The Daniel Elizalde Hypothesis: IoT Product Leaders Create Products That People Trust

Daniel Elizalde is a product consultant specializing in the Internet of Things (IoT). He has over twenty years of experience working in aerospace, energy, and other industries where consistency and security are mission critical. This week on the Product Science Podcast, we talk about what it takes to build risk management and security into your product development practice. Learn how to set expectations with leadership, and what can happen when something gets overlooked.

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Questions We Explore in This Episode

The Daniel Elizalde Hypothesis: IoT Product Leaders Create Products That People TrustHow did Daniel get involved in the Internet of Things? How did working with customers and relaying that information to engineering and marketing get him started in product management? How did he combine that interest with work in user experience? How did that lead to teaching a course at Stanford? How did he fill in the gaps in his career? How did he work backwards from an interest in renewable energy to shape his career? What bet did he make with Rich Mironov, and who won?

What type of work does product management do in the context of renewable energy? What is smart energy, as opposed to traditional energy? What IoT systems are used in smart energy? How do those systems interface with the cloud? How can these IoT concepts in energy apply to other industries? What is different about IoT today that is driving renewed interest in it?

What type of mindset do you need when developing product for industries with low margins of error (energy, weapons, etc.)? How do security concerns affect IoT product development? How do you find a balance between iteration and tempo with the need for caution and attention to detail in these industries? What does Daniel teach to help students and organizations understand risk management? Why is talking about security a skill, and how do you develop it?

How can conflicting views about the product life cycle get in the way of smart risk management? How do you adjust expectations when you’re building secure products? Why is making products that people trust just as important as making products that people love? How do you create trust? Why is understanding policy and regulations key for these types of products?

How do you balance security and compliance with developing features for your customers? Why does Daniel always bring up his least popular blog posts? What does he think about data regulations? What do you do when there are gaps in regulations because the technology you’re working on is so new? How do you build bridges to make sure that your team doesn’t have critical knowledge gaps?

Quotes From This Episode

Bringing in the knowledge we have of product and applying it to solve these type of problems can generate value to the company, to the customers, and to society. - Daniel Elizalde Click To Tweet My core advice for product people is to get conversant with what it means to talk security. We need to be able to bring this topic up, to be able to talk to our teams, and to be able to secure funding from executives. - Daniel Elizalde Click To Tweet People think of building with security in mind as something that will slow them down. I view it as an opportunity to differentiate in the market, save a lot of trouble in the future, and create products people trust. - Daniel Elizalde Click To Tweet Product managers need to have a solid friend in the legal team or in the policy team, and they need to be part of our extended product team because their input is critical for what we can and can't build. - Daniel Elizalde Click To Tweet


Holly Hester-Reilly: Hi and welcome to the Product Science podcast where we’re helping startups, founders and product leaders build high growth products, teams and companies. Through real conversations with the people who have tried it and aren’t afraid to share lessons learned from their failures along the way. I’m your host. Holly Hester-Reilly, founder and CEO of H2R Product Science.
Holly: In this week’s podcast, I had a conversation with Daniel Elizalde an IoT product consultant who helps product leaders and their teams develop a winning Internet of things product strategy. He has over 18 years of experience in managing the lifecycle of IoT products in many industries including manufacturing and renewable energy.
Holly: He’s trained over 1200 professionals around the world through his consulting practice, has online courses and his popular classes at Stanford University. He’s also the host of the IoT Products Leadership podcast, and he writes about IoT products management I had a fantastic time getting into the details of IoT product manager with Daniel, so listen on for our conversation.
Holly: Hi. So this week on the Product Science podcasts, I have Daniel. Daniel, can you tell us how we say your whole name, and what you do and how you got there?
Daniel Elizalde: That sounds great. Thank you so much for having me, Holly. My full name is Daniel Elizalde and I’ve been working in product management for about 20 years in product related type of roles. I started my career as an engineer and moved all the way to executive roles. And today I work as an independent consultant for IoT type solutions. And we can talk a lot more about what that means. But I help companies with their IoT product strategy, and I also teach IoT product strategy at Stanford University.
Holly: Wonderful. So we will definitely get into more of the nitty gritty around IoT. But before we do that, I always like to hear more about how people got to where they are today, because I want to help all of the aspiring product leaders out there hear real stories, and realize that they can get there from where they are too. So you mentioned you started as an engineer, what kind of companies, where you’re working at, and when did you first learn about what product management is?
Daniel: Yes. That’s the million dollar question, We all come from different perspectives. I was working for an industrial automation company when I graduated from schools. My background is in computer engineering, so it’s a combination of electronics and software development. And my first job was in Austin, Texas. I am originally from Mexico City. So I moved to Austin, Texas after college to work at a company called National Instruments. And we were doing industrial automation solutions.
Daniel: And very quickly after I started my career there, I moved into applications engineering role, which really in the industry is more call of our solutions architect. I was designing this very complex manufacturing systems around the world. I was working very closely with sales, and this is where a combination of hardware, software, networking, data storage, analytics, basically what we call IoT today. We were doing 20 years ago in a very different fashion of course.
Daniel: And that’s really when my love of products started to come out because I have the opportunity to be in front of customers, helping them with the solutions. Understanding what their challenges were. And then coming back to the company and talk to engineering and said, “You know what, this things that we said we were going to launch, it’s not really what the customer wants.” Or to marketing’s like the … we’re not understanding the problem. And so it was really interesting too to have that ability to be between sales, marketing, engineering, and the customer.
Daniel: And that’s where it all started. I of course didn’t know that this was called product management. And then I move on to different companies. I started working for a smaller company where I had my first product role. I was heading a data management solution for manufacturing, working with a lot of big manufacturing companies around the world.
Daniel: And from there I started basically learning on my own because there are not a lot of resources even today, but back then I couldn’t find a lot of information about what is it that I was doing or trying to do. I then move on to try to figure out all the different pieces that I thought my career was missing.
Daniel: I was very passionate about understanding the user needs, and user experience that of course we didn’t call it like that then. I started working at an agency that did a user research, and user experience. And eventually became the head of projects there. And I got the opportunity to do a lot of heavy duty research projects that many tech companies through this agency.
Daniel: And so continuing my evolution got back to working on product heading, eCommerce platform, the portion for integration with third party systems. I learned a lot about cloud integration and third party and vendors, those kinds of things. Then I decided to move to the Bay Area. My passion has always been on a kind of big industrial applications, and specifically renewable energy.
Daniel: So I wanted to work in that space, and I ended up working at a startup that does intelligent energy storage, so this big batteries that control the energy from the grid and to buildings. And I was head of product for that for a while. And that’s when I started working more on giving back because of the time I had a lot of mentors and a lot of people like Rich Mironov that really helped me figure out the path.
Daniel: And I ended up starting my blog and getting some traction there. Then I got the opportunity to teach at Stanford. I was able to put together a course based on IoT product strategy, and teach my lessons learned to people there. And I’ve been teaching there for about three years. It’s been very popular course. Then I decided to become an independent consultant and I started working with companies, helping them with their strategy. So all the things that I’ve done wrong throughout my career, it’s like you don’t have to do it again. So that’s how I ended up to where I am today. Long answer.
Holly: Oh, It was a wonderful long answer. Thank you for sharing that. I love that you’re basically helping people not make all the same mistakes that you made. That’s …not making the same mistakes again is something that I want to help with as well. I definitely see a lot of the same mistakes being made over and over. And making mistakes is actually a great way to learn, but let’s at least try to make new ones.
Holly: There were a couple of things in there that I want to hear more about, but one thing that kind of struck me with what you just said is, you went through a lot of areas that while in 2019, we identify as kind of unifying into a product leadership skillset. I imagine that over the course of time that you were going through this, that might not have been obvious to everybody. I’m kind of curious how you identified what gaps you want it to fill and what kind of reactions you got when you say decided to move from, a product role to a user research role and things like that.
Daniel: Yeah, that’s an interesting question because I want to say that I’ve somewhat modeled my career after what I’d been trying to pursue. And of course, in hindsight it all looks like it perfectly fits together. And at the time it was very chaotic. But the way I always thought about it is that I’ve been very passionate about, like I said, renewable energy and the challenges that we face with climate change and all that. And so my passion was always … if I’m a technologist and I want to help with those problems, how can I do that?
Daniel: And so I started backwards from what kind of problems can be solved through technology. What kind of companies are doing that, and what are the areas that I would need to know in order to work in those companies? And so piecing it back together, I knew I needed automation and hardware and software expertise. Then I started to realize that, well, it’s all about what the users need. How do I learn that? Okay, well what if I go start working at a UX agency and not as designer, but more as a director of programs. I suppose my role leading this efforts and learning from the designers and the developers.
Daniel: And then the next portion that I identified was cloud. Cloud computing is very important for this kind of analysis to say, okay can I get that experience? And I was lucky to find a job at a eCommerce company that I learned a ton. And it was not necessarily working on smart energy immediately, but I was kind of putting all the pieces together. And then I got the opportunity to work at an actual energy company and that’s where all my knowledge kind of came together.
Daniel: Both you and I know a Rich Mironov. I remember having this meeting with him where I was telling him I wanted to work in product management, for an energy company in the Bay Area. And he said, choose to either product management in the Bay Area or energy and product management or … And then after a few months I gave him a call and he’s like, “Hey, guess what? I’m head of product at an energy company in the Bay Area.” And so he took me out to dinner because he lost the bet.
Daniel: But it’s kind of been a little bit planned, and of course it’s not as easy as it sounds, and as direct as it sounds, but it’s my stories I get to tell it. Right.
Holly: That’s right. How did you win that bet? What did it actually look like when you finally get … it sounds like you were kind of on a mission all along the way, but I’m curious about some of the details. Did the energy company have a head of product opening that you applied for, or did you like network your way into that? Or like did you have to convince them that they needed a product person? What did that look like?
Daniel: Yeah, that’s a good question. It was a startup and I had to network my way in. And it was one of those things where, they kind of needed what I had. And the conversation really was about, the skills that I bring to the table are the skills that you don’t have today. I might not have the energy background, but you have a lot of those experts already in the company, but you don’t have a product person. I can compliment that.
Daniel: And so it was convincing them that I had this missing piece, and how I could blend in. And there were at a stage where they really needed to or wanted to create a product practice. So I come in as a first a product person there and start setting up the processes and the tools and hiring a team and all that. And that was a great experience.
Daniel: And today, now that, you know, after so many years of that, I continue with that passion. And as an independent consultant, I always try to work with more energy companies. As I mentioned before, I have a podcast on my own for IoT and I try to feature a lot of energy companies because I think it’s not only important topic. The technology is fascinating.
Holly: That’s awesome. Listeners of some of our episodes may have discovered I have a degree in Chemical Engineering. And then I worked in environmental engineering for a little while. And so I’m particularly interested in this topic of renewable energy. Because it’s been something that I would say I went a different path where I was like, that is a really important work.
Holly: And I know enough that I could work in it, but it never seems like the right confluence of things. Like the opportunities were in the right place where I wanted to live. I live in New York City and got to a point where I realized like, I want to live in New York City more than I want to move somewhere for a job.
Holly: And so I’m curious to hear a bit more about where the energy industry is today, and what it’s like to be a product person in it. And how IoT folds into that. Can you tell us some more?
Daniel: Yeah, for sure. I think there’s a big push for working on areas around, let’s say, climate change. And so if you look at it from a technology perspective, what does that really mean? And so what do I consider that, for example, is can we reduce the burning of fossil fuels? Okay, that all sounds good, but how do you do that?
Daniel: One way of doing it is integrating some renewable energy. So let’s talk about wind or solar. Well, they have challenges because if the wind doesn’t blow or the sun doesn’t shine, that doesn’t work. Okay, well we can have batteries that can support that. And then we have to connect them to the grid. But the grid is not designed for this kind of intelligent thing.
Daniel: And so this are the pieces and now it’s more about as a product person … okay what are the companies that are helping on each of those pieces? So it’s not all about solar power. But it’s artificial intelligence companies that are able to take energy data to create dispatches of when to run batteries. Or how do you make sure that an electric car can find a charging station.
Daniel: And so all of these products … so it’s thinking about what are all the different pieces that need to happen in order for us to have a transition out of fossil fuels. And it’s of course, extremely complex. But this idea that okay, by integrating these renewables, it has a lot of challenges that product companies need to figure out how to do. If you want electric vehicles. Well, there’s a lot of challenges around the industry that, that has to do. Even just making fossil fuel burning more efficient. Well there’s a lot of product works that can go into that.
Daniel: I think the work of a product person in energy. It’s about bringing in the knowledge that we have of product and applying to solving this type of problems that can generate value to the company, to the customers and to society. And there is actually I think two things that I’ve found in this world right now. Which is one is a traditional energy and the other one is what’s called more smart energy.
Daniel: And so I think we are seeing more product work in the smart energy area because it focuses more on the technologies that product as a profession is working on. That’s like a fast networking, machine learning, cloud. All those kinds of technologies. And then traditional energy has a little bit more of the more traditional thinking about how to build products in terms of those tendencies.
Daniel: So as a product person in this world, you have to be fluent in both cause you’re going to have to figure out how all this business fit together. And as a segue, the Internet of Things is one of those big philosophical umbrellas that helps bring all these things together. Super long answer as well. I’ll let you ask me stuff and we’ll talk about it in the middle. Otherwise I’ll keep going.
Holly: I know, it’s good. I love all the details and I’m happy to dive into them. So tell me more about the role of IoT. Maybe there’s a specific story you could tell about, some IoT systems that are related to smart energy that have had an interesting, product problem to solve, or how they’ve come to do that.
Daniel: Yeah, for sure. And that’s why I’m really interested in the Internet of Things. And one of my missions is really to shed light that the Internet of Things can help us with this very tough problems. A lot of people think about the Internet of Things and they think about, oh it’s a smart toaster. Or my refrigerator can send me a text message. And yeah, that’s out there. And there’s use for that. And the technology is actually the same, but that’s not what I’m talking about.
Daniel: The description that I have for how Internet of Things helps with, in this particular case, smart energy. It’s a simple concept. If you think about it, it’s can you add sensors to the real world environment to acquire data off the context, and then you can analyze that data in a centralized location, let’s say the cloud. So that you can provide insights. So that you can provide some value to the customer, to the society or to your company.
Daniel: And so when we think about let’s say the company that I was working for with energy storage systems. This big batteries, well these batteries have a ton of sensors that are measuring the consumption of energy from the building. A lot of parameters from the battery itself, what the grid is doing, what the weather is doing, all those kinds of things. And you are acquiring all that data and you’re processing it what’s called the edge.
Daniel: So you have a computer that’s acquiring all that data onsite. And then you’re streaming it to the cloud. And in the cloud you can run algorithms in aggregation. So instead of looking at just the performance of one battery, you can look at a whole city of batteries and then you can make decisions and you can dispatch them and orchestrate them differently.
Daniel: And then of course you have all the front end applications that you are different users. And this is a lot of product work. A lot of users are going to need. The person that it’s the operator a lot utilities going to have a different view than the person that is the owner of the building that’s looking at their consumption. That the person that is controlling the batteries et cetera.
Daniel: And so the Internet of things allows us to connect all these different pieces together. And this is just one system. I’m talking about the batteries. But for example, if you have, let’s say solar panels, well those have their own sensors, and they are measuring their own things, and they could communicate with the batteries and talk amongst themselves to charge and discharge and connect to the grid et cetera.
Daniel: And of course, smart energy is just one thing you can do. You can use this same concept of sensors, a data aggregation, cloud, et cetera. In manufacturing, there’s a lot of applications in healthcare, waste management, water management, supply chain, agriculture. Anything that has to do with, connecting the physical and the digital worlds so that we can create more insights and value. That’s really where the Internet of Things can really help us. It’s very different than the smart toaster.
Holly: It’s very, very different. One thing that’s interesting to me is that you’ve been involved in some of these things, going all the way back to your time in Texas with that National Instruments. I think sometimes people don’t realize how a lot of these sensors and electronics and computing tools have actually been involved in these systems for a long time, but evolved over the decades. What is so different about it today that makes it worthy of a name like IoT and exciting for all of this investment?
Daniel: Yes. That’s really a good question. And part of it is the marketing teams get a hold of things, and then you come up with this hype. But the reality is that if you think about the work that, for example, I was doing 20 years ago. The components were there, but the processing power was very limited. They were bulky, there was no connectivity to a remote place. There was no cloud, it was just local servers. Any was very expensive and very clumsy.
Daniel: It would take us a team of engineers for a long time to put something together that would collect some of this data and try to do something about it. Today the technology of each of the components has evolved tremendously from sensors to the power that you can have in a computer in terms of performance, size storage, connectivity is a big one. You are able to stream data wirelessly or wired across the world for very fast for not a lot of money. Cloud is [inaudible] right now. We can get all that information, their front end applications and all that has evolved a ton.
Daniel: So the pieces are a lot easier to put together and they are faster than ever and they are cheaper than ever. And so this really opens up the product profession to take advantage of these technologies. Because now we can do value assessments and we can do some rapid prototyping and iterations and those kinds of things to figure out market fit and the things that product people do with the understanding that the technology itself is not the challenge.
Daniel: We know that our engineering teams can connect sensors to gather that data can have elastic clouds with endless storage, quote unquote, right. We know that we can even go to like virtual reality. We know that it can go to artificial intelligence. It’s not a technical problem anymore. And to the CTO listening to me out there, I understand that this is still very difficult and I’m not taking that work for granted.
Daniel: But the reality is more that it’s a product problem these days and a business model problem. So now that the pieces are there, what are we going to do with them? And that’s where I think the value of a product profession in the era of connected devices is extremely important. Because managing an IoT product is very difficult. And it’s again, not a technical problem. Hopefully that answers a little bit.
Holly: Yeah, I think that was really helpful. I know one thing that I’ve described to people, someone we’ve been working in tech and software for a while, is that in today’s world, it’s not really … there are a few things that, one … okay, there’s a lot of things you could imagine that maybe can’t do yet, but there’s so many things that people think would be impossible that are actually possible with today’s technology.
Holly: And so the questions are increasingly not can it be done, but should it be done? And then how much will it take to do it? And is it the most important thing for us to do with these resources, because we’ve kind of gone over an edge and now there’s this so many amazing things that we could do with, these incredibly tiny processing devices and this hyper connected world that we’ve got.
Holly: So that kind of brings me to, curiosity around the state of the product profession in IoT and in a smart energy or energy. Personally I spent years in say advertising technology, which was a place where some of the cutting edge … what we can do with the big data and interconnected world. Came together pretty early and I know that there are industries that are slower to change.
Holly: And sometimes on the other end of the spectrum you’ve got industries where there’s still a lot of things that are maybe completely digital, automated and managed by machine learning in one industry. And in another industry it’s all still human experts. So I’m curious, what does it look like in energy and in IoT. What is kind of the awareness of the role of product and how much are they using technology, and how much room is there to go?
Daniel: I think that there’s been a ton of room to go. This is just getting started because although the hype of IoT has been around for some time, we’re just getting past that hype and actually starting to see some real deployment, some real value being delivered. And when I say that the complexities is huge for a product perspective, it’s because there are a lot more pieces that you have to fit into the puzzle. So you have hardware, you have embedded software, you have networking connectivity, you have cloud, and you have front of applications.
Daniel: And so you need a more holistic view, a more system perspective in order to get all those pieces to work together. So it’s not only about, “Hey, can we use artificial intelligence?” Yeah, that piece is starting to get better understood. But like how does that relate to the embedded software and how does that relate to the communications and how does that relate to the hardware? That thinking is where the product profession needs to evolve towards.
Daniel: And then the other thing is to think about when you’re, when you’re dealing with, critical applications, what I call them. It’s not the same, you can’t really move fast and break things when you’re controlling a power grid. When you are controlling the automation of a manufacturing facility. When you’re controlling the turbines of a [inaudible] When you are controlling weapons systems. It’s a very different mindset.
Daniel: We have to meet somewhere in the middle. We can’t be fully waterfall, but at the same time, we have to be able to experiment with care, because not only you get … you get the worst of both worlds. If you do something without the right attention to the detail and consequences, you don’t only open yourself and your customers for data breaches, which are terrible. But now you can actually control things in the physical world.
Daniel: Think about an autonomous vehicle. Autonomous vehicles are IoT products in that perspective. They have all the sensors and the computing and they’re connected to the cloud. Well if somebody could actually hack into a car and control it. Think about controlling the grid, controlling the security for building, controlling a heart bypass system that goes inside a human body. That’s where the complexity grows. It’s not that you can … each of the components by itself, it’s kind of understood putting it together and just thinking about the implication of what you’re going to put out in the market it’s big.
Daniel: We are getting there, that’s what I did today. I’ve trained over 1200 professionals around the world, and like how to think about IoT. And it’s really interesting to see the light bulbs going on and how people say, “Yeah, I have the hardware expertise, now I need to focus on the networking.” Now I need to focused on learning about cloud or about this or about that. But more importantly, think about the privacy, the security and the policy implications of your products.
Holly: That is heavy.
Daniel: I feel like I’m a soapbox right now, but that’s interesting thing is like when I talked to a lot of companies, especially executives, they’re like, no, well we just need to do something quick to market and we don’t have time to look at security. It’s like you are going to automate a plane. Are you really sure you’re not too that are like. That mindset has to change. And so companies that are coming from a traditional world, yes, they need to adopt some of the things that were coming in the digital world, but carefully.
Daniel: And that’s a lot of where I think the evolution of the product leadership role in a more and more connected world needs to evolve. To have this system perspective and to be able to identify all these risks and make the right trade offs while still providing value to the company, to the customer and to society.
Holly: Yes. I’m struck by how heavy that topic is, but it was on the back of my mind. I was like, okay, we’re going to talk about security before we’re done. I have no idea what people inside of these companies, what level of exposure they have to … what tools and systems and thinking and experts, they even have to help them deal with that. But that is a lot.
Holly: So what do you tell them to do? If they were thinking, “Hey, we just got to get something out fast, like we gotta be trendy and have an IoT thing,” and then you’re like, “Whoa, whoa, we got to make sure this is extremely secure, because if somebody did something nefarious with this, it would be dangerous.” Like how do they even get started?
Daniel: That’s an excellent point, in my classes and in my workshops et cetera. I run them through a few scenarios where we have a potential IoT product, and brainstorm what’s the worst that could happen. And you would be amazed. Like every time I run those exercises, people come up with like horrendous things. And so it was like, yeah, that is what could happen. And it’s not only about loss of data, but it actually could be about loss of life. And so first of all is identify that this risk is real. And then you have to evaluate or prioritize what are some of the things that are most likely to happen and then which risks are you willing to mitigate versus not.
Daniel: So it’s a little bit of traditional out of the box risk management analysis. But then the next part is thinking about, and this is what I teach with my IoT decision framework, is how to break this thing into manageable pieces. And so the framework has five layers of the IoT technology stack, device hardware, device software communications, cloud platform and cloud applications.
Daniel: And so the exercise really is to think about how are you going to secure not only each of the layers. How is your hardware secure, your embedded software secure, et Cetera. But as a whole, how is the whole secure? And then because the systems have a lot of interactions with third parties because it’s a big eco-system. You have to open a BI, well what happens when a third actor access your system? And so you have to do a lot of planning for penetration testing and evaluating all those kinds of things.
Daniel: It was just thinking about all those different things and then figuring out how to do it. And you can rely on vendors to help you, cause a lot of the platforms that you can buy today have a lot of security built in. That gives your first layer of the fence. But then on top of that, whatever you build needs to be secured.
Daniel: My core advice for product people in this world is get conversant of what does it mean to talk security. That’s a skill that we need. And I’ve actually given several talks about the topic. It’s like, we need to be able to bring this topics up, and we need to be able to talk to our teams, be able to secure funding from executives, et cetera.
Daniel: And then plan for security in your roadmap. If it’s not on your roadmap, is not going to get done. So prioritize security as you would anything else and actually hire right. And so it’s not that, “Oh, we didn’t get time, so it goes out like this.” It’s like, no, this particular feature is competing against priority about, closing this security holes that we know. Then you do your normal product prioritization.
Daniel: So think of it as things that you have to prioritize, and think of it also as a never ending process. You’re never done. Just like you’re never done every feature you have to figure out how to test it, how to secure it. And then the last thing is that you have to think about security from a development perspective. How do you produce secure products as much as you can? And then security once you deploy systems in the field, like how would you know that you have been hacked? How do you know how to contain the attack? What do you do?
Daniel: There’s two aspects where products managers have to live, which is security before it goes out and then secure it once it’s out. And all of those security items need to be on the roadmap. How do you quarantine something? How do you shut access? How do you detect that anomaly has occurred? All of those are features that need to be built. That’s why it’s big.
Holly: It’s huge. And you’re right, very complex. Like there’s a lot of things to deal with that are consumer, like software might not have to deal with.
Daniel: Exactly.
Holly: So I was wondering, I don’t know, I imagine there’s like NDAs around these things. But do you have any stories where somebody didn’t do these things? Like what the state of IoT security gone wrong. Are there any bad things that have happened or almost happened?
Daniel: Yeah, there’s a ton. And yes, I have someone there in the eight, but I’ve also just basically just do a Google search and you’ll find a lot of them. And the challenge here is that you’re never done. And the way I like to phrase it is that for every developer that you have looking at security, hackers have 10. So it’s a never ending thing. And it’s a race. In some of my classes I always show an example of … and you can look it up and I can send you the link if you want for your show notes … of a car in motion that gets hacked through wireless. And so somebody takes control of the car in motion. And so the way that the hackers get access to the car is still the infotainment system.
Daniel: So the developers never thought that somebody could hack their infotainment system and move latterly all the way till they get to the engine control unit and then attack the car. And so that is the kind of thinking that we need to have. Is not that this company we’re not doing security. I’m sure they were but there are so many components that all of a sudden and can get access to the controlling units that how do you do that. That’s why defining what could happen, constant testing, constant penetration testing from third people that do this for a living. That is what’s needed, because our team won’t be able to detect all this things, period. So we need a lot of emphasis.
Daniel: And of course the investment in time and money and people has to be proportional to the level of risk. If you are automating a nuclear plant, you better put a lot of effort. If you’re automating is smart toaster, well the worst that could happen, maybe they get access to the network, they steal some information, it can be contained more. The answer is somewhere in the middle. As a product person, you have to be able to articulate that to our executives because there’s not only the damage that you can cost to other people.
Daniel: But it’s the damage that being hacked will cost to your reputation. And some companies never recovered from that alone. There’s a huge business implication and that’s a way that I talked to executives. The cost of not investing in this could cost you your whole business.
Holly: Have you ever had pushback when you talk to executives about that and had them … I mean maybe when you say that to their face, they don’t say, oh, but it’s okay, but have you had them then not act as though that was important?
Daniel: I get pushed back all the time directly to my face. And I think that this is-
Holly: Oh no.
Daniel: Yeah, of course. And I think this is where were conflicting/ misguided views about what the product lifecycle is, can get in the way. And what I mean by that is people come at me with the [inaudible] agile, that’s going to slow us down. It’s like being agile has nothing to do with building a secure product. Well, it’s going to take too long. Well, we have to be more thoughtful about this is what really takes to build products of this caliber. You can’t just go fast and not secure it.
Daniel: You have to just realign expectations to say a product like this takes this long because of the complexity inherently not only with technology but with security, with the regulation, which is huge with data privacy. So it’s I think a realignment of, hey this is what it really takes and this is what could happen.
Daniel: People oftentimes think of it as a deterrent, something that’s going to slow them down. I tried to position it as this is an opportunity for you to differentiate in the market, save a lot of trouble in the future, and actually create products that people trust. Marty Cagan loves saying, you know, we have to make products that people love. Actually my mantra is we need to make products that people trust.
Daniel: And if you trust the product and love can emerge from that. But in this era of connected devices with all that at stake. I think as PM’s, we need to bring that trust to the table. And that is having our arguments with our executives and saying, “Hey, this is important.” And the answer is somewhere in the middle. We can’t just be paralyzed by it, but we have to invest in it. Time, money and resources.
Holly: Yeah. I think that is so timely to talk about, in this connected era how important that is. And that companies that have customer love today can lose it tomorrow if they haven’t been treating that with respect and making sure that trust is in the foundation.
Daniel: That’s true. And we see it all the time right then. And that’s very common also in the business to consumer world because all your consumers are not going to be able to get into discussion about how did you secure your product. Either they trust your brand to do the right thing or they don’t. In the B2B industrial world where I work the most, that’s a little bit different.
Daniel: Because when you’re selling B2B to this kind of critical infrastructure systems, you actually get to sit down with their head of security and you have to explain what you’ve done in order to get a contract. So a little bit different. But I think the mindset should be the same. The mindset shouldn’t be, we’re going to do the minimum so that we can pass an audit from our potential customer, is we need to build secure products because we don’t want to hurt lives.
Holly: Yeah, absolutely. So are there any other parts of, what you teach in your curriculum that would be really interesting to our products leaders or startup founders that we haven’t touched on?
Daniel: Yeah, I’m glad you mentioned that. And I want to put a caveat. This is something that I’m sure they won’t find interesting, but they need to find interesting, which is understanding policy and regulations. Especially when you’re dealing with connective devices, especially in B2B. There’s a lot of regulations that goes around with that.
Daniel: If you are deploying something, let’s say go back to the energy examples while you’re going to install solar panels on a building, well there’s a lot of regulation that goes around it. And so your product needs to be compliant not only from the physical characteristics, but the data management characteristics. A lot of products get audited what you can and can’t do with the data, all those things.
Daniel: And so I’ve seen a lot of examples, especially startups that don’t think about this, things in advanced, they launch a product and it’s illegal that day they launch. And they get sued and they lost all their funding and they go under.
Daniel: So understanding what are the regulations both the lifecycle of your product and also the adoption lifecycle. When you’re growing and let’s say you’re expanding to a different markets and you’re taking your products to Japan. The regulations are going to be different in Japan, versus in the UK, versus in Mexico, versus California, versus in New York. All the different things that you need to do for your product to be viable, “legal” in those places are things that have to go in their roadmap. And have to be prioritized against everything else.
Daniel: And so I get a lot of interesting discussions from executives that other product leaders, which is like, well, when are we going to actually develop features to value for our customers. If we’re spending all our time in security features and compliance with policy. And it’s like, well, that’s why building these sets of product is hard. And that’s why product work in advance to make sure that you have a good market fit potential is very important.
Daniel: Because if you’re going to go into this journey of investing in building something like this, then you have to have very solid product work to know that there’s a path and there’s market fit. So that actually your investments can pan out. It’s very different than if you build a small app to put on the iTunes store. And yeah nothing happens if nobody buys it, right. We’re talking a different scale. So it’s going to move a little bit slower. You’re going to have to invest in things that might not seem that add value to the customer, but their foundational for having strong products, and for you to grow from there.
Daniel: So again, people don’t, they gloss over. In my blog articles that I wrote about the importance of policy are the least popular of all my articles. And so that’s why I always bring it up. Yes. You may not find interesting, but what you have, you still have to deal with it.
Holly: Yes. Thank you for that. That’s actually was the other thing in the back of my mind that escapes me at the moment. And I was like, there’s something else I want to ask him. One thing on that note that I’m curious about is, what do you think about the state of regulation? Is for the internet of things, for these connected devices. Is it caught up? Is it enough to keep the public safe? Is it way behind? Is it too much? what do you see?
Daniel: Yeah, it’s a great question. I to tell you two different areas. One is regulation is way behind. I there’s really no regulation for these things. And it’s growing a lot that the adoption of these devices. And so you can start to see now some, regulation, attempts to regulate data. For example in Europe we have a GDPR, which is the first real data regulation. in the US we don’t really have something like that. California has something more or less.
Daniel: So we’re starting to see that, but then that’s one of the areas and each industry is going to have different regulations, just the way they operate. Healthcare versus energy versus transportation. And those are trying to figure out how does this new revolution fit into the policy and when, what to do with it?
Daniel: I experienced that firsthand when I was working at this energy storage company. Regulation was not caught up at the time. I think it still struggling with that part. And so you were treated as a solar panel because they thought, well, this thing, when the discharge it [inaudible] energies, so where do we put it? Next to a solar panel. And so all of a sudden you have all this new area of technology, intelligent storage that policy wise it fits on their solar panels.
Daniel: And so that as a product manager really hinders your roadmap because all of a sudden you can’t do things legally because the government thinks you a solar panel. And so that took a lot of working and influencing and all that to change those rules. And so we’re seeing that same parallel in all industries.
Daniel: Think about autonomous vehicles, not only cars, but there’s a lot of efforts on autonomous trains and ships and drones. What the regulation is trying to figure out. What are you do with that? So it is challenging. It is very, very challenging. And I always say that, product managers need to really have a solid, a friend that knows the policy. Somebody in the legal team or in the policy team and they need to be part of our extended product team because of their opinions and their input is critical for what we can and can’t build.
Holly: That’s a really good tip. I love that. I think this is something that’s not an area that I personally have come across yet, but I know that, you know, who is in the product team and who’s a core stakeholder, how close they are to the decisions, changes from industry to industry. And it sounds like in this one, yeah. A policy expert would be critical.
Daniel: I think so. And I think that this is one of the big differences that I see with IoT product management, that the scope is so big that we can’t … one person cannot know it all. Because you have to understand the hardware lifecycle, they embedded lifecycle, the networking lifecycle, the cloud lifecycle, the front end life cycle for all formats.
Daniel: And then security and regulations and of course business models and everything else that we do. And so all of a sudden the scope is so big that the perspective of what I believe in IoT product manager is it’s the change to be more of a system thinker and companies really build teams of IoT product managers that together they can manage the scope.
Daniel: There’s really one single PM that can look at everything. It’s just too much. Because even if you can … for example, I’ve had experience managing all the areas of the stack. So I’m comfortable with that, but I am not a policy expert, so, oh, I’m not an artificial intelligence expert. And so there’s no way you can know it all. So that’s why it’s important for us to, to build those bridges and invite those folks to launch and, and dear friends with them and cause they need to be part of the team.
Holly: Yeah. We’re almost out of time. So I’m, the last thing I always like to ask is if there’s any one message, what’s your one final message that you would share for product leaders or startup founders in the IoT space or an energy. What is the one thing they need to remember?
Daniel: I think one thing that I would say is this technology revolution is here to stay and it’s having a big impact in the product profession. So it’s important for us as product leaders to keep up with where this is taking us and where it’s taking us. It’s the need of understand this holistic and systemic approach to building products. That has to deal with a physical signals from the real world and hardware and embedded and cloud and networking and all that.
Daniel: Think about all that and policy and security. Just start thinking about the complexities of all these different things put together. But not only about the complexities of the building it, but on the other side is if you were able to acquire real world signals from your customer’s environment and you could analyze it as scale, what additional value could you provide to your customer and to your company? So it’s a double edge thing.
Daniel: So it’s like there’s an opportunity for us to capture real value and differentiate our products by analyzing it this way. And if we decide to go that route, just understand that it’s a complex world and you know, many are doing it, but like just know what you’re getting into and seek the help of experts and vendors and things like that. So it was like three pieces of advice in one, but hopefully that helps.
Holly: Yeah, I think it’s just one, it’s too hard. But I think that’s really helpful. And this has been a fantastic and very enlightening conversation. So thank you so much for your time. Where can people find you if they want to learn more?
Daniel: Thank you so much. Thank you for the opportunity. I really appreciate this conversation. People can find me at my website which is just my name, and um, I also, like I said, I have a my blog and my podcast and the podcast, you can find that and it takes you to my same site. It’s just easier to remember than spelling my last name. So I have my courses there and my blog and my podcasts and everything else. I’m happy to connect with you and discuss more about this exciting world of IoT product management.
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