The Chris Voss Show - The Chris Voss Show Podcast – Building Insanely Great Products: Some Products Fail, Many Succeed? This is their Story: Lessons from 47 years of experience including Hewlett-Packard, Apple, 75 products, and 11 startups later by David Fradin

Episode Date: May 2, 2023

Building Insanely Great Products: Some Products Fail, Many Succeed? This is their Story: Lessons from 47 years of experience including Hewlett-Packard, Apple, 75 products, and 11 startups later by David Fradin https://amzn.to/41Y0j2e Building Insanely Great Products: Some Products Fail, Many Succeed…This is their Story is dedicated to one goal: To help you learn how you can enhance the chances of product success and reduce product failure. Steve Jobs coined the term “Building Insanely Great Products” and this book with many real-life examples tells the story of what he meant by that phrase and how every organization can build insanely great products and services. Building Insanely Great Products covers the six keys to success, how to do market research, the importance of customer loyalty, innovation and design, using personas for development and not just marketing, determining the product’s value proposition, the correct way to prioritize product features, market sizing that works, market segmentation, product positioning, distribution strategy, product lifecycle framework and process, and the customer journey and digital transformation. As Steve Johnson, the grandfather of product management training says: “... we’ve learned that companies often don’t know why they succeed and why they fail. Many rely on luck; too many rely on “HIPPO”—the highest paid person's opinion. And if you don’t know why you succeed, you won’t know how to succeed again. About David Fradin David Fradin was a classically trained product manager at Hewlett-Packard during the 50 years that HP grew 20% a year. Apple recruited him to bring the first hard disk drive on a personal computer to market. He soon rose in Apple’s management ranks to the same level as Steve Jobs by heading the Apple /// product line and providing the profits which helped fund the development of the Macintosh. Since 1969 he has worked on over 75 products and services, at 25 small, medium and large organizations and eleven startups covering hardware, software, services, internet, SaaS, mobile, advertising, online training, video and for non-profit public policy associations and political campaigns.

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. The CEOs, authors, thought leaders, visionaries, and motivators. Get ready, get ready, strap yourself in. Keep your hands, arms, and legs inside the vehicle at all times because you're about to go on a monster education roller coaster with your brain. Now, here's your host, Chris Voss. Hi, folks. Chris Voss here from thechrisvossshow.com, thechrisvossshow.com. Welcome to the the big show my family and friends we certainly appreciate you joining us today to the big wonderful intelligent podcast that we currently put on in the chris voss show for 14 years we've been doing this and uh we'll just keep on doing it how's that for fun

uh anyway guys be sure to go to goodreads.com for just chris voss go to youtube.com for just chris voss and all those crazy places on the internet as well uh we just recently launched uh a new uh vertical for artificial intelligence ai podcast with chris voss you can find it ai chrisvoss.com and uh we've had a lot of great artificial intelligent authors on the show and leaders thought leaders over the years and we've uh started porting some of that data over to that vertical and we're probably doing a lot more interviews of artificial intelligence, so stay tuned as well. But as always, we have the most brilliant minds, the hottest new authors on the show, and we have another one on today. He's the author of an amazing array of business books and smart, brilliant idea books, as you would say it.

The book we'll be talking about today is Building Insanely Great Products. Some products fail, many succeed. And this is their story, lessons from 47 years of experience, including Hewlett-Packard, Apple, 75 products, and 11 startups later. This came out in 2016. David Frayden is on the show with us. They're going to be talking to him about his books and what he's learned and what he's teaching. So we'll be getting into that and all the stuff that he has to share with us. He was classically trained as an HP product manager.

You may have heard of Hewlett Packard. They've been around for quite some time and they do all the great stuff out there. Then he was recruited by Apple to bring the first hard disk drive to PC to market and later became the Apple Business Unit Manager. I have some problems with our little screen here. He's the author of Building Insanely Great Products, Organizing and Managing Insanely Great Products, and widely published Successful Product Design and Management, now available on Amazon. At Apple, at the business unit manager, he was at the same level as Steve Jobs.

He's trained companies such as Cisco on these topics worldwide, and his mission is to help products succeed. Welcome to the show, David. How are you? Good. Great. Thanks for having me. There you go.

There you go. And give us a.com or wherever you want people to find you on the interwebs, please. It's the name of my company, Spice Catalyst, one word,.com. There you go. And so let's talk a little bit about your history, your origin story. What got you into technology? What got you into HP and some of these different things? How did your life growing up influence you in this way?

Well, when I went to the University of Michigan, I started the flying club there. At that time, they didn't have one. And the head of aeronautical engineering, aerospace engineering, Wilbur Nelson, who was on Lyndon Johnson's supersonic transport advisory committee, asked me if I'd be interested in organizing a nationwide student organization in support of the SST, which I did. And by the end of my sophomore year in college, I had testified before Congress, and I had 40 chapters, about 15,000 students as members across the country. When the SST was shot down, it was shot down because it was perceived as being anti-technology.

This whole anti-technology feeling in the United States in the early 70s, technology was being blamed for all of our environmental problems. When in reality, technology is nothing more than the organization of knowledge for practical purposes. And depending on how you use it, it could either be good or for bad, similar to the debate that we see today on artificial intelligence. So that's what got me into technology. I branched out into an interdisciplinary technology program at Michigan, which included the business school, and moved the headquarters after I graduated to Washington, D.C., lobbied Congress successfully to build the space shuttle, lobbied Congress unsuccessfully on project independence

so that we wouldn't be dependent upon foreign oil and coal. And that eventually led through Minnesota and running the Environmental Balance Association to being recruited by Hewlett-Packard, and they then moved me out to Silicon Valley. There you go. What was that like to lobby for the launch of the space shuttle or to have it built? It was a lot of fun.

I testified before the aeronautics and astronautics committees, wrote several studies on the subject, studied and surveyed student attitudes towards it. And in fact, in one of my testimonies, Tom Heppenheimer, who co-wrote my testimony with me,

inserted in the appendix a short story from Arthur C. Clarke called Death of the Senator. And the notion in this story was that the United States Senator had a weak heart and they thought if they put him up into space for six months, his heart could recover. And as a result of that, the United States had defeated its space shuttle in this science fiction story and he had to go up into space on the dreaded Soviet Union's space shuttle.

And Arthur, who was living in Sri Lanka at the time, saw that I had inserted his story in the congressional record, sent me a letter, that's what we used to have, snail mail, and said, hey, I'm going to the American Association for Advancement of Sciences annual meeting in New York. Are you going to be there? And I wrote back, said, yes, I'm a member of the youth committee or the youth council for AAAS. And he invited me and took me out for lunch at the national press club of which he was a member and uh if people don't know who Arthur C. Clark is it was his uh short story the sentinel which was made at 2001 a space odyssey yeah yeah well this is an interesting journey in fact a couple days ago, I just posted old videos I found of me visiting

NASA. It was the Air Force Base in California when they flew the Endeavor out to be put in the museum and retired it. And I got to go tour the 747. There's a video I have where I'm literally with 20 feet of being able to touch the space shuttle

on top of the 747. And we got to see it land, which was amazing. And they also, and the F-16s, I think it is, also blew by us and gave us a run over, whatever it's called, a blow by. It's the Vandenberg Air Force

Base down in Southern California. Yeah. And so we got a full NASA thing. It was, we got to meet the guys who flight the crew. So, I mean, I, and I grew up with the whole romanticism behind the space shuttle, you know, that you just watching it fly for the first time. I didn't get to see it, you know, just watching on TV, but you know, the whole experience of it and, and, and the arc of that whole thing was beautiful. So then you, then you go to HP, Hewlett Packard

and tell us about your experience there. Well, I joined the corporate PR department to help site new facilities around the country. And they hired me because I was at the time only one out of two environmental mediators in the world, helping resolve major economic, environmental and energy disputes, of which I did a couple of, including the reserve mining dispute. One of the things I noticed is that there was some word processing available on the HP minicomputer, and the only department in the entire company that knew how to type was the PR department, because we all had to know how to type in order to

be journalists and do public relations. So I integrated and brought in HP Slate, which was the internally developed word processing program and automated the 30 people in the department. One of the nice things about Hewlett Packard is that they allowed you to move horizontally. And I realized that what I had was all of the skill sets required for product success, or as they called it at the time, product management, which had evolved in 1938 out of Procter & Gamble, which was originally called brand management. So this whole career field of product management, where some people say you're the mini CEO of the product developed. And I moved over to product management in the information network division at Office Systems, brought several products to market.

And that's when Apple recruited me to bring the first hard disk drive to market for the HP, excuse me, for the Apple III. And it was an enormous drive. It was five megabytes in size. And it was really, really cheap. It was only $3,600. Sure. And nobody could understand how and why anybody would ever need that much space. And it did hold but 36 floppy disk drives 143k floppy disk drives so after a little while the

management noticed that i knew how to manage and the last product manager for the eight the apple 3 had left the company and the product manager before that is the guy that went off and started the electronic arts a fellow by the name of trip hawkins and the product manager before that is the guy that went off and started the electronic arts fellow by the name of trip hawkins and the product manager for the apple 3 before that was a guy by the name of steve jobs and i've heard of him yeah and they had screwed things up royally such that when the product was shipped to the dealers it was dead on arrival and they found it was because they had used such closely printed printed circuit board and the types of seating from the chips that the chips would work loose

and the other thing they did is they released the product without any software an amazing feat that only steve jobs could repeat again with the Macintosh a few years later. So they asked me to come over and be the Apple III group product manager, which I did, and they gave me three people. Gave me full responsibility for the product line, but no authority. That was retained by all the other departments and divisions throughout the company. And then after I was on the job for about three weeks, here I was, my product was producing about $600 million a year in revenue at a 43% margin,

which is a pretty good group of profits. But Steve had it in his bonnet that he had to get rid of the Apple III and get rid of the Apple II, even though they were producing the profits for him because he felt that they were occupying a portion of the market that he wanted to grab with his still yet unannounced and unshipped uh backintosh wow so he convinced the executive committee committee to cancel the product line and about a week after that i got called into john scully's office and

he said uh we've got 20 million dollars worth of piece parts which would be about 250 million dollars today spread in our across our manufacturing facilities from singapore to cork island went to dallas what should we do about it and i said what, what do you mean, we, paleface? And he didn't laugh. So I had explained to him that back in the 50s, there was a television show called The Lone Ranger. And there's been some movies made since. And he had an American Indian sidekick by the name of Tato. And they're galloping through the desert of Arizona.

And they get surrounded by 10,000 yelling, screaming Indians. And The Lone Ranger turns to his American Indian side sidekick I have to say American Indian because I tell the story to India's Indians and my that third book the Wiley book is used for uh executive trading at the two of the major universities in in India so I have to say American Indians are discerned from the Indian Indians. And so Tonto asked Tonto, what should we do? And American Indian paleface, psychic says, what do you mean, we paleface? Which was the slang name for the white man back then.

So Scully laughed and the other people in the room laughed, which included a future president, Del Yocum, a head of, future head of international for Microsoft, Ida Cole, Joe. And then I told him the story of my friend Kelly Johnson, who ran the skunk works at Lockheed, who I talked to on the phone earlier, when I was supporting the supersonic transport. I told him the story of the IBM PC. I told him the story of the Alpha computers, mini computer, where they all spun off an independent group for each of those products

like Kelly Johnson's Skunk Corks could develop an advanced airplay and get it flying in 18 months while the rest of Lockheed would take seven years. And I said, give me the authority to commender it with the responsibility for the product line and we'll sell it.

So the executive committee about a month later after I presented along with the responsibility for the product line and we'll sell it. So the executive committee, about a month later, after I presented, along with the help of a couple dozen additional people at Apple, put together an 80-page business plan. They approved it and they asked me to be the business unit manager. They didn't want to call me a general manager, so they had to call me a business unit manager or a bum. And we had full authority over the product line. We could do anything we want. And we sold enough Apple III's and enough profit to keep about 1,000 to 1,500 Apple people employed for the next year and a year and a half.

There you go. Did you go through the whole drama of Steve Jobs leaving and Scully and stuff? No, I left before he left. And he left because he no longer had the profits from my product line that he worked dutifully to kill. And then he was given in January of 85 the Lisa, which he went dutifully on to kill. And the company was suffering financially terribly.

So that's why they laid off 1500 people in the early night, in the 1985 times span. And Steve got fired in mid 1985. There you go. What most people don't realize is that there were two Steve Jobs. There's the one that I knew back then, who many people could not say flattering things about. And then after his last computer, which he uniquely called Next, failed, he sought out, I found in my research for my book, Building a Sailing Great Products, that he sought some mentorship from David Packard of Hewlett Packard.

And coincidentally enough, I used to handle Dave Packard's PR from the board when I was in the corporate PR department there. And Packard taught him, you got to have empathy for the people you work with. You got to have some humanity and you got to have empathy for the people you work with you got to show you got to have some humanity uh and you got to have some consideration and the steve jobs that came back to apple was a completely different person having gone through these uh repetitive failures over the previous uh 10 or so years and one of the things that uh dave Packer taught him is when you have a downturn in the economy, that's when you double down on your product development, your research and development. Because HP had gone through six of these recessions since its founding in 1938, and they came flying out of the box and overcame their competition very quickly because they didn't cut back on their r d and in fact that's exactly what steve did in 2007 2008 during the great recession and by the time he had retired because

of his cancer in 2011 apple was well on its way to becoming the most valuable and for that matter admired company in the world yeah yeah i mean you look at how much the world changed with the iphone and the advent of bringing social media and so many things with what he did with that and the stories are kind of and he was still an asshole i mean my friend annie grignan helped build the iphone and he has a great fuck job story i think he sold it publicly but i on movies and stuff now but but yeah it's it's and i think it was in walter isaacson's book um right people read it went holy shit wasn't that nice of a guy but you know i mean there you go uh but at least uh you know he learned a bit more so you've written how many books so far well it's it's three major books. Building a Sanity Great Products, which covers

the five keys to product success. It's about almost 200 pages. Then I wrote a book for managers of product managers. By the way, I prefer to call them product success managers because that explains what they do a lot better than the term product

manager. And plus, you don't want to be product failure manager either, so product success manager. And plus, you don't want to be product failure manager either. So product success manager, probably. That way you can ensure it because many times I've gone to a party and I've been talking to a beautiful woman and she says to me, what do you do? Sometimes they ask, usually they don't. And I said, well, I'm a product manager. She says, what do you do?

And I said, well, I try to figure out what it is the customer wants to do. I do market research. I do competitive research. I write personas about who I want to target the product to. I then do product positioning in order to position the product in the mind of the marketplace. And with all that information, then I can put together a product plan, specifications for what the product needs to accomplish, a distribution strategy, a sales strategy, a pricing strategy, a support strategy and plan. And then when the product is introduced, I pass all this over either to a product marketing manager or I continue and take the product to market. And usually about an hour before I got finished with saying that, she has already turned and walked away. So that's why I've suggested we change the title to Product Success

Manager. Otherwise, most product managers will never get married and have their requisite 2.5 kids. I wonder if that makes that much of a difference when you're saying success in in pickup game uh oh yeah works all the time is it really all right oh yeah i got i got a show your watch you know that whatever i don't show your car whatever the hell uh so there you go so you know this the big book you want to talk to me about, the building insanely great products. You talk about how some products fail, many succeed, and you have lessons from over 47 years of experience

and 75 products and 11 startups. Do you want to tease out maybe some of your concepts or ideas or maybe stories that you tell in the book? You know, the five keys matches into the mnemonic of SPICE. The company's name is SPICE Catalyst. The S stands for strategy. You need to have a product market strategy. And all the things that I had mentioned just a few moments ago

that I would have been telling somebody at a party, what I do is the components of a product market strategy. Unfortunately, about 35% of the products that are brought to market each year, representing about a half a billion to a trillion dollars in waste, they go to market without a product market strategy. You mean you're supposed to have a strategy? Yeah. And by the way, the word strategy means the same as a plan a plan

means it's a strategy not to be confused the p stands for a process you need a repeatable process in order to develop and bring your product to market one of my clients had five successive product failures and they said i asked them did you have a process and they said no and the vp of product management there said if you don't have a process that's repeatable and then everyone buys into then everyone blames everybody else because the product failed and that is it creates a culture of failure a culture of blame a finger pointing if you don't have a process and they reach a point where they're they're always trying to make sure it doesn't get assigned to them.

There's like a dodgeball of like, oh, it's his fault. Or they have a culture of blame where if something goes wrong, they figure someone out, find someone to blame, sort of like the Russian armed forces right now. Every time they have a defeat, they fire people, and they change the heads of each of the departments there. The I in SPICE is have the information that you need in order to make the decisions. Frequently, these kinds of decisions are made off the top of your head.

I remember a few years ago, Reid Hoffman, who was the founder of Netflix, was sitting in his hot tub with a friend. And he decided he was going to discontinue the shipping of DVDs, go all online, and increase the price by 30 or 40%. And the other guy in the hot tub said no that's not a very good idea and uh but that was the extent of his market research which was kind of silly because he knew better uh and then of course for people that uh are not from california where i am in silicon valley that's all we do is sit in our hot tubs all the time and yeah that's california and um so they went to market with that breakup. They also promised to deliver video games by DVD, and they never did that.

Yeah. So I canceled my, it was sort of a disloyalty to the customer. He didn't understand what it is that the customer wants to do. In other words, he made decisions off the top of his head, probably not too dissimilar to the decisions Elon Musk has been doing for the last six months on Twitter, which is without doing the market research, without asking people. The C in SPICE means the customer. And there it's built on the notions that others had developed called outcome-based innovation from Harvard or from Synergym jobs to be done. And I say it's understanding what it is that your customer wants to do. Why do they want to do it? Where do they want to do it? How do they want to do it?

What's standing in their way? What's important important how satisfied are they with the current solution and if you understand what it is the customer wants to do you realize what people have been saying all along you can't ask the customer what they want because if they knew what they want they will have identified the problem of what it is that they want to do and they would have also identified the solution to that problem which is a little bit much for most people a classic example of this is henry ford went out and asked people when he was thinking about the building the model t would you like to have a car and of course most people had no idea what a car was they said no i don't want a car i I want a faster horse.

So he should have been asking questions about what is it that you want to do? Or he could observe and see people hitting their horses with a stick in order to get it to go faster and get them and them and their carriage if they're carrying cargo from point A to point B faster. And then you get the old notion of big data and the whole concept that Google and Facebook is based upon, which came out of computer science school at Stanford called Wisdom of the Crowns. The crowns are so smart that if they go into a theater and a fire breaks out, they all try to get out through the same door all at the same time,

which never works and a lot of people get killed as a result of the wisdom of the crowds. So if back in the, when Henry was thinking about his Model T, if the internet existed, he would have gone to the internet and looked up how many people were searching for the keyword car or the keyword automobile. And the results would have come back zero because no one had any idea that those things exist. So wisdom of the crowds only works when there's a lot of known quantity going around, not like the fire escape kind of thing. And of course, the negative benefit of not understanding what it is your customer wants to do results in all of this fake news circulating in social media.

And people tend to like a story if it's negative, or if it creates fear 10 times as much as something that's positive. And that explains all of this going viral and why back in 2014 uh a russian general said we have figured out a way to whip it weaponize the internet and that's exactly the campaigns that they've run of fake news and creating fear and division in 30 elections around the world up until 2016. And they continue to do that today. There you go.

Understanding your customer is very, very important. And then lastly is your employees need to have amongst all of them and your consultants, 130 competencies or skill sets in order for the product to be successful. Wow. And therefore, the training should be provided to the product managers and the other staff to be able to do many of the things that I mentioned earlier, like the market research, the competitive research, the pricing strategy, and so forth. There you go.

So is it always a guarantee that if you build insanely great products, they will succeed? Or have you seen examples where sometimes, I mean, no matter how great the product is, it still fails? And is there a reason why? If it's built on understanding what the customer wants to do, how they want to do it, why they want to do it, where they want to do it why they want to do it where do they want to do it uh what's important about it how successful the current solution is then the chances of product success are extremely high a classic example that by the way nothing that humans do today uh is any different than what cavemen or cavewomen did uh thousands of years ago yeah i know it's classic a classic intervention or innovation is that uh when a caveman wanted to communicate with other cave people

they grabbed a chunk of charcoal and they drew or wrote on the cave wall but since they couldn't take the cave wall to the next cave to show their friends, they came up with slates. And then they noticed that their hands got dirty any time they were writing. So they wrapped the charcoal in wood and they called it a pencil. And they noticed when the pencil wore down

and they had to constantly sharpen the thing, they invented the fountain pen with the quill from what, a duck or something like that. And then they noticed they kept spilling the oil or the ink on their paper or running out of ink so that's when they they invented the ballpoint pen and then the mechanical typewriter came along electric typewriter and word processor and now we can dictate to our computer so all of those things convey the solving and the same do. What is it that you want to do? You want to put your words or pictures down on something that someone else can see and use it as a form of communication. And each of those steps that I just mentioned are forms of

innovation, doing something better, doing something faster, doing something with better quality, or like in the example, the Apple Watch, which does nothing more than tell you what time it is, doing it with style. And by the way, it can do a whole bunch of other things, not only that, but monitor your health and your exercise. There you go. You know, I was looking at the cover of your book, and it's really cool. It's got a bicycle with square wheels and next to a bicycle with round wheels. That clearly works better than one with round wheels. But I was thinking most of the time there's a, I don't know if you've seen this video, but on Tik TOK there's a YouTube or something.

I don't know where it's from, but I saw it on Tik TOK, but there's actually somebody who took square wheels for a bicycle and what they did is they basically made like a track tread like a tank tread that goes over the squareness there's about i don't know it's a small space there but it's a it's a track tread that goes around the square of the tire and so basically he's made a square-tired bicycle work. It rolls like a tank, basically. It's kind of funny to see. Yeah, the advantage of the square wheel is you don't need any brakes.

That's true. Yeah, there you go. You know, I remember my friend used to call me when the iPhone first came out, and he was a big Apple dude. And he, you know, I had the latest phones, but I didn't have the Apple iPhone. I remember when it first came out he used to call me all the time just gush on it he's like this is going to change the world and then blah blah blah and i'm like i don't know i can you send email i can do that on my old blackberry you know whatever and uh he's like you gotta see the phone you gotta i just didn't get it and when i got a hold of my first iphone, I was blown away. I saw all the magic and the beauty of it.

And what was interesting to me is, like you were talking about before, where people from Henry Ford, the consumers, didn't know they wanted a car. I don't think a lot of people knew that's what they wanted in an iPhone and all the different things that were packed into it. They crammed everything into that phone until they really saw it, right? I mean, sometimes consumers just have to kind of see and experience the beauty of the product to know that they really want it, maybe.

Exactly. But those of us that try to study and observe what it is that people do will recognize the brilliance of that device. An example of that is I was driving on Highway 101 north to San Francisco. And in those days, I had a Motorola flip phone and a pager. And my pager went off on my belt. And I'm doing about 65 miles an hour uh in the middle lane and i take the pager off my belt holding it with one hand and i see the number on there and now i got to transfer the number from the phone from the pager to the phone so i pick up the phone with my

other hand and they realize nobody is driving the car yeah well now if you get a text message and you have phone mounted on your windshield or something or a holder you just touch the number and it calls it yeah so he what the iphone did is it combined a telephone and by the way the first iphone was a lousy phone you could barely hear the other guy and the speakerphone was never loud enough to hear anything uh it's gotten a lot better now or you can just use it for your music speaker You could barely hear the other guy. And the speakerphone was never loud enough to hear anything. It's gotten a lot better now where you can just use it for your music speaker in your car. And so they combined a pager with a phone with an iPod so you could take your music around. And the concept that the thing was originally introduced for the iphone was the internet in your pocket yeah and as a result of that we have things like uber and lyft

and other such services that were never possible before the smart iphone came about and all it did was combine a whole bunch of things that people do that they really want to do. And the current solution like driving with no hands on the wheel, uh, was not quite satisfactory. Yeah. It's an amazing story of what goes into that phone. Even when Steve jobs announced it. And I think that story has been made public now as to how the phones were working. And they had multiple phones up under the desk. And it was interesting how much they were selling that phone. And my friends were in the audience just going, that phone's going to fail. We're all going to be out of jobs tomorrow.

And it was a wild story. And then he sold the phone. I think it was about six months before it ever got put out. And it still wasn't even working right at the time he announced it, which was crazy. Yeah, and if I recall, he came out with it at like $800, and I bought one. And about six weeks later, he dropped the price to $600. Yeah.

That's the way, thank you very much for your loyal first customers that are entrepreneurs and will go out and buy the first greatest thing and get slapped in the face like that. But then they said, okay, we'll give you a free copy of the next Mac

operating system or a credit or something for $200 worth of apps in the app store or something like that, which is great on the surface. But being a former product manager, I knew that's not what they are paying for. So they gave me like $40 for something I paid $200 for. And that's because they hadn't done the market research on the price to find out what the right price point should be. And I teach in one of my classes that has been taught at Cisco worldwide for the last 10 years in terms of pricing strategy and how to figure out what your

customer would perceive as the value proposition or their return on the investment and if you do that analysis the 600 price point turns out to be the right thing so steve screwed up on his pricing strategy at that point in time what do you have you ever done any commentary wrote in the books about you know how steve was really anal about i think anal is probably the best word you know i mean even just worrying about the shade of yellow on certain icons and stuff, the meticulous nature of his craft work and the hardware of the phone and software? I don't know if I mentioned it or not, but three days before the Macintosh was introduced, this would be in mid-January 1984,

he decided on a whim that he didn't like the color of the walls in the Mac factory at fremont so he had the entire factory uh repainted in the color in which he liked yeah he was a bit consumed by that but one of the aspects of his attention to that level of detail was the or is the customer experience my fellow product manager at apple mike connor who is responsible for the apple 2 product line told me the story that steve had taken an apple 2 home it was extremely frustrating getting the thing out of the box but rather than being diplomatic and coming in to see mike who was responsible for that experience,

he threw the box at him and said, you got a shitty out of the box experience. Fix it. And if you notice now that, you know, that notion is infused all of Apple. When you buy an Apple product, probably about a third of the joy of buying the product is going into the

Apple store and not having to stand in line at a cash register. And another third of it is when you get home and that's taking it out of the box, like it's a little jewel and it's a little gift to yourself or someone that gave it to you. So that whole out of the box experience is something that others in the industry are beginning to copy. We talk about that as the total customer experience. There you go. Yeah, I remember when that became a big thing, the experience of unboxing an iPhone. And we've been unboxing and reviewing products for, what, 13 years now,

14 years, something like that. It's starting to become a blur. And so a lot of the products we would get started mimicking the Apple experience of the unboxing and making it intuitive and everything else. And then intuitiveness actually became a part of our whole review sort of experience. How well can a consumer just pick up the phone without reading the instructions

and just intuitively bond with that type of product? And I think that's an important factor. I don't know. Yeah. It's kind of funny because I've heard of a video. I haven't seen it. Others have told me about it where some teenagers are trying to learn how to use a rotary phone.

It's a great video. You got to see it. And I hear that they they're pushing the hang up button under the handset effort to reboot the phone. You got to watch the video. It's epic. I think he offers them like five bucks or something. If they can figure out how to make a call on it.

And they, it's like watching, it's like watching the monkeys try and figure out technology in 2001 space odyssey or something. It's it, there's, they're just dumbfounded. And there's another,

there's another great one where a young girl is uh his his father her father uh hands her a record uh and she's trying to figure it out what like what sound comes out well i think in those cases the adoption was such that one person showed another person uh Like when I was in school, this would be probably 72, the automatic teller machine came out. And if you could figure out how to use the ATM, you got money.

If you couldn't figure out how to use the ATM, you're hosed because the bank's not open. And in those early days, the banks would stage people sitting on stools next to the ATM machine for like six months showing people how to use it until enough of them learned how to get their money out of the machine. So it was a great incentive, even though the user interface was terrible. is back in, up until about the mid-2000s, I was on, I used Windows machines. I used to have two Windows machines on my desk because I did a lot of video editing and multimedia editing,

and the thing would always crash, which, so I would be rebooting one computer while I was working on the other computer. And usually the Microsoft position, I would assume the Microsoft position, which was rebooting. And then I switched to an Apple. And I had a problem. And I called Apple up and they solved the problem. Previous to that, I would call Microsoft up.

And being a product manager, I tend to find bugs. And they wanted to charge me $200 to tell them about the bug that I found. Wow. Well, now if you call Apple up, they just help you up. And I understand Microsoft is no longer doing that. And I had the same issue with Comcast, where my internet kept going down. And there was no way they wouldn't let me talk to the network people. And being a trader at Cisco, I know a little bit about networks.

And the only thing I could do is I had 20 service calls to come out and fix it. And I figured that by the time I get to the 20th or so, somebody would hand the manager a spreadsheet that says, look, it's costing us $150 for each one of these calls. This guy's only paying that a year for internet or something like that. And then they go out and try to figure out what's wrong. And sure enough, I found out by hacking into the modem that the uh switch near me was was flooded every time it rained the internet would go down because the thing was uh the uh the interference on the network was going up but they wouldn't let me talk to the network people but today uh since i've heard some apple people left Apple and went to Xfinity or Comcast,

their service is great and very customer-oriented, focusing on the entire customer experience. Yeah, it's really important. I mean, I've had the, I call it extortion. I've had the big cable companies say to me, well, we'll send someone out to look at your problem, but we're going to charge you unless we find a problem. And it's kind of like a, it's an interesting stick sort of thing.

It's almost like, hey, why don't you go away with your little problem that you're having with our company and service, or we're going to charge you, but maybe you just won't call us and complain anymore if we threaten to charge you. It's a real interesting sort of dynamic. That's a result of the incentives in that organization where they view each activity as an expense rather than as Apple views it as part of the total customer experience. Yeah. And since there's no one, there are no independent profit and loss centers within Apple.

It's the entire company. Everybody works together to make sure that you have a delightful customer experience in their words and that's part of the apple values is to provide that kind of service which apple adopted back around 1977 1978 and that's when steve came back to apple he said part of apple's problems over the previous 10 years is it lost track of its values. And then when Tim Cook took over Apple, the first thing he talked about at length was the importance of Apple values being at all the corners of the company. And that meant making sure that your customer is satisfied. And they really built, you know, I've had friends that are like, I'd like to maybe have an Android phone. I'd like to maybe have a PC.

But the ecosystem, Chris, they'd like to maybe have an Android phone. I'd like to maybe have a PC. But the ecosystem, Chris, they always talk to me about the ecosystem, which you talked about, where it's congruent across all spaces and all product lines. And like Chris, you know, the whole ecosystem, you know, my mail's there. You know, this is there. This is there. The family's hooked up there. All my, you know, stuff on the phone goes to the computer you know the whole thing uh between your ipad and all the other toys you know is all there and in fact now i i think tim cook correct me if i'm wrong has just kind of expanded that whole ecosystem to

where you know they have apple tv and so many i mean there's a million different services you can pay for now if you really want to most people do do. Yeah, he has, I forget if he calls it congruence or something like that, where you could be doing work on your Mac and switch the work to your iPad as you leave home and then switch it to your iPhone. Or you may be watching something on your iPhone and you get home,

you can throw it up on the screen of your home TV. That full concept of integration comes from that concept of providing total customer satisfaction. There you go. Let's tease out a little bit of artificial intelligence talk, if you want. Anything you see on the forefront or in the current state of AI technology? Have you tested out the new JetChat GPT and any thoughts on it? Yeah, I've played with it a little bit. For example, I wrote in there, who is David Fraden? And it came back with a pretty good bio

except they say I worked at Sun Microsystems. Well, I worked there. I was a Sun Microsystems dealer or reseller. So I didn't quite get that difference. And there was a couple of other errors on that. And then what's the AI from Microsoft? Or something like that? Yeah, yeah. I think.

And he or she automatically came up as a contact of mine at Skype. So it's kind of strange. You go to a communication tool to ask a AI chat thing. But anyway, it's more convenient than trying to find the web page, like for chat, whatever. So I put in there, who is David Fray? And it came back with a perfect bio. And essentially, it regurgitated what you used for your introduction,

which, of course, is out there a number of different places. So it didn't do too bad of a job. And I read Elon Musk's and Steve Wozniak's statement that, hey, we ought to slow this thing down and figure it out first before we introduce it. But it didn't give any reasons that i could hang my hat on or could remember uh so i think there are places where ai can help because what it does is it um categorizes and digests all of the information on the internet, including the fake stuff that the Russians and Donald Trump are putting out there. And what's his name? Tucker Carlson. So it could easily take

those lies and not check them and spit them back and it could become truth so that's one of the dangers it's another way it's an alternative to uh wisdom of the crowds and i talked about the problems of the wisdom of the crowds of the past ai has the same thing um and then of course we've seen these chat bots uh for some time as chat help. For example, if you go to Xfinity's website and you ask it a question, it's AI that comes back and answers your question. Well, if you go there and you simply say,

I want to talk to a human being, it comes back and says, I don't understand what you're asking. See, they've already eliminated us. They're planning. Yeah, exactly. I'll pass you on to another chatbot in a few minutes.

My chatbot manager? Yeah. It was funny because I want... Fox News gets a lot of their money from subscriptions that are required by your cable provider. And that's true of the other channels, MSNBC and so forth.

So I think two-thirds of Fox's income is from that. I really don't like the money I'm paying for Comcast going to Fox, which I never watch. So I wanted to contact them and say, hey, I would appreciate it if you'd make it optional. And if you watch Fox, pay for it separately. Don't charge me and everybody else for something that some of us don't want. Well, there's no email on their website.

So you can send them an email. There's not really a phone number. All there is is support. So I went to the support chat and I typed in there. They said, what is your issue? Well, I'm not having internet problems, but I had to pick an issue. And then I sent them a little message saying, hey, let people decide if they want Fox. Don't make everyone pay for it.

And it just sat there and spun and did absolutely nothing. So companies need to think about those things that are out of the box and provide for solutions that are out of the box, not just through AI or through wisdom of the crowds. Definitely. Do you have any dystopian outlook? I mean, you've been in technology for a long time. You've seen the crowds. Definitely. Do you have any dystopian outlook? I mean, you've been in technology for a long time. You've seen the arc of it. Do you have any dystopian

thoughts of AI and are we just all going to end up on the show Terminator? Possibly. I just saw that the Ukrainians have come up with I think some kind of a game controller that they can use to control

a machine gun remotely. Really? So they can post a machine gun at a guard place and then remotely they'll be safe. So yeah, I think we're probably going to see, we already see intelligent drones flying around. The key question is whether or not they will be allowed to decide themselves to shoot and kill, or there has to be some human involved. On the other hand, the humans involved in whether or not to shoot and kill

haven't always been perfect, as we've seen in Afghanistan and Yemen. So in those corner cases, which are very important to people's lives, there needs a lot more work to be done and some kind of regulation to make sure it occurs. It's not clear to me that's going to come from Congress, especially this Congress, where one party is the party of fear and the other party is trying to do some governing to come up with anything intelligent. Yeah. And it's funny to watch the politicians who are really old and they don't understand some

of this technology. It's if you ever watch their things. You know, to me, it's an interesting space, and I'm seeing so many people do so many innovating things with it. I think the next time I'm going to get on chat GPT, I'm going to ask it, I don't like your answers. Let me talk to your manager. I'm going to go full Karen on it.

Then you'll find a bullet coming through the play class. Yeah, they'll probably put me on a kill list, Black Hell causes a show over my house and all that sort of stuff. And then they'll play the, hey hey anytime i hear her talk about it i have the terminator music going through my head uh so i think of the big when when siri first came out and you had asked siri for directions and for 40 years i've been trying to get away from a woman giving me directions when I'm driving. And as soon as Siri comes out, I'm back to a woman giving me directions when I'm driving.

There you go. I think you can change the voice now, can't you? Yeah, about three, four years ago, I put it in English Butler. Yeah. I know ways you could put in Samuel Jackson, which made it very interesting in the Waze program. You had Samuel Jackson telling you how to drive around town. I was surprised there weren't more swear words. It's really interesting.

Anything you see on the future horizon for product innovation and future changes that you see that might change the landscape, or are we just going to continue on with that caveman sort of attitude? There's probably uh close to 20 major things that are going on that are going to drive change and innovation uh in the future uh i call it the the perfect storm one is ai another is Another is pandemics and epidemics. Another is robotics.

Another is 3D printing. Another is climate change. Another is cloud computing, dispersed services, that type of thing. Another is biogenetics and medical technology. We're real close to breaking down cancer and coming up with a custom cure based upon the type of cancer that you have. And overriding this long-term preoccupation about cancer is different because it's in different parts of the body. No, it's not. But we can do the genetic sequencing on that. I just made a contribution a couple of years ago when my pet cat passed away to the University of California, Davis Veterinary School of Medicine and Research. And part of the money is being used to test the genome sequencing of dogs

we know so little about dogs and then if it works there and then some specialized treatment of those dogs for which my contribution is helping pay for the the testing works that'll be transferred to cats in order to help uh save their lives and give them better medical treatment rather than just copying the treatments that were developed for uh humans there you go well this is important because we need cats and dogs to stay alive because dogs chase cats and thereby goes uh i don't know it When AI has killed off all the humans, they need to have the capability to live longer than 10 to 15 years. I have Huskies. I understand dogs very well.

They don't understand me. They ignore me most of the time. I should ask Chet to figure out why Siberian Huskies have a mind of their own. I actually, I know, but I should, I should be like, how come they don't listen to me half the time? And, and they'll probably, he'll probably reply or they'll reply.

I don't know who it is. Teenagers. I don't even know if chat BT has pronouns. We should find out where they should find. Probably, probably has some cats in the, they're probably, it's probably run by a dog actually.

But, but there you go. No, I, I think that's beautiful. You did that. I, you know, I by a dog actually uh but but there you go um no i i think that's beautiful you did that i you know i lost a dog to cancer uh had at hospice care for about a year and a half uh and uh and and did that whole route and cancer to me is you know and also in humans and every place else cancer is just such a horrific thing it's my number one enemy. Next to, I don't know, there's a joke there somewhere. Next to fat molecules, I suppose, because I'm wearing most of them.

But anything more you want to tease out or talk about, Dave, before we go? And of course, we want people to pick up your books. Yeah, feel free to check out my books. You can search for my name, David Freighton, on Amazon. I come up as an author. There's no fake Dave Fradens with a blue mark there yet. And then if you want to get in touch with me,

my contact information is on my website, SpiceCatalyst.com. There you go. It's been fun to have you on, David. Thank you very much for coming on the show. Thanks for putting up with me. Oh, it's been wonderful. I mean, the stories you have you on, David. Thank you very much for coming on the show. Thanks for putting up with me. Oh, it's been wonderful. I mean, the stories you have are just astounding. We could sit here for hours and do this.

But you're always welcome to come back, my friend. Thank you. Thank you. And thanks, Moniz, for tuning in. Go to goodreads.com, fortuneschrissfoss, youtube.com, fortuneschrissfoss,

and linkedin.com, fortuneschrissfoss, all the crazy places on the internet. Building insanely great products. Some products fail. Many succeed. This is their story. Lessons from 47 years of experience, including

Hewlett Packard, Apple, 75 products, and 11 startups later. You can order wherever fine books are sold, and Dave's other books. Thanks for tuning in. Be good to each other. Stay safe, and we'll see you guys next time.