🍪 Product lessons from Apple and Meta, plus what's happening in markets??

Happy Friday, friends! Welcome to Bite Sized Beta, where we dive straight into dessert with 5 min learnings in entrepreneurship, productivity, and business.

Let's get to the good stuff.

In the oven this week:

• ☝🏼One big pizookie: what you need to know in a market downturn

• 🔥 Freshly baked: product lessons & what happened to all the buttons on your iPhone

• 🍪 Cookie crumbs: 4 quick highlights

• 😂 Snickerdoodles: memes to tie you over through the weekend

THE BIG PIZOOKIE

David Sacks (OG member of the Paypal Mafia, entrepreneur turned VC) and Ray Dalio (CEO of Bridgewater, the world's largest hedge fund) both chimed in this week on markets taking a nosedive.

Since I'm starting this newsletter with negative money, I tuned in and summarized all the good stuff for ya.

Sacks starts off with pain, pain, pain. Inflation has spiked to 40 year highs and nothing but the Costco hot dog is immune.

The fed typically fights inflation with higher interest rates. The problem is that stocks do worse when interest rates are high since any projected revenue now gets discounted back to present day at a higher rate, lowering the current value of those earnings.

TLDR, if you haven't checked your stock portfolio in awhile, now's probably not the time.

What does this all mean going forward?

For entrepreneurs: it's time to lower burn and keep at least 30 months of runway. If you have the option to slow growth and not raise funding, do that instead of supercharging your growth rate and needing to raise more money in this climate.

For everyone else: hang in there. We're close to the bottom, but the market still has more room to drop. According to Dalio, the market is still high even as it declines, so we're likely in for more belt tightening in the near term.

Ray Dalio on the market's % of the way towards the highest bubble

Silver lining: bullish consumer sentiment is at an all time low, which historically has preceded huge stock market rallies. Plus, some of the best co's of the last decade (e.g. Google, Amazon) were built in recessions. After the dot com crash of 2000, you could have invested in Amazon at $7 per share (it's high last year was $3.7K).

FRESHLY BAKED

Last week was ProductCon, and it got me thinking about a few of my favorite product stories and learnings. Get your cup out, cause I'm serving the tea.

🫖 #1: How to fight con artists on job boards

This story is wild, and it's from a product director from one of the largest online job boards. Check this out.

Apparently, job scams are one of the biggest consumer scams out there. People lose $2B annually on these cons. Ok random, but kind of mind boggling, right?

The usual shtick promises a fat paycheck, but requires some upfront payment for job equipment, training, etc. that the "company" promises to reimburse you later for.

Surprise! They never do, and now you're out a few grand.

So how did this company get better at catching scammers? They came ready with a honeypot.

A honeypot is a cybersecurity classic. The suspected scammer account gets baited and placed in a version of the site that mimics the real deal, but is actually a complete mirage. It looks like people are applying to your job listing, saving it, liking it, responding to your messages, etc., but in reality, no one is a real account except you.

Suddenly, you're on the Truman Show and all the employees at job board X are scarfing down the popcorn watching your every move so they can catch the next one of you.

Tech co's keep their friends close, but their enemies under a microscope.

🫖 #2: How Facebook built one of its most successful products

Meta takes a lot of flak for using Snapchat as their factory for product ideas, but this story is one from the inside, and it's about one of my favorite Facebook products: Marketplace (i.e. Craigslist 2.0).

Marketplace started after Deb Liu, a product lead at the time, noticed moms buying and selling kid stuff in Facebook groups. She had a hunch that this could be a much bigger opportunity, but couldn't prove this was a common thing beyond moms.

So the team built a feature that allowed group admins to label their groups as dedicated commerce groups. This did nothing except to allow group admins to raise their hand and say, “yeah hello, if you’re looking to buy or sell stuff, you can do so here.”

Looking at the number of members in these groups, FB could then track interest in commerce, and as it turned out, millions of people were already bought in. (Bought in - see what I did there? Ok, I'm done.)

So what did FB do? It built Marketplace.

5 years and over 1 billion users later, it's just crushing.

There’s 2 really good takeaways here:

1. Follow organic, latent behavior to get traction for new ideas. Figure out what people are already hacking your product to do, then build a real solution to help them do it.

2. Don’t build the product, build the red herring that can give you conviction about your product. Focus on creating the smallest atomic unit for signal before investing more effort on the real thing.

🫖 #3: What happened to all the buttons on your iPhone

Adam Nash is a Silicon Valley legend - an early engineer at Apple and exec at eBay, LinkedIn, Dropbox, and Wealthfront. Pretty gangster track record.

He did an hour long talk on this, but here's the skinny:

When Apple was conceptualizing the iPhone, there was one thing that all the best phones in the market had, and that was buttons.

We were up to our ears in buttons.

Along came Apple with the iPhone, who took one look at what was in the market and ran they other way. They tried to get rid of all the buttons.

But there was one problem: if you got rid of all the buttons, you couldn't silence your phone while it was in your pocket. And at the time, getting to the mute button in your settings was like unstacking 20 Russian nested dolls. If someone was calling, you'd have to take your phone out and decline to shut it up.

A buttonless phone was too simple to the point of degrading function. So they added just enough buttons back to allow people to accomplish the critical things without looking at the screen. The product lesson? Einstein's Razor: make things as simple as possible, but not simpler.

COOKIE CRUMBS

• The life of Better.com's CEO just doesn't get better. The CEO, who has been tangled in a series of fraud lawsuits, outed for calling his employees "dumb dolphins," and skewered for firing over 900 employees in an embarrassing Zoom call last year, is now admitting in a company email that he's personally liable for a $750M cash infusion from Softbank from when they went public via SPAC. If this isn't the ultimate face palm moment I don't know what is. If you're having a bad day, at least you're not this guy.

• Elon and Twitter continue to spar, with Elon angling for a better deal and Twitter now committing to "enforce" the acquisition at the current price. Elon's also on the hook for a $1 billion breakup fee if he abandons this dumpster fire, so NBD just some small potatoes here...

• Marc Andreessen: "the best founders go through the idea maze." The idea maze represents the years of thinking through all the twists and turns of an idea in great detail. The best entrepreneurs put in the work, but even the best ideas take time to make their way through the maze and come to fruition.

• a16z released their 56 page 2022 State of Crypto Report, here's the TLDR:

  • This is the 4th major crypto winter and it's time to build sh*t. Founders that swore off tech in the analogous dot com crash missed the best opportunities of the decade.

  • OpenSea paid out $174K PER CREATOR last year while Meta paid $0.1, Spotify paid $636, and Youtube paid $2.47.

  • The numbers are small, but Ethereum is still the GOAT by number of active devs (4K per month).

  • We're still early in crypto - there's only ~7-50M Ethereum users today. (Compared to the trajectory of the internet, that puts us somewhere around the year 1995.)

SNICKERDOODLES

How'd we do today?

• 🍪🍪🍪 Top notch!

• 🍪🍪 Meh... could use more milk

• 🍪 Undercooked, do better