🌱 5-Bit Fridays: Stop serving the compliment sandwich, the end of the knowledge economy, choosing risks, and more
#53
👋 Welcome to this week’s edition of 5-Bit Fridays. Your weekly roundup of 5 snackable—and actionable—insights from the best operators and experts, bringing you concrete advice on how to build and grow a product.
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Happy Friday, friends 🍻
I hope you’ve all had a wonderful week! Before hopping in, I just want to say a huge thank you to everyone who shared a testimonial the other day. ❤️ Going through them was so motivating, and I really do appreciate every single word. As a design nut, I’m really looking forward to putting my website together this weekend with them.
If you’d still like to, you can share your thoughts about HTG here.
Alrighty…
In case you missed it this week:
While not news from this week, I found this fascinating. Last time we spoke about turning costs into profit centers. Well, I came across this story of how a NYC bathhouse is mining Bitcoin to heat their pools—and score a “rebate” on their $20,000-a-month energy bill. It’s a cool story → (Learn more ↗ )
There’s been chatter about what Google’s mass layoffs last year meant for their famous culture. But what about the impact on the bottom line? Turns out, they're paying nearly $3B to lay off employees. Plus, in their recent earnings call, core search revenue was down from WS estimates. (Learn more ↗ )
Adding salt to Google’s wound—Microsoft’s revenue grew +18% YoY to a whopping $62B. Azure continues to lead growth at +30% YoY, of course, largely driven by their expanding AI services. Also contributing, the Xbox division was up 61% thanks to the Activision acquisition. (Learn more ↗)
I just returned from a West Coast trip earlier this week, and I begrudgingly (and nervously) flew back on a Boeing 737. Clearly, the sketchy jet is flying again. Here’s what experts say about its safety. (Learn more ↗)
As much as we’d like, interest rates likely won’t go down in March. Most investors were expecting the Fed to finally start cutting interest rates at their next meeting in March, but after their latest meeting, Money Daddy Jerome Powell splashed cold water on that idea. (Learn more ↗)
Universal Music Group, the music label for artists like Taylor Swift and Drake, have pull their massive catalog from TikTok. (Learn more ↗)
Zoom is launching a dedicated Vision Pro app that will coincide with the launch of Apple’s new platform today. The idea is to create a Spatial Zoom experience. Buckle up for weird Zoom calls, folks. (Learn more ↗)
Okay, let’s get to the meat and potatoes of it.
Today at a glance:
Stop serving the compliment sandwich
How to decide whether to take that risk
What can be done in 59 seconds: An opportunity (and a crisis)
The knowledge economy is over. Welcome to the allocation economy
Crossing the Canyon: Product Manager to Product Leader
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(#1) Stop serving the compliment sandwich
You’re great at this
But, you do tend to do this
Don’t forget how great you are though!
That’s, as Stewie Griffin called it on Family Guy, the compliment sandwich.
You’ve probably had someone serve you this sandwich as a way of giving you feedback.
In theory, it’s one of the better ways to give constructive criticism. But, perhaps the compliment sandwich just makes the giver of feedback feel better about themselves vs it actually helping the receiver.
Adam Grant explores this in a great post.
Key quote
A team of psychologists boosted openness to tough feedback by at least 40% by prefacing it with just 19 words:
“I’m giving you these comments because I have very high expectations and I know that you can reach them.”
Rather than attacking them, you’re signaling that you have their back and believe in their future potential. It’s surprisingly easy to hear a hard truth from someone who who wants to help. As Kim Scott observes, people accept being challenged directly if you show that you care personally.
— Adam Grant via Granted
Insight
There are two main issues that Adam points out with the compliment sandwich:
The compliments usually sound obligatory and disingenuous. Everyone waits for the but knowing that you’re just buttering them up
If you’re able to avoid that problem, the shadow side is that the positives drown out the constructive criticism you’re trying to give. Research shows that primacy and recency effects are powerful: we often remember what happens first and last in a conversation, glossing over the middle. Plus, people love latching onto the positives about themselves.
Take action 🛠️
To serve a more flavorful dish of feedback, try add these two techniques onto the first bit of advice from above: explaining why you’re giving the feedback
Make sure you’re conveying that you’re not perfect either, and that you giving feedback as a manager (or peer) is towards you trying to get better yourself. This takes you off the pedestal.
e.g “I’ve been studying great managers, and I’ve noticed that they spend a lot of time giving feedback. I’m working on doing more of that.”
Lean by asking if people want feedback. So simple, but the mere act of accepting to hear feedback (nobody will ever say “No, I don’t want it”) makes it far more likely that they will be receptive.
e.g “I noticed a couple things and wondered if you’re interested in some feedback.”
Read the full post by Adam Grant
(#2) How to decide whether to take that risk
I turned 30 yesterday. And in the lead up to entering a new decade of life, one thing that’s been on my mind more than usual is risk.
When I was in my early 20s, nothing in my view was really a risk. Starting a company. Moving countries. I don’t recall every thinking about the risks involved.
But now that I’m married, entering the 30s, and going to start a family in the next few years, risk becomes something that’s more part of the conversation.
I’ve also been chatting with Jason Feifer recently about newsletters and media businesses (thanks for the intro Rawi Nanakul !). Jason is the Editor and Chief at Entrepreneur magazine and writes the One Thing Better newsletter. When I was checking out his work, given risk was on my mind, I double clicked into a recent post of his that goes into how to better choose your risk.
Key quote
Every decision has two costs.
When we decide whether to do something, we’re really asking ourselves two questions:
1. What’s the upside to doing this?
2. What’s the downside to doing this?
These are fine things to explore, but the fundamental premise is flawed. Your evaluation is too limited. That’s because you’re only asking yourself: “What happens if I do this thing?”
There’s something missing: What happens if you don’t do that thing?
That is what we often fail to consider. There are risks of action, but there are also risks of inaction. Every decision has a cost — either because of what we do, or what we do not do.
You cannot truly know the wisdom of a decision — and therefore decide whether to make that decision — until you explore the costs of not making the decision.
— Jason Feifer, via One Thing Better
Insight
Often the risk of inaction far outweighs the risk of action. And usually, doing nothing just gets you nothing.
Take action 🛠️
What’s one thing you’ve been thinking about recently that you’ve been hesitant to pull the trigger on? Perhaps…
A hard conversation with a partner about something that’s bothering you?
Risk of action: they get upset and it’s uncomfortable
Risk of inaction: resentment builds up, and the situation gets worse
Wanting to change careers?
Risk of action: you lose some progress in your current profession
Risk of inaction: you continue doing something you don’t enjoy forever and miss out on finding something you care more about
Wanting to start to your own side hustle?
Risk of action: it doesn’t work and it’s embarrassing
Risk of inaction: you miss out on potential new income, freedom, and enjoyment of owning something
Find that thing, write down or think about the risks on both sides, and then make a decision on whether to do nothing, or take action.
Usually, doing something is the better call.
Read the full post by Jason Feifer
(#3) What can be done in 59 seconds: An opportunity (and a crisis)
In the past couple of months, the use of AI has continued to proliferate. Two big additions here have been Microsoft’s Copilot for Office becoming widely available to anyone for $20 a month, and OpenAI’s GPTs becoming more useful with the new “GPT Store”.
In a recent experiment, Ethan Mollick tested how good these capabilities really are.
He set out to test if AI could help him complete five different tasks— launching a product, writing a market research report, creating on-trend designs for a kitchen, making an entire PowerPoint, and crafting a syllabus—all at the same time. And all in 59 seconds.
The results were….yes. Yes, AI can help you complete tasks insanely fast if you know how to use it. (Ethan shared a video in real time as proof, it’s very cool)
Key quote
For many people in many organizations, their measurable output is words - words in emails, in reports, in presentations. We use words as proxy for many things: the number of words is an indicator of effort, the quality of the words is an indicator of intelligence, the degree to which the words are error-free is an indicator of care.
When a middle manager writes a weekly report on the status of a major initiative, the report may not be the point. Instead, it serves as a signal that the middle manager has done their job, speaking to the relevant employees, keeping an eye on the status of the project, and making corrections as needed. And it has always worked well enough - a senior manager could tell at a glance if the report was seemingly substantive (showing effort) and well-written (showing quality). But now every employee with Copilot can produce work that checks all the boxes of a formal report without necessarily representing underlying effort.
What this means is not yet completely clear.
— Ethan Mollick, via One Useful Thing
Insight
AI still has it’s problem. But those error and hallucination rates are getting better, and generally the quality of first draft outputs are always improving. What’s more, these newer AI models don’t even require great prompts to work. Even basic prompts can do the trick, making using AI far more accessible.
But, it’s this better and better accessibility and quality that presents both a problem, and an opportunity:
The problem: No one is going to write their own drafts anymore. And very few will seriously edit those drafts either, as research shows that people “fall asleep at the wheel” when faced with a good-enough AI. AI content will suddenly be everywhere, in every organization. And with that, to use AI at work requires you to think about what your work means to others, and what it means to you. This is the existential crisis of AI…what even matters?
The opportunity:
a) Freedom: Fairly obviously, if AI can help you complete tasks in rapid time, that means freedom. Sure, employers might think it means efficiency and us all doing way more work, but I think us employees think it means more work life balance. We can delegate the boring and repetitive stuff out to AI, and focus on the few things we actually enjoying doing at work. And then of course win back more time to enjoy our lives outside of the 9-5.
b) Expansion of our capabilities: AI gives us the ability to write code, design illustrations, and so much more that we may not have the skill to do ourselves without it. Thus, AI gives us new power to expand the stuff we’re able to do. Now, getting ideas out of your head (say, a screenwriter creating a concept trailer for their script to secure funding) become much cheaper, faster and more accessible to anyone.
Take action 🛠️
Honestly, I don’t use AI nearly enough. I literally just scratch the surface with how I use it.
So, personally, something I want to do here is create a custom GPT for myself to handle elements of market research.
My wife—damn, still feels weird to type that—created an entire arsenal of custom GPTs for herself recently.
If you’re like me and you’re not the overlord of some GPT yet, I challenge you to go and make one with me. It’s actually pretty straightforward to do within ChatGPT.
Here’s some resources to get started if you’re interested in unlocking more free time:
Read the full post by Ethan Mollick
(#4) The knowledge economy is over.
Welcome to the allocation economy
Rifting on the theme of AI….
Key quote
Last week I wrote about how ChatGPT changed my conception of intelligence and the way I see the world. I’ve started to see ChatGPT as a summarizer of human knowledge, and once I made that connection, I started to see summarizing everywhere: in the code I write (summaries of what’s on StackOverflow), and the emails I send (summaries of meetings I had), and the articles I write (summaries of books I read).
Summarizing used to be a skill I needed to have, and a valuable one at that. But before it had been mostly invisible, bundled into an amorphous set of tasks that I’d called “intelligence”—things that only I and other humans could do. But now that I can use ChatGPT for summarizing, I’ve carved that task out of my skill set and handed it over to AI. Now, my intelligence has learned to be the thing that directs or edits summarizing, rather than doing the summarizing myself.
As Every’s Evan Armstrong argued several months ago, “AI is an abstraction layer over lower-level thinking.” That lower-level thinking is, largely, summarizing
— Dan Shipper, via Every
Insight
The knowledge economy, simply, is the idea that what you know (and your ability to pull on your depth of knowledge at the right time) is what creates economic value for you.
Us folks sitting at desks behind computer screens are usually dubbed knowledge workers. But, as Dan points out, when computers have the knowledge, and can use it quickly at the right time, then what does it even mean to be a knowledge worker?
Here’s what he says:
We’ll go from makers to managers, from doing the work to learning how to allocate resources—choosing which work to be done, deciding whether work is good enough, and editing it when it’s not.
It means a transition from a knowledge economy to an allocation economy. You won’t be judged on how much you know, but instead on how well you can allocate and manage the resources to get work done.
Today, individual contributors (the bulk of the workforce) don’t need that “management” skill.
But, as we move into this allocation economy— where everyone from interns to principal ICs will be expected to use AI—to some degree, we’ll all need management skills. We’ll all just be “LLM managers”, vs the few that are people managers.
Take action 🛠️
People who have the skills to use AI/LLMs in their lives are going to be at a significant advantage.
Today, management is a skill that only a select few know because it is expensive to train managers: You need to give them a team of humans to practice on. But AI is cheap enough that tomorrow, everyone will have the chance to be a manager—and that will significantly increase the creative potential of every human being.
So, get allocating your knowledge tasks to AI.🫡
Read the full post by Dan Shipper
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(#5) Crossing the Canyon: Product Manager to Product Leader
And while we’re talking about everyone becoming managers…
There’s a hidden trap right in the middle of the product manager career path where many great IC product managers stall and fail.
It’s “the canyon” between Senior Product Manager to a Product Leader.
In an excellent post for Reforge, Fareed Mosavat and Casey Winters explore why this is the most difficult career transition for many product managers.
Key quote
Not all product work is created equal. After initial product-market fit, there are four categories of product problems that need to be managed and sequenced:
Feature Work - Creating and capturing value by extending a product's functionality and market into incremental and adjacent areas.
Growth Work - Creating and capturing value by accelerating adoption and usage by the existing market.
Scaling Work - Focuses on bottlenecks to ensure the team can continue to move forward and take on new levels of feature, growth, and product-market fit expansion work.
Product-Market Fit Expansion - Increasing the ceiling on product-market fit in a non-incremental way by expanding into an adjacent market, adjacent product, or both.
Each type of product problem has its own process, measures of success, and execution factors. But as you grow in the early phases of the product function, you tend to build expertise and depth in one of these areas.
Many product professionals don't recognize that there are fundamentally different types of product work. This leads to a hammer/nail problem, where you over-rely on the tool that you are familiar with. You might have worked on zero-to-one products and therefore treat every product problem with the same process and approach. Or you might have worked on growth product problems, and therefore treat everything as a growth product problem.
To be successful as a Product Leader, you need to have knowledge of all the different types of product problems and lead your team to work on the right ones at the right time without getting into the weeds of the work itself.
— Fareed and Casey, via Reforge
Insight
First, not all ICs are cut for management—but often companies push them there anyway. What do you do when you have an excellent performer? You promote them, of course. But, not all ICs want to/should be managers, and companies often overlook that and end up (1) losing a good IC, and (2) creating a meh manager.
Second, “what got you here, won't get you there”. The reason why moving from Sr. PM to a manager of PMs is the hardest step function is because it’s a very different job requiring a whole new set of managerial skills. And those are skills your employer probably won’t teach you. As Casey and Fareed point out, the four key transitions you need to make to cross the canyon are:
Depth in one type of product work → Breadth across multiple types of product work
Being good at your job → training others to be good at theirs
Solving with the resources you have → Solving by allocating resources and influencing others
Gaining more personal scope → Creating more scope for the organization
Take action 🛠️
So, to set yourself up to navigate this big transition, consider:
Expanding your skill set from depth to breadth: As an IC you’re likely specializing in one area of product work (feature, growth, scaling, PMF), but to grow, you should pick one are you’re weaker in and start working on developing those skills. For instance, if you've never built a growth model, go and practice → here’s an excellent resource.
Shifting from execution to enablement: Instead of doubling down on your own wins, consider how you can multiply your impact through others, rather than direct execution. After all, the PM role is all about leverage.
Driving organizational scope creation: Rather than just expanding your personal scope, think about how you can create and lobby for new opportunities and resources within your team/company. This will push your strategic chops and push you to think of areas for growth, and perhaps even champion for the development of new teams or functions. Not easy, but definitely the brushstroke of product leadership.
Read the full post by Fareed and Casey
And with our main 5 bits for the week done...
Chart of the week 📈
On the social media front, YouTube is by and large the most widely used online platform measured in a recent PEW Research survey. Roughly eight-in-ten U.S. adults (83%) report ever using the video-based platform. TikTok continues to grow the quickest, now at 33% adoption.
And now, byte on one of these 🧠
Here are some of my favorite reads from this week:
What kills velocity, by me 🤷
Which Substack Publications Charge the Highest Subscription Fees (And Why They Can Charge So Much), by Casandra Campbell
Anticonversions - Your Ultimate Guide to Cancelation, by Aakash Gupta
Home Economics No. 1: Living in Brooklyn on $466k joint income, by Lindsey Stanberry
And that’s everything for this week, folks.
If you learned anything new, the best way to support me and this newsletter is to give this post a like below or a share. Or, if you really want to go the extra mile, I’d be incredibly grateful if you considered upgrading.
Thanks so much for reading. I hope you have an awesome weekend.
Until next time.
— Jaryd✌️
Congratulations on your birthday Jaryd!
An honor to make favorite reads, thank you sir! Congrats on the big three zero!