The Way of Product with Caden Damiano: #134 Leading Innovation Without Needing a Huge Budget

Mike Todasco 0:00

I called it the one technology everyone should be freaking out about. First thing. So whenever people say we can't do innovation, it's too expensive. We had no budget, we had no resources. We would have from dozens to hundreds of people work on passion side projects. Everything we were doing was a proof of concept and we made that abundantly clear. You want an idea that you are really passionate about? Actually, let me let me rephrase that. You want a customer you are really passionate about who has a problem that you think you have an idea to solve that problem.

Caden Damiano 0:32

Ideally, you become obsessed with the problem. There's an unhealthy aspect of your relationship to the problem. If you want really great job security, obsessions are a nice thing to have because it's really hard to compete with someone that's obsessed. These tools

Mike Todasco 0:47

Should be able to uplevel you to do much more and frankly to get you closer to the customer. If you want to take a class, fine, I'm not going to stop you. But the one thing I can recommend is Thanks for having me today. I'm late to ask you. Professionally, I started as an accountant, moved into corporate strategy, started a company, failed miserably at that, moved on to PayPal where I was in product for the first half of my 11 years at the company and the second half running the innovation group. For the last couple of years, I've been wholly focused on AI writing, advising in the space, and I'm also visiting fellow at the James Silverad Center of AI at San Diego State. That is why I'm now I got

Caden Damiano 1:42

Here. How did you start out as an accountant and then go into corporate strategy?

Mike Todasco 1:45

Yeah, because I sucked as an accountant, Caden, is the short answer of that. Remember, I got a I think my intro to accounting class in school, I got a C. And then coming out of college, I had a job offer at Brunswick, like the bowling company, and a job offer at General Electric, which at that time was the most valuable company in the world. I remember my management teacher talking about Jack Welch, who was the CEO at the time, and what a great manager he was. That's what sold me. I'm like, okay, if I gets to go work for that company, that's where I wanted to be.

I forgot what debits and credits were and the basics of accounting. I knew nothing. So I was a bad accountant, trying to figure stuff out. But I've always liked business in the broader side. After a couple of years at GE, I had an opportunity to move to a paper company like Sunder Mifflin style. In my time there, it was I wasn't doing a traditional finance accounting role. Strategy happened to be under the CFO and there was a way to move under that wing. That was the first time in my career where I actually had a This was 2003, 2004. One of the very first projects I worked on was should we get into the E-ink business?

Folks who've ever had a Kindle or anything like that done with E-ink technology, it's like positively and negatively charged balls. One side is black, one side is white. You run a current through there and that's how you see your little pixels. It looks like you're reading a book or whatever it might be. And that was so exciting to me because it's just like 300-year-old industry of paper and doing all this stuff. I got to work on some really cool stuff. And that's what excited me. And it all just came down to organizationally, strategy happened to be in the same group and I happen to know the person running strategy. What's cool about

Caden Damiano 3:38

You working at a paper company, and I appreciate the office reference by the way, is that paper, so like Peter De Amandis, he wrote a book. Yeah, I'm trying to Yeah, I'm trying to remember what the book was. The cover I think is like aluminum foil or something like that. Peter De Amandis was the one that for guests who don't know who he is, he created with the He's trying to surprise a little bit. Help me set up this thought and then

Mike Todasco 4:06

I could use some help here. The surprise. So it actually was supposedly Peter says it was inspired by Charles Lindberg. Folks know like Lindberg was the first person who flew solo one shot across the Atlantic Ocean back in 1920 something. This was a contest. Somebody put up $100,000 at the time and then you had all of these crazy people say, I want to win the contest, I want to win the thousand, $100,000 or whatever it was. And Lindberg was eventually the one who won, but people forgot that this was a prize. So Peter back in the early 2000s said we should be doing these prizes again as a society.

Raised a bunch of money and got people to work on things like driverless cars. I think there's one about longevity they're doing now. They've done stuff about space and reusable, like all this crazy stuff.

Caden Damiano 4:57

It's like a high stakes hackathon and the idea is to take away the incentives of normal corporate development where it's like, how do we make money from this? It's don't worry about that. Just how can we make a big leap in our understanding of technology? And in his book, he talks about this story. He says technology is anything that augments human capability to do something. And like we talk about like paper, I think the easy one is, okay, there's an orange in like a really high branch of a tree. You can't you could climb up, but there's a risk you could break your leg and evolutionarily that's not safe and like smart, but you need to get calories.

And the ladder is like a piece of technology that augments your ability to get to the top branch and get the tree. So like technology isn't just computers, technology is any artificially created lever for humanity. And that he also talks about paper. Paper was one of the biggest innovations, right? They talk about pyrus in Egypt and like the idea to like the invention of writing like the written word and how it played a role in human exponential growth because we're able to maintain continuity of subject matter expertise. Thousands of years later, Mike set up a paper company and we're exploring this new technology called E-ink, which isn't ink.

I use the remarkable tablet which was like they could just make a computer like the iPhone for those watching and lifting up the remarkable tablet. The whole thesis is that paper is a way to maintain continuity of ideas and they double down on the interface being very similar to interacting with paper. I think it's so cool that like your trajectory into technology and product and innovation is literally just the you're part of that next evolutionary leap into the next iteration of paper, which is a technology technically.

Mike Todasco 6:51

For full disclosure, back in 2003, the takeaway I had in that report on E-ink technology was that we were too late. Of course, one years later, it sounds hilarious that I actually thought we missed the boat on this one. Like E-ink is going to take over, the players are set, all this. Well, I was so wrong with that. But it did have me think about many other things. And for quite some time, I was working on a project to redefine the strategy of us as a company. Like we turn trees into paper. What if we turn trees into other things specifically like fuels? We're working on a synthetic, what's this?

It was a synthetic gas project with the company in Sweden where we could say, okay, how do we turn trees? There's a lot in the US supply chain. I don't know what percentage is corn ethanol. Corn is very energy intensive. There's a lot of argument if that's actually even a good thing. Ultimately, it probably comes down to the first presidential caucus in Iowa and people want to appease the corn growers, which is how we've gotten to the point where you see ethanol content and fuel. It's not really for the environment, but the math seemed to work environmentally. The economics didn't. I was working on this in like 2007.

And for folks who look at oil prices in late 2007, they went from 150 bucks a barrel down to 20. The math went from, holy cow, we can totally do this to we're just going to struggle to stay in business because that was the financial crisis. That never quite happened unfortunately, but it was an amazing

Caden Damiano 8:24

Experience. Some people might see that as a failure, but there's a really good maxim that I live by. Failure is an event, not an identity. And especially when you're doing R&D work and innovation work, waste is part of the job. You do all this work to analyze something and yeah, it's not guaranteed that you're actually going to be able to work on something. And if you're at a pretty like high speed, high performing company, your road map's getting churned every three months because you're learning new things, there's new opportunities, your work gets wasted all the time. And I think the there is this like school of thought in product management that like I need to do all this analysis, I need to guarantee that the numbers will make sense before we invest in anything. By the time you actually get to a nice little like artificially contrived like spreadsheet analysis of the opportunity space, it's too late.

Mike Todasco 9:18

Absolutely. If you're not failing and you're trying to do innovative things, then you're not trying hard enough ultimately. That is going to be part of the process. Some of the most memorable experiences I've had in my career are the failures. Those are the things you learn the most from because well beyond being in the paper industry with doing that and the tech industry as well. For people, it just needs to be part of the learning process. For product people, you just need to fail fast. You need to do what you can to get that customer's feedback as soon as possible and just iterate and repeat, keep building and working up that way. Failure is always going to happen. Life wouldn't be interesting if there wasn't failure.

Caden Damiano 9:56

Yeah, and you hear all these stories about people that go through a really harrowing professional event like having to give layoffs and you ask them, hey, would you change anything? What would you do to prevent that from happening? I wouldn't have learned the lesson if that didn't happen. Machine learning algorithms literally do failure at scale. Computers, they don't have the ego to not fail. And that's why computers and like software is like such a valuable leap in like technology. If you don't care about failure, like they'll continue repeating until it works reliably. And that's what's really compelling about large language models. I want to hear the story of how you go from looking at E-ink technology to getting into PayPal into product in the first place.

I'm curious, like you said the innovation org was product adjacent. What's the difference between the product org at PayPal and the innovation org? And then we'll go from there. I'm working up to your current work. I'm just so fascinated with the biography aspect of these interviews, so we'll just go from there.

Mike Todasco 11:06

Caden just asked me to talk about myself. For 99% of the population, that's the thing they like to talk about most, so I'm happy to do it. Let me start with how I got into PayPal. I got into PayPal because the startup I had started was not going where I wanted it to go. The short of that is it was a niche collectible marketplace. The thesis I had back in 2008, 2009 was that sites like eBay did broad things, they didn't do unique things. It was just bravel over the place, a different types of stuff. I really believed you were going to see a future where different types of collectibles have their own marketplaces.

I started it with a product called Sketchma, other domains like Shoemaven and whatever else and all this other kind of stuff as part of it. And it started off as comic book artwork with a unique problem where every piece at least back then came from a hand drawn piece of art. A comic book that a million people may have read, there's only one of the original page that exists. And to find anything where there's only one of it in the world, that's a really hard problem. And so it was a kind of a two-sided marketplace for that. You could post that you have it, you could post that you want it, and it was a way to catalog everything.

Moderate success didn't take off to where I wanted it to be. The long story short, opportunity opened up at PayPal to join the mobile team. This was back in 2011. And I had a lot of friends there. Mobile seemed to be pretty exciting at the time. It was also a short bike ride from my house, which was another bonus. I'd been a PayPal customer since probably 2000 when driving people with 10 or 20 bucks to sign up to get an account. Everything kind of pointing in that direction. I'm like, what the heck, I'll give it a try. So somehow convinced them to hire me and I started off doing product analytics there and I knew nothing.

I didn't know how to run a SQL query, I didn't know how to do anything, so I was just figuring stuff out. So moved to different roles and products through the time. Was a product manager, did product marketing, did we even had a product launch function. But when fast forward to 2015, PayPal is separating from eBay. Used to be one company. Carl Icon and many other things happened. Basically said, hey, you're going to be stronger separate. And so one of the things we did was forming an innovation org. And it was tiny. We didn't want to create a two-tier structure within the company. We had a long history of innovation at PayPal already.

We didn't want to create a structure which I see in a lot of companies where there's an innovation group here. They work on all the cool, sexy, futuristic stuff. And then there's the engineering team. They do the boring stuff that pays the bills. They do the fun stuff that gets all the attention. And that's not what we wanted in our culture. It was a tiny team. It was funded by legal to start because they wanted to rebuild the patent portfolio. And I was really good at filing patents and coming up with new ideas. We weren't even part of the product org. It was just a tiny team in legal working on patent ideas.

But to get to those patent ideas, we had to have people thinking about what's the next solution. Go beyond this sprint, go beyond the road map, go beyond all that kind of stuff. And that was just the way to infuse that into

Caden Damiano 14:33

The culture. Wow. So how does work in the innovation org at PayPal translate into a handoff into being a part of the product portfolio without pissing a bunch of people off under my under my

Mike Todasco 14:51

We had no resources, we had no money. That's the first thing. So whenever people say we can't do innovation, it's too expensive. Everything we were doing was part-time. So it was me and at the very most, it was me plus two people who were full-time innovation people. That was the most in the six years or so that I was in that job. We had no budget, we had no resources. We would have from dozens to hundreds of people working on projects. They're working on passion side projects. One of the things that we would do because it was a way to promote what we're doing, promote what the people are doing in the orgs, we would do things like demo days where I'd use whatever little budget I have, get a bunch of food.

We had some big auditoriums on the PayPal campus. We would make a video cast of it as well so all of our external offices could see it away from headquarters. We would have people do three-minute demos. Hey, here's what I'm working on or this is an idea I have. Those at various stages. Leaders from throughout the organization were there. Some of the stuff was like, okay, that's fine. Some of the stuff was like, wow, that's interesting. And wait, you did half of the coding? Maybe we should actually bring that to our road map. There was never any pressure and there was also never a promise that it would become products.

Everything we were doing was a proof of concept and we made that clear. If I was at the company, I knew all of the product leaders at the company from being in product for a long time. Somebody was working on something interesting, I'd probably ping them fairly early and say, hey, there's something cool going on with consumer onboarding and they have a new way of think about it. Can I simply 30 minutes where they could demo it for you and you could just see this because I think it might fit. And 75% of the time it was, no, we're full, our road map's full. And 25% of the time it was, oh, yeah, keep me in the loop.

Actually, we're going to take that now. People got recruited out of the innovation lab. Can we just take that person and bring them in to do that full-time? Those are the things we had. It probably wouldn't have worked if I didn't already have those pre-existing relationships in our work from, you know, the last five years or so I was at the company.

Caden Damiano 16:55

There's a book called How Innovation Works. What you're describing, I think his last name is Ridley. In the book, it's an anthropological profile of innovation in humanity to make a case that innovation isn't about novelty usually, but by the time something becomes like an innovation like mass market innovation, you could do forensic audits of, okay, well, this person got this idea from this person and then that person got this idea from this person at a conference somewhere in Munich. He talks about ideas having, I can't figure out a better way to say it, the ideas having sex. It's like evolution. So you start out with an idea in the demo days, you keep showing proof of concept, you keep showing your work and having a team that is really good at just doing that.

It leads to someone looking at a demo and being like, oh, can we talk more about this? Your idea, their idea, have another idea that leads to an eventual viable solution. What you described is actual innovation work, which is really cool. Sometimes when I talk to guests about innovation, it's literally about novelty that they don't care about viability or whatever. You have to ignore viability for a little bit, but it just said it's better because it's new. It doesn't become a disruptive technology until the customer adopts it and pays money for it consistently. Innovation work is really just we have all these new technologies and you can see it early in your career with the E-ink technology.

Is this got legs under it? Do we have the team needed to actually execute this well? It might not and you might just be the spark as a product innovation person that leads to someone having an idea that eventually leads to that outcome. The downside, sometimes you don't get to reap the rewards of the discovery because it takes a few more iterations to get to viability.

Mike Todasco 18:48

Yeah, two thoughts on that, Caden. First one, I've never seen a unique idea in my life. I've never had a unique idea or any like all ideas, they're born from all these other things. One great example is a South Park episode called The Simpsons Did It. I remember hearing an interview with Trey and Matt about that episode and they were saying that because they were working on this cartoon, Simpsons were a cartoon that was on two years longer, they would come up with ideas and then at some point somebody in the room like, yeah, the Simpsons did it. Yeah, the Simpsons did it. So literally it came up to them like, okay, we're just going to make a whole episode about all the things that the Simpsons already did.

Maybe it's because they watched Simpsons and it's in some dark recess in the back of their brain. In reality, all these ideas come from somewhere else. You track it back, you can find some sort of origin. It's not like Da Vinci just wakes up and is, okay, we're going to have a helicopter. All of these things have origins and things that came before. In the innovation lab, we encourage people to work on any project. It didn't have to necessarily have anything to do with our business. A great example of that which anybody can use, Adobe created probably about 10 years ago a program called Kickbox and they open sourced it so anybody could go to kickbox.org and you can see all the materials there.

We actually embraced that in PayPal. I adjusted it and made it a way to it's basically product launch and creation and ideation pack. And so I modified it. I would teach classes of this at PayPal. We would have these demos that I described. The students would work in six to 12 weeks on ideating, talking to customers, building an MVP, all this other kind of stuff as part of the process and iterating again and again. And then they get in front of a bunch of senior leaders. Some of these became reality, some did not. The thing that mattered was teaching the process, getting people to see what they could do, what they could build.

Your passion mattered way more than the customer or even the company's passion. This was the time just I just want you to create. Some of the types of things people built, like one built like a role playing game, like literally like tabletop role playing game, all this other kind of stuff as part of that. Is PayPal going to get into that business? That person who's going through that is learning all the steps. They're learning how to talk to customers. And then gave that same demo to leadership as part of that. Hey, I did this and this was a way to also because here's the other reality of this.

Like we don't know what is going to inspire other stuff. If you only stay within your swim lane, if you're a product person and only listen to product podcasts, you need to expose yourself to other things that are out there in the world. It is all these disparate things that you start to make connections on that are going to give you amazing ideas that you're going to be able to bring back and say, oh my gosh, this thing from nature, I'm going to be able to apply that in some unique way to what I'm building, this mobile app that I'm building.

Caden Damiano 21:57

Seth Goden had a from his podcast like a long time ago, I was in college when I heard this, but it stuck with me for a long time. He talked about when you are trying to develop an idea, don't look at anybody in your industry. Look at someone in another industry that is really successful and see if you can remix what they did. The best examples I've heard of this and from a similar like career standpoint, like Tony Fidel, like he's been he was thinking about a mobile handheld computer technology since he got out of college with like General Magic. Like that was that's a perfect example of the evolution of idea.

It was career long. If you read his book, it's basically him having failure to launch on mobile technology. General Magic folds and he's, oh, you want to work at Phillips? It's corporate culture's not right. I'll start my own company. And then he gets his arm twisted to go inside of Apple again and eventually do that, the iPod. But the iPod was never the end game. Eventually it led to a viable handheld computer because the technology was there. And Steve Jobs' last interview, he talks about the disease in business and the idea is 95% of the work. That all an executive has to do is have a good idea and then hire smart engineers and it will be a commercial success.

In their own way, they're starting an innovation org because they're going to find out that it's not ready yet. The team behind these big innovations have been learning their whole career to execute the vision. Yeah, I

Mike Todasco 23:38

Would rather have a decent idea with great execution versus a great idea with decent execution, anything. Ideas, especially now in the age of AI, are going to be worth less. I have Evernote files with thousands of book, TV, products, any kind of idea that you could imagine. Just having thousands of ideas, it's not worth anything. Okay, but I keep them because maybe it is going to inspire me someday to execute, to build something, to do something with those. I don't want anyone to ever think otherwise. I lived in the world of ideas for years. I got to learn how easy it is. It's pattern matching.

If you want to file a patent, if you want to come up with an idea no one's ever had before, there's ways to do that. If an accountant like me could figure that out, just about anybody else can figure that out. You want an idea that you are really passionate about? You want a customer you are really passionate about who has a problem that you think you have an idea to solve. That idea is going to change. That's where the passion needs to be. And then you just need to work as hard as you can to solve that problem for that customer. And maybe the

Caden Damiano 24:40

Customer evolves because you're like, oh, actually my assumption about the customer might have been wrong. And you find someone that you had no idea existed, but then you actually fall in love with their problem and what they're dealing with.

Mike Todasco 24:52

Go ahead. You may be think of something else here and I haven't told the story. Go ahead, please. So when we were doing that Kickbox at PayPal, we also did it with a group of recent college grads fresh out of school. Some of these, they're nervous. They don't have a lot of speaking opportunities. We would start the session with them. I remember talking to the person running the recent college grad program and like, a couple of these folks are really nervous about putting them on front of a bunch of vice presidents all by themselves. And I remember the first time we did that, it was amazing because they were so passionate about the things that they were doing.

Whatever perceived shell we saw in them had just gone away. It's like my teenage son might seem introverted and all that, but you get him talking about Fortnite or Brawl Stars and all of a sudden he would talk to the presidents about that for hours on end if there was interest on the other end. And so, you know, to have that passion, to have that excitement, be it for the customer, be it for the product, whatever it be, it will be I've literally seen it change people. That is product founder match or it doesn't have to be founder, it could be within a company. But when you are so dead set of I want to improve this person's life, I want to do that, that is where magical things happen.

Caden Damiano 26:11

Time and time again. I'm reading a book. It's a memoir of Sam Zell, the big real estate mogul. He was responsible for the Tijuana border land bridge and among like many like really big like real estate developments. And he talked about an entrepreneur doesn't equal a founder. Like an entrepreneur in the original sense is taking potential energy and turning it into something valuable, like into a different form. And so like you are you're basically a developer. You're you're like in the concept of a land developer. Like a land developer is mostly a deals guy, an allocator of capital in real estate. When we hear developers in software, like the like the mental model changes.

It's a coder. But I think what is really interesting about product people, if they really lean into their role, is that you are like you're like a in-house entrepreneur. Like your job is to take an ambiguous problem space, hopefully you're passionate about it, and turn it into something that could be economically sold to solve that problem and provide value to the business. But at the same time, people are happy to pay money for it because it relieves such a big pain point. One of my favorite parts about this podcast is tying to other guests. I had this interesting insight because I didn't expect it. Taha, the director of Tableau Public, which is the free version of Tableau where you could use it if it's public data.

She was promoting a book about the street trees of Seattle. She cataloged and cleaned up all the data because Seattle has the largest collection of street trees from all over the world. She's on this street. This tree is from the East Coast or this one's from Israel next to a house of Israeli immigrants. The clips for the podcast did not sound like a product podcast. But she's talking about insights of cleaning up the street tree data, getting on the ground, doing the work. She hosts street tree tours where she'll meet people and then she'll walk around the city and tell stories about these trees. In the comments of one of the videos, someone said, what does this have to do with product?

I'm like, this person doesn't get it. This is what product, you fall in love with a problem. Ideally, you become obsessed with it. There's an unhealthy aspect of your relationship to the problem because that gets you through the late nights and weekends. You're the steward of the problem and agnostic of the solution. You're willing to do the work to find the best way to deliver value and solve this problem.

Mike Todasco 28:33

Absolutely. I'm reading a book now. It's called Reign of Superman, but it's about flow and flow states and all that and specifically in extreme sports. And because one of the theories in the block that it talks about is like when you literally can die, when you're about to die, you get into that magical flow state almost as a self-preservation mode. And your body is just trying to find the most efficient way to get from the bottom of the mountain to the top of the mountain. It just knows that this is the end goal. However it's going to be, you get there as part of the process.

I think there is so much that product people can learn by looking at people who are passionate in whatever it is they do. I find joy in seeing somebody who looks at something that 99% of people just walk by and don't even think about, but they will then see the beauty of that. Another podcast about design, 99% Invisible, is literally what the whole podcast is about. Roman Mars started this podcast as a way of, hey, everything in the world around you is design. When you understand that, you appreciate the world more. You start to see things that then you're able to bring back and better serve your potential customers with all these examples.

What I would say is find where there is passion and you will learn so much from that. When you see somebody who is obsessed with something, that is where you are going to be able to just take away pieces and look at the discipline they have or the nuance they understand about it. For all of us, I think you can only hope that we are all as obsessed about something like that, like our customers, whatever it might be, to even just have a tenth of that obsession.

Caden Damiano 30:19

If you want really great job security, obsession is a nice thing to have because it's really hard to compete with someone that's obsessed. Patrick David, he's a business thought leader and I'm just working also harder to give context to the guests. That's why I'm like doing a quick intro of whatever, whoever I'm quoting. He was talking about taking his kids to travel league soccer. He's had tournament and this one team's just dominating. They're so good that the coach is a Premier League soccer player and he walks up to one of the players' parents and he's just, what do they do differently here? Like they're like, how are you guys so good?

And he just said, every person on this team, their goal is to get into the Premier League. This isn't a hobby for them. He talks about the concept of obsession. Like they are so obsessed. You cannot compete with an obsessed person. And he's like talking to his kids after in the car, is this fun for you? Is this a hobby or are you obsessed? If you want to get to that level, you're not spending enough time on this if you want to do this. And Marty Cagan in his books talk about like a good week for product managers is like 50 to 60 hours. Not because you're doing meetings for 50 to 60 hours, but it's all the it's all the outside hour things you're doing to like learn about a problem space.

And if you think that you could just do 40 hours a week and just make a roadmap, you're going to have a bad time. You're just not going to be as compelling and persuasive to the people that you need to convince to build the vision you have. I've gone down an AI rabbit hole. The reason this podcast even has video in the first place is I saw the potential of ChatGPT. I didn't know that AI was going to immediately disrupt the creative industry, but that's good for me because I have a small media company. I was going in the rabbit hole, different applications of AI, getting all the newsletters and reading about it.

We're definitely not there yet. A lot of the applications of AI are low on the evolutionary totem pole. They're not going to be around in a couple years, but the ideas that we get from them, I'm just so tight about it. How did you become obsessed with AI? Now to the actual main event of the show. If you stayed this long, good on you.

Mike Todasco 32:28

Before I comment on the unfair advantage, I always remember Steven Levitt, who's the author of Freakonomics, a professor or used to be a professor at Chicago. He said when he's hiring associate economic professors at the school and basically his one criteria above and beyond anything else was, are these people obsessed about economics? If they're obsessed about economics, if this is what they think about at the farmer's market when they're watching TV all the time, they have a huge advantage over anybody else who just sees this as a 9-to-5 job. As I show my brain off, whatever. If you're the kind of people who is just constantly, huh, why are there so many strawberry vendors at this market, but only one blueberry vendor in every market I go to is like that or whatever it might be, like, do you know what?

There's probably a paper around that and some principle that nobody's dug into. And he knew this intuitively. That is the thing that sets the rate economist apart from other people. Yes, exactly. And it is and again, it's not just sitting from a computer, it's getting out the world. Having these other experiences. But if you always have that economic part of your brain or whatever your discipline is, your product part of your brain, your design part of your brain, thinking, huh, that's a really crappy sign or wow, I love how they design that or wherever that is, that is something special. That gives you a competitive advantage.

That was awesome. How did I get obsessed with AI? When I was at PayPal and running the innovate lab, AI was never really part of our purview. We did a lot of augmented reality and blockchain and even fiddle with robots, doing tangential products that we had no expertise in. Machine learning and AI was something that PayPal actually did really well. So I would meet with AI engineers all the time. They would come in the lab, they would do demos and when they would do it was always a lot of, that's so damn cool. I don't know how to do that. I wish I could do that.

They're taking all this data and I see what they're doing, I understand what they're doing, but I'm not a machine learning engineer. I don't know how to do that. So fast forward to 2021, finally got access to GPT-3. GPT-3 was one of the precursors to the products that OpenAI now has out here. I was actually just working on writing something. I was writing a piece for fun about a computer in the future who becomes president. And this was the inaugural address of this AI robot president. So I'm like, oh, why don't I put this in a GPT-3? See what it could do. I gave it the starting prompts.

I wrote a little bit myself and I actually took a little from Obama's second inaugural address, interspersed some things in there. And then I was like, okay, what can you do? I remember sitting in my kitchen. It was just me and my wife. I don't know where my kids were. I think they were at school there or something. And I just I start running upstairs screaming, the computer is making words and coherent thoughts. I had seen things like that in demos where machine learning engineers could do this wonderful stuff, but just me, the accountant who doesn't know how to code, is able to do this stuff.

That really got me excited. So that was 2021 and then comes summer of 2022, left PayPal after an amazing run. I was just getting sucked into all the AI tools that summer. DALL-E had just released the new model, which was the image generator that OpenAI had created. There were a few other things out there and it was really bothering me that no one was talking about this. It was still a weird niche thing that most people weren't exposed to. So in August 2022, I wrote my first AI article. I called it the one technology everyone should be freaking out about. And this was months before ChatGPT came out because I was like, hey guys, like this is look at the things you could do today with this.

It became so interesting to me because I'm not an engineer. I don't know how to code. I saw how amazing this could be for the 99% of the world who aren't engineers. I start writing about that. Somebody saw my writing at university, got brought into an AI center and they're working on this the next few years. And then ChatGPT came out that did have everyone start to freak out, both on the positive and negative side. That was my first experience of it. I still see the childlike giddiness when a new tool launches. When Google launched NotebookLM or at least the audio podcasting feature of NotebookLM, I was amazed.

I was listening for hours where you could upload files. It sounds like someone having a side-by-side conversation about your kid's paper, your resume or some deep scientific article. I'm still giddy about that. When Audio released their new text-to-song engine, I was texting all my non-AI friends songs about our childhood growing up, funny things we had in common and all these different musical styles. It is amazing what you can do out there. I'm just talking about the fun stuff. You can start to bring this back to how it improves your job, how it improves your life and all that. For me, it all starts with fun and play. Then you start to figure out, what else can I do? That's amazing

Caden Damiano 37:56

With these tools. I would say that it was a seismic shift in like how I viewed my career. I studied human-computer interaction in school. That's like I thought I was going to be a designer. I'm still in tech by the way when I say this. It's going to it's not it's an endearing loving way of saying it, but I just found out the technology space is a racket. The show Silicon Valley is good satire because there are real human beings that act like the characters in that show.

Mike Todasco 38:30

I had to stop watching. It was hitting too close to home. I'm like documentary stuff. Yeah, and I think there's

Caden Damiano 38:39

Scenes shot in San Mateo. I'm like, oh, I just drove by there the other day. Not my monkeys, not my circus. The decision making that is going on and how most of the decision making is building for the board so that the board doesn't shut things down or fire someone and how like product leaders, the average tenure is like two years. Like every company I work at, the product leader that was there when I started gets exited. It's such a high churn role. And it was so frustrating. I didn't realize this until recently because I'm just like, we just need designers and engineers that have good product sense.

Look at Airbnb, look at Linear. The reason Airbnb and Linear are doing so is they chose to prioritize product management competency. They put less emphasis on the job family. Some of the best product managers aren't product managers, but we need someone that has the analytical skills and foresight to decide what's important. When I saw how easy it was to take incoherent notes and turn it into a one-pager or like a high-level PRD, the task of creating a coherent memo or document in the implementation of AI technology to look for patterns in like transcripts and pull out insights so fast, I'm like, I'm going into product management.

Management are really solved by AI. To all the product managers listening that say, designers be careful, AI is here, but it's not there yet. You should be worried about designers and engineers that they could do their job better than you and use AI tools to do all the mundane stuff, till document specs and all that. It's my career. It's like a butterfly effect. The gap, the creative gap between idea to coherent vision is so small now.

Mike Todasco 40:23

Absolutely. And I think for anybody out there, your designer, PM, you're whatever, I think it is worthwhile to stop and think, what are all the tasks that make up my job? What are all the things I do? Then you need to go in and say, what are things that are not value added? First of all, what have I been doing? What are things that can be automated? What are things that could be outsourced? Because it isn't the best use of your time. You could hire somebody on Upwork to do this stuff for you. I think if you think that your job is going to stay the same five years from now, it's not going to happen.

This is what's known as the illusion of history in psychology where we tend to think that our current selves and who we are today is who we're going to be in the future. But when we look backwards 10 years, we know, oh, I was into Miley Cyrus and that's not me today. So I think we need to take a further look at those things and see where we can go because these tools should be able to uplevel you to do much more, frankly, to get you closer to the customer. What this is going to mean is every product manager is going to operate a little bit more like a chief product officer than a traditional PM.

It is going to uplevel you more strategically. You could be the director of all these potential AI agents that are working for you. As CPOs do and should, you should also be out there meeting with customers. So that's nothing that the AI is going to be able to do anytime soon. The AI can transcribe all those things for you, can summarize that, but it's still not going to be able to get the plot. We're years away from truly being able to do that level of customer inputs. But that's our future as a product manager, as a writer, as a person who's making films. It becomes more of the director.

And you're the director of all these scenes and using all these tools to create the vision that you best see fit. That should be really exciting. Now, if your PM skills are just writing PRDs, then I think you need to think about how my PM skills get me more thinking

Caden Damiano 42:36

Product. I think you look at disruptive automation to a task, what you just defined as like a tweet I saw about how AI right now is really only good at doing tasks. It's not good at replacing responsibility. There's still responsibility. You actually have more responsibility now because the time it takes to synthesize and document insights is getting way fast, meaning if you're not spending more time actually just becoming an expert in the market and talking to customers, the product management job with advances in technology should be the coolest job ever now. Talk to customers because you could just put raw notes into an LLM and there's your spec document, you do some editorial, cool. It meets the needs of the engineering team.

Mike Todasco 43:23

Yeah, is the engineering team even going to need that? Some of these things are probably going to go away. They're going to be simplified because at some point it's just going to be AIs talking to AIs, but ultimately you are the one directing all of this. My gosh, there should be no excuse to have more time with customers, talking to them, open-ended questions, all those things. There's never an upper limit as how what percentage of a product manager's time should be spent doing that. Even if you're like, I'm doing that 30% of the time, it should be 40 or 50% then. Keep more that you could do that, the better the product and better experience is

Caden Damiano 43:57

Going to be for sure. I want to respect your time. Thanks for going over a little bit. What do you feel hasn't been said that should have been said in this conversation and how could people connect with you and learn more about your work?

Mike Todasco 44:13

Yeah, thanks Dave. It was a super fun conversation. I want to maybe just double down on one of the last points we were making about product managers. I do think you are uniquely qualified to ride this next AI wave. You just need to just get in there, use these tools, understand these tools. If the tool doesn't treat the tools like a highly motivated intern that is going to work 24 hours a day if need be, that's what these tools could be. Use them to the extent that your company allows, but really see what you can do because there's so much these are capable of. I think it's just hard for people sometimes because when you have a tool that has infinite possibilities in the outcomes, we tend to just freeze up.

Instead of doing something with it, we tend to do nothing. Do that, literally spend 30 minutes a day just in these tools, however you can. ChatGPT, Claude, it doesn't matter. Spend the time in these tools and you will start to become an expert and see, oh my gosh, I didn't know people were doing this and this. So that's point one. And then point two, I love talking about this stuff, I love writing about it, I love writing about AI in general as it relates to product and design or other things. I'm on LinkedIn. I have a free newsletter for anybody. I'm not trying to make money off of this stuff.

If you want to read some interesting and maybe moderately funny stuff that I come up with, please follow me there. Todasco, I just Todasco, T o d a s c o. If you go to Todasco on LinkedIn, it's basically just me and my wife. Advantage of having a unique name. No, it's actually Romanian, but they changed the spelling when they came over. So that's why there's no other Todasco other than our

Caden Damiano 46:00

Family. Anthropology, I think we're moving more to professional anthropology now that we have time to research and study. I think UX researchers might want to consider going to product management because you'll have more time to research and make decisions. It's just research with accountability at that point. You just triggered a thought. I know it's overwhelming to learn about AI. Think of it like a wine snob. Most people don't make money being a wine snob. It's about developing a palate and taste. You're not doing it to make money or get accreditations or certification. Most certifications right now are way too early. There shouldn't be a curriculum for certifications.

It's too early. If you're going to be a real innovator, you can take a lesson from Mike's time at PayPal. You're just doing proof of concepts, testing things out. Don't feel pressured to learn everything because your job is to find out if you're obsessed with it. If you're just like, oh, I want to try this out over 10 years, like a future you will thank you.

Mike Todasco 47:01

Yes, absolutely. And like a build on that point, people ask me all the time, hey Mike, what class should I take to learn AI? What? I always like, look, if you want to take a class, fine. I'm not going to stop you. But the one thing I can recommend is literally give 20 bucks to Anthropic by Claude, give 20 bucks to OpenAI by ChatGPT, get the latest model and just start using it. Just ask it questions. If you don't know what question to ask, say, I don't even know what question to ask you. How should I start? Just start having conversations with these things. You will start to become an expert and see what you could possibly do with it.

Over the summer, I was writing about AI movies and I thought a fun thing would be to create video games for each of these movies I was writing about. 2001 and Her and movies like that. I coded alongside an AI. They're pretty primitive 8-bit style video games. I was able to do that, upload it to GitHub and have this whole experience. And I've never done that before. I'm not an engineer, but now I see what it's capable of. I see how to do that. That is the super exciting thing about this. You want to learn a foreign language, learn Spanish with ChatGPT. Do whatever it is, but use these tools and you will just start to see how powerful they

Caden Damiano 48:15

Truly are. What an exciting time to be alive. This is as big as the internet or e-commerce. I'm glad that this is the time that we get to cut our teeth for real. One last question. I noticed that you give a lot of preferential treatment to Anthropic Claude. I've heard a lot about its edge over GBT. Could we close out with an explanation of high-level use cases that you feel like Claude's better at than ChatGPT and vice versa?

Mike Todasco 48:39

Sure. All in all, Claude is probably my first go-to. I've spent money on I think four different AI tools, five maybe. And the big ones are Anthropic's Claude and ChatGPT. I spent 20 bucks on both of them. Claude is a really good brainstorming partner, darn good writer as well. Whatever, I will never have it write the first draft of anything for me. But when I write a first draft myself, I will use it as an editor all the time. I will drop it in there and say, hey, and sometimes I put little brackets for things like I'm just lost here or I need to do research on that.

Hey, I'll be filling the brackets, be my editor and all that. Claude is really good at that. ChatGPT, it's good too. It is absolutely good too, but the test to find out, do whatever your most common task is, drop it into Claude, Mistral, ChatGPT, meta.ai, drop the exact same prompt into all of them and see which one gives you a better response. Most of these at least have free versions. You don't have to pay for all of them up front. So that is one easy recommendation to people who aren't sure which one to use. I have a personal preference, I think at least right now, to Claude.

That could change in a week or months depending on new models coming out. I think that's the easiest way to go. If you were like, yeah, I'm writing a PRD on this and this, copy-paste four times over, see which one gives you the best result, just go with that one. There's no wrong choice for you to make.

Caden Damiano 50:07

Yeah, I really like that. And it also just proves your point that it's all about taste. How do you know what good looks like if you do a B C D test? And whatever is the best outcome is completely subjective to what you think is what good looks. And so it might not actually be good. This is why you need to not just listen to tech and product podcasts. We need to bring back the liberal arts education. You need to read different subjects because

Mike Todasco 50:33

Yep, Grammarly is another AI product that I use all the time. I love it. I actually tried to get rid of Grammarly and then after I didn't have it for a month, I'm like, oh, I need this thing back. But I will tell you like 40% of the things Grammarly recommends, I'm like, no, I'm not going to do that Grammarly. I'm trying to do something with these are the thing. But the other 60%, I'm like, oh, that's actually better. That's right. You're the director of this. You're the one going to be making all those decisions. You too. Thanks,

Caden Damiano 51:03

Dave. Hey listener, thanks again for listening to The Way of Product. As we power down today's session on the fusion of creativity and technology, let's solidify the energy you've gotten from our dialogue today. If you've gleaned insights or strategies that could turbocharge your projects, I have a small but powerful ask. Swing by the platform where you're hearing this and leave a review. Think of it as your digital high-five to us. It's a fuel that propels this content to more creative technologists like you, amplifying the impact of the shared knowledge. So until our next interview, keep pioneering and pushing the envelope. Thanks again for lending your ears and your imagination to our community. Catch you on the next download.