Business

As someone who flies business class on American a few times per year, I am zero percent surprised that [American Airlines CEO Robert Isom] doesn’t know or care about the experience flying American’s competitors.

...I think it comes down to the classic idea of a “businessperson”. That an executive can just have a knack for “business”. That an MBA trains a would-be executive to run any sort of company. That’s probably the sort of executives who run most companies in most industries. But I don’t think it’s how excellent companies are led. Excellent companies, in any industry, seem to be led by executives who live and breathe whatever it is their companies do, and they stay up at night and wake up in the morning thinking about how to lead their industries in quality.

If the CEO’s primary perspective on the company is via spreadsheets — if it’s all just P&L to them — that company is not going to excel at quality. Or if they do excel at quality, they won’t for long.

On the advice of McKinsey, Nike’s new CEO John Donahue decided to pivot to a “data-driven” approach, reorganizing the company towards digital direct-to-consumer sales and eliminating the former model centered on distinct categories. The allure is easy to recognize, and it’s the same trap that Boeing and other companies fell into over the preceding years.

Coming up with new ideas is difficult and requires specialist knowledge. Moreover, it requires specialist knowledge to understand what those specialists are doing and therefore manage them.

If there was one course I could add to every engineering education, it wouldn’t involve compilers or gates or time complexity.  It would be Realities Of Your Industry 101, because we don’t teach them and this results in lots of unnecessary pain and suffering.  This post aspires to be README.txt for your career as a young engineer.

I saved my company half a million dollars in about five minutes. This is more money than I've made for my employers over the course of my entire career because this industry is a sham. I clicked about five buttons.

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The lesson is simply: consider power dynamics.

Consider “ARRANGEMENT” or discordance not just to be “individual”, but about communication that some spaces are JUST YOURS.

Never allow your furniture to dominate you, but equally, ensure it is not simply generic: personalization is crucial, as a humanization tactic. (We admit we didn’t really get into that.)

Understand that control can be nice for you to feel some sense of authority in this wild world, and the EXECUTIVE WORLD has honed this approach for decades.

Maybe the internet is due for a wave of things that don’t scale at all. In that light, I’ve been fascinated by ‘Morioka Shoten’ in Tokyo - a bookshop that sells only one book at a time. This is retail as anti-logistics - as a reaction against the firehose, and the infinite replication of Amazon. Before the internet that would only work in a very dense city, but, again, the internet is the densest city on earth, so how far do we scale the unscalable?

...and why the era of worker-centered work tools may be over.

Increasingly, I think UX doesn't live up to its original meaning of "user experience." Instead, much of the discipline today, as it's practiced in Big Tech firms, is better described by a new name.

UX is now "user exploitation."

I’ve been looking at this chart a lot over the past few weeks.

It shows us that print ad budgets were doing just fine all the way though the first decade or more of the consumer internet. There was even a little spike upward for the Dotcom bubble. Then the financial crisis and recession of 2008/9 caused a step change down, but when the crisis was over the budgets didn’t come back. Instead, the market had been reset, and budgets have been falling steadily ever since.

You might call this the Will E Coyote effect - you’ve run off the cliff, or the cliff has disappeared from under you, but there’s a brief moment while your legs windmill in the air before gravity kicks in. It can take a while for the inevitable to happen, but then, as Lenin pointed out, you get a decade of inevitable in a week.

It’s easy to dismiss craft and beauty as mere aesthetics, says Katie Dill, Head of Design at Stripe. But that changes in a crowded market. “The quality and details become the differentiation,” she says. “We’re eager to prioritize craft and beauty not simply because we think the world is better when it’s more beautiful, but also because quality is important for growth.” In fact, it was this focus on quality and details in the Stripe Optimized Checkout Suite that helped businesses using it see 11.9% more revenue on average.

Earlier this month, at Stripe’s annual conference, Katie sat down with Karri Saarinen, co-founder and CEO of Linear, and Yuhki Yamashita, Chief Product Officer at Figma, to explore why craft and beauty are essential to user experience, business growth, and getting ahead of the competition. You can watch the panel discussion here, or read on to see highlights from their conversation.

I recently built an education tool.

Like other enterprising folk, I stumbled into a ethical dilemma: (1) my product probably shouldn’t be paywalled, but (2) I also don’t want to be poor.

My solution: uglify the UI for non-paying consumers.

[Slack is] selling a reduction in information overload, relief from stress, and a new ability to extract the enormous value of hitherto useless corporate archives. We’re selling better organizations, better teams. That’s a good thing for people to buy and it is a much better thing for us to sell in the long run. We will be successful to the extent that we create better teams.

To see why, consider the hypothetical Acme Saddle Company. They could just sell saddles, and if so, they’d probably be selling on the basis of things like the quality of the leather they use or the fancy adornments their saddles include; they could be selling on the range of styles and sizes available, or on durability, or on price.

Or, they could sell horseback riding. Being successful at selling horseback riding means they grow the market for their product while giving the perfect context for talking about their saddles. It lets them position themselves as the leader and affords them different kinds of marketing and promotion opportunities (e.g., sponsoring school programs to promote riding to kids, working on land conservation or trail maps). It lets them think big and potentially be big.

Fulfillment is a multimedia installation that examines aspects of the “hidden-in-plain-sight” landscapes of e-commerce, cloud computing, crypto-mining, as well as the legal contracts that bind us to these technological systems. Both horrified and fascinated by the dematerialized digital systems of transaction and communication, Linder uses pen and paper to critically reconnect the digital world to one of tangible nature.

The chief of Emirates, one of Boeing’s largest clients, has said the crisis-stricken US aircraft maker should ensure its new chief executive has engineering experience to restore safety standards.

A day after Boeing chief executive Dave Calhoun announced he would step down, Sir Tim Clark also said he backed efforts by the US group’s largest labour union to win a seat on the board.

“To fix Boeing’s issues the company needs a strong engineering lead as its head coupled to a governance model which prioritises safety and quality,” Clark told the Financial Times on Tuesday.

Recently, I’ve been thinking about developing domain expertise, and wanted to collect my thoughts here. Although I covered some parts of this in Your first 90 days as CTO (understanding product analytics, shadowing customer support, talking to customers, and talking with your internal experts), I missed the most important dimension of effective learning: getting your hands dirty.

...So often executives take a view that the constraints are a problem for their teams, but I think great executive leadership only exists when individuals can combine the abstract mist of grand strategy with the refined nuance of how things truly work. If this stuff seems like the wrong use of your time, that’s something interesting to reflect on.

One question that is still hard to answer after 10 years of working on Are.na is “what is the long term vision?” This is difficult for a few reasons.

One reason is that we have to calibrate our definition of long term with the person who is asking the question. Are.na is a lifelong project. Our ideal outcome as a company is not becoming the next Facebook (god forbid), it’s becoming the next Nishiyama Onsen Keiunkan, a hot spring hotel in Japan, and one of the world’s oldest businesses (founded in 705 AD).

macOS software that adheres to craft — Things or Carbon Copy Cloner or BBEdit or Sublime Text (which, despite not being “native native” feels so solid and so responsive you’re willing to overlook its quirks) or Bear or Alfred or iA Writer or Keynote (arguably one of the best pieces of macOS software of all time) or anything by Panic, heck, even Terminal or Quicken (which, against all rational expectations is just a joy to use)5 — exists in troves, the existence of such proves to the Slacks or Twitters or Adobes of the world that it’s not impossible nor rare to produce craft-oriented software in service to user fluency, and still make a profit.

In fact, there’s a business case to be made for being craft- and fluency-focused. We’ve seen entire companies with business models that could be summarized as “Bloat-Free X” emerge in recent years. Affinity is bloat-free Adobe. Install Adobe Creative Cloud on your laptop and marvel at the no fewer than a dozen processes whirling around in the background for unknown purposes. It’s no surprise Affinity Photo and Publisher and Designer have taken off. Sketch’s main feature for many years was simply: Not Adobe.

And the web! When you care — when you really give a shit — the web is awe inspiring. I still can’t believe Figma is web-native (also born from the Not Adobe camp). That an application can feel so powerful, so fast, so well-crafted and be fully web-based should be a kind of lighthouse-archetype for all other sites lost in a sea of complexity and muck and unnecessary frameworks.

This is not just a succinct distillation of a practical and powerful work method but one for a successful company culture too. And this is how Musk runs his companies. Isaacson's book is easily worth the read for the countless case studies illustrating exactly how these points are applied.

The trick to getting the best out of Musk's method is to realize that you needn't celebrate the madness as much as merely accept that it's part of a package deal. Like it so often is. One of the memorable quotes from the book reveals that even Musk himself realizes this: "Did you think I was just going to be a normal, chill dude?".

You can absolutely learn from people you wouldn't want to be. Extracting wisdom from Musk's success does not oblige you to become his disciple or his mirror. Besides, you'd probably fail miserably in an attempt of the latter anyway.

The process of competition ensures a better user experience, and at the same time disincentivizes companies from engaging in too much enshittification. But it would seem like the decline of Myspace or the decline of Research In Motion (the maker of the once popular Blackberry, which was superseded by the iPhone) are more of the exception than the rule. After a certain threshold is crossed in terms of market saturation, competition becomes less of a threat.

...So even if [Doctorow] is right that big tech companies are becoming shittier, I don’t see the final stage in which people leave the platform ever happening either, or that better platforms arrive and introduce competition. We’re stuck in stage three forever.

To be clear – I don’t think that ads are fundamentally bad and user-hostile. Many a modern small business has been built on the back of ads. I also do believe that the browser company has their heart in the right place, and can likely create a much more user-aligned ad model while also delivering a next generation browser with incredible UX. I love their mission and want them to win – we all love a David and Goliath story after all. I just find the implication that they’re not gonna have the same incentives and business challenges as Chrome a bit hard to believe. Would much rather they be honest about it.

I've touched on this idea before – that software practices just don't matter very much to business outcomes. This is basically why I think more companies don't "do XP" – it's technically, operationally, and emotionally hard, but it's not so much more effective that companies that do it outcompete ones that don't.

What I'm very much not saying, though, is that programming practices don't matter.

They matter a lot! I value pairing and test-driven development for themselves. I value good code and good software for itself.

How many entrepreneurship programs out there require their students to start a real business? They may exist, but I’ve been around and haven’t seen one yet.

...Instead, there’s a lot of talk. There’s a lot of abstraction. There’s a lot of strategizing. There’s a lot of business plan writing. There’s a lot of game play. There’s a lot of theorizing. And there are plenty of case studies.

But there’s very little guitar being played, clay being formed, and balls being hit.

Imagine learning guitar by planning how you’re going to play. Or learning how to throw a pot on a wheel by presenting a Powerpoint on it. Or learning how to keep the ball in the lines by studying how the lines were painted.

The bane of large interests is that, just by dint of communication complexity alone (leaving aside politics/fiefdoms, "compliance" process and associated mandatory trainings, etc), they are extremely wasteful machines that largely squander human creativity and wisdom all while generating massive revenue due to small but effective groups within.

Think the Pareto Principle: 80% of the value from 20% of the people—except it's likely worse than 80-20.

I thought I’d write a follow-up to my post a couple of weeks ago about Japanese urbanism.

...Briefly, I attributed the awesomeness of Japanese cities to:

• Zoning that tells you what you can’t build in an area, instead of what you can build, which allows most areas to have shops and restaurants
• Zoning that forces shops and restaurants to be smaller in more residential areas
• Policies to promote small, independent retail businesses over large ones
• Public safety
• Noiseproofing and noise ordinances
• Excellent trains
• Nice public spaces

That list was, of course, pretty reductionist. You could implement those same policies elsewhere in the world, and while you might get a really awesome city, it would still be very different from Tokyo.

...[So] I thought I’d talk about some of my takeaways from Emergent Tokyo and from Joe’s paper, and how these insights could be applied to improve other cities in the U.S. and beyond.

Philippe: Tell me, Driss, why are people interested in art?
Driss: It's all business , I guess.
Philippe: No. It's the trace of our passage on this earth.
Driss: Bullshit. For 50 euros, I'll do you a trace of my passage. I'll even add some blue!

In a given geographical territory, half as many people will not support half as many such enterprises spaced at twice the distance. When distance inconvenience sets in, the small, the various and the personal wither away.

Organic Software is software that...

1. Has no external pressure (eg. from funding sources) to chase funding rounds, grow unsustainably, or to get acquired
2. Has a clear pricing page, discloses their sources of funding, and sources of revenue
3. Doesn't make majority revenue from selling user data to third parties

The CYCLE OF GOODNESS® is the corporate philosophy established by YKK’s founder, Tadao Yoshida, who believed that “no one prospers without rendering benefit to others.” It expresses the basic belief of the YKK Group. Tadao Yoshida firmly believed that business belongs to society. As an important member of society, a company survives through coexistence. When the benefits are shared, the value of the company’s existence will be recognized by society. When pursuing his business, Mr. Yoshida was most concerned with that aspect and would find a path leading to mutual prosperity. He believed that using ingenuity and inventiveness in business activities and constantly creating new value would lead to the success of clients and business partners and make it possible to contribute to society. This type of reasoning is referred to as the CYCLE OF GOODNESS® and has always served as the foundation of our business activities.

The real test is the question “what are you willing to sacrifice to achieve simplicity?” If the answer is “nothing”, then you don’t actually love simplicity at all, it’s your lowest priority.

It’s so easy nowadays to get up and going on a project. I can burp some npm commands into my terminal, burp some more to setup a deployment pipeline and blam! Website. The time to product demo is so low. You can get far on your own… very quickly… but then… you’re on your own. And it’s possible you’ve built something way past your ability to maintain.

Designing UI is designing an organization.

You can only design and make real a UI that matches an organization’s capabilities to deliver on its promise.

This is why startups are best suited to these kinds of radical UIs tailored to reality. Their entire organizational structure, which is small, can orient around a single idea and deliver on it — then build to scale.

Your UIs, and the real life experiences they deliver, can only ever be as good as an organization’s capabilities to deliver on them.

Peter Drucker said, “Culture eats strategy for breakfast”.

If you want to make an effective organizational change and are struggling, look at the communication structure and the culture. If you try to fight against this, you’ll hit significant friction, as I experienced this year. Thoughtworks introduced the idea of the Inverse Conway Maneuver to address this. It’s a framework for building low-risk experiments and autonomous teams that are empowered to make changes in an org while sidestepping the constraints of the existing communication structures.

The DOJ complaint against Apple filed yesterday has led me to think, once again, about the increasing chasm that exists between antitrust theory and basic common sense & logic. I think this dissonance is getting worse and worse, to the point of mutual exclusion.

...If I opened a chain or restaurants that became the most popular in the world and everybody only wanted to eat there, would I then have a duty to sell competitors' food and drinks so as to not "exclude" them? Would I have to serve the DOJ's favorite dishes?

And, to be clear, I am aware that the DOJ is saying that Apple is maintaining its iPhone market position thanks to anticompetitive practices but, quite frankly, discounting the possibility that users simply PREFER the iPhone in this day & age is ludicrous to me.

Metrics come up when we’re talking about A/B testing, growth design, and all of the practices that help designers get their seat at the table (to use the well-worn cliché). But while metrics are very useful for measuring design’s benefit to the business, they’re not really cut out for measuring user experience.

The Macintosh as a computing experience and cultural object in 1984 felt fun and liberating, a scrappy upstart on the side of the people; now Apple is an illiberal behemoth, a tightfisted keeper of a walled garden.

If you look back another five years to 1979, however, you can see that Apple has had a remarkably consistent vision of what it wanted to make, and how it would make money from what it made. What we dislike about Apple now was there at the start, part of the company's original design principles.

...With snappy words, [Jef] Raskin wrote that "the computer must be in one lump," "seeing the guts is taboo," and "you get ten points if you can eliminate the power cord" and run the thing on a battery.

People are so inundated with information about 1% of the companies that they forget to ask how they might make incremental improvements vs. our nearest competitors. If you're working in a regulated environment and getting a customer in direct contact with a team is hard, there's a good chance it is ALSO hard for your competitors.

...Set aside time to figure out how your competitors are working (and what's working and not). What practices are "common" in your context, and where are there opportunities to set yourself apart? What specific capabilities must you evolve and strengthen as a company? Avoid handwavvy words like "Agile" or "Modern Product." Get specific. 

What is one area in which you can get incrementally better?

Adopting existing tools that work, applying them to the business problems at hand, and quickly iterating in the business domain rather than endlessly swirling in the vortex of technobabble is woefully underrated.

...As long as companies keep making people solve obscure puzzles that has nothing to do with the job or hiring managers keep employing automated systems to look for keywords in resumes, a group of smart people will always engage in techno-maximalism to prepare for the next big opportunity; setting the underlying product up for failure.

...There must be a middle ground where developers can focus on the core business logic that yields the most value without incurring technical debt and making the development process a nightmare.

Early on at Sentry I attended an event with a number of seasoned CEOs and leaders, including one of whom worked under two sitting US presidents. They will tell you the same thing I’m telling you today: everyone makes the mistake of hiring the wrong people, and then failing to terminate the relationship in earnest. We do this because we want to give people a chance - to coach them. We do this because we want to avoid conflict. We do this because we lack confidence in our decisions. Then, when we do this, we create a mess of problems for organizations, sometimes even dooming them.

This is where the Fire Fast mentality comes into play, and anyone will happily nod along and say “yeah stop hiring shitty people”. The problem with leaving the conversation there, is often people fail to address the problems that got us into those situations. What would you have done differently to avoid hiring the wrong person? It’s a pretty straight forward question, but it’s not one that’s always easy to answer. There are however some really common scenarios that I’ve lived through, so I want to give some direct-from-the-source tips today.

The component works. And because it works, nobody pays attention to it.

This is the promise of a design system made manifest: Consistent, quality experiences for complicated interactions, distributed at scale with minimal fuss.

This is objectively great. The problem, however, is how we talk, or fail to talk about this type of success.

Big, flashy things get noticed. Quiet, boring things don’t. A lot of design system work is the exact opposite of glamorous, and this effort is no exception.

In a business context, design system work means numbers go down. Less bug reports, faster design iteration, shorter development cycles, fewer visual inconsistencies, smaller staffing requirements that enable folks to work on more interesting challenges, etc. All good things.

Unfortunately, contemporary business practices only reward numbers going up. There isn’t much infrastructure in place to quantify the constant, silent, boring, predictable, round-the-clock passive successes of this aspect of design systems after the initial effort is complete.

Of course the output of a solid design process can be groundbreaking and beautiful. It's also true to say it requires a creative mind to find solutions to tricky problems. But one of the things I love about design – and service design in particular – is that it's more about fixing the basics than coming up with the shiny thing.

When you fix the basics – through a process of internal service design – you get satisfied customers, more efficient operations, and happier people in your organisation. Those are the real by-products of a design project that is successful, meaningful and has a positive impact.

A calm company's purpose is to provide exceptional service to customers while simultaneously improving the lives of the people who work there.

By default, a calm company is profitable. Those profits give a calm company its resilience: there's no last-minute scramble to meet payroll or earn a last-minute sale to keep the business afloat. The company has enough financial margin to weather economic storms.

Moreover, calm companies are fun to work for. The work is usually interesting and enjoyable. The team has been carefully selected, and there's a good vibe in meetings.

Calm companies provide meaningful work, healthy interactions, and flexibility for people's lives. If your kid is home sick, you can set work aside and take care of them. If it's a beautiful day, you can go for a run on the beach.

In retrospect, 2023 felt like the closing of a chapter. At least for a class of design leaders, who spent more than a decade participating in a massive expansion of design’s role across every sector of business, from tech to accounting firms and insurance companies.

...The very people who advocated successfully for a “seat at the table” when design first made inroads into big business (and jump-started thousands of creative careers) find themselves at major crossroads with fewer seats left.

Whether you’re a product engineer, a product manager, or an engineering executive, you’ve probably been pushed to consider using Large Language Models (LLM) to extend your product or enhance your processes. 2023-2024 is an interesting era for LLM adoption, where these capabilities have transitioned into the mainstream, with many companies worrying that they’re falling behind despite the fact that most integrations appear superficial.

That context makes LLM adoption a great topic for a strategy case study. This document is an engineering strategy document determining how a hypothetical company, Theoretical Ride Sharing, could adopt LLMs.

The tech info-sphere is currently awash in talk of real vs. fake, best vs. rest, do this vs. that, tech utopianism vs. AI hysteria, top-tier vs. mid-tier, use AI or be used, and founders vs. workers vs. managers vs. VPs. People are processing that the companies they joined are, well, companies with factions, investors, confirmation bias, and competing needs.

...It's all a self-reinforcing loop—a doom loop that's dividing people. We need to find ways to rekindle and amplify the excitement, fun, challenge, and joy—for our well-being and the well-being of others. We need to lift people without being so serious.

Whoever has the power and influence to create bastions of challenging fun where teams can experience how rewarding it can be to make stuff and have an impact together—I think that's what we need now. It is also what will jumpstart teams and kickstart hiring because teams having fun will be much more impactful, and real teams will be less divisive.

Productivity? Efficiency?

I’ll take “Having fun building stuff that has impact” any day.

Direct Management does not include or permit the concept of profit to occur. The management is fee-based, or based as a fixed salary, and all construction costs are fixed ahead of time, and the building design is modified during construction, to make up any over-runs. The manager is not able to move money around at will, or put it in their pocket. At the same time, the design is approximately fixed, but with the understanding that it may be changed, during the evolution of the building, so that subtle adaptations can be included in the emerging building. In the Direct Management method it is the architect themselves and the direct manager who together manage the building works and all on-site construction for the owner.

Huy Fong's Sriracha hit revenue of $150m+ a year...with no sales team, no trademark and $0 in ad spend. Its creator is Vietnamese-American David Tran, making the sauce's success a tale of immigrant hustle and a product that literally sells itself.

More than ever, people are choosing how to spend their time based on the amount of attention they can garner—and you and I are no exception. Everyone is susceptible to this logic. But what I want to argue in this piece is that tech startup founders are particularly susceptible to this tendency.

Working at and around startups for several years, I’ve noticed many founders prioritizing culture, visibility, and perception over product, customer development, and strategy. Maybe this is to be expected in a time where culture moves faster and is perceived as more important than ever. But I find it unusual that the tech industry seems unaware of a whole class of typical mistakes founders make in pursuit of cultural relevance.

Even many companies that ostensibly specialize in software, such as enterprise development companies, do not specialize in software. They specialize in enterprise sales, and simply need to produce software that does not collapse until after the contracts are signed. Then they charge their clients for variations, which I can only describe as some absolute motherfucker behavior. There is value in the software being well-engineered, but you can extract most of that value by being able to ship one bug-laden feature every six months. It's the old 80/20 adage - you just need to be able to do work that isn't going to immediately explode, and I passed that standard approximately one year into my career. Most problems are solved by CRUD apps with some simple integrations, and they really aren't that hard to make "good enough", though it would take me a lifetime to make them perfect.

It's easy to have strong opinions about stuff only developers see since user validation is just asking people like yourself. It's much harder to name something consumer facing. Here are some useful rules I gleaned from Apple:

• Two syllables max
• Familiar English word - literal 5 year olds can spell and pronounce it right
• Starts with A - useful for alphabetical sort. Amazon did this too
• Name leads to easy logo/swag/branding ideas
• Evoke aspirational qualities - knowledge, health, nature

How do you learn to run a company at 21 with no business experience?

Throughout the years in business I found something, which is, I’d always ask why you do things, and the answers you invariably get are “oh that’s just the way it’s done.” Nobody knows why they do what they do, nobody thinks about things very deeply in business. That’s what I found.

I’ll give you an example. When we were building our Apple Is in the garage we knew exactly what they cost. When we got into a factory in the Apple II days, accounting had this notion of a “standard cost.” Where you’d kind of set a standard cost and then at the end of the quarter you’d adjust it with a variance. And I kept asking, “why do we do this?” And the answer was just “well that’s the way it’s done.” And after about 6 months of digging into this what I realized was the reason you do it is because you don’t really have good enough controls to know how much it costs, so you guess, and then you fix your guess at the end of the quarter. And the reason you don’t know how much it costs is because your information systems aren’t good enough.

But nobody said it that way. And so later on when we designed this automated factory for Macintosh we were able to get rid of a lot of these antiquated concepts, and know exactly what something costs, to the cent. And so in business a lot of things are what I would call “folklore.” They’re done that way because they were done that way yesterday. And so if you’re willing to ask a lot of questions about things and work hard you can learn business pretty fast. It’s not the hardest thing in the world. It’s not rocket science.

Organizations, like people, have values. To be effective in an organization, a person's values must be compatible with the organization's values. They do not need to be the same, but they must be close enough to coexist. Otherwise, the person will not only be frustrated but also will not produce results.