10x Not 10%

Product management by orders of magnitude

By Ken Norton

13 min read • Dec 17, 2015


Ken Norton

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You can see the full video from my keynote of this talk at the Mind The Product conference at London’s Barbican Centre.

For more than a century, the Eastman Kodak Company dominated the photography market. From Hollywood, to the Apollo project, to family reunions, Kodak was there, recording our lives. Known for innovation, Kodak has been called “the Google of its day.”1

By the middle of the twentieth century, Americans alone were buying more than a billion rolls of film. Kodak enjoyed more than 80% profit margins on film. At one point Kodak captured 90% of the film and 85% of the camera sales markets in the United States. But by 2012, revenue plummeted, the company filed for bankruptcy and 50,000 jobs were lost. Reduced to a pile of patents, Kodak was irrelevant.

Kodak Brownie camera

Film camera sales, 1977-2007

Film camera sales, 1977-2007. Source: CIPA

What happened? Digital. Digital cameras roared onto the scene and clobbered the film market. Even that wasn’t the end of the story. Smartphones then took over and obliterated standalone digital cameras. In 2015 the world will buy 1.5 billion smartphones. That’s 1.5 billion pocket cameras: forty times the number of film cameras sold in the very best year. People around the world will take more than a trillion photos this year.

Was Kodak taken by surprise? Did they not predict digital photography? Let’s look back and find out. This is the world’s first digital camera, from 1975, pictured with its inventor, Steven Sasson:

Steven Sasson and the first digital camera

Steven Sasson and the first digital camera. Credit: Steve Kelly/Kodak.

Sasson was a Kodak engineer and the digital camera was invented in a Kodak lab. When Sasson showed it to executives they told him “that’s cute – don’t tell anyone about it.” As Sasson later explained, “every digital camera that was sold took away from a film camera and we knew how much money we made on film. Of course, the problem is pretty soon you won’t be able to sell film.” Kodak engineers saw the future, they invented it. And Kodak’s management squandered it.2

With case studies it can be too tempting to criticize with the benefit of hindsight. Kodak’s example is fascinating precisely because they acted completely rationally, defending their highly profitable product lines. Read Clayton Christensen’s The Innovator’s Dilemma for a detailed look on why this is the case. It’s the most important business book of the past fifty years. (Check out more of my PM book recommendations.)

Why were Kodak executives apprehensive about digital? Psychologists call this loss aversion. Kodak was nervous about losing the film market. Losing hurts more than winning feels good. It’s why we hold onto stocks as they go down, or double down on bets at a casino. Humans are loss averse, which means companies are loss averse. To prove this, I ask audiences to try a simple experiment.

Imagine your company is choosing between two projects. Assume they have equal costs and require the same number of people. (Suspend your disbelief and bear with me.) The first project looks like a slam dunk: you give it a 99% chance of delivering an additional $1 million to the bottom line. The second project is much riskier: you estimate that it has only a 1% chance of succeeding. Yet the payoff is much bigger: it could add $1 billion in profits. Which do you choose?

If you’re like most people at most companies, you choose the 99% project.3 The sure thing. Why take the treacherous route when a million dollars is sitting right there? Decision theory shows us the expected value of the 1% project is 10x bigger, and that we should choose that one. Still, most companies won’t. Rarely is the world so cut-and-dried, but that just proves the point – even when it is, we still find it hard to make the big wager.

Two projects with their expected values in yellow

Two projects with their expected values in yellow.

Modern companies and management hierarchies are designed to avoid losses. Your boss’s job, at best, is to help you succeed. At worst, to make sure you don’t screw up. This only increases as companies get larger. As the management hierarchy increases, tolerance for risk-taking and failure subsides. Consider the expressions we use: under-promise and over-deliver, slow and steady wins the race, a bird in the hand, nobody ever got fired for buying IBM. Most companies are more enthralled with growing by 10% than by 10x.

Kodak was a 10% company, but they needed to be 10x. 10x is a moonshot, an order of magnitude improvement. If you’re only thinking 10%, you’re taking the obvious path that everyone else is on. 10x requires a whole new mentality. If Kodak executives had asked what it would take for the world to snap one trillion photos a year, a new understanding would have emerged. Clearly you wouldn’t get there by selling film.

Hōkūle’a image Polynesian Voyaging Society

Photo Credit: Hōkūle’a Polynesian Voyaging Society (Photo by ʻOiwi TV)

There are many examples of 10x leaps in history. For centuries Swiss watchmakers competed to improve the accuracy of their mechanical watches. Competition was exhausting, requiring tremendous craftsmanship, precise tools, and miniscule advancements. Accuracy improvements were measured in tiny percentages. What would it take to make a watch 10x more accurate? New thinking was required.

It came in the form of the Seiko Astron, the world’s first successfully marketed electronic quartz movement watch. Almost immediately quartz won. These electronic watches were more than 10x more accurate than the best mechanical watches, and at less than 10% the cost. Even today you can buy a $10 Casio that’s more accurate than a $10,000 Rolex. After hearing Steven Sasson’s Kodak story, you probably won’t be surprised to learn that the first miniaturized quartz watch was prototyped by a Swiss engineer, whose company was too slow to catch on to the invention.4

The story of quartz watches offers a provocative lesson. Seiko’s engineers pulled off a remarkable feat, but it’s hard to argue that it was ten times harder than squeezing out a marginal 10% improvement in mechanical movement. As Google X’s Astro Teller says, “it’s often easier to make something 10x better than it is to make it 10% better.”5 That counterintuitive observation recognizes that finding another 10% means using existing tools and assumptions. The same tools and every other Swiss watchmaker was putting effort, resources, and money behind. 10x improvements lean on bravery and creativity. Not so much thinking outside the box as flipping the box over.

1967 Omega Speedmaster with digital quartz watch

Left: 1967 Omega Speedmaster mechanical watch. Price: about $9,000 in today's dollars. (photo credit: Shane Lin). Right: digital quartz watch with ISA K63 commodity movement. Price: $7.

Failure must be an option

To succeed wildly means being comfortable with failing dismally. As Alphabet CEO Larry Page says, “It’s natural for people to want to work on things that they know aren’t going to fail. But incremental improvement is guaranteed to be obsolete over time. Especially in technology, where you know there’s going to be non-incremental change.” Trying something remarkable requires failure, and failure is learning.6

To demonstrate how we learn from failure, two artists – David Bayles and Ted Orland – relate the story of a ceramics teacher.7 The teacher found herself teaching a class meeting on two separate days, neatly divided in half. She decided to try an A/B experiment. To the first half of the class she said what she’d been saying for years: you’ll be graded based on the quality of your work. At the end of the semester, turn in the single best piece of pottery you created. To the other half of the class she said something very different. She explained to them that they would be graded purely on quantity. Crank out as many pots as you can this semester.

At the end of the term, she noticed that the best pots – both technically and artistically - didn’t come from the quality group, they came from the quantity group. By making pot after pot after pot they were learning, and adapting. They didn’t set out to make the best pots, yet they did. Meanwhile the other half spent the semester aiming for perfection and falling short. When you try and fail, you learn. Moreover, those lessons feed right into your next attempt. As Bayles and Orland put it, “what you need to know about the next piece is contained in the last piece.” The more last pieces there are, the more you have learned. We succeed by trying and failing, not by striving for perfection.


How do you build a company that thinks 10x? It all starts with your approach to people.

People want to do great work, let them

The people you hire are professionals, and they want to do great work. When they make mistakes, they’re usually the result of good intentions. Sounds like a platitude, but most companies don’t live it. As a company grows, it starts to insulate itself from failure. It becomes more about protecting the downside than optimizing for upside.

People also do their best when they get to work on problems that interest them (this is where Google’s famous 20% time comes from). Give people mobility – let them move to projects that are more exciting. Allow them to speak up – create an environment where people feel comfortable weighing in on topics that aren’t necessarily in their job description. Which means you need to default to open – share everything with everyone. If you believe people are good, you need to trust them. If everyone knows what everyone else is working on, there are more opportunities for 10x breakthroughs to come from unexpected places. Transparency and openness also helps inoculate against 10% complacency.

Use data, not opinions

Use data, not opinions

Even if you’re not a CEO or founder, there are things you can do to promote 10x thinking.

Jim Barksdale, former CEO of Netscape once famously said, “If you have facts, present them and we’ll use them. But if you have opinions, we’re gonna use mine.”8 Use data to drive your decisions, not opinions. Be a seeker of truth, not intuition. That can be a blow to our egos, especially as product managers. We like to think we’re hired for our brilliant instincts. A delightful thing happens when you stop relying on the opinion of the highest paid person in the room and start demanding data: you move faster. Rather than arguing for weeks, you test your assumptions and see what works and what doesn’t.

Here’s another big reason why data rules. Probably the biggest opponent of 10x thinking is someone saying “that will never work.” If you rely on opinions, that’s the end of the story. If you use data, prove them wrong.

Measure impact, not effort

Measure impact, not effort

John F. Kennedy challenged Americans to land on the moon before the sixties had ended. He didn’t say “let’s launch 20 rockets, 25 as a stretch goal.” He emphasized impact – walking on the moon – over effort. As product managers, we so often fixate on effort. How many bugs are left in the queue? How many engineers are working on this project or that project? Here’s the problem with that – if we know in advance what effort is required, it’s probably by definition not going to give us 10x.

Instead, measure the impact you want to have. “We will have accomplished this” not “we need to do that.”

Be bothered by limitations

Be bothered by limitations

Too often we surrender to external impediments. The computer doesn’t have enough memory. The user’s internet connection is too slow. The CPU isn’t fast enough. It costs too much. It takes too long. We bump into these walls, and we walk away.

Great 10x thinkers don’t surrender to limitations, they get bothered by them. They look for ways around them, or things they can do to blow through them. Two-thirds of the world’s internet population still doesn’t have reliable internet access. Some Google scientists and engineers formed a team called Project Loon to use weather balloons to bring reliable connectivity to underserved populations. Whether Project Loon succeeds or not remains to be seen, but they’re trying. 10x thinkers don’t back down when they bump into a wall.

In the early days of Amazon, the company didn’t own warehouses. Instead, when a customer bought a book, they placed an order with distributors, who often insisted on minimum order sizes. This delayed shipping until enough book orders trickled in to reach the minimum. If Amazon wanted to sell 10% more books, they might have coped with this. But Amazon is a 10x company, and they were bothered by this limitation. They found a loophole in the form of a perpetually out of stock book which they used to reach the minimums. (It was an obscure book was about lichens.)9

One copy of a cook, 9 copies of a lichen book

Here’s another example. In the 1960s, faster cargo ships and containerization revolutionized international shipping. Freighters from Hawaii were getting their cargo to San Francisco in a matter of days rather than weeks. However, there was a limitation: the ships were forced to sit in port for days before they could unload, waiting for their bills of lading to arrive via the postal service and clear customs. Some clever entrepreneurs decided they wouldn’t let this be a deterrent. While the ships were being loaded in Hawaii, they drove from dock to dock picking up the documents. They put the paperwork in their luggage, and booked a flight to San Francisco the next morning. Now customs officers could begin their processing before the vessel even left the islands, saving valuable time. (They named their company using the combined initials of their last names: DHL.10)

Bet on trends

Consider the Amazon of 1995 compared to the Amazon of today. Their growth is astounding. But over those more than twenty years, internet users grew 70 times over. Amazon executed flawlessly, and they also strapped themselves to a rocket ship. They bet on a trend, and won.

At some level, spotting a trend is cheating. It’s finding a favorable wind and letting it do the hard work for you. In 2004, Google launched Gmail, promising one free gigabyte of email storage. That doesn’t sound like so much today, but it was colossal in 2004. It was more than 250 times as much storage as Yahoo! Mail gave its users. The team that launched Gmail knew that storage was costly. A one gigabyte hard drive ran about $1.50 in 2004. When you’re building a service you hope hundreds of millions of people will use, that adds up quickly.

However, the Gmail team anticipated a trend. They knew the cost of storage would come down dramatically. They gambled that by the time hundreds of millions of users had archived gigabytes of email, the cost wouldn’t be as prohibitive. Sure enough, today a one gigabyte hard drive costs less than a penny.

Hard drive costs. 1GB in 2004: $1.50. 1GB in 2019: <$0.01

Trends aren’t limited to technology and Moore’s Law. This is a chart of the average age of the world population in the year 2000 and United Nations projections for 2050. The world is getting older. In some countries the shift is even more striking. China will go from an average age of 30 to 50 in the space of fifty years. What might you do if you knew the world was getting older?

Average ages of population, 2000 and 2050

Average ages of population, 2000 and 2050. Source: United Nations, Department of Economic and Social Affairs, Population Division (2015). World Population Prospects: The 2015 Revision, DVD Edition.

Here’s one example: the Intergenerational Learning Center in Seattle. It’s a preschool inside of a nursing home. Today’s children will be taking care of their parents, their grandparents, and even their great-grandparents. This gives children an opportunity to learn about the aging process. Since we’re living longer, it gives the elderly a renewed sense of self-worth, and brings joy to their lives. Not all moonshots have to be about technology. No scientists required. Just a different way of thinking about a problem.

Powers of Ten still

In 1977, the designers Charles and Ray Eames made a film called Powers of Ten. If you haven’t seen it, I encourage you to do so now. It’s only nine minutes long.

The video begins with a couple enjoying a lakeside picnic. Slowly the camera pans back, zooming out by a power of ten every ten seconds. Soon we see the whole lake, then the countryside, then the entire continent. Within minutes we’re leaving the solar system and watching our entire galaxy shrink in size. It’s a marvelous way to wrap your head around orders of magnitude.

I mention this film because it was the inspiration for a technique you can take with you today, one that will help you remember to think 10x. The film is subtitled “The Effect of Adding Another Zero.” That’s what I want you to do: add zeros. If you’re building a car, ask how it could go 500 mph instead of 50 mph. How might we reach a billion users instead of one million? Could we get our cost down not to a dollar, but to a penny? What would it take to use only 1% of the energy?

Make sure to add zeros to the impact you want to have, not effort. (As fun as it might be to wonder how much more you could get done with 100 more engineers, that’s not going to help.) Just asking the question forces you to challenge your assumptions, to see the problem in a different way. Because doing 10x means stepping away from how it’s always been done. It also gives your team permission to be 10x.

Not everyone is aiming to land on the moon, and not everyone works for Google or SpaceX. That doesn’t mean you can’t use moonshot thinking. If you set crazy ambitious goals and miss them, you’ve probably still achieved something remarkable.

Speaking of moonshots, take a look at this photo:

Photo from Apollo 11 mission

Photo Credit: NASA

That was taken by Apollo 11. Like all NASA photos of that era, it was taken on Kodak film. Kodak SO-368 Ektachrome film to be precise. Moonshots didn’t end in 1969. Here’s another photo:

Photos of Pluto from 1996 and 2015

Photo Credit: NASA

On the left is the very best photo we had of Pluto as recently as 2014 (it was taken by the Hubble Telescope in 1996). It was about 100 pixels across. On the right is the best photo we have today, as I write this in 2015, thanks to the New Horizons mission. Talk about 10x!

When NASA released these new images, their spokesperson excitedly referred to them as the project’s “Kodak moment.”11 However, there was one important difference: Kodak had nothing to do with it. Forty-five years after the Apollo mission, Kodak lives on only as an expression.

Will you be 10x? Or 10%?

Thanks to Dan Olsen, Jenna Bilotta, Mandy Kakavas, Mark Hull, Martin Eriksson, Molly Stevens, Rick Klau, and Summer Bundy. Also, a special thanks to the audiences at Mind The Product London, Lean Product Meetup, SocialCode, and LinkedIn.

Recommended Reading

  1. “The last Kodak moment?”, The Economist, January 4, 2012. 

  2. Claudia H. Deutsch, “At Kodak, Some Old Things Are New Again”, The New York Times, May 2, 2008. James Estrin, “Kodak’s First Digital Moment”, The New York Times, August 12, 2015. 

  3. Daniel Kahneman and Amos Tversky, “Prospect Theory: An Analysis of Decision under Risk”, [Econometrica, 47(2), March 1979], 263–91. 

  4. Anthony Young, “Markets in Time: The Rise, Fall, and Revival of Swiss Watchmaking”, The Freeman, January 1, 1999. 

  5. Astro Teller, “Google X Head on Moonshots: 10x is Easier Than 10 Percent”, Wired, February 11, 2013. 

  6. Steven Levy, “Google’s Larry Page on why moonshots matter”, Wired, January 17, 2013. 

  7. David Bayles and Ted Orland, Art & Fear [Eugene: Image Continuum Press, 2001], 29. 

  8. Laszlo Bock, Work Rules! Insights from Inside Google that Will Transform How You Live and Lead [New York: Twelve, 2015], 127-8. 

  9. Brad Stone, The Everything Store: Jeff Bezos and the Age of Amazon [New York: Little, Brown and Company]. 

  10. James Scurlock, “The strange, rocky beginnings of DHL”, Reuters, January 19, 2012. 

  11. Emily Lakdawalla, “Bye bye, Kodachrome, but ‘Kodak moments’ will live on in space”, The Planetary Society, December 31, 2010. Nick Stockton, “NASA Finally Knows Pluto’s Size… Kind Of”, Wired, July 13, 2015. 

Originally Published: December 17, 2015

Ken Norton is an executive coach who works with product leaders. He spent more than 14 years at Google where he built products used by more than 3 billion people.

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