Five mistakes that product managers make

  1. Assuming that they are the market. Unless you’re designing a product for affluent people who work in tech in the Bay Area and use 27″ screens with the latest hardware, chances are that your product will not work in the mass market. For most people, technology is a means, not an end. They don’t care about how things are done, just that they are done. Google’s failures with Buzz, Wave and Google+ are great examples of this. They tested well among Google’s employees, but failed in the marketplace.
  2. Assuming that San Francisco is the market. Again, you’re targeting an affluent market that is willing to try just about anything. There’s also density that enables a lot of business models that won’t work in the suburbs or exurbs. If it works in San Francisco, that just means it works in San Francisco. Will your product work in a red state? That’s one of the keys to making a great business. Get out of the city and try doing market research in Minneapolis or Austin. Nextdoor is a great example of success — when I talk to my friends in St. Paul, they love the product.
  3. Assuming that users will make big changes quickly. The mainstream customer can take months or years to adopt a new product. Take Twitter. It was founded in 2006 and it’s still struggling to find Product Market Fit among normals. Fortunately for Twitter, the media has had an ongoing love affair with the product and it gets billions in free media. Unfortunately for Twitter investors, all of that free media exposure doesn’t translate into the number of users and revenue that Facebook generates. I used to call Twitter “the command line interface for communications.” It’s gotten much better, but it’s still complex. Complex products will take longer to gain adoption than easy-to-grok products like Snapchat and Instagram.
  4. Assuming that rules and regulations won’t change. Uber and Airbnb are the best examples of this. Build a product that people love and eventually laws will get changed. They’ll change faster if you get involved in the legislative process instead of just viewing politicians as out-of-touch people who “don’t get it.” It’s your job to educate the them. Uber and Airbnb have been masterful in government relations and political campaigning.
  5. Failing to taking into account Moore’s Law. Technology gets cheaper, better and faster. This happens at a rapid pace. Especially when it comes to designing hardware products, this is key. The goal is to optimize over the product lifecycle, not necessarily the initial product costs. Products like XBox assume an initial loss on hardware that gets made up with software and declining BOM.
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Things Apple slammed before implementing them

  • Two-button mice
  • Multitasking phone
  • Third-party apps (App Store)
  • Small tablets (iPad mini)
  • Streaming music services (Apple Music)
  • Third-party keyboards (iOS 8)
  • NFC (Apple Pay)
  • Styli (Apple Pencil)

Have more? Tweet them to @rakeshlobster.

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If you’re going to own individual stocks, own these three

A friend asked me about investments recently after moving jobs. My recommendation was to invest all her retirement assets into a target date fund and avoid individual stocks.

But she wanted to feel like she was playing in the market and passive investing through mutual funds didn’t satisfy that craving.

These are the three stocks I recommended to her:

  • Apple. Yes, it’s the world’s most valuable company. Yes, it’s huge. But it can come up with hit after hit. It has a loyal fan base. Even in light of low-priced competition from Android handsets, Apple has remained resilient for years. It has eco-system lock in. If you’ve bought one Apple product, you’re likely to buy more Apple products.
  • Facebook. The company has almost (see below) unparalleled lock in. International growth will continue. More importantly, the company stands to benefit from maturation of ad systems in international markets. The company also has largely untapped opportunities in payments and video.
  • Google. It’s the best advertising engine to date. Google has diversified into many product lines. Yes, the bulk of the money is in search. But it has a strong product position in other spaces.

All of these companies have the flexibility to think for the long term, instead of chasing earnings quarters. They have strong CEOs who aren’t going anywhere.

This doesn’t mean that you won’t lose money over the short term. There will be short term volatility, as is the case with all stocks in the age of the Internet and high-frequency trading.

But if you buy small chunks over time and focus on the long term, you should do well.

Again, this should only be done with play money for the feeling that you want to trade stocks. The bulk of your assets should be in diversified mutual funds or exchange-traded funds.

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Rakesh’s quick guide to investing for the lay person

A friend asked me to take a look at her IRA with Chase. I couldn’t believe how horrible the products she was sold were. Here is some quick info to help you make better investment decisions.

If your IRA is managed by Chase, MorganStanley, Merrill Lynch or similar, there is a 99% chance you are being hosed. Try Betterment or Wealthfront.

If you still think that you should keep your money where it is, here’s some more advice:

  • If your adviser tells you he’s going to trade individual stocks, RUN!!!
  • When investing in mutual funds, ask your adviser what the front end load is. If the answer is >0, RUN!!!
  • When investing in a specific fund, ask your adviser what the expense ratio is. If the answer is >1.5%, RUN!!!
  • Ask if there are any fee waivers in place. Often mutual funds will offer a promotional rate to lure in money. Your “regular” price can be much higher.
  • If investing in a S&P 500 Index fund, ask what the expense ratio is. If the answer is >0.10%, RUN!!!

Some funds also have a short-term redemption fee. Don’t worry about this; you shouldn’t be doing short-term trading.

The generic advice I give to most people is:

  • Don’t bother with individual stocks. They are too risky and require too much maintenance. If you think a certain sector is going to be hot (e.g. healthcare), buy a sector-specific fund instead of individual stocks.
  • For retirement, pick a target date retirement fund. These usually have a year in them, e.g. 2030, 2040, 2050. Pick the date that you expect to retire. Put ALL of your retirement money in that fund. Get one of these funds from Vanguard or Fidelity.
  • For non-retirement assets, invest in Betterment or Wealthfront. They give you a diversified portfolio at low management rates.

I was inspired to write this by my friend who was sold funds with a 4.5% front end load and expense ratio of 1.3% something. (Temporarily waived to .96%.)

For those of you who’ve followed me and think, “that’s not what you do.” “Didn’t you make a pile of money shorting Groupon and buying options?”: you’re right. But I have specific expertise in technology, accounting and tax. I read annual reports and listen to earnings calls.

You probably have a life and don’t have time to do such things.

Besides, I trade stocks and options with play money. Most of my assets follow the rules above.

(If we’re close friends and you want me to look at your IRA, shoot me a note.)

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Thoughts on service startups

As someone who lives in SF, I spend a lot of time trying various startups. Here’s a quick summary.

Highly recommended



Others I’ve looked at





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My genius product/service list

Following up on my genius people list, here’s a quick list of products I love.

  • Evernote – The popular note taking tool serves as not only my repository of personal notes, but an intranet of sorts for redesign mobile.
  • Evernote ScanSnap document scanner – A modified version of the amazing ScanSnap ix500, it is optimized for Evernote junkies.
  • Trello – A great task management tool. It makes it easy for our geographically distributed team to stay connected.
  • Google Hangouts – Video conferencing.
  • Expensify – Yeah, we’re little. But we still have expenses. And the $5/month/user I pay for Expensify is well worth it.
  • Google Apps – If anyone is running a company email system w/o using Google Apps: Why? What’s wrong with you?
  • First Republic Bank – The bank of choice for redesign | mobile. I gave up on opening a Chase Private Client business account because they wanted too much paperwork. Ashley at First Republic took care of it with no hassle.
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My genius list

One of my favorite things about what I do is the opportunity to meet some brilliant people. It seems that every week I meet someone who I’d consider a genius. If you ever have the opportunity for a meeting with them, I highly recommend making the time.

These are all people I’ve met in person. In all but a couple of cases, I’ve met the many times.

I meet so many people that I’ve undoubtedly left some people off the list. My apologies if I left you off.

I recognize that women are underrepresented in this list. This is a function of:

  • Overall shortage of women in tech.
  • The fields I focus on — finance, VC, payments and media. These fields have even smaller percentages of women than tech overall.
  • Who will take meetings with me.

Emily White, COO of Snapchat, is incredible. One of the smartest people I’ve met. (And a dear friend to boot.)

Note that the only order here is alphabetical. These people are so talented that it would be hard to rank them.

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