Build: An Unorthodox Guide to Making Things Worth Making

by Tony Fadell

Vision: Know what you want to make, why you’re making it, who it’s for, and why people will buy it. You’ll need a strong leader or a small group to ensure the vision is delivered intact.

Customer insights: This is what you’ve learned through customer or market research or simply by thinking like your customer: what they like, what they dislike, what problems they experience on a regular basis, and what solutions they’ll respond to.

Data: For any really new product, reliable data will be limited or nonexistent. That doesn’t mean you shouldn’t make a reasonable attempt to gather objective information—the scope of the opportunity, the way people use current solutions, etc. But this information will never be definitive. It won’t make your decisions for you.

Vision: Assuming you got 1.0 more or less right, that original vision moves behind the data and insights you can get from actual customers. But your original vision should not be set aside entirely as you iterate. You should always keep in mind your longer-term goals and mission so that your product’s fundamental purpose doesn’t get lost.

You’ll need to agree on a singular process, which is often harder than agreeing on a product.

People will disagree based on past experiences and trust can quickly break down. The risk of making something new is always compounded by not having confidence in the team.

The lesson is about when and how vision and data should guide your decisions. In the very beginning, before there are customers, vision is more important than pretty much anything else.

If you wait for your product to be perfect, you will never finish. But it’s very hard to know when you’re done—when you need to stop building and just put it out into the world. When is it good enough? When are you close enough to your vision? When are the inevitable issues ignorable enough that you can live with them? Typically your vision is so much greater than what materializes in V1. There’s always another revision, always something else you want to do, change, add, tweak. When do you tear yourself away from what you’re making and just . . . stop? Ship it. Set it free. See what happens.

as you’re getting close to finishing, as you’re debating what makes it in, what gets cut, what matters, what doesn’t—take out your press release. Read it. If you launched right now, could you more or less send that press release into the world and have it be mostly true? If the answer is yes, then congratulations: your product is probably ready, or at least pretty close. You have achieved the core of your vision. Everything else is most likely a “nice to have,” not a priority. Of course, there’s a chance that since you started, you’ve had to pivot so much that the original press release is laughably off-base. Sometimes that happens. No problem. Write another press release. Rinse. Repeat.

You need constraints to make good decisions and the best constraint in the world is time. When you’re handcuffed to a hard deadline, you can’t keep trying this and that, changing your mind, putting the finishing touches on something that will never be finished.

When you handcuff yourself to a deadline—ideally an external, immovable date like Christmas or a big conference—you have to execute and get creative to finish on time. The external heartbeat, the constraint, drives the creativity, which fuels the innovation.

The Magic Link only launched when it had to launch. We only started making hard decisions—this stays, this gets cut, this is good enough, this isn’t—when we had no other choice. We couldn’t spin endlessly anymore, trying to reach perfection. General Magic was flailing and needed a pair of handcuffs. It needed to set a date for launch and hold to it.

It was only with the third version that we understood all the pieces well enough to create the right V1 device. But we would have never reached that third design if we hadn’t given ourselves hard deadlines with the first two—if we hadn’t cut ourselves off after a few months, reset, and moved on.

Don’t go crazy hiring people just because you can. With most projects in the concepting stage, you can get a huge amount done with around ten people or even fewer.

keep your project small as long as you can. And don’t allocate too much money at the start. People do stupid things when they have a giant budget—they overdesign, they overthink. That inevitably leads to longer runways, longer schedules, and slower heartbeats. Much, much slower.

Generally any brand-new product should never take longer than 18 months to ship—24 at the limit. The sweet spot is somewhere between 9 and 18 months.

Just be careful. If you’re building something digital—an app, a website, a piece of software—you can literally change your product at any time. You can add features every week. You can redesign the whole experience once a month. But just because you can, doesn’t mean you should.

You need natural pauses so people can catch up to you—so customers and reviewers can give you feedback that you can then integrate into the next version. And so your team can understand what the customer doesn’t.

Predictability allows your team to know when they should be heads down working and when they should be looking up to check in with other teams or to make sure that they’re still headed in the right direction.

Predictability allows you to codify a product development process rather than starting from scratch every time.

You typically need to create at least three generations of any new, disruptive product before you get it right and turn a profit. This is true for B2B and B2C, for companies that build with atoms or electrons or both, for brand-new startups and brand-new products.

there are three stages of profitability:

Not remotely profitable: With the first version of a product you’re still testing out the market, testing out the product, trying to find your customers. Many products and companie...

Making unit economics or gross margins: Hopefully with V2 you can make a gross profit with each product sold or each customer who subscribes to your service. Keep in mind that fantastic unit economics are not enough to make a profitable company. You’ll still be spending a ton of money just running your business and acquiring customers through sales and marketing.

Making business economics or net margins: With V3 you have the potential to make net profits with each subscription or product sold. That means that what you take in in sales revenue outstrips your business costs, so your company as a whole makes money.

The reason it takes so long to reach gross margins and even longer to make net margins is that learning takes time. Fo...

Your team will have to figure out how to find product/market fit for V1, then get the product fixed up and properly marketed to a wider audience with V2, and only then can you focus on optimizing the bu...

customers need time to feel you out. The vast majority of people aren’t early adopters—they won’t try new things right away. They need time to get used to the idea, time to read some reviews, time to ask their friends, and then time to wait until t...

Crossing the Chasm introduced the world to the famous Customer Adoption Curve chart below. The idea behind it is pretty simple: a small percentage of customers will jump to buy a new product early regardless of how well it works—they just want the latest doohickey. However, most will wait until it’s been around for a while and all the kinks have been worked out.

Companies that build with both atoms and electrons have to worry about COGS and CAC, but generally should focus on one at a time. First knock out COGS, then move on to CAC. Build the product, then add the services.

customers still need time to learn about you, to try your product, to decide it’s worth it. They need time to march up the adoption curve.

crossing the chasm isn’t a guarantee, even with much-loved products. And actually making money is much, much harder.

many companies—Instagram, WhatsApp, YouTube, Uber—have gone through five or ten or more generations before they figured out how to make money. Many others still haven’t. The reason unprofitable companies are still around is that they have a giant pool of VC funding or were acquired by even larger tech companies. They focused on finding product/market fit and building their user base first, and figured they’d iterate on the business model to make money later. But that does not work for everyone.

Far too many people expect profitability, for the product and the business, right out of the gate. When I was at Philips I watched most new product categories and businesses on their slate get cancelled—even for products that were almost ready to ship. Built. Tested. Done. They would die on the vine because the top brass were protecting themselves. Any execs joining the team always wanted a near guarantee that new products would make money. [See also: Chapter 2.2: Data Versus Opinion: Most people don’t even want to acknowledge that there are opinion-driven decisions.] They demanded to be shown ahead of time that the unit and business economics of the product were sound. But that was impossible.

They were asking us to predict the future with near 100 percent confidence. They were asking for proof that a baby could run a marathon before it had even learned to walk.

How to Spot a Great Idea There are three elements to every great idea:

It solves for “why.” Long before you figure out what a product will do, you need to understand why people will want it. The “why” drives the “what.” [See also: Chapter 3.2: Why Storytelling.] 2. It solves a problem that a lot of people have in their daily lives. 3. It follows you around. Even after you research and learn about it and try it out and realize how hard it’ll be to get it right, you can’t stop thinking about it.

Before you commit to executing on an idea—to starting a company or launching a new product—you should commit to researching it and trying it out first. Practice delayed intuition. This is a phrase coined by the brilliant, Nobel Prize–winning economist and psychologist Daniel Kahneman to desc...

Painkillers eliminate something that’s constantly bothering you. A regular irritation you can’t get rid of. And the best pain—so to speak—is one you experience in your own life. Most startups are born from people getting so frustrated with something in their daily experience that they start digging in and trying to find a solution.

Not every product idea has to come from your own life, but the “why” always has to be crisp and easy to articulate.

You have to be able to easily, clearly, persuasively explain why people will need it. That’s the only way to understand what features it should have, whether the timing is right for it to exist...

First, you’re dumbstruck by how great an idea this is. How has nobody thought of this before? Then you start looking into it. And oh, okay—they have thought of it. They tried it and failed. Or maybe you really have stumbled into something nobody has ever done before. And the reason is this insane, impossible obstacle that there’s no way to get around. You begin to understand how hard it would be to do this—there’s so much you don’t know. So you put it aside. But you can’t get it out of your head. So you research it here and there. You start sketching or coding or writing, making little prototypes of what this thing could be. Napkin drawings constantly fall out of your bag. Your notebook is full of feature ideas, sales ideas, marketing ideas, business model ideas. You think that maybe the people who tried this idea before were taking the wrong approach. Or maybe an obstacle that was stopping others can now be solved with a new technology—maybe the moment for this idea has finally come. That’s when it starts to get more real for you. So you decide to commit to really looking into it, to digging deep to make an informed decision. You need to figure out whether you should pursue this idea or not. One day you realize there’s a way around that one impossible obstacle. You’re thrilled! Until you see the next huge roadblock in your way. Crap. It’ll never work. But you keep digging and trying things and getting advice from experts and friends and you realize, actually, maybe there’...

People start asking you about your project—when are you going to start? Can I join? Are you taking angel investment? Each obstacle turns into an opportunity, each problem pushes you to find a new solution, and each solution gets you more excited about this idea. Even though there are still a million unknowns—they’re not unknown unknowns anymore. You understand the space. You can see what this business could become. And you start to gain momentum from all the research you’ve done and barriers you’ve conquered. It feels like it’s all coming together. You feel in your gut that this is the right decision. So you bite the bullet and commit.

You do not want to start a company only to discover that your seemingly great idea is a shiny veneer over a hollow tooth, ready to crack at the slightest pressure.

A lot of startups have a “fail fast” mentality in Silicon Valley. It’s a trendy term that means instead of planning carefully for what you want to make, you build first and figure it out later. You iterate until you “find” success. This can manifest in two ways—either you knock out a product quickly then iterate even faster to get to something people want, or you quit your job, cut loose from your commitments, and sit around thinking up startup ideas until you find a business that works. The former approach sometimes works; the latter usually fails.

Throwing darts at a wall is not how you pick a great idea. Anything worth doing takes time. Time to understand. Time to prepare. Time to get it right. You can fast-track a lot of thin...

That’s why we didn’t just present our vision when we pitched investors. We presented the why—told our story—and then we presented the risks. Too many startups don’t know what they’re getting into or, worse, try to cover up the risks of failure. But if investors can spot holes in your plan that you completely missed or ignored or carefully avoided, they won’t have the confidence to fund you.

Your founding team should be anchored by seed crystals—great people who bring in more great people.

Even if you have a brilliant idea for a world-changing product, when you’re starting a business, you need to run that business.

Sharing the load is one thing; unloading it altogether is another. If you’re going to lead a team, you need to be ready to lead.