customers & their drinks. Why not your app?

I want to know where I’ve been, and where I’m going

I’ve been to dozens of different Starbucks. If I drop the kids off a school, I might grab my morning drink at the Starbucks on Alma. If I’m late, I might go straight to the office, and walk to the one on University. If I’m heading to San Francisco, I’ll stop at the one in Los Altos before jumping on 280.

The Starbucks app should:

  • Have a hot list of Starbucks I’ve visited, ranked either by recency or by frequency
  • For each visited Starbucks, show me when I visited them last. Show me what I ordered.
  • If I break pattern, it’s even OK to suggest a drink to me.

You could know all of this, of course. But you don’t care.

I want you to care about my opinion

On most days, your barristas do a great job. But did you know that the line at the Los Altos location is really long during the week? Or that the Starbucks on Alma is the fastest?

Did you know that sometimes, your barristas see me, place my order, and have it made before I get to the head of the line?

I want to tell you these things. I want to let you know when your barristas are amazing. I want to tip them. I want them to get promotions. I want them to know they are appreciated.

The Starbucks app should:

  • Let me tell you when the line is long (like Waze)
  • Let me tell you when I waited a long time for my drink
  • Let me tell you when my drink was made poorly
  • Let me give kudos when my drink came quickly
  • Let me tip when my drink came quickly
  • Rank drinks and user reviews (like Movie Box)

Your mobile app eliminates tipping, and devalues my relationship with the barristas. It should be the other way around.

I want you to save me time

I love the Starbucks experience. But the truth is, I go to Starbucks for four different reasons, in order of frequency:

  1. I go for my daily coffee on the way to work.
  2. I walk to Starbucks for a meeting.
  3. I go to Starbucks as part of a social destination.
  4. I go to Starbucks to relax and read.

The problem is, you seem to only care about the last 3. For the first use case, I just don’t have time to kill. I’m alone, and I need to get in and out as quickly as possible. I love you, but sometimes I just don’t have time for the experience. I promise, we’ll catch up later.

The Starbucks app should:

  • Know my favorite orders
  • Let me order & pay for them before I get in the car
  • Have them ready for pickup when I arrive
  • Let me know when the order is ready

If you are worried about the casual user not getting the “Starbucks experience”, I understand. Maybe this should be a perk for being a frequent customer?

Last Thoughts

Since we’re being open and honest, I might as well tell you what no one else is. Just stop with the nonsense with the app of the day, song of the day. You are giving me a red badge on my app EVERY DAY for something that no one wants. It’s beneath you. You are better than that.

Notify me because you have a new drink, and since I’m such a loyal customer, I get one free.

Notify me because 95% of the time I’ve visited Starbucks on Wednesday by 10am, and check to see if I want one today on the house?

I don’t want to hear about wireless charging mats. Seriously.

I love you Starbucks. Tell me you love me back.

How to Recover the Left Side Navigation in iTunes 11

I can’t believe I’m writing this blog post, but I am.

Last night, I tweeted out my joy at finding out that Apple did, in fact, provide a menu item to re-enable the side navigation in iTunes 11.  Now, while I’m not a huge fan of the complexity and modality of the older iTunes interface, there is no doubt that after using iTunes 11 for a week, you wish for the halcyon days of the left navigation bar.

Surprisingly, enough people tweeted and commented in gratitude that I realized I should probably summarize in a blog post.

iTunes 11 – Default

This is the iTunes 11 default interface. (Try to ignore my taste in movies for a second)

Screen Shot 2012-12-18 at 9.09.42 AM

iTunes 11 – Sidebar

This is iTunes 11 with the sidebar enabled.

Screen Shot 2012-12-18 at 9.14.16 AM

All of a sudden, the shockingly horrid modality of the iTunes 11 default interface is resolved.  You can easily select which sub-category of content in your iTunes library you want to browse, and viewing connected devices and playlists has once again become trivial.  It turns out, you still end up with the horrid choices for navigation views within a “domain”, but at least we’re 80% of the way back to the (limited) usability of the previous iTunes interface.

Wait, How Did You Do It?

It’s hidden under the View menu, “Show Sidebar”

Screen Shot 2012-12-18 at 9.13.27 AM

Simple does not mean Easy to Use

Just as cuffs, collars and neckties are subject to the whims of fashion, so also do memes in design tend to come and go in software.  I think iTunes 11 represents a bit of a teachable moment on a couple concepts that have been overplayed recently, and what happens when you take them too far.

  1. Consistency does not always lead to ease of use.  Having a more consistent interface between the iPhone, iPad, AppleTV and Mac OS renditions of iTunes may seem like an “obvious” goal, but the fact is all of these devices vary in terms of input mechanisms and use cases.  The truth is, many users sit down at a desktop for different tasks than they sit down at a TV for, and the interface of the desktop is optimized for those tasks with large, high resolution screens and a keyboard.My best guess here is that Apple optimized the interface for laptops, not desktops, and for consumption, not curation. However, Apple would have been well served to provide a “first launch” experience with packaged pre-sets of these minor configurable options, to let users who are upgrading easily identify their primary mode of operation.I would love Apple to take a more proactive stance on how to build applications and services that provide elements of commonality across the multitude of devices that users increasing use to author, curate and consume content with, without blind adherence to making everything look & behave “the same”.
  2. Simple does not mean easy to use.   On the heals of Steve Jobs mania, it has become ultra-fashionable to talk about simplicity as the end-all, be-all of product design.  The fact is, there is often a trade off between reducing the number of controls that an application (or device) has, and introducing increased modality for commonly used functions.  The one button mouse was, in fact, simpler than the two button mouse.  However, it came at the expense of pushing a significant amount of functionality into a combination of selection and menu modality.Look at the poor “single button” on the iPhone.  Simple, but now stacked with modality based on the number and timing of presses.Designers would do well to consider the balance of simplicity, accessibility and the difficult decision of which functions are so key to an application that they require “zero click” comprehension of availability.  For iTunes 11, the hidden modality of managing the devices synched to your iTunes library is unforgivable. (The likely sin here is being too forward looking. As we move to iCloud for everything, the need for devices to be tethered to iTunes goes away.  But we’re not there yet with video.)

I hope this helps at least one person out there have a better experience with iTunes 11.