Build: An Unorthodox Guide to Making Things Worth Making

by Tony Fadell

In the late eighties my beloved Apple ][ was struggling. It needed to be faster. So a friend and I decided we were going to save Apple. We built a new, faster processor—the 65816. I did not, in fact, know how to build a processor. I took my first processor design class in college a semester after we started. But we built those chips and they worked eight times faster than what was available—a blazing 33MHz—and even sold some to Apple

The dot-com bubble burst. Funding dried up overnight. I did eighty VC pitches. All of them failed. I was desperate to keep my company going.

we got pretty far—a product, employees, an office. But I was still going to the library to look up the difference between an S-corporation and a C.

No matter how much you learn in school, you still need to get the equivalent of a PhD in navigating the rest of the world and building something meaningful. You have to try and fail and learn by doing.

Adulthood is your opportunity to screw up continually until you learn how to screw up a little bit less. Traditional schooling trains people to think incorrectly about failure. You’re taught a subject, you take a test, and if you fail, that’s it. You’re done. But once you’re out of school, there is no book, no test, no grade. And if you fail, you learn. In fact, in most cases, it’s the only way to learn—especially if you’re creating something the world has never seen before.

So when you’re looking at the array of potential careers before you, the correct place to start is this: “What do I want to learn?” Not “How much money do I want to make?” Not “What title do I want to have?”

“The only failure in your twenties is inaction. The rest is trial and error.” —ANONYMOUS

When things started to go awry, I’d ventured out and started talking to people in sales and marketing, began learning about psychographics and branding, finally grasped the importance of managers, of process, of limits. After four years, I realized there was a whole world of thinking that was needed before a line of code should be written. And that thinking was fascinating.

Remember that once you become a manager, you’ll stop doing the thing that made you successful in the first place.

The more things go wrong, the more you fall back on doing what you know. And you know accounting. So instead of becoming a better accounting manager, you focus on being the best accountant on the team. You start taking on more tasks that your team should be doing themselves. You withhold your feedback and concerns because you don’t want to demoralize people further. You rally the team by crying, “We’ll get through this! I’ll show you how it’s done! Just watch and follow me!” And that’s all it takes. That’s how normal, reasonable people turn into unbearable micromanagers.

One of the hardest parts of management is letting go. Not doing the work yourself. You have to temper your fear that becoming more hands-off will cause the product to suffer or the project to fail.

I started reading management books and realized that a great deal of management comes down to how you manage your own fears and anxieties.

“Wait, how can I manage Jane if Jane is better than me? If she excels at this and I don’t, then everyone will think she should be doing my job.” And I’m here to break it to you—that might be true. And that’s a good thing. Because if someone under you does something spectacular, that just shows the company that you’ve built a great team. And that you should be rewarded for it. There should always be at least one or two people on your team who are natural successors to you. Those are the people you have more 1:1s with, who you pull into leadership meetings, who everyone will begin to notice.

There’s a reason everyone congratulates parents when their kids do something great—because the kid’s achievement is their own, but it also reflects the parent’s influence. The parent can take pride in their kid’s accomplishment because they know all the time, effort, guidance, hard conversations, and hard work that went into it. If you’re a manager—congratulations, you’re now a parent.

But data can’t solve an opinion-based problem. So no matter how much data you get, it will always be inconclusive. This leads to analysis paralysis—death by overthinking.

Most people know in their gut when they should quit and then spend months—or years—talking themselves out of it. But I could tell from the start that I would have been well paid and utterly miserable. And I want to make it very clear: hating your job is never worth the money.

If hardware doesn’t absolutely need to exist to enable the overall experience, then it should not exist.

There are bumps between Awareness and Acquisition, between Onboarding and Usage, between every phase of the journey, that you have to help customers over. In each of these moments, the customer asks “why?” Why should I care? Why should I buy it? Why should I use it? Why should I stick with it? Why should I buy the next version?

Every product should have a story, a narrative that explains why it needs to exist and how it will solve your customer’s problems. A good product story has three elements: » It appeals to people’s rational and emotional sides. » It takes complicated concepts and makes them simple. » It reminds people of the problem that’s being solved—it focuses on the “why.”

He used a technique I later came to call the virus of doubt. It’s a way to get into people’s heads, remind them about a daily frustration, get them annoyed about it all over again. If you can infect them with the virus of doubt—“Maybe my experience isn’t as good as I thought, maybe it could be better”—then you prime them for your solution. You get them angry about how it works now so they can get excited about a new way of doing things.

And the story doesn’t just exist to sell your product. It’s there to help you define it, understand it, and understand your customers. It’s what you say to investors to convince them to give you money, and to new employees to convince them to join your team, and to partners to convince them to work with you, and to the press to convince them to care. And then, eventually, it’s what you tell customers to convince them to want what you’re selling.

You should always be striving to tell a story so good that it stops being yours—so your customer learns it, loves it, internalizes it, owns it. And tells it to everyone they know.

You can continue evolving that product for a while, but always seek out new ways to disrupt yourself. You can’t only start thinking about it when the competition threatens to catch up or your business begins to stagnate.

It doesn’t have to be a product—Amazon was a disruptive service long before they got into making their own hardware. You can disrupt how things are sold, delivered, serviced, financed. You can disrupt how they’re marketed or recycled.

You can change the motor, change the dash—but it still has to look like a car. You can’t push people too far outside their mental model. Not at first.

Most people don’t realize what the iPod was originally built for. Its purpose wasn’t just to play music—it was made to sell Macintosh computers.

Here’s the trick: write a press release. But don’t write it when you’re done. Write it when you start. I began doing this at Apple and eventually realized other leaders had figured it out, too (looking at you, Bezos). It’s an incredibly useful tool to narrow down what really matters. To write a good press release you have to focus.

Businesses that build with atoms are focused on COGS—cost of goods sold.

Companies that build with electrons are focused on CAC—customer acquisition costs.

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.

They created a V1 product, scaled it for V2, then optimized the business in V3.

Practice delayed intuition. This is a phrase coined by the brilliant, Nobel Prize–winning economist and psychologist Daniel Kahneman to describe the simple concept that to make better decisions, you need to slow down.

It seems like good ideas are everywhere. But the only way to know if they’re truly great—meaningful, disruptive, important, worth your time—is to learn enough about them to see their huge potential risks, the vast downsides, the icy blue Titanic-sized shitshow that lurks just below the surface. At that point you’ll probably set that idea aside. You’ll move on to other opportunities, other jobs and journeys. Until you realize that no matter what you do, you can’t stop thinking about that one idea. That’s when you stop running from it and start chipping away at the risks, one by one, until you’re confident enough that they’re worth taking. If that does not happen, then it’s not a great idea. It’s a distraction. Keep going until you find an idea that won’t let you go.*

According to the book Super Founder, by Ali Tamaseb, around 60 percent of the founders of billion-dollar startups started another company before their wild success and many lost a ton of money. Just 42 percent of them had a previous exit of $10 million or more, so the majority “failed” by the standards of venture capital.

So if you don’t have a CEO who will go to bat for you, if you don’t have compensation packages that will attract a great team, if you don’t have the resources of a giant company but all of the overhead, then don’t try to start your project inside someone else’s business. Your best option is probably to go it alone. Either let your idea die or start a real startup.

a VC is beholden to the limited partners (LPs are large-scale investors or entities like banks or teachers’ unions or very wealthy families) who fund that VC—so they may push you to sell or go public before you’re ready in order to show value to the LPs.

Remember, once you take money from an investor, you’re stuck with them. And the balance of power shifts. A VC can fire a founder, but a founder can’t fire their VC. You can’t divorce them for irreconcilable differences.

Typically a VC needs between 18 and 22 percent to make their model work—step carefully if they begin asking for more.

It will take longer than you think to get funding. Expect it to be a 3–5 month process. It may end up being faster than that—especially in a founder-friendly environment—but I wouldn’t gamble on it. Too many companies wait until they’re about to run out of money, then hit an air gap and are near bankruptcy before desperately grabbing whatever funding they can get. Always start the pitching process when you don’t actually need money. You want to be in a position of strength, not buckling under the pressure and making bad choices. You should also remember to watch out for the holidays—August, Chinese New Year, Thanksgiving through New Year. People forget that VCs take vacations, too.

Every young person you spend time training is an investment in the long-term health of your company.

The best teams are multigenerational—Nest employed twenty-year-olds and seventy-year-olds. Experienced people have a wealth of wisdom that they can pass on to the next generation and young people can push back against long-held assumptions. They can often see the opportunity that lies in accomplishing difficult things, while experienced people see only the difficulty.

What you’re building never matters as much as who you’re building it with.

In the early days of a company, when most people are self-managing, the absolute maximum number of people one human being can effectively manage directly is 8–15 full-time employees. As the company grows, that number shrinks to around 7–8.

The product is the brand. The actual experience a customer has with your product will do far more to cement your brand in their heads than any advertising you can show them.

on bells and whistles, stunts, and dancing polar bears—you simply explain in the best way possible what you’re making and why you’re making it. And you tell a story: you connect with people’s emotions so they’re drawn to your narrative, but you also appeal to their rational side so they can convince themselves it’s the smart move to buy what you’re selling.

Today, ten years later, Google Nest is still using some of the photos and assets we created before we even launched our company. The reason is that marketing was part of the process from day one. Nobody was ignoring it, nobody was forgetting about it. We knew it was useful, so we used it.

Brand ads made our egos feel better but they didn’t drive sales (you have to make great products for years before customers will buy a product simply because of your brand).

My dad was on commission but he would often sacrifice a sale in order to build a personal connection. The best salespeople are the ones who maintain relationships even if it means not making money that day.

Lawyers are trained to think from the competitor’s viewpoint or the government’s viewpoint or that of pissed-off customers or irate partners or suppliers or employees or investors. Then they look at what you’re working on and say, “Doing it this way will almost certainly get you in trouble.” Or, on a really good day, “Doing it this way may turn into a lawsuit but we’ll probably be able to handle it.”