Lecture 17 - How to Design Hardware Products (Hosain Rahman)

very exciting and thank you Sam uh for having me Sam and I have known each other for for a long time because we were fellow Sequoia companies and we met in the early days of when when he was on his uh company Journey um and so it's cool so what he asked me to talk about um today was a little bit about sort of the hardware journey of building products and so what I wanted to do is give you guys a little bit of an overview of jawone what we do how we think about the

world um and that informs how we build products and then goes specifically into the process of how we design how we develop and how that all kind of comes together and sort of what we do to to change categories so first off I always like to start with with sort of the broadest thinking and and the way we look at the world um is we think of ourselves at this intersection of of really crafted Innovation um in engineering that's almost invisible to the user in terms of its functionality and that's at the intersection of even

Beyond design we've been doing design products for you know well over a decade now we think of it as going the conversation has shifted even Beyond design into Beauty and it's that section of engineering meets Beauty and the whole point is to help people with a better life with technology um and largely speaking we we do play in this world of what everyone's talking about now is the Internet of Things We were there much longer uh before there was such a a moniker um and the way we think about that is it's smart devices that

have computing power and connectivity with sensors in them that are measuring all kinds of things they're wirelessly connected and they're all talking to you and we started on this journey really really early right actually out of engineering school here uh and we were developing core technology we decided to build consumer products around that our first consumer product was the headset we we sort of created um a headset that became a wearable computer it was the first job on headset um that was when we started thinking about wearable Computing we then um invented the wireless speaker

space um around Bluetooth audio and I'll talk a little bit about that Journey uh and then most recently we focused our attention on sort of this whole wearable Health Revolution and using a lot of the sensors that we did in the in the first generation of headsets and applying them to other parts of the body to understand more about users so our view of of this world having been here for a long time is that it's a little bit of a mess um in the Internet of Things everything in in the world is smart and

connected and everything has an app built to it that doesn't mean that it's easy for users right your microwave your refrigerator your car your Xbox your Xfinity Comcast everything has an app it doesn't talk to each other it's really confusing for the user so we think that there's a desperate need for an organizing principle around all of this and this is sort of the core of when we start to think about how we build an opportunities to sort of create products we think about where is the world going and so if there is going to

be such a world that that everyone's talking about around the internet of things which is happening you do desperately need these organizing principles so that it's easier for users to understand how to come in and interact with these services so we think the thinking needs to shift from being less about the actual things to being about the individual ual user and so ultimately when everyone's talking about wearables and you have things like Google Glass and you have the stuff that we do and you know Apple watch and all this stuff ultimately what we believe is

that when you have things that are on your body 24/7 they become This Kind of Perfect context engine for everything in the world around you right so my phone is not on me it's in my jacket or sometimes on the charger but my Up is on me and it it understands everything that's happening with me it's tracking my heart rate it's tracking my respiration it's tracking all these different things and when I when I say context engine I know I can tell the smart thermostat my Nest that I'm hot or cold that device doesn't have

that understanding I can tell it's hot that device I'm hot because I'm sick I went for a run it's hot outside I can tell your car that you're falling asleep that you're agitated or irritated so this is ultimately where we think the world is moving is that wearables are going to be the center of this this revolution around everything being connected and smart and they're going to drive what a lot of those interactions are going to be and how they're going to work right and so that's sort of the first principle that we think about

when we start to think about okay where are things going and what we should should we build and how do we think about new categories right so in order for the vision of what we're talking about to happen you actually need to be great at almost everything we need to be great at what we call the full stack we have to be amazing at building Hardware um and these are Hardware experiences that people have to keep on all the time right you have to wear them 24/7 because if you don't then everything that I'm talking

about is sort of a castle in the air right you can't actually create a service that people engage with or get lots of data off it to then go power all these other things if it doesn't start with great Hardware so that's where we start we try to build you know these magical experiences in Hardware they're absolutely powered by software we have developed um worldclass software application expertise um we've got to be as good there from an engagement perspective as something like an Instagram or WhatsApp and then on the data side we've got to know

what to do with this this massive amount of information and process it and push it and and have it work for the user so we really see ourselves as being at the intersection for the first time of a company that's doing Hardware software and data as three kind of equal stools that have to work together in order to unlock that experience around something that's on you knowing what's happening and then talking to the rest of the world around you so that's a pretty key piece of what we do I think it's different than what a

lot of other companies do and it allows us and requires us to play at all levels of Stack now this was a complicated thing for us to put together because typically you know people who are great at Hardware understand mechanical engineering electrical engineering how those things interact how you build um at scale how you build tools Etc um they're not typically great at at building software and services right it's a very different discipline a very different skill set so when we first put those pieces together that created a lot of really interesting friction in the

company our software and our application team was so used to moving really really fast and iterating whereas in the hardware World you've got to take your time because your iteration Cycles are much more deliberate you have tooling that takes 16 weeks you can't just tweak stuff and you can't hack it in the same way and so what was interesting to see as we put all these pieces together the hardware team learning to move faster the software guys thinking more about how do they resolve experiences before you actually have to ship it versus just throwing something

out and AB testing it and then the data science sort of informs all of that with sort of more information to make different kinds of decisions so how do we think about how do we go how do we build products how do we change categories first of all everything for us is a system right we don't think about it discretly just as a piece of Hardware discretly as an application or discreetly as a as a platform we think about it across the whole thing and so this is an example with up right where we have

these tracking sensors on the body algorithms there it connects to the phone where you have this engaging application and service experience we use the sensors in the phone that talks to a lot of stuff that we're doing in the Cloud where we're taking all that information driving inside on it and then we have a huge platform of thousands of developers where they have thousands of apps that then plug in and also create more experiences and so we think about it across the whole spectrum and I'll come back to this system think in a in a

second so what does the actual process of of creation look like and this is fun for me because we don't actually talk about this very often it's quite you know sort of um we keep it confidential and private and I know that we're talking now that we we're on sort of a live cast every so it's fun for me to talk about this for the for the first time because it's not it's it's quite a deliberate process right uh and this is a little bit of what it looks like and and this is kind of

a map where we are very unbridled in our imagination in the exploration phase we start to validate some of our Concepts bring those ideas Tighter and Tighter and Tighter and then we actually start to build a product launch it and then iterate right that's the simplest way to look at I'll take you through each of these steps so in the exploration phase it is very wild it's imaginative we think about the vision of where the world's going what our strategy is what does the brand stand for U and we think of a lot of of

of what you guys do here you're dreaming you're imagining it how do you disrupt what's the future going to look like right it is a little bit science projecty sometimes and and and we talk about it in that way right and we do build from inspiration and insight and that and it sort of raw creativity and we want to create and we try to create a form where that's okay cuz a lot of times in companies that gets lost and then when we start bringing it to early validation I always say like look everyone when

you're doing this stuff you have to now take those Concepts and prove them a little bit like you do a PhD thesis right where you have your conclusions you've done your you know empirical data collection and you start to say look here's where we see it going here's what it's going to do right and you outline the story and then once we've sort of signed off on that phase that we think okay you know what there there this theory is right we start to go into a concepting phase where we start to really think about

what is the the experience and what's possible and this is this is another interesting opportunity for Innovation at a more specific level of how this thing will come to life or what it is and how would we sell that experience and how would we tell that story and then it and then we decide that it's a program and it goes into a heavy planning phase where we start to look at and say okay we're doing this we've got to ship it there is no turning back right what are the tradeoffs between all the creativity and

all the ideas we want versus what does the physics dictate what do you know battery power or all the different constraints that we have and start making those tradeoffs and start to look at you know how do we pull that together and then we move into um a development phase where it's a handoff between various stages um and and really various functional teams in the company and you pull it together and you're solving problems as you go implement this and you launch it uh and you learn um and you see what users think and then

you start to think about where does this stand in that experience Continuum that you've been imagining where the world's going to go what have we achieved what haven't what have we learned from our users how does that change what we're thinking and then we start right over again right so that's the broadest way to think about it um a little bit deeper on the exploration phase right so it is very much like a building and tinkering process right and and a lot of it is driven by what we call Demo Fridays where people kind of

have an opportunity to go showcase their work because we find that that's a great way to pull it together pull it in a form that others can consume it and give feedback right and it's a it's a it's a really it is a show and tell um obviously hackathons are a big part of it there's lots of data that that gets driven and it's led by our our strategic development team which is traditionally called sort of an R&D team and there's participation from product and Engineering both Hardware software um but they're sort of taking a

backseat and they're looking at what these Explorations are right and the executives in the company at this phase are more of a sounding board they're there to poke and prod and tell people hey think about this or did you thought did you try that how does that work right so and in this phase in order to move to the next threshold we think about it literally as hey would I give this guy 50 Grand it's a little bit like an angel investment right would I give this guy 50 Grand to go explore this and see

if there's a there there is there something to do and our CTO is the is a sort of final decision maker he gets to sort of pick those things internally and say you know what I I like all the feedback this is the one I want to go chase down and see what happens right so then we get into this validation phase and this is where it starts to get really still led by R&D but they're really poking at it and they're saying how does this work we have these leadership meetings with the broad across

functional team I have to show results I have to go through a scientific process to outline you know why this works why why is it going to happen and and you'll hear this is really when we start formulating a really important tool that we use in the company which is what we call Wise defining the why are we doing this why does this exist what problem does it solve I'm going to come back to that in deeper in in a minute right um and so at this point it's still an R&D lead but this is

when a lot of our um industrial design team you Bahar and few project guys they come in they start to think about okay how can I pull this concept into something physical if it's hardware and how's that going to interact with the rest of the pieces of the system our product experience team is still also driving a lot of the core values and and what the storyboarding is but it starts to become a lot more real this is when we start thinking about okay how would we build this you know how expensive is going to

be what's the budget going to be Etc right um and at that point right we start to really validate can we actually build it or do we have to wait 3 years for Batteries to be there or or do we have to wait for this other Innovation to happen or do we have to wait from a budget perspective or whatever it is is there a business viability and then we start to really start to sketch kind of um briefs and this is where I come in and and make the final decision on okay I think

this is there's really a there there and we can now take this to the next level and get it into into a play and then we go into the concept phase right and this is now when the the responsibility shifts from the R&D folks to what we call a product experience team and the way we think about product experience at Jawbone is sort of what everyone thinks of a sort of conventional design so from industrial design to you know software design to audio design to you know anything in that touches that experience we have writers

on that team storytellers we have you know ID people like Eve or um you know genius creatives we have amazing you know app level designers graphic designers everything it's all in one team and we call that product experience and their job is sort of from bits to Adams and back and all the way through to unify as as one organization um and that's when they sort of take a hold of this and they start to really kind of work out what is what is and this is what we call when you're starting to really drive

the wise right thinking about what's possible there's a lot of innovation and creativity now in the actual implementation of how we're going to build uh and create a product and we start to say like what are the most important things in that product that what are the most important problems we're going to solve we call them hero experiences right what are we going to do how what is the bar that that will be acceptable Etc right um and at this point we start to really resolve what we call these wi which I'll show you again

in a minute um and why is that different from what anyone else has done from the competition from the category and then what is where does it go right it's we don't like to do just oneoff things we have to see a broader vision and this is part of that that creation experience is we look at at where do we think the world is moving and how is this thing going to be a stepping stone to that ultimate envion that's where the road map starts to get fleshed out again I have the ability here to

come in and sort of be the final decision maker with my team and say yep we're going to move this to this next phase and here is also where we look at some of these things um and and when I get into some of the speciic examples we have FastTrack programs right so we took for example the jam boox when we were in this phase and we said we're not going to go through the other phases we're going to go straight into the development process right because we want to get this thing out we want

to test it in market and move really quickly so we have the ability to sort of circumvent our own process now and say like okay let's go let's go really rapid um and fast track it and recalibrate kind of the go to market possibilities right so this is when we after this stage now it shifts from that product experience team to our product managers who are really defining the business plan when's it going to launch when's it going to get into the retail calendar when what is it software release cycle really prototyping you're actually starting

to feel it um and you're starting to make as I call a lot of those trade-offs we like okay we wanted to build this we can't do that but here's what we can do we wanted to be this way we have to you know we want these functional experiences but we're going to sacrifice battery life whatever it is that's where we start to really kind of pull those decisions and start looking at it and and it's really a big juggling act uh frankly at that at that point right and so the product guys are are

driving that and that's when again you know we we sort of look at and synthesize all of what we've put together and we say okay does it actually cross enough things off our list does it meet that that minimum viability right because we we always start with a very as you can tell like this very big wish list of what's possible and what we can do and then we start to whittle it down and say does this cross enough of the value threshold that we think that it's it's worth pursuing um and now can actually

move it into the development phase where again product management continues deleted but now you're starting to really get um deep and this is where engineering comes in and really starting to sign off on like we can build it here's a time schedule and how we ship and then again you know product team is looking at how should we go deeper on this how can we increase engagement what are the little Innovations what are the tuning what are all the things that we need to do to sort of make that um you know one of the

things that that we've been fortunate to have is a lot of wonderful response to the products that we built and and and we take a lot of care and time and detail really in in sort of this development and concepting phase around little details that create these magical experiences so for example when we turn on a jam boox you know we have this pretty cool sound design that goes w w and you know that that took you know months to come up with the right audio tuning we work with a lot of different you know

choreographers to to create that sound but every time someone turns it on I see them smile and they laugh the feel of the rubber prototyping you know there's one manufacturer in the world that was able to make rubber at the Quality and durometer that we wanted and the colors that we wanted for the first Jam boox right so all those little magical details how to resolve even in software right when we had the first up and when it plugged in and your sleep graph showed up even just the animations of how you know the bars

would show up and and the way the cards would would flow in and out that was a detail that we thought about how is this going to interact how's the user going to experience that how are they going to feel it right so this a lot of that kind of stuff happens even at this stage where you sign off on a program it's going but you're making those kinds of decisions all the way through and you're trading them off and you're doing it in the context of of this bigger picture so um and continued Innovation

is an opportunity to keep refining and keep doing all that stuff so um so how do we think about it now you know kind of at a broader level the sort of what is the framework for how we think about these signature experiences well we do start with these y's right which is that articulation of the problem that we're solving um and then the themes around how these become actionable Concepts right um and then there there's what we do is we build these cross functional pods that take a person from the product experience team a

person from Hardware engineering a person from software engineering a person from the data team and we put them together and they're kind of a person there's this is the Pod that owns that theme or that track and they continue to sort of build that out against the hero features and inside features um and how we put that together so I'm going to go in now in into more specifics around what we call these wise because this is where I I spend a lot of my time really asking the question and what it does is it

seres as a really interesting framework for us to be able to come back and say hey do we meet those questions that we ask does this thing actually do it and it serves also as a really good um guidepost for a lot of our creativity and a lot of our Innovation so that's not unbridled right so it really comes down to a very simple question for us which is what is the user problem that we solve through this experience whether it's a hardware software data platform whatever it is that once once we solve it people

can't live without it right they may have a absolutely burning need to go solve this problem and they can't you know they're looking for a solution or it's things like you know that that once you have it you never thought you needed it but now you can't live without it right um and again the jbox is a great example of that we did you know we talked to some people when we were thinking about making that product and it was interesting because little story for you guys when we launched the jam boox in the fall

of 2010 the market for wireless speakers as a percentage of the overall speaker Market was 0% right 0% last Christmas which was you know Christmas of 2013 it was 78% of the market right and so in few years we able to transform this entire industry that had been around you know since the 50s and 60s turn it on its head and if I had gone out and asked a bunch of people I said who want who wants a $199 speaker for your mobile phone I guarantee you that in that focus group 0% of those people

would have said that I want that thing or I need or thatd be willing to pay for it but yet when we did it it transformed an industry right and so what we and and this is where these wi's become super important is just really focusing in on what you're doing right and I'll go through one example in the audio space which is the Jambo example in audio and then I'll take you through a little bit of how we did it um in up uh in particular up 24 but it starts with what we call

kind of our our category strategy and this is the sort of experience framework right and and our view was look all of your content and media experiences are now on your phone right they're no longer on your iPad iPod or your computer and so we need a different way to interact with it that needs to be as mobile as portable as high quality right that was our our fundamental thinking and then we said that experience need to be seamless across time and space you go anywhere through it different your car you know traveling in and

out of your house around the house that that was fundamentally what we were doing and we said that's the whole point of why this category should exist right and that was the human problem um and then we said okay what's in it for JA right why why should we do this and so if you think about that broader macro context that I was talking around the internet of things for us this was our entry into your home right and so while everybody talks about all these new things in your house from you know lights and

and thermostats and cable boxes and fridges and and you know smoke alarms or whatever being connected media is still the killer app in your house it's where we sell millions and millions and millions of units right so we said well speakers can be our entry into that world that's around you and and it can be the Hub of things that we want to do from a software and service perspective in your home so there's there's this interesting strategy both at solving user problem but then why does it matter to job on so those two have

to go together because you know a we're not in you know philanthropic not for-profit industry but B this is if you do this well it allows you to keep doing great products and allows you to keep moving forward and doing interesting things so that's sort of how we put that together um and then we built this sort of what we think the experience what we call the experience Continuum is where is it today right and when we started it was a Bluetooth speaker right that was the core enabling technology allow us to connect to stuff

where do we think that it's going to go tomorrow and then what happens when we can dream in the future right and we start to really try to live in tomorrow in the future and then start to think about what we build today as a graduate as a stepping stone to graduate users starting in one place continue to move and continue to move through that and that gives us a view of how we also make these tradeoffs right because we say you know what we're not going to put this into this product but we got

a space for in the next one and we know that we can move users to that and they'll be ready for it right um and and that's that's a lot of of of the way we build stuff is we sort of Define that experience contain right um and then and then we we do talk about this a lot we don't think of ourselves as a hardware team or software team or data company or whatever it is we think of ourselves as an experiences company right it's not just about that physical device or the feature the

object it's about the system it's about how the Pieces come together and so when we start to Define these y's they become the problem statement and we say okay how do we use a piece of Hardware how do we use a service in the cloud how do we use you know an application a sound a button to solve this user experience problem that we have and what's the right distribution across that system of where you should attack the problem right and where do we need to innovate and where do we need to pull together so

that's a big big big part of the thinking that helps us do it right and you know it's when we think about these hero experiences right we we say it's it's really around the context of why it's magical to the user right and then like I said the system is a flagship and then it has to go to the level of emotional connection right where you feel without it you're lost like I'm going to go back home and get it if I don't have it right and so those are the kind of principles that govern

all these things and we have to keep asking ourselves those questions is it doing that so we pull this all together in experience framework this becomes essentially a brief for your engineering team and your design team and all the people that work on this in the company that they can go back to and say what are we doing and why are we doing it and how does that work and then how do we create against that right um and then we have a a sort of whole process blueberry is one of the internal code names

um but the user experience process starts with a bit of research so we do actually listen to users and talk to them but we talk to them in a very specific Way start looking for those key insights we concept it and then we start to build right and this is why we go Define those lists of consumer problems the principles how do we think about approaching that what are the solutions and then what's required in the product to make that happen Sam could could you talk about how you balance fact that the user would never

have told you they wanted to pay $200 for a wireless speaker with user research at the front of this process yeah well there's two different there's two different there's a lot of layers to to use a research right so what we look at that's a great question so there's there's you know you guys probably aren't familiar enough with this yet but there are sort of standard tools for what people do in Focus grouping where they say you know would you try this would you do would you pay this do you want this feature do you

not want that feature what do you care about that's one way to do it and what you don't usually get there is really great answers we ask different kinds of questions we say you know how much music do you listen to when you are with other people how do you play that music do you listen to it on headphones or you listen off the speakers on on your on your phone okay how often are you with other people how often do you want a personalize experience how often do you want to share how so we

ask like we ask a lot of questions we just ask different ones and we don't ask them specific things about do you want this or do you want that we ask them how do they behave how do they live and you say to them hey if you had something that allowed you to take you know a great example is iPod if you said to somebody you know if you could put a th songs in your pocket and take them anywhere that's cool not do you want a digital portable music player that you know so again

it's it's at a price that was you know more than your phone right so you know you got to you sort of have to separate what are questions that you can ask that are going to help make you smarter about your thesis versus trying to get somebody to validate it for you right and I think that's the real separation is it it's that no one's going to tell you what to build if they do then they should do do it right and not you um and so you're you're the one who's making that decision you've

got the thesis you've got the creative idea you've got the Innovation you got to use these people to help you make it better and to refine your thinking that's the difference make sense got okay so I'm going to switch over to some up 24 which is the product that we've had in the market um our our wireless product um for health tracking um and the wise of up 24 are really simple right well first of all let me start with the wise for up the idea there was there's so much that we know about the

world today through Twitter Facebook social media access to the internet Google Etc but we know nothing about ourselves we have no idea why days I sleep8 hours I feel terrible sometimes I sleep three I feel awesome like I I just have no idea right and so I our thought was could we take a lot of this sensor technology help people understand more about themselves and start to then make better decisions about how they live better and so this that was the first product this was the second product we said okay great now that we have

wireless connectivity it's not just about Bluetooth or Wireless it's about the fact that I can use that real time flow of information to understand what's happening with me and and and go and take action on it right I can get the data in a more meaningful relevant contextually important way at the moment that it matters I can also get back guidance in a structured way that can help me go do things and I want that on guring encouragement because everybody you know knows that they want to be better but they fall down or do whatever

um and they want a fluid way to interact with it so this is what we were sort of building in up 24 right we had this very Cris set of five things that were the wise of why we're building this product and why we're doing it and our point of view was that it was going to we had this sort of fundamental narrative going going back to the experience framework where we said everything we do in up is about you know helping people and understand them track themselves it was understand which is taking all that

data and converting it into knowledge and then the third part was act so track understand and act that is our narrative for everything we do in the in the kind of wearable Health space fundamentally and it will be for for the entirety of what we do it sort of help people get more information about themselves data is great understanding is better convert that into things that they can have create real knowledge that they can then take action on so anything that we can do to keep the device on get more information help them be engaged

and then find ways of of um guiding that behavior was was really really interesting and this is the sort of framework for the system um and you can start to think about well that designs how you build your data infrastructure your Insight system how you process it how you build the application experience that surfaces it um and this is a little bit more of a blowout around track understand and act right so we got to and and this is the the tracking part is really fundamentally about the hardware too it's sort of how do you

design the batter batteries how do you design the embedded systems the materials the way it latches on you how easy is it so that you keep create the habit of keeping it on your body right then you got to take all that data and it's not just visualization of information like you know if I told you your guys's heart rate was 75 is that good or bad who knows the answer to that question I don't it depends right on what you're doing and who you are and what's happening so just the data surfacing is not

enough you got to contextualize why that matters turn it into action that's the third part right is action is key so let me understand the data let me understand that when I work out at 4:00 I get four more hours of deep sleep at night that's awesome so let me let get Ry minder at 4:00 to go work out or do whatever right and that's what we built and that's a lot of infrastructure to sort of create that experience but that's how we build software that's how we build Hardware that's how we build sort of

the whole system um and then often we we will talk about different kinds of users and what they care about um and what we think our user base is made of um and you know who's more into weight loss who wants the sort of social acceptance who um are people who are vain that just want to look better um and and want it's it's true so um you know there's lots of different things and we and there are people who have sort of medical reasons for they use our product and we design different kinds of

experiences right we think about using the platforms like the phones and and ways to push notifications and as part of the system think right we think of notifications as a tool for Behavior change right um and then we actually start to go map out these things what is a Smart Action right is it real time does it feel customizable does it feel Progressive does it help me is it really tailored to me right and then for this particular type of user we go out and storyboard and then these storyboards go to our our design engineering

teams who work together and they actually start to build off of this and what this does for us is it creates a nice set of constraints um you know my experience has been constraints are really great because they serve as opportunities to resolve to refine to simplify and push you to find the right answer that is that it will solve a user problem in the simplest way right and so we we create a lot of those constraints around what we're doing this is this is uh the the sort of storyboarding for you know getting someone

to the goal and and how they do it and what we use in in real time so um and then then and then we put in sort of the secondary experiences right which is if we can do this and we can fit it in it's not too clutter or confusing we'll put it in so that's a little bit of a snapshot in and how we build and we have a few minutes left so I'd love to answer any questions or yeah questions would be great yeah you got about a 15 minutes go ahead so let's

say you have this product right you have all these features that you want to do all these things yeah to satisfy um and you're about to enter the design process right how do you approach the the whole problem right how do you break it down so that okay solve this and to satisfy you know it's going to fix this problem this way right but then because each design feature is not usually exclusive so how do you like approach it holistically while solving problems can you repeat the question tother Qui yeah I mean so that I

think the question was um when you have a number of different features and functions that you're trying to build how do you look at it at a system level to understand not within that one Silo what the trade-offs are but what the trade-offs are across the entire system I think that's the answer to your question you do exactly that you don't think about it in one Silo you have to force a lot of you know when it's a small team it's really easy because you guys are all sitting around a table you're looking at each

other you're making those decisions in real time as you get bigger and a larger company you have to force a lot of communication where everyone's in a room and that that person says you know what if you build if I if you were construing me in this way um then I can't get the quality spec that you need me to make and this guy's going to say well if you do that and you give me that much space then I can't fit all the algorithms in at the battery performance that you want and so when

you start to look across the system you start to see everyone has to share what their pains are and they have understand if I make this trade-off it's going to affect me over here and so you have to put them all together in a room and start hashing that but what's on the board and on the walls and on everywhere is what are we trying to do and does that does that trade-off still meet it right across all those all those different silos because everyone's thinking about the trade-offs in their bit and they know what

they need to accomplish right but again is how does that affect the whole the whole thing we just went through this with up three which is a product we're shipping in a couple weeks that sort of Define the next wave of what's happening in the wearable space on the health tracking side we we invented a totally new sensing system right there was raw science that had been developed that we productize really fast and even just trade-offs on like what the electrode materials were had effects on reliability sourcing you know signal performance and it just these

guys weren't talking to way had to get in a room do daily calls for three hours where they're going through each of their things it's tedious but we're figuring out we knock it down so it's a when you when you're small it's really easy because you just s all look at it but you have to always have that definition of what you're trying to do across the system and that's why a lot of what I was talking about was much higher level what problem are we solving where does over time and how all these pieces

inform it go ahead if a startup wants to build a system eventually should it start focusing on one small thing or should it start looking at the systems itself and how to build it all together I think I think system think is is it's a way it's a mindset right it's not a it's not actually a system right there are simple systems there are complex ones um you know uh there you know a plane is a very complex system a car is a very complex system system there's other products we make that are much simpler

phone is a complex system an application you should think of as a system right and how all the pieces work together you storage you know the front-end experience what you're doing the connectivity that's all a system right and so that's more what we mean about system yes for us system is Hardware software and data but I think within even anything there's always system think and so it's more just thinking about how the trade-offs work across all the different pieces as they come together does that make sense yeah yeah go ahead I have a question um

what's the decision-making process between creating like uh related products and same space so like for Fitness tracking there's different versions of up or for Jam Box there's different versions J box you know what goes into that um we do have a grand unified theory um at some point around how these experiences come together and what happens and it touches a little bit that point that I was making to you around a context engine when you have things on your body that can make everything in the world around you smarter like if I know the emotional

state of a user I can tell Spotify what song it should play you on the jam boox right I can tell the TV that you didn't like that commercial they should fast forward the next one or I can tell you not to watch Game of Thrones on a Sunday night because you don't sleep well right so you start to see how I'm serious right and so these pieces start to to go together and so we do think at that level and then we start to say what are the building blocks that get there and how

do we establish credibility how do we establish a distribution system how do we establish manufacturing scale how do these pieces start to come together so there is a grand unified Vision um for us and and we look at different categories and different categories have different Dynamics they move at different Paces they have different replacement Cycles a great example of this right now is what's going on with iPad and iPhone we're all very used to replacing our phones every single year iPads are not following that same trajectory right so the replacement cycle is different the use

case is different the problem solving is different so you got to adapt to that right you don't replace your nest every year it's a 15-year install so how do they build in that kind of a world how do they think about so it's just you got to think about your category the replacement cycle the usage how these things come together and and the Dynamics are different right good so uh first of all how you can with this a unique pattern of the jaw B I mean the PB background in the first place and you think

it's a it's a better design you have this idea or you think the functionality is more important which P are you talking about you're talking about the texture yeah the texture yeah so texture of it's like signature of every job and product yeah and a lot of that was developed by by Eve and or a design team and and sort of you know coming up with a branded look so that you know you saw the icon and you knew what it was right whether it's here or or anything so that was part of sort of

our our mission we wanted to convey a certain emotional quality Etc some people like it some people don't that's sort of the nature of design but that was all part of the same process right go ahead remind on question sorry no problem uh yeah so I guess it's kind of building up one of the other questions but when you iterate on a certain product how does your process necessarily change and how do you take into account like information you might have learned from let's say like4 when like how does the framework process um that's that's

a great question I'm actually going to go back to that the question was is sort of not on the initial product but as you've launched the initial product what happens to your thinking and how does that evolve the process right so I'm going to I'm going to um take it back to that that slide that shows the um kind of the how we create and the the process flow right here so sorry I got to go through these builds um so it's actually a great question so this is you know say this is you starting

something totally new from from scratch and you come out here and you do all this stuff and you get it to here and then you learn a lot and in the first iteration of up you know in 2011 it broke it didn't work so we had to actually go back to the drawing board and so what that did here is we actually ended up telling these guys a bunch of things that they should be thinking about and sort of unlocking a lot of problems we had to solve that they then started working on at a

different pace because sometimes this will take years to come to fruition we can dream a lot faster than what's possible right and so even at core technology levels at sensor batteries I mean chips right you know processing what we can do with storage like all that kind of stuff we'll say well you know what if we have th those are the problems that we're facing what if we start running different parallel threads to go fix that and so we'll we'll start doing some work here they'll look at it in different parts of the process so

there's room for Innovation and all these different things but we may see something here that we say let's go straight into Planning and Development we don't need to go all the way back right so we have the flexibility to sort of jump through and say we don't need to do these things we know that like it wasn't a big struggle for us to know to go from a solution that plugged in to go to wireless like I wasn't concerned that we had to do a lot of concepting invalidating I knew that was going to work

right so we can kind of skip through those steps if you know how to make those decisions what this is more for us in a lot of ways is a way of kind of taking a lot of innovative spirit and creativity and giving it a very focused way to actually get out right um and so that that's the way we think about it we have the ability to sort of go back and forth and skip over steps as necessary go ahead um I'm just curious how large is job burn now in terms of the number

of employees and then as you've added more employees what were some of the ks that you encountered of having you know not just a group of five but more people working on one project and then everybody getting H or some of the like organizational tools to to facilitate that smooth that's a great question so the question is how big are we and then as We Grew From You Know few to many how did it change our our thinking around process and tools and how we kind of work together right so um we're about 500 people

um and we have a a very remote setup we've been an office in sunville headquarters in San Francisco office in Seattle Shanghai um Pittsburgh London and so we have a very um you know distributed team that poses a lot of interesting um communication challenges but also allows us to get where the talent is and and where they are interesting people and specific areas that we're doing I would say the single biggest thing that that we continue to always try to get better at is that communication between all these different people working in different ways and

forcing them to sit at the table and say Here's what I'm working on here's where my trade-offs are this is what I think it should affect you listening to other people and sort of understanding it and then remembering that we are building this system and here's what happens when all the pieces come together and then how do we we solve problems but it's a lot of that forcing that communication and doing things like I I literally on up three have a daily call that's 2 and 1/2 hours with the entire um Team from materials sourcing

manufacturing design um sensor you know firmware mechanical engineering all together and they all have to sit through each other's updates and but then understand what those tradeoffs are and I sort of force that communication so uh go ahead um what at what point did you decide to expand and how did you decide where to expand to first you're talking about geog so the question is how do we decide to expand and when is that geographical is that our team is that markets how do you how did you find the connection the other I mean I

think a lot of it um some of it's deliberate you know we we we sort of say Obviously we we build a lot of things in China so we need to have a presence there and and manage things so at some point we got big enough that we wanted our own team on the ground um you know we've expanded sales I think we're in 56 countries globally 100,000 points of sale so that was we started in North America we went to Europe we went to Asia now we think a little bit differently about when we

launch what geographies we go to so it's it's some of it's deliberate and plan some of it takes time and again it's part of that you know we want to be here here's how we want to grow we want to migrate our business this way um and then a lot of it is also opportunistic right there are markets that we've entered where um you know we had a really good partner we had a really you know strong proposition or the the culture was really well suited to what we were doing you know we we for

op China's a huge market for us um we went in with apple in in Apple Stores and that was a great stamp of credibility and we sort of rode that wave so you know again it's it's it but we knew we wanted to be in China and that was a great entry point for us so I think it depends on what you're doing specifically and in and you know what's appropriate for that situation go ahead why haven't you made any headphones I mean you know for us like any category I get ask a lot of

different things you headphones is sort of one um for us it's like you know when we come into a space we want to blow it wide open and make sure we have a proposition that makes it better for the user than what's there today and make it better in sort of order magnitude or two order magnitudes and and do stuff so sometimes the Market's not ready sometimes the technology base isn't ready sometimes we're not ready we don't have the right capabilities to synthesize and pull those pieces together so it's a combination of factors whatever the

whatever the product or the category is right all right one more question uh go ahead in the red s yeah hi uh for hardware company or assistant company the product cycle is always a headache uh Sam mentioned one early capacity we tried to run a hardware company like a software company I was wondering if for any you can share there are you trying to run job more like as much as close to a software company to uh get user feedback along along the way in your development process uhhuh so I think the question was Hardware

companies are sort of hard um to run they're different from software companies how are we trying to run jaw on right um I I would say there's no model for what we're trying to do it's never been done before so we feel like we're at the tip of the arrow we're putting together disciplines that have never had to work side by side to create experiences it's very painful sometimes it's very fun we try to take the best of everything try to take the best practices of what make you know rapid software iteration testing and development

deployment try to apply that to Hardware we try to take the resolution that you require in hardware and apply that to software design because web software is very different than mobile software it turned out that building mobile software was actually a lot more like building Hardware where you actually had one shot and you had to get it right right out of the Gat so we try to take the lessons from each place and make ourselves really good um and that's my job and that's job of some of the other senior leadership is to look at

those opportunities of how kind of take the best of everything and put it together but I don't think there's ever been um a company that's been great at equally great at Hardware software and data and that's what we're trying to be so all right thank you guys [Applause]