I just finished reading Tim Urban's latest blog post on waitbutwhy.com. I love Tim's style and I read his blog to help me get better at expressing complex subjects in more consumable (and funny) ways.
In the post, Tim builds a model for personal grown and achievement based on how Elon Musk works. I love how he makes the claim that our brains are hardware and software and it is the software that really matters. You can work on your personal software every day, or you can keep up with the Kardashians.
I highly recommend that you read his post to get a sense of how this model works.
I have been reflecting on this model as a way to better describe product management. It is the best model I have come across yet. So, I thought it was worth a post to talk about how you can use the "Musk Science Model" to elevate your PM game.
Here goes:
The WANT box is the domain of things your company wants to do. I work for a company that builds software for the construction industry. We WANT to make software products that make that industry run more efficiently and effectively. Right now, my company is thinking hard about a commercial trucking app. Think Uber for trucking. We WANT to build something that will better address this underserved market that is still living in 20th century paper processes.
The REALITY box is putting some tight limits around our WANT to build a trucking app. For instance, truckers today are not typically technophiles. Truckers also currently depend on a middle man called a broker to manage their work. Brokers work hard to build little fiefdoms of trucks and construction companies and have a tendency to lock out competitors.
So, our GOAL POOL is to build a system that meets the market where they are today while automating the current broker, trucker, and construction contractor. There are a bunch of ways to attack this market problem. We could have set a unrealistic goal and try to do something really audacious like disintermediating the broker. However, we decided to stay in the GOAL POOL and start by just automating the current manual processes. We are choosing to do a phased approach and tackle a goal that is squarely in the middle of the GOAL POOL by just automating the current processes.
So, from there we created a STRATEGY that is our best guess at what the market is ready for now. For the next 6-8 months, we will head off and start building software and by this time next year, we should have a few pilot customers trying out the new system. We won't learn to much between now and then since we have to wait until real users try it to know how well it works.
Once we are in pilot, we will be in the ACTION->FEEDBACK->ADJUST cycle for 4-6 months. If things go well, we will have a basic phase 1 product that we can build from. If things go bad, we could learn that no one wants a trucking app or that we just built the wrong thing. It is impossible to predict what we will learn at this point. We just know that we will learn something and will need to react to that.
Over the next 18-24 months while we are incubating this concept, a whole range of externalities could happened. In the category of A CHANGING WORLD, we could learn that self driving trucking will completely eliminate the need for this type of system and make it irrelevant. At that point we will have to ADJUST the REALITY box and potentially change our GOAL POOL and STRATEGY.
In the category of A CHANGING YOU, our company could change where we WANT to focus. For instance, we could discover that solving problems for railroads looks a lot more interesting that trucking and we could ADJUST our WANT box and potentially change the GOAL POOL and STRATEGY.
The thing I love about this model is it is about constant thinking, acting, measuring, adjusting and learning. It fundamentally accepts that to do new and strategic things requires acceptance that we know nothing and are still willing to go for it in a context of learning. The model assumes that we will not get it right. Instead, we assume that we will get to the wrong thing fast and then adjust as we learn.
This all seems like common sense, but very few people and companies are comfortable following this open ended and seemingly ambiguous path. I think if more companies followed this succinct model for product management, we would see exponentially more innovation and progress.
I was initiated into the ways of business at Andersen Consulting in the early 90's. It was a weird situation for me. I never saw myself doing anything in business. I was a computer & engineering nerd. I got my mechanical engineering degree in school and fully intended to work in the aerospace industry building single stage to orbit launch vehicles. In fact, my senior project was to design a closed loop software based gimbal control system for the McDonald Douglas DC-X "Delta Clipper."
My team came up with a really cool reentry mode that spun the craft longitudinally like a football as it reentered and then used the gimbals on the 5 engines to flip it over and retro burn to a landing. It all worked on a simulation on the VAX, but the DC-X crashed on a landing before we ever got a chance to ask McDonald Douglas if they would try it out.
Wow, that was a huge digression. Sorry. Anyhow, I got this cool opportunity to go to work for a Big 6 consulting firm in 1993. Andersen Consulting was known world wide for being amazing at getting big business systems built for big dollars. They did this by drop shipping hundreds of smart yet inexperienced college grads on projects after reading one book on a programming language and claiming that they were worth $100/hr. That is like $200/hr today. They hired for a very specific personality profile: Super Smart, Ambitious, Personable, Competitive, and willing to chase the "Golden Ring." Customers called us "Androids".
In retrospect, the "Golden Ring" is a fascinating concept. Soon after hiring on, a Partner picks you up in his Porsche 911 or Jaguar. You go to lunch in a high end restaurant and he tells you about how he was just like you just 8 years ago making $30K per year. He then tells you the secrets to getting on the fast path and how you can be at the Manager level making six figures in less than five years and Partner making seven digits in eight. We totally bought it. Hook, line and sinker. And we showed up at our customer site ready to move mountains.
It reminded me of this quote about socialism:
“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”― Ronald Wright, A Short History of Progress
It is kind of like all of us middle class kids were convinced we were already millionaires and it was just a matter of time.
We never took an honest and analytical look at the mental math. Lets see. I was making $30K per year. Working 70 hour weeks at $100/hr, we were making the firm $350,000 per year. Seriously. We never thought about it. We just looked at the Partner's Porsche every day and kept hammering along.
In hind sight it is bat shit crazy.
To make matters worse, even though we were chasing a pretty big carrot, there was a pretty scary hammer right behind us. They called it "Up or Out." Basically, you had to keep progressing every year. Keep getting to the next level. If someone stalled out, even if they were good at that level, they were pushed out. I saw guys that were great programmers that 3-4 years into their career at the firm were not moving into team lead roles. Instead of letting them continue to be productive as programmers, they were pushed out.
This pyramid scheme was masterfully set up by the partnership. They already knew they had the partnership largely sewn up. Sure, they would let a few guys into the club each year and make a really big deal about it. This was important to continue the myth. But in reality, by the mid 90's, there were 65,000 employees and about 500 partners. About 10 new partners got in each year. So in reality, you were far more likely to fall victim to the "Up or Out" hammer than the "Golden Ring" glory.
Our customers were largely shielded form all of this. They just saw this army of smart (yet green) kids hammering out mountains of code for 15 hours a day and for some reason could not figure out how to motivate their employees to work over a 40 hour week.
Andersen (and the other large consulting companies) figured out how to productize consulting. It seems like a weird way to say it because we were not making products. We did not make cars or microwaves, or stereos, or computers. We just had people. So it was critical to productize the people. The Firm (as we called it) had honed this whole mindset with the people. They took it even further and told us that we were the elite. We were told we were like special forces and our customers were the army. They told us "You are much smarter than our customers and that is why they hired us, but don't let them in on our secret. We don't want them to feel bad."
We came up with ridiculous methodologies that we printed into three 10 inch thick binders and would thump onto a prospect's board room conference table to help put an exclamation mark that we were the only ones that could make their impossible goals happen. And we were confident we could do it because we had the Method/1 process. That too was a masterful part of the whole productization of consulting. Customers believed that we had the people and methods to make their dreams come true.
To a degree, this was not all just marketing and propaganda. We actually did have a good track record of delivering on tough assignments. For instance, in my first few years at the firm, we completely rewrote the insurance contract management systems at USAA. Then we built the first ever online banking system for them in 1997 and one of the first online stock trading systems in 1998. It just cost them a mountain of cash. My guess is that in the seven years I was staffed at USAA, we billed them over $100 Million. Even in today's dollars that seem ludicrous.
For instance, today, I could pull together a 20-25 person team and build the USAA online banking system from scratch in less than a year for less than $1 Million. That includes hardware, software, licensing, etc. It is just crazy what we got away with in the 90s.
I think part of that is why there is such a tenuous relationship between business and IT. For so long, IT has not been a good partner to business.
In the bad old days, we either would:
- Cost way to much but delivered
- Were cheap, but did not deliver what they needed
- Or worst case, we were expensive and failed
That is probably why business gave up on us and went off shore. I guess they mostly just figured that if it is gonna be crappy or fail anyhow, let's at least keep it cheap. From the mid 90s to the mid 00s, most of the business software out there barely reached the upper echelons of mediocrity.
I think the IT industry and consulting are getting better now. It only took forever. Agile methods put more accountability on development teams to quickly demonstrate business value and grab new levels of efficiency. Also, Agile empowered the business to be able to react early when development teams get off course. I wish I could say that the days when a consulting firm can trick a company into spending millions of dollars on bloated processes designed to maximize cost were behind us. It is getting better though.
I know most anyone that reads this post knows the Agile Maifesto, but it never hurts to go back and read it from time to time...
Principles behind the Agile Manifesto
We follow these principles:
Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.
Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
Business people and developers must work together daily throughout the project.
Build projects around motivated individuals.
Give them the environment and support they need, and trust them to get the job done.
The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
Working software is the primary measure of progress.
Agile processes promote sustainable development.
The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
Continuous attention to technical excellence and good design enhances agility.
Simplicity--the art of maximizing the amount of work not done--is essential.
The best architectures, requirements, and designs emerge from self-organizing teams.
At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.
I know this post is a big rant, but there is an important lesson for us here. We (the IT industry) cannot allow ourselves to revert back to to where we were in the 90s. Although it was really fun being on the consulting side, the long term effects are unacceptable. If you are building software as a consultant or for a product line, you have one responsibility: Deliver value. Every day when you get to your desk and the caffeine starts circulating, write down how you will add value and eliminate waste for the business that day. Do something little every single day and don't leave until you do. Also make sure you clearly understand how your work will further the objectives of your company or your company's customers.
If you are not committed to the mission of constantly delivering value, please get out of IT. We need this profession to be seen as the key differentiator for business success. Every time you are over budget, deliver bad designs, are late, allow poor architecture to persist, or accept quality issues, it is not just a reflection on you, it is a reflection on our profession that can take years to clean up.
TL;DR: Every Day Add Value, Eliminate Waste, And Don't Suck!
In 1999, I left consulting to try my hand as the COO of an electronic health records company out of Dallas called Patient Technologies, Inc (PTI). BTW - I know the name sucks, this was still the 90s and no one knew what to name business software other than TLAs (Three Letter Acronyms).
Anyhow, we had a pretty kick ass mission. We were going to be the first to market with a web based electronic health record specifically for nursing homes. Nursing homes in 1999 were like most businesses in 1970. They were swimming in paper, phone calls, faxes and UNIX based accounting systems. The poor nurses were the coordinator of all care for the patients and spent most of their day coordinating with doctors, labs, pharmacies, hospitals, and families.
EVERYTHING about nursing home processes was ugly. The homes smelled bad and were dark scary places. The residents were miserable and over-medicated. The doctors hated their work. We had this vision of changing all that that through information technology.
It is hard to remember what 1999 was like now. Back then, the World Wide Web was about 5-6 years old and everyone got online with 56kb/s modems. They made this noise that still haunts my dreams....
Web sites were SLOW and static. Business applications on the web were just starting to become a thing. Blackberry had just released their little email device to replace pagers. It looked like this:
Nursing homes talked to all their providers over fax machines. Faxes are based on technology developed in the mid 1800's and have not materially changed.
Nurses would literally line up at the fax waiting on prescriptions, lab reports, and discharge summaries. Nurses were amazingly astute in the arts of fax machine repair and I personally witnessed a nurse swap out a thermal role on the fly without the machine even pausing. This gave me hope that they were technically ready to log into a web application and join the 20th century.
NOPE!
We had this amazing vision to tie together all of the communications revolving around the care of a patient by leveraging the centralized power of the web. We planned to integrate blackberries, pagers, fax machines, scanners, printers, web servers, browsers, laptops and wireless networks to drag nursing homes into the electronic age.
We toiled like the good little dot commers we were. My buddy Pete joined me as our chief architect and we stayed up until midnight all the time sipping beer and coffee and hammering out volumes of code.
Of course our main investor had a private plane (a 1985 Fairchild Merlin) that he took Pete and I on for demos to potential customers. This is the plane we almost died in at least three times:
It was not uncommon for us to setup a server and network in the plane so we could code up what we thought the prospect would want to see at the demo. Remember that this was 1999 and 10 mb/s ethernet was a big deal. To have a whole network and rack server on a turboprop flying to Ft. Smith Arkansas was fucking amazing.
We would tell our tale of how we were going to fix the nursing home industry to the skeptical nursing home experts. We would remove all the phone calls, faxes, delays, errors, documentation, and bad care. We were going to make nursing homes leverage technology to give patients and nurses a better life.
Prospects would become enamored. We would have smart corporate nurses joining us in the dream and executives were already doing the mental math of the marketing value of their ancient homes becoming modernized.
We told them about this utopian future and they told us what we wanted to hear: "We are in." "This is amazing." "What took you so long." "When can I get it?"
So, after we had sufficiently convinced ourselves that we would become dot com multi-millionares, we got back to work, doubled our efforts and staffed up.
We even did an overnight trip to Southern California to buy a hard drive from a guy that was running from the law for nursing home fraud. The hard drive had a key piece of missing code that we needed to have a viable feature set. We were literally up all night in Culver City. One team hashed out the legal work as the fugitive transferred the asset to his girlfriend and then to us. The other team feverishly walked through the code to make sure it was complete and would meet our needs. By 4AM, we handed over a briefcase full of cash and they handed us a 250MB hard drive. Then we got back on the flying server room and integrated the new code into our system on the flight back to Dallas.
At this point, we were really drinking the Kool Aid.
Over the next few months, we got our hosting co-lo set up with some home built servers and went live in our first nursing home. IT WAS A DISASTER.
The nursing home was an old 40 bed cinder block shack. It looked kind of like this:
It smelled like a dead cat rolled into a pee soaked rug and drug through a pit of bat guano. And the residents looked like this:
For months we had to live there. We had rooms in this place. We ate their food. We listened to their cries for help at 2AM. IT WAS MADNESS. Especially after what we had previously been through. We went from flying on executive planes and wining and dining corporate VPs to living in the worst conditions people live in the US.
WHY?
Just because a nurse can use a fax machine does not qualify her to run a centralized web based patient care hub. The cold hard facts were that they just could not use it. Even though we did tests with our parents and friends, these nurses we not ready. Most of them had never even used a computer much less gotten on the internet.
I felt like a turn of the century developer of internal combustion engine cars trying to convince a horse drawn coach builder that there is no longer a need for poop catchers. If you don't know what a poop catcher is, I'll save you the google search:
They just could not understand how this whole thing could possibly work, so we had to be there all the time to basically do it for them. We would type in what they needed. We would scan the documents. We would print the med sheets. We would do everything. They liked the system because three humans came with it. They just refused to learn how to use it themselves.
It was then that I learned how hard it can be to compete with PAPER. Paper is wireless, the batteries don't die, you can fold it, tear it, write anything on it, mail it, fax it, burn it and file it. It is so flexible. Software systems are structured and rigid. This was when I started my career long hatred of the pulp and paper industry!
Well... We kept at it. Eventually, we got used to the smell, got decent at playing hearts, and heard a lot of WWII stories. Also, we worked our way into some nicer and more advanced homes and after a while, we had four homes kind of using the system with limited success. In fact, one home was using it with their doctors, pharmacy and labs. They were drinking the Kool Aid with us. And it gave us just enough encouragement to keep going and keep spending our investor's money. We never stopped to ask ourselves why after a year of hard labor we had only four nursing homes and one paying customer. We had a vision and DAMMIT, we were going to change the world.
Then the dot com bubble burst. Then 9/11. Then we sold to a holding company and got tied up in a 2 year contract.
Then we got THE CALL. This is the point I have been building up to. The period that led to the biggest mistake of my career.
THE CALL was from the largest nursing home chain... The Holy Grail. They heard about us at a conference and wanted to learn more. Once again, Pete and I found ourselves in the Merlin flying to Toledo to make the pitch we had been making for three years now. And it seemed like they got it. They understood the vision and said that they wanted us to become the standard. We just needed to add a few additional features and we would get the business. So I got a rental in Toledo and camped out there for a few months working feverishly with their staff to nail down the functionality. And we delivered. We were down to contracts and implementation planning. It was finally all coming together.
One cold Monday morning, I flew out to Toledo for the signing event and when I arrived, I was met by my main customer contact. I had been through hell with this guy and we were pretty tight at this point. I could tell immediately something was wrong. It was like that moment when you are on what you think is a date and the girl breaks up with you before you even get appetizers... Very Awkward.
We were still in the lobby. My heart and my jaw were on the floor. I was devastated. How in the world could they have been dating someone else this whole time? Who were these other guys? Did they have the "VISION".
Well, it turns out that they did not have the "VISION". This little startup from Canada had just taken the warmed over functionality from the last generation of client server applications and moved them to the web. It was ugly, clunky and CHEAP. It was 1/5 our price.
1/5
Even though it was only 10AM, my customer buddy and I found a bar and started with irish coffees and quickly moved to shots and long island iced teas. I was in total denial all day. I knew there must have just been a stupid mistake. The lawyers must have messed things up. NOPE. It was us. It was our bull headed ideas about changing the world. About jumping ahead. About build it and they would come.
But instead, they bought the basic system from Canada that did just what they needed and nothing more. And it did it for 1/5 our price.
It was many years later before I fully came to terms with what had happened. My ego wanted to believe that we were right and everyone else was wrong. It turns out that we were right to a degree. We were right that the nursing home industry needed a connectivity solution like our software. We were just 15 years too early. Today, this is exactly what the industry wants. But today, everyone is used to using technology to connect over facebook, email, instagram, etc.. In fact everyone expects software to connect everything now. In 1999, no one got it. At All.
If I knew then, what I know now, we would have met the industry where it was. We would have done what those jerks from Canada did and built a low cost basic system on the web. Then we would have incrementally added capabilities toward a 2015 "VISION". That strategy would have won and I would be a rich executive at a nursing home software company today.
I think about how much discipline it must have taken Jeff Bezos to only sell books in the early days. He had the "BIG VISION" from the beginning to take on Walmart. But he was patient. He did not push beyond what the customer was ready for. He built the basics, he did it cheap and he won.
Netflix did the same thing. All along, they had the vision to stream, but broadband was not there in 2000. So they met the market where it was and shipped DVDs. Blockbuster did not see it as a real threat. In the mean time, Netflix got their streaming client in every device possible and as soon and broadband made the last mile, they won. Almost overnight.
Uber is doing this right now. Their real mission is to own the transportation space by buying up all the self driving cars. At that point, we will be in a sharing economy and car ownership will be 10X the cost per ride of a self driving Uber trip. No one will own cars anymore. Uber is just meeting the market where they are right now by having people offer rides with their own cars. That whole thing goes away once self driving is here. The auto industry gets clobbered overnight. Also, trucking, transportation construction, and even public transportation all will take major hits way before anyone has time to react.
TL;DR: Meet the market where it is today and be cheap.
"Sharpening Stones... Walking on Coals... To improve your business acumen." Its a fun little line from an obscure R.E.M. song called Exhuming McArthy off their Document album.
I used to listen to this album in my 1975 Audi Fox so much that I had to replace the cassette tape... twice. To me, it is the best R.E.M album and the most influential work to come out of the late 80's alternative music scene.
Anyhow, once I joined the workforce out of college, I was issued a 386 PC that ran Windows 3.1. We really only used the GUI Operating System to launch a 3270 terminal so we could access the IBM Mainframe and code our little COBOL and SQL routines.
The big thing at the time was to set up your screen saver on Windows to something cool. We also played minesweeper. My cube mate had this radical 3D tube generation screen saver that I could stare at for hours, especially when I got to work still partly drunk from the raucous consulting lifestyle we were living in the early 90s.
I really wanted my screen saver to be something deep and meaningful. I could not think of anything for the longest time and then one day I was listening to my portable CD player with my third copy of Document playing (it was well worth the digital upgrade) and Exhuming McArthy came on.
As I reflected on the line "sharpening stones... walking on coals... to improve your business acumen", I could not help but feel that those words described my job. I got up every day, tried to learn something new, did hard and scary things, all in order to be a little better at business. That line is still my screen saver over 20 years later. It still describes my job. (I know the song is satirical and pretty tongue in cheek. Maybe that is part of what I like about the message too)
Today, I lead a seven person product management team that shepards eight software products. Every day, I come in to work and try to make my team better, the products better, and myself better. Every day is a scary struggle, but it is about running a great business and being great at business.
This blog is about my experiences over the last 20 years in product development and product management. There are already tons of Product Management blogs out there. I have read most of them and will reference some from time to time. I do not intend to cover well trodden trails, but to instead talk about all the experiences I have personally had on this journey. I will bounce around a lot. One blog post may be about product architecture, the next about people, the next about the 90s, the next about 2025. Do not look for linear trajectory here. It is just an amalgamation.
My hope is that others can benefit from the thousands of mistakes and hundreds of wins I have had in my career and this will help people improve their business acumen.
