Tech Brew Ride Home - (Bonus) Tech Giant Psychoanalysis With Alex Kantrowitz

Episode Date: April 11, 2020

I couldn’t tell you the amount of times, over the last two years, I’ve quoted pieces from Alex Kantrowitz on this show. Hundreds of times? Easy? Alex is the senior tech reporter at Buzzfeed News, and, while I don’t have favorite people to quote from on this show (I shouldn’t anyway) the sheer number of times I quote from someone should tell you something about the amount of news they break. The insights they have. Alex has an amazing new book out called Always Day One- How the Tech Titans Plan to Stay On Top Forever. And as I said yesterday, it’s an amazing breakdown of not only the cultural DNA of each of the tech giants, but also a useful playbook to their success… a way to understand how they do what they do and why they win more often than not. Amazing book. Anyone who listens to this show every day will find it useful in informing the competitive analysis we always engage in. Sponsor: Tovala.com/ride Buy the book here! Always Day One - How the Tech Titans Plan to Stay On Top Forever Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the Tech Meme Right Home. I'm Brian McCullough. I couldn't tell you the amount of times over the last two years of this show that I've quoted pieces from Alex Cantorwitz on this podcast, hundreds of times, easy. Alex is the senior tech reporter at BuzzFeed News, and while I don't have favorite people to quote from on this show, or at least I shouldn't anyway, the sheer number of times I quote from someone should tell you something about the news. the amount of news that they break, the insights that they have into the tech industry. And Alex,

frankly, is among the best. Alex also has an amazing new book out called Always Day One, how the tech titans plan to stay on top forever. We talk about that book today. And as I said yesterday, it's not only an amazing breakdown of the cultural DNA of each of the tech giants, but it's also a useful playbook to their success, a way to understand. how they do what they do and why they win more often than not. It's an amazing book, and anyone who listens to this show every day will find it useful in informing the competitive analysis that we always engage in. Please enjoy. So on this podcast, kind of, I've joked before that what we end up doing a lot of times is like psychoanalyzing the big tech companies, you know,

kind of to see why they are the way they are, like try to understand, not only why they've been so successful like you do in this book, but also just to understand how they tick, you know? And so it's, I really love this book because, you know, you pick, you know, five of the big tech behemists. But in the aid of, I know you were trying to analyze how they've been so successful, but I feel like you also put them on the couch in a lot of ways to understand why they do what they do. I'm curious, did you set out to try to understand them better, or were you trying to reverse engineer how they work? What was your goal? Yeah, thank you, Brian. You know, I think that when I started out with this book,

figuring out how they tick was a big part of it for me. I mean, it was definitely encapsulated in this larger question of why have they been so successful and what is behind, like, the culture and the leadership and the process and the technology that's made these companies thrive on most big companies fall apart. But as a reporter every day, we don't just cover the actual stories, but we want to learn a little bit more about the physiology of these companies. You know what's going on in their leader's heads and the rank and file, employees' heads that ends up leading to the outputs that they spit out. So for me, it was like, you know, my day-to-day is mostly about the outputs. Here's what this company did. Here's what this company did. And this one, I really wanted to

dig into the machine. And I think that once you understand the machine, you start to understand why the companies make the decisions they do and why we see the headlines that we do about them. Yeah, you're really kind of explicit about that there's no one formula. There's no one thing that they all share, really. Each one is different in subtle ways, which we're going to get into in a second in pretty granular ways. But it also struck me to continue the cycle analysis theme of it. that what they all do have, and this is going to sound cliche, as I say, is a fetish for innovation. But I mean that, like, there's no benign management going on here, like, no, you know, just keeping the lights on management on any one of these companies. Like, to one degree of success or another, they're all trying to shock themselves into the new all the time.

Like, for none of them do they ever feel like they're winning? They're always only obsessed with how to win at the next thing. Yeah, that's right. And I think they know it well. I mean, in the 1920s, companies would last on the Fortune 500 for 67 years. Today, it's about 15 years, and it's probably even less if you're a technology company. So they know what's coming. I mean, they have been companies that have already come from behind and taken other companies out, and they realize how easy it is, especially in the age of cloud computing and artificial intelligence, where it's pretty easy to spin up a company, or I'll say, easier than ever. They know that there's going to be a competitor. There always are competitors, whether it's their fellow tech giants or smaller companies that are coming up to try to take their bread. And so they do try to invent themselves out of this problem. They know that if they stay on what they're doing today, they're going to miss the future by a long shot.

And that's why you see these little mantras in each one of these companies. The book's title is always day one at Amazon. And that comes from Amazon. Amazon always is working as if it's its first day. not getting attached to its legacy and its current products and trying to invent the future. And inside Facebook, it's 1% done. And inside Microsoft, it's hit refresh. So I think that's part of the reason why we see these companies being so successful

is because they do have this belief that if they stick to what they're doing. And as you said, try to spend their time keeping the lights on, those lights will go off. And what they really need to do to stay ahead, to stay successful, is focus on, you know, the next day and the day after that, as opposed to what they're doing today and what they did before. Well, let's start with Amazon then if you're game to put them all on the couch one by one. Oh, yeah. Let's do it. So you say that Amazon practices democratic invention. What does that mean? So to me, that means that Amazon has worked really hard on building pathways for anybody inside the company to get their ideas in front of decision.

makers. You know, in a typical company, you have an idea, you tell that your boss, your boss tells their boss, their boss, et cetera, et cetera. And if anyone along the chain says no to that idea, you're in big trouble. You're not going to get that thing made. And what Amazon has done is they've created this democratic invention process where they want to make sure that if you have an idea, you have a chance to get it in front of a decision maker with as little friction as possible. And then if that idea works for Amazon, they'll work to bring it to life. So I think people talk a lot about the six-pager idea inside Amazon, which is instead of PowerPoint, everybody inside Amazon writes their ideas in a document, and they use this document where they all sit

silently at the beginning of the meeting and they read it, and then they start discussing. And I think the focus on this six-pager and the silent meeting has largely been on how it clarifies thought, which is true. It's much more difficult to lie to yourself. if you're writing something out sentence by sentence, if you're creating a PowerPoint. So it definitely helps shape ideas inside Amazon. But I think the biggest thing about the six-pager is anybody can write them.

And once it's out there, once that idea is on paper, that thing can move like lightning inside of Amazon and make sure that your idea doesn't get caught in the bureaucratic mess. At the same time, though, you describe a culture of, if I'm going to be blunt about it, is that Amazon sort of encourages people to always innovate themselves to the point of innovating themselves out of their job, or at least the role that they've maybe even been successful at. Like, they're taking this idea of always be, whatever good idea go run with it. They take it to the extreme of run with it until, like, you basically

make it so efficient that we don't need what you were doing before. Yeah, that's right. Amazon employees the thing, every time I speak with them, it's so weird because they're actually eager to invent themselves out of a job. You know, they always say to me, Alex, you know, the thing that we need to do is make sure that we can, you know, we can make sure we work ourselves out of a job, take any processes that we have that we don't need to be doing, and set them to the point where essentially it could be taken over by machines. And there's this leadership principle inside Amazon. So Amazon has these leadership principles. There's 14 of them. People live by these principles as if their, you know, their religion. They teach them to their kids. People who marry their colleagues end up using these

principles in their marriages. And one of the big ones is invent and simplify. So the idea is you create a new product and then you find ways to simplify all the processes that are standing up this product to the point where you can go out and invent again. So the idea is, I mean, sort of cliche to use this term, but it's really creative destruction. The idea is let's invent a new product, stand it up in whichever way we can using the technology that we can to support it. And basically, once we've worked ourselves out of a job that way, we'll go on and create the next product. And that's how they do it again and again. And you see how Amazon's transformed itself over and over, you know, from a bookstore to an online clearinghouse that sells just about everything to a big

third-party marketplace, to a fulfillment and logistics company, to a cloud services company, and a grocer and an Academy Award winning movie studio, not to mention a pretty successful hardware producer and a voice computing platform. So this is really how it goes. The idea is build the thing, find ways to simplify all the process, standing it up, and then invent again. You, with Facebook, you say that Facebook has a culture of feedback, which on the face of it sounded immediately contradictory to me, because if you buy into the perceived image, of, you know, their tone deaf, you know, we'll do what you want, we'll tell you you like a product because we know you like it even if you claim you don't or whatever. But there's some pretty,

you know, obvious historical precedents here and anecdotes and stories that you relay that are like, it did make sense when you laid it out that whether or not he takes your input, Zuckerberg wants your input. Yeah, that's right. I think there's this misconception that, that taking feedback means changing based off of feedback, there has to be this balance between what you listen to and what you act on. If you acted on what everybody else said all the time, you wouldn't have a spine. And I think that, yeah, it's kind of weird to talk about Facebook as having a culture of feedback. Everybody knows they're not really receptive to a lot of stuff that comes from the outside. And even Zuckerberg's right now on his media tour

or has been early this year before the coronavirus hit, talking about how his main goal was to be understood more than liked, which sort of means like we're just going to do it our way. But the company on the inside is built entirely based off of this idea of feedback. There are posters around the headquarters that say feedback is a gift, major meetings and with requests for it. And there are day-long trainings, which I wrote about in the book and actually attended, where employees are taught how to give and receive feedback. think that's really critical. It's part of this thing that we were talking about earlier on in the conversation about how these companies have this, as you put it, fetish for innovation. I would call it

passion for invention. They're addicted to the high they get off of invention. And the idea for Zuckerberg really is that inside the company, he wants to hear everyone's ideas, and he won't just roll with his own ideas. So I don't think he really acts as, you know, the typical Silicon Valley visionary. I think he really runs Facebook as a facilitator, bringing other people's ideas. to life. And the whole idea is that if you're going to invent your way out ahead of the competition, it's not just going to come from one person. It's going to come from everywhere. And so this idea that people in Facebook are pulling each other aside at all times and saying, hey, I have some feedback for you really means that if there's an idea out there that's good, that can be good for

the company and help it transform in a way that will keep it relevant, then that idea is going to be hurt because people don't have a problem going to their skip level manager or even bringing to Zuckerberg himself an idea that can help Facebook get ahead. And we've seen Facebook just like Amazon, you know, transform itself from an online directory to a sort of broadcast platform where the news feed is central. And now it's going through another reinvention where it's going from this broadcast platform to a network of networks where groups and stories and messaging play a major role in the way that that company is going to, you know, I guess, mediate our conversations in a way that it hadn't before. Well, and you miss the,

the big example that you had in the book, which is the famous pivot to mobile, Zuckerberg had to be talked into that one. You even say, I think, that the impression is that it was his great insight from on high that mobile is going to change everything, and we've got to be mobile first. But in reality, it was something that he had to get people to take him aside and be like, no, you're not taking this seriously enough. We've got to go whole hog. Yeah, and that's sort of a wild story. I mean, people do give Zuckerberg all the credit for making this switch to mobile. And, you know, as the CEO, he deserves some of the credit for sure. But Facebook was, so when Facebook had to endure, like, had to adjust to go from people are accessing our service on desktop to accessing our service on mobile. Zuckerberg was very attached. So the move fast and break things mantra inside Facebook was really just an idea that the company was just going to iterate, like, like crazy. And in order to iterate like crazy on the desktop, you know, you actually would

script the site in a way that you could update, you know, an unlimited amount of times. And all it would take would be a refresh of the browser in order to bring up the new site. On mobile, it worked very differently, right? So you had these app stores and the app stores would approve these updates in a much slower cadence. So you couldn't update your app a thousand times a day. maybe you were lucky if you could do it once a week when they were starting out. And so to get around this, what Facebook did was they built this wrapper code, which basically showed the app stores, hey, this is an app, but the second you tapped into the app,

you were basically using a browser version of Facebook. And this allowed Facebook to keep iterating quickly, but the problem was that it wasn't really working very well on phones, and it kept breaking. And I think people who used the Facebook app back in the day, you know, remember that it kind of sucked. And so Zuckerberg was so attached to this development philosophy because it was just built into the culture that was move fast and break things culture. And they were talking about breaking the site, not necessarily society, although they eventually got to that.

And they actually didn't even have developers capable of building natively inside apps. And so Zuckerberg was really resistant of the idea of changing this, the way that the company would code things up. And it did take an executive named Corey Andraika to basically pull him aside, you know, after one of his Friday Q&A's that he did with the entire company and say, listen, man, like if you're going to keep going this way, we're going to be in some deep trouble. So Zuckerberg said, okay, he gave him a little bit of room to start building a prototype. And then when Andraka came back and said, okay, this is how we're performing versus how your app is performing. he relented. But yeah, there was definitely resistance from Zuckerberg at first to say we should go this route. But the key is, you know, he did listen to someone who told him he was wrong inside the company, took the advice, and they coded Facebook the right way for mobile. And now we see that, you know,

it's it's a dominantly a mobile app versus a desktop website. Apple, conversely. Apple, yes. Very much a top-down culture. No democratic invention for them, I don't think. A lot of silos and secrecy, which we kind of, I mean, obviously we all know that, but it's funny. Having you lay it out in the book made me realize, especially right after comparing all these other companies, how antithetical they are to modern Silicon Valley's in startup culture. So if Google is a culture of collaboration, what's the Apple culture? I think Apple is a culture of refinement.

These silos in secrecy that you mentioned have made them really, really good at refining one product. So the iPhone is just like the best phone on the market. There's no question about it. I have it and I love it. But what they've done is basically they've created these silos where experts just sort of get better at working on what they're doing. So, you know, the screen gets better. The processing gets better. The battery life gets better and better and better.

But the problem with that is you end up focusing so much on your flagship product. You will eventually end up missing the next thing whenever it comes because your company won't be in position to be able to build for that because you just don't have the cross-pollination of ideas that the others have. Nor do you really have the mindset where you're able to say, okay, well, you know, our key thing isn't going to be that important, you know, somewhere down the line. and then we're going to find ourselves playing from behind. And that's what happened with Microsoft with Windows. I mean, we can go a little bit more deep into Apple, but I think Microsoft is like a good counter example. Yeah, jump to Microsoft, and then I'll come back with one Apple question after that.

Yeah, yeah. So Microsoft became so myopically focused on Windows. It couldn't pay attention to anything else. And so it missed the mobile transformation, and obviously never really got a hold in the mobile space, neither with devices nor an operating system, despite the fact that it was the dominating operating system on desktop with Windows. And it basically just took someone like Satya Nadella to come in and check the company up and say, listen, we've been focused on milking this asset windows our

entire lives. And guess what? The desktop operating system isn't going to take us very far if we want to run that asset, get the most out of that asset for as long as we can. And you saw the transformation, coming. There's an old quote from years ago that I can never remember who said it, but someone said at one point, like, Microsoft needs to remember they're a software company, not a Windows company. Like, there's a definite distinction there, yeah. Definitely. Yeah, and that's what Satya turned them into, right? I mean, they became this services company as opposed to this operating system. And it's amazing because actually, the things that he was working on, cloud, actually threatens Windows, because if you end up facilitate people using,

cloud the cloud not only do you potentially lose some of your servers customers who are determined to keep their servers in their own offices but when people can access software on the internet they don't need a specific operating system you know your browser is the same whether you're on a Windows machine or whether you're on an on yeah an Apple device or whether you're on a Chromebook so it's actually kind of this amazing move that Microsoft made by saying listen like we have this asset we're not going to continue refining it. We're actually going to focus on the future, even if that means we might weaken Windows. And they did. I mean, now you can use, you know, a MacBook at work because

you can get all the software you need on the browser. And Microsoft, it's amazing that Microsoft was actually, you know, part of the wave that helped build, you know, prop up the companies that built on the cloud because of the way that it diminished its own asset. But its ability to think of this and change its culture from one that was very similar to Apple, very siloed. didn't really care about ideas coming from anywhere to one that's much more collaborative and one that elevates ideas is a big reason why Microsoft has gone from sort of an afterthought and a joke to a very important company today. And I think that if Apple doesn't want to suffer that same fate, you know, it should start rethinking the way that it operates and not necessarily be this culture of

refinement, but be one that's open to new ideas. And now maybe we can get to the second part of your Apple question. Yeah, well, what I was going to say is you say in the book that maybe the culture of secrecy and silos is no longer working for them. And specifically, and this may be as a tangent, but it kind of ties in. You go off for a period of time talking about the Car Project, Project Titan, and how maybe it is that sort of top-down authoritarian design edict, you know, sort of style that might be a reason, why that project is struggling so much? Yeah, that's right. I mean, listen, the thing that the thing that Apple needs to do is realize that if it's going to get to this next phase of its life, and it really wants to move beyond the phone.

I mean, its ambitions are there, right? It wants to be a voice computing leader. It wants to be a leader in autonomous driving. And I think in order to do that, it has to sort of take away some of these processes. So if you are refining an iPhone, it's okay to leave people in silos because, okay, so the screen gets better, the battery gets better, the processor gets better. But when you build something like a self-driving car, you need all of the parts to be able to speak to each other. One example I give in the book is I had someone who worked on this project told me that, okay, so this is a design controlled project or has been very seriously influenced by design inside the company. And design didn't like the fact that you see a typical self-driving car and it looks like

this really ugly rolling submarine on wheels where there's all these different appendages, cameras, and sensors. And let's be honest, it's not pretty to look at. It's kind of like freaky looking thing. And so the Apple design team said we want to put the sensors and hide them a little bit inside the car to make it look a little bit nicer. But that ended up limiting the amount of data the machine learning engineers could get to actually help the thing drive on its own, which caused a lot of frustration.

So I do think that, yeah, I think that if it continues to look at its new projects as iPhone refinements or as refinement projects versus something that it can, you know, work to invent and sort of strip away all the rules that it's used to get itself to this place, if it doesn't strip those rules away, it's going to be in trouble. But if it's able to revise the way that it works its culture, I think it, you know, it's a very impressive company that they've accomplished a, many incredible things, despite people telling them that they weren't going to be capable of it. And I think if they make these culture shifts, we're going to see some further amazing invention from Apple. But again, it starts with the culture, and I don't think it's really there yet.

Final question. Do you, I feel like you wrote this book to, like, teach people, again, like, why these companies have been so wildly successful. But when you were writing it, did you feel like were speaking more to other startups, other tech companies who could learn why those at the top are at the top, or was this more for companies outside of tech to understand how tech companies work? Like, I'm just curious in your ideal world, who do you wish would read this book the most? Yeah, so I think that if you ask me, like, how did I picture the audience as I was going through it? I wrote it for, like, a pretty broad audience. Like, I think that if you are a, a tech company competing with the tech giants, this is great for you, right?

Because you start to learn some of their processes and maybe you want to bring them in-house. And you're probably a little bit further ahead on being able to use some of the technology that I talk about in the book, the technology that can bring down some of the support work can give you room for invention. A lot of times that involves, you know, machine learning. But I have to say, I had an interesting experience early on where I went to this automation conference in Miami. And I looked around at the companies, and I think that's an automation, you know, the fact that these companies were at an automation conference kind of shows that they have the building blocks to start to put some of this in place. You know, and as I looked around, I saw banks there. I saw Walmart was there. I saw Toyota's carmakers.

And basically any different type of business you could imagine was there. And so I think anybody working in the business world today, it's moving fast for everyone. I mean, we definitely are going to have to kind of wait out this coronavirus impact and see how it changes things. But I think every company in the economy today needs to adapt and needs to adapt quickly. And many of them don't have the manual to do it. And that's why you see so many of them not able to reinvent themselves and end up falling apart because they can't handle the change. So I think that this book is applicable to people in the tech industry for sure. I think they'll probably get the most out of it.

But if you're working in the car industry in Detroit, you're working in the technology. You're working in the banking industry in New York. You know, you're working in Hollywood in L.A. I think that there's definitely things that you can learn from it. And I definitely wanted to write it, you know, broadly, descriptively, not prescriptively. So people can, you know, there's no bullet points at the end of the chapters that say you must do A, B, and C. It's simply a collection of, you know, I think, I really believe that people learn the most from stories. So simply a collection of stories with a thesis.

just in the beginning, that shows how things work inside these companies. And they do. They really do have a head start on the rest of the economy because they've been able to build, you know, these processes and most importantly incorporate the technology in their own workplaces before anybody else just because they're so advanced in terms of being able to create this stuff. So the rest of the economy will catch up. And, you know, I hope that this book can give everybody out there just a little bit more

knowledge to help them stay afloat in a very challenging business environment. The book is, again, always day one, how the tech titans plan to stay on top forever. And as I said at the top, anyone that listens to this show every day where we, you know, sift through the tea leaves, do the Kremlinology on these companies, it's an amazing, really intuitive deep dive into how these companies work. Thank you, Alex. Thank you, Brian.