Product Success Issues: Introduction to David Fradin and the Five Keys to Product Success

This podcast episode describes the series’ purpose. It introduces David Fradin, President of Spice Catalyst, and the Five Keys to Product Success: SPICE: Strategy, Process, Information, Customer, and Employees.

Transcript:

[Music] broadcasting from the business capital of the world, this is the podcast Business News Network. Welcome back to the show. David Fradin is joining us as the president at Spice Catalyst based out of Los Gatos, California. 

He is here to talk more about his training and consulting business and, of course, how he could be of service to you. 

Welcome to the show today. How are you? 

I’m doing great, and I’m glad to be with you. 

Well, I’m glad to have you and excited to talk to you all about Spice Catalyst, and yes, that’s the website to go to spicecatalyst.com, and this is product management training, product marketing training, and assessments.  There’s Consulting and so much more. You as a speaker, are excellent we have so much to get to know, and I don’t know if we have all the time in the world to get to know you, but we’re going to start today so David, first and foremost, please introduce yourself to our listeners and viewers 

I was born and raised in Detroit Michigan back in the 50s and 60s during the go- go years there yeah went to Cass Technical High School which is an honors High School for the entire city when Detroit used to have one of the best Educational Systems in the country and got my private pilot’s license and then went into aeronautical technology and later interdisciplinary engineering at the University of Michigan and my freshman year I was very disappointed that there was no Flying Club there so I started a flying club called the University of Michigan Flyers. 

They’re still going over 55 years later and they’ve trained over 5,000 Pilots many of them are Airline captains around the world including the head of the Blue Angels then in my second my sophomore year in college my aerospace engineering Professor who is on Lyndon Johnson’s SST Supersonic Transport advisory committee, which was having a lot of trouble getting funding from Congress, is the first commercial airplane development outside the US Military and he said that the SST was in trouble would I be interested in organizing a Nationwide student organization in support of the SST and not having any idea what I was getting into I formed 40 chapters 15,000 numbers on campuses throughout the country and by the end my sophomore year I ended up testifying before Congress, the House and Senate Aeronautics and astronautics committees, going to meetings in my pink polyester suit in the White House and then after the SST was shot down by Congress we felt that was very much because of a strong anti-technology feeling in the United States which is hard to believe today…technology was being blamed in those days for the environmental problems that we felt we were going to have and in reality technology is nothing more than the organization of knowledge for practical purposes so we changed the name from Fly America’s SST or FASST to Federation of Americans Supporting Science and Technology and by the time I was in my junior year I had a budget of over $100,000 a year and three people working for me as I was continuing to go to interdisciplinary engineering school at Michigan and testified before Congress in favor of the Space Shuttle, testified on Project Independence with regard to energy organized a national energy youth Council National Space Youth Council, advised and lobbied Congress to build the space shuttle. 

We were successful on that Lobby Congress in favor of independent energy

I thought you’re working for Apple and your history and you as an author were big enough. This is huge. I didn’t know all this, David, and I did my research on you. Wow, keep going,…

And then one time, for example, I got a letter from Arthur C Clark the science fiction writer and it was his short book short story book that led to 2001 Space Odyssey and he asked me if I was going to the AAAS scientific convention the in New York City and I was since I was on their Youth Council and he invited me to lunch at the Press Club in in New York

 We had a good time talking about technology, the future of technology, he was credited for inventing the concept of a satellite for communications and then I couldn’t find a job when I graduated because nobody is hiring interdisciplinary Engineers which was a National Science Foundation funded program to develop technically trade managers so I hired myself and moved by FASST headquarters to Washington DC and continued to Lobby Congress in support of science and technology and the other federal agencies

Then in 1975 I felt I was I couldn’t be a student anymore since I graduated two years earlier and the Environmental Balance Association of Minnesota recruited me to go there and be their Executive Vice President which I did and I helped pioneer the field of environmental mediation that is using mediation to resolve environmental economic and energy disputes.

I resolved the second successful environmental mediation of the world over at Anheuser Bush malt plant proposed for Morehead, Minnesota in the southern part of the Red River Valley, where malt and barley has grown for much of the beer in the in the nation and then I got heavily involved in in what was at that time the largest environmental dispute in the history of the world over the Reserve Mining that was deposing of taconite tailings from their mining operations into Lake Superior. I helped resolve that and I was called by the Duluth News the Henry Kissinger of northern Minnesota for my shuttle diplomacy between the corporate headquarters of Reserve in Cleveland and Congress in Washington DC, the White House, and the governor’s office in St Paul

That dispute was finally resolved after 7 years of litigation. Around that time, Hewlett Packard contacted me, and they said we understand you know how to site new facilities, and we’re having trouble. It was highly unusual for a socially and environmentally aware company like HP, so they moved me out to California to be in the corporate PR department. I handled community relations for new facilities in Colorado, California, North Carolina, and the Seattle area. One of the things I noticed in the PR department is that we did not have word processing, which was kind of strange for me because I had word processing dating back to my FASST days, and through my Environmental Balance days, we always had word processing in the office and I thought it was also strange that the corporate PR department, at the time was the only Department of the company that knew how to type, so I introduced some internal word processing there. 

I was acting essentially as an internal product manager so one of the nice things about HP is I could take those skill sets and move horizontally over to a the Information Networks Division in the Office Systems product management group.  I brought a couple products to market and then Apple noticed me and they recruited me to take the their new hard disk drive to market.

It was the first hard disk drive for a personal computer.  In 1982 and the that hard disk Drive is really cheap it was only $3,500 and it was enormous in size it contained 5 megabytes of space which is about the amount of space we used up in about the first 30 seconds of this podcast. 

So I brought that to market, and then Senior Management noticed that I knew how to manage, so they asked me to take over as the group product manager for the Apple /// product line, which at the time was the office and business computer.  It was building upon the Apple //’s success.

I did that for about a week into the job then Steve Jobs and the executive committee went off to Pajaro Dunes at an offsite meeting and they decided to cancel my product line with without bothering to ask me or tell me.

 so about a week after that I was coming out at corporate headquarters over on DeAnza Boulevard and Ida Cole, who was then the marketing director for the division, ran out and grab me and said John wants to meet with you and I said John who and she said John Scully I said well that’s the president I met him once or twice so she ushered me into his little conference room which also contained Joe Graciano who is the chief financial officer and Del Yokum later president of apple he was a VP of manufacturing and Scully was sitting at the end of the table he says Dave we’ve got a problem he’s looking at a super VisiCalc spreadsheet he says we got about 20 million dollar in peace Parts spread across the World in our manufacturing facilities and you know we canceled the product line so what are we going to do about all this inventory we just can’t and in today’s dollars that would have been about $200 million and the company at the time sales were about 600 million so it would take a huge hit on the on the stock market wow so John says what should we do about it I said what do you mean we pale face and he didn’t laugh I said you never heard the joke he said no I said well you’re familiar with the TV show and the movies The Lone Ranger and he had a was dressed in white he had one Silver Bullet he wore a Mas ask rode a white horse called trigger and he had an Indian sidekick named tat and I when I tell this story to Indians in India I have to say an American Indian yes and they’re surrounded by 10,000 yelling screaming Indians on the Arizona desert and the lad Ranger turns to T and says tat what should we do about us and T being an American Indian says what do you mean we pale face I said you went down to Pajaro Dune and you cancel the product line you’ve given me full responsibility for the product line including now inventory yeah give me no Authority give me the authority to manage market and sell service support the the product line will sell the $25,000 um 25,000 Apple 3es we have an inventory and work out all of the Supply Access and turn a profit and he says how do you suggest we do that I said’ make me an independent business unit manager and we’ll do it and I told him the story of my friend from Kelly Johnson for The locki skoke Works down in in Southern California and how he can come out with a high-tech airplane like the X1 the X15 the xr71 in 18 months while the rest of lck at the time the bureaucracy was such would take them seven years I told told him the story of a soul of a new machine where Alpha General came out with a new Mini computer because they put the development team alone and not interrupted by the corporate headquarters down in they moved him to Raleigh Durham North Carolina I told him the story The IBM PC which is also shut shut down by the senior salespeople at IBM because they AF of competition and nobody in those days believed in catabolizing your own products your own product line and that’s one of the reasons that Steve was so insistent at that time to shut the product line down because he felt it was messing in the market that his beloved in Macintosh might be able to get oh got it got it okay so um Scully agreed and he says make me a proposal so I got 80 people to contribute information use a core group of about 7 to 12 people we wrote an 80 page business plan and then on July 15th 1983 presented that business plan to the executive committee it also compared the pros and cons and the profits and the return on investment analysis that anybody would do in a good business plan we also compared it to Apple values and at the time Apple had a series of values that they had adopted a few years earlier which covered things like empathy for our customers achievement positive social contribution individual performance team spirit Innovation vision indiv idual growth quality excellence and most importantly good management wow and it would not be good management to shut the product line down without giving people the opportunity to transition someplace so at the end of my presentation Floyd kwami who was there who was at the time the Executive Vice President of sales and marketing for apple he says Dave if a dealer called you and you we decide after this meeting to shut the product line down or we let you pick the option that you pick which you recommend let the market decide and the reason I picked that option is because when I was in aerospace engineering at at Michigan they flew us down in a charter PL to see the Apollo I think it’s 15 my goodness all three astronauts were from U University of Michigan and after the launch they took us by bus over to Disney World which was under construction at the and they explained how they had to clean the water and have it flow around because it’s usually a brackish swamp there and they didn’t want that in what is that Lake Disney in the middle of the park and one of my fellow engineers said how did you guys decide where to put the sidewalks and everybody laughed they thought that was a silly question and the chief imagineer who was giving his presentation and answering our questions he says oh that’s not that funny that’s a very serious issue we’re building a major world class theme park we have to decide where to put the the sidewalks and what they is they argued with each other all 100 imagineers Disney calls live imagineers not Engineers yes yes or where to put the sidewalks and then finally one of the junior imagineers says let’s not put in any sidewalks and um I thought that was a blasphemy you to build a major Park without any sidewalks so they they decided to follow the the young engineer’s advice they put in no sidewalks and planted grass everywhere and just waited about 3 weeks to see where people are walking and then they decided where to put in the sidewalks well when I was writing my book about 5 years ago building a s great products I was wondering what it looked like in Disney World in terms of the grass and sidewalks yeah I pulled up a whole bunch of pictures on Google and there was no grass anywhere everything had been paved over because apparently everybody walks everywhere yeah so back to quab asking me which what would I he says to me what would you say if we shut it down versus let the market decide I said if you let the market decide I’d tell the dealer who called me that that’s what we decided yeah and it’s it’s up to him or her and us to continue to market sell service support and develop the product line but if you decide to shut the product line down I’ll give the dealer your phone number Floyd oh my gosh everybody laughed and I didn’t realize it at the time but ad Bowers who is the VP of HR at Apple she was also VP of HR at Intel at the time it was Mary de Bob noise one of the founders of Intel and intel was very quick to pick up on Apple or excuse me on the HPA which was values and that’s why back in 78 what 5 years before this meeting the company developed and adopted a set of value which is part of the reason for its continued success today so everybody laughed at about a week later I got a call from Ken Zerby who’s the Executive Vice President and Ken says I hear you know a little about the Apple 3 they would like to make you the Independent Business unit manager will give you 17 people and $4 million which would be be about 20 $25 million today you can sign for anything you want up to $200,000 no questions asked and go do it so I said okay I said but you’re not going to make me a general manager he says no you’re an independent business unit manager I said you’re gonna call me a bum for sure the smartest bum out there but go ahead we went on and sold billions of dollars of the Apple 3 created millions of dollars with the profit enough to keep about a, to 15 highly paid Apple people employed and also enough money to help pay for the development of the Macintosh and then later when Steve took over the Lisa and the Macintosh division killed the Lisa and his sales of the back in January 1985 dropped to four units he was let go within six months ah he went on to start his next computer company which I called last and then he had difficulty with Pixar and he finally sought out Dave Packard I found in research for my book and Dave explained to him that you got to be kind to people you have to have empathy for your employees you cannot be afraid to cannibalize your your old products because if you don’t someone else will and he took lessons to heart when he came back to Apple in the late 90s and laid the groundwork for being the most valuable company in the world today wow so that’s my story and I’m sticking to it that is an amazing story we better have more shows together because this is just about your background and there’s still so much more to get to know you oh my goodness okay so congratulations on what a story I just got to ask you still have your private pilot’s license or did you upgrade to multi what are you doing I’ve got a commercial pilot’s license and instruction tring God bless I have 65 hours I’ve soloed in my little Cessna 172 this is like 20 years ago and I did my medical I was supposed to cross country um I did my solos and then I stopped so 20 years later I still have all my books my material and it’s my goal it’s my dream to get my license and I got my captain’s license instead but it’s now finances can’t do it I have two kids as a single mom seven and nine so I juggle that but my goal is to follow in your footsteps I mean wow commercial Li yeah I when I worked at I worked at a Super Sub Shop which was a new jersey style Submarine sandwiches in Detroit and I would have to work nine hours to pay for for one hour of flying yeah so the the ratios are huge of course gas back then was about 43 cents a gallon for an airplane now yeah five or six dollars I can only imagine what it is cost to fly now oh my gosh to get the license but one day but enough about me David I want to know more about you so now here we are with spice Catalyst okay we’re jumping the gun I mean as an author we have to still talk about your book books how many books do you have I’ve got three main ones one is Building and Insanely Great Products uhhand I’ll grab it here I don’t know if you can see it with the blue screen yes hold on there it is building insanely great products and it’s it’s on Amazon and then I’ve got organizing and managing insanely great products which is for management and then I’ve got this little