Lenny Rachitsky: evaluation

Transcript context

…Yeah. Well, one of the reasons I loved it is he very rarely talked about product. He loved to talk about his products. He loved to talk about why the iPhone was awesome, why the iPod was awesome, why the Mac was awesome, but the nature of building products was not. I mean, that was his secret sauce if you will, is he had very good insights to this. And so to find this hour plus interview where he's very thoughtful. He had a chance to think through what went well, what went wrong. And to answer your question, in my own writing, and in fact in the recent book Empowered, I share my theory for why there's such a big difference between the best and the rest. In other words, why isn't every company trying to work like the best companies? I mean, why not? Look at the valuation they get. For money alone, you'd think it would do that. And my best theory was that, well, the biggest reason I see is that they have never worked at a company like that, so they don't know what it looks like. They don't know what good looks like. And then I watched this video, which, as you know, resurfaced recently. And Steve Jobs shared his theory from 1995, for God's sakes. And I'm listening to it and I'm going, "Oh my God, his theory is better than my theory for sure." And it's still more relevant. And he talks about product discovery, he talks about process people, he talks about all these really relevant topics. But the one that struck me the most was his theory for why there are so many bad product companies. And his theory was, and by the way, I hope everybody that's listening to your podcast, it costs $4 to rent this on Amazon Prime. Definitely you should watch it. The whole thing. So don't let my summary discourage you. It's worth watching. But anyway, he shares that he thinks what happens in general, as companies get bigger, obviously they wouldn't have got big if they didn't have a decent product at one point or another. But what he was talking about is the same thing I am. Why is it that so many companies lose that mojo? And his argument was because as a company gets bigger, product historically became less important. The people in a company that would be celebrated were marketing people, sales people, finance people. If a company stops innovating, these are the engines for growth. Sales, marketing, or not growth with finance, but cutting cost. And his argument was this happens over time. Pretty soon, these are your leaders. They're the ones that have been promoted. So then what happens? Good product people don't want to work there anymore and they leave and they go to a company that values product. I think that's a better explanation than any other that I've heard. And it was so prescient because when he said this, this had yet to even happen to so many other companies, but it still happens all the time. I wrote an article a while ago called Devolving from Good to Bad that was observing some of this, but he really tapped into it. And honestly I think he's spot on. I like that he describes these as diseases of a company. They own enough market share. This is what happens. Growth is happening. They're winning. They don't need to keep innovating and it becomes this disease. And it's a really powerful way of thinking about it that you want to try to keep this disease from taking over your culture and product and company. And I think there's market share. And then just generally, it happens to companies just doing well. Things are going well, let's not break anything. Why launch something risky and new, and why not just keep selling this thing that everyone seems to want? And actually, Lenny, I think it's worth highlighting because that is an anti-pattern I see a lot, especially after the founders leave. You know how a lot of times in product, we'll talk about there's value creation activities, there's value capture activities. Discovery is all about value creation, optimization's all about value capture. And they're both great, absolutely. You should do both, but so many companies after the founders leave, they're scared. They're literally scared. The product teams are scared, the executives are scared. And the reason they're scared is because they don't know what is essential and what is incidental. They're scared they're going to hurt the thing that's fueling the business. Now of course, the founders knew the thing because they were there from the beginning. They have all this institutional knowledge. They know what's important, they know what's not, and they have that confidence. Sometimes we talk about the moral authority of the founder. They know and they know deeply what is essential and what's not. But when they're gone, very often we see companies that are scared. I can tell because all they're doing is little low risk, Optimizely A/B tests. They're just doing these little A/B tests. They're just tweaking the workflows, the main flows, growth, retention. They're just tweaking. And again, there's nothing wrong with that, but those things will not innovate. They will not cause major improvements to the company. So once they stop doing real discovery, to me, it's just the beginning of the end.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.