GGV Capital’s Hans Tung, Jenny Lee, and Zara Zhang interview Tony Fadell, the inventor of the iPod, co-inventor of the iPhone, founder and former CEO of Nest, the company that pioneered the “Internet of Things,” and currently the Principal at Future Shape, an investment and advisory firm coaching deep tech startups. Tony was the SVP of Apple’s iPod Division and led the team that created the first 18 generations of the iPod and the first three generations of the iPhone. Throughout his career Tony has authored more than 300 patents. In May 2016, TIME named the Nest Learning Thermostat, the iPod and the iPhone as three of the “50 Most Influential Gadgets of All Time.”
Tony has been a long-time friend of GGV and of our managing partner Jenny Lee, who we have as a guest host on the show today.
Tony discusses why China might have a “last-mover advantage”, the qualities he look for in entrepreneurs, and how to discover the next game-changing technology.
HANS TUNG: Hi there. Welcome to the 996 Podcast, brought to you by GGV Capital. On this show, we interview movers and shakers of China’s tech industry, as well as tech leaders who have a U.S.-China cross-border perspective. My name’s Hans Tung. I am the managing partner at GGV Capital, and I have been working at startups and investing in them in both the U.S. and China for the past 20 years.
ZARA ZHANG: My name is Zara Zhang. I’m an investment analyst at GGV Capital and a former journalist. Why is this show called 996? 9-9-6 is the work schedule that many Chinese founders have organically adopted. That is, 9 a.m. to 9 p.m., 6 days a week.
HANS TUNG: To us, 996 captures the intensity, drive, and speed of Chinese Internet companies, many of which are moving faster than even their American counterparts.
ZARA ZHANG: On the show today, we have none other than Tony Fadell, who needs no introduction. But just for the sake of formality, Tony is the inventor of the iPod, co-inventor of the iPhone, founder and former CEO of Nest, the company that pioneered the Internet of Things, and currently the principal at Future Shape, an investment and advisory firm coaching deep tech startups.
Tony was the SVP of Apple’s iPod division and led the team that created the first 18 generations of the iPod and the first three generations of the iPhone. Throughout his career, Tony has authored more than 300 patents. In May 2016, Time named the Nest Learning Thermostat, the iPod, and the iPhone as three of the 50 most influential gadgets of all time.
HANS TUNG: Tony has been a long-time friend of GGV, and our colleague Jenny who we have as guest host on the show today. Welcome to the show, Tony and Jenny.
TONY FADELL: It’s great to be here. It’s great to see you all here in Beijing.
ZARA ZHANG: Welcome to Beijing.
TONY FADELL: Thank you. Wonderful.
ZARA ZHANG: So, you have been a prolific coach and investor since you left Nest in 2016. Could you share with us what excites you these days?
TONY FADELL: Well, I think the first thing that’s exciting is that innovation’s happening everywhere. There’s always been great ideas all around the world, but really, after the iPhone and smartphone revolution happened, we unlocked the DNA for people around the world to make revolutionary technologies through open source, through communications networks, through the Internet, and now you can see innovation and creation of new businesses, new technologies, new products all around the world. So, to me, it’s engaging the entire global set of brains and not just ones in Silicon Valley or in the East Coast of the U.S., but literally the whole world can now innovate at incredible world class levels. To me, that’s really exciting because that means we can get to solve big problems faster, which is really important.
ZARA ZHANG: Are there any particular parts of the world that you are especially excited about?
TONY FADELL: Well, I’m definitely excited by what I’ve seen in China since coming here—I started coming here in 2001, the very first time with the iPod—and then seeing how much it’s changed. This is the first time I’ve been back in about five years. And to see how much not just copycatting in a lot of ways that you thought, but it’s literally innovating in all new ways that we’ve never seen before. You know, I think of first mover advantages all the time when I invest, but I also think of last mover advantages. And if you think about China, when you didn’t have credit cards and there wasn’t a lot of consumer credit and there wasn’t a lot of a lot of things here, and you get to use the best technology and actually make it yourself and create things that the world has never seen before, that’s really exciting because we’re not just taking old systems and innovating them but we’re creating new things and new species of things that have never been seen before.
ZARA ZHANG: So, Jenny, you’ve known Tony for a long time. Could you talk about how you first met?
JENNY LEE: Yeah, I still remember. I’ve known Tony for about five years, actually five years exactly to this day. Back then, Hans and I were attending a party in the Valley, at Yuri Milner’s house. The first question that I ask entrepreneurs, whoever the entrepreneurs that I meet, would be “Who’s the coolest guy in the room that I should get to know?” And it was interesting because I had Phil Libin sitting next to me, ex-CEO of Evernote, and then on my right was Aaron Levie, CEO of Box, and they all pointed to the guy across the table from me: Tony Fadell. Back then, they said, “Wow, he has a new company, new cool products. You should just get to know him now.” So, that’s how we met. I went up to Tony and he was busy introducing his cool Nest Protect product at that time that was about to be launched.
That’s how we met, and I think after that, we just hit it off. It’s always great to find entrepreneurs whom you can talk tech about, who can really give me the straight “This is good. This is not good. This thing is not real.” And so, we’ve always kept in touch and it’s been a very interesting and very engaging interaction.
TONY FADELL: And we’ve invested in a lot of things together. We talk all the time. We’re on the board together. So, it’s really great and fun to see how things have developed over the last five years. But when we met, we instantly hit it off. As you said, no B.S. You tell it like it is; I tell it like it is. And when you meet people like that, regardless of wherever they’re at, you just resonate with them. You’re like “Okay, this is someone I can get along with.” It was clear after our first one or two conversations that I was like “Okay, we’re going to get to know each other a lot more,” and we’ve actually talked a lot. She’s very busy obviously, but we’ve talked a lot. Hans as well, we’ve talked many times and continue to find great entrepreneurs to back around the world.
JENNY LEE: Hans and I, after that first meeting, actually made a second meeting to go pay a visit to Nest and Tony, to try and see if we can invest in Nest. But we were too late. I think two months we were talking and talking, and then two months later, the news came out. And so, we would love to find more ways to work together as partners this time, not just investor-entrepreneurs.
HANS TUNG: Exactly. So, Tony, you have close to 250 investments now. Most of them seem to be more deep technology, at least in the U.S. and Europe. What do you look for when you invest in founders and what excites you?
TONY FADELL: Well, there’s lots of money out there and there’s lots of entrepreneurs doing a lot of interesting things, but for me, what I want to be able to do is not just make money. My job is not to make money. I’m not investing other people’s money. I’m investing my time more so than money. What I want to do is I want to really be able to help entrepreneurs who are doing very hard things, which are usually in deep technology—things that don’t have revenues for a while, that take many years to develop before they can become really disruptive in an industry—help those entrepreneurs and mentor them, not just myself but our team, to help them get their dream to become reality, to affect the world as fast as possible for the most amount of good.
I was a young entrepreneur when I went to Silicon Valley in 1991 and beyond, and I had lots of people who helped me because they saw something in me and they said, “I want to help this kid.” And it wasn’t always about money. So, now that I’m older—almost 25 going on 30 years later since going to Silicon Valley in the first place—now I think it’s my time to be able to do what other people did for me and help those innovations grow, now that we can do them in a lot of places and do many more meaningful things than we could have 30 years ago. So, for me, that’s what’s so exciting.
And it’s not just about consumer hardware and building the next iPod or something or Nest; it’s really about technology being applied to new spaces. The things that we know and we’ve created over the last 30 years, you can innovate that, sure, but it’s about bringing that and that democratization of those technologies to agriculture, to food, to medicine, to automotive things. If we look at it, there are so many things that now need to be either revolutionized by the software and hardware revolution or they need to actually be created, new things that we’ve never seen before to be created. That’s what’s interesting to me.
Because I don’t want to just keep doing the same thing. I left Apple because after 18 generations, the iPod or whatever, the 19th one is pretty predictable. I think you can pretty much predict what the next cell phone wave or smartphone wave is going to look like or the one after that. That’s not fun. What you want to do is be on the cutting edge to create something that’s totally changing. Hopefully, like I’ve been able to do in my career, now do it with 200 other companies in different things that I don’t know anything about.
And that’s what’s the best thing is: You go and do something you don’t know anything about, so you come fresh-eyed and you go “Why don’t they do it that way?” Instead of saying, “This is the way we’ve always done it, so it’s never going to change,” you just come and go, “That doesn’t make much sense. Let’s rethink it.” That’s what’s fun, is rethinking old industries or thinking of new things no one’s ever thought of before. To me, that keeps me young. I get to work with lots of young people and hopefully help them reach their dreams.
HANS TUNG: Right. So, how do you tell if a team is just doing science project versus someone who will actually have a chance to grow and learn, evolve, and do something truly revolutionary?
TONY FADELL: Hans, that’s a great question. You ask them what their mission is. You ask them what they’re really trying to do. If they’re just trying to find more money to continue their research from college, from university, it’s very clear that it’s like “Oh, I just want to do this” and they don’t think about the business implications. They just want to keep having fun doing what they’re doing. When they say, “I have this technology and it can change the world in these dramatic areas,” and then they can state some kind of business case or some kind of market case for it and they’re trying to get other people to help them understand and build a business, that’s when you know it’s something interesting.
We see a lot of great demos – and nothing wrong with robotics and those cool AI robots they’re running around, but then I keep saying, “What need are we filling? What are we actually really fixing?” You can create all kinds of nice demos, and that’s fun, but I come in and go “What are you doing? In 10 years, when you wake up, what are you going to have on your resume to show that you’ve done to build something great, and all the people on your team to do something great? And that something great is not just another product or another demo but a business, something that will last beyond your time at the company.”
So, if I think about it, my time at Apple, it still has the iPhone. The iPhone revolution, that was something we were building that really was important and it still continues to be important. And Nest. Nest continues to go on and create new products and we’ve created a culture and a business to create more products. That’s the kind of thing you want to talk to an entrepreneur about, not just this one idea and getting it to the market but “What is their big vision? Where does it need to go?” And even if they don’t know what it is, they have to have like “Wow, I want to change the world, in this way, for the right reasons, for these kinds of business reasons, to make sure it’s sustainable. It’s not just bringing a technology to the world.”
ZARA ZHANG: I also think a large part of being a successful entrepreneur is solving the right problem at the right time. So, the timing is also important. So, what do you consider to be the right problem at this current age?
TONY FADELL: Well, timing is everything. Sometimes a failure is based on execution; other failures are based on timing. You always want to be a little bit sooner than it needs to be. You know, Nest was just a little bit too soon, but it worked out. It was just a little bit cutting edge, and now you see that everybody is doing it. But we got there at the right time.
Something in China that’s a great idea might not be a great idea in North America, it may not be a great idea in Europe. So, you have to think about timing not just what people are talking about in the press but “what are customers saying?” Just because you have a great idea and you’re not close enough to the market need—and it takes a really big gap, a leap, for them to understand what it is. If it takes more than two minutes to sell your idea, you’re probably not doing a good job of either explaining it or you’re too far advanced from where they’re thinking for them to buy it or purchase it in some way.
So, I think about my time at General Magic. Most people don’t know what General Magic is, but we were basically creating the iPhone in 1991 to 1994. We had the best team; we had the best everything. We had downloadable apps, we had games, we had e-mail, wireless e-mail – we had everything. But that’s what we use today. It took us 15 years to get there. And we had the smartest people. So, we were a total failure; we obviously showed up 15 years later. But we had the right idea.
So, what is going on here in China? When I look at startups and thinking about the timing, there are things that the market needs now and things that will get funded now, and there’s something pressing for like “Made in China 2025.” If you’re doing something that needs to be done right now, you’re probably not innovative enough. You need to be building something that is going to be a hit in four to five years, when the market wakes up, because that means you’re starting before anyone else is.
But you can’t be so close that everyone else is doing it or it’s pretty simple to implement. But you also can’t be 10 years out because then business isn’t happening. So, you have to really be in. If you’re doing anything important, I always say, “It takes 10 years for it to see full fruition, to come to full ripeness, in a way, 10 years to really realize a business. A product, a good product, is usually three to four years; good business is 10. So, you should always be thinking in those kinds of horizons. Now obviously you want to ship something in a year or a year and a half, something from the time you start.
So, those are kind of the windows I see in business, but you got to make sure that what you’re pitching is close enough to what the need is, or a need that you’ve discovered that they didn’t know they need, so that they can convert or they’ll actually put their signature on a contract in some way or put some money down for it.
HANS TUNG: So, if you’re looking at a portfolio, what would be the top 3 products that fit that description, that it could be something quite game-changing, it’s still a bit early for its time but it’s close, that could really break out?
TONY FADELL: Well, I think we’re starting to see a breakout almost happening in impossible foods. Impossible foods is basically meat without a cow, right? It’s a burger that’s vegetable-based but it has almost all the same or better properties than regular meat. There’s a lack of protein in the world, we are unsustainably farming cows and cattle today, and it’s killing the planet, it’s killing us, it’s totally inefficient, and we’re just at the point where meat-eaters will go, “I’ll actually try that,” and they like it. It’s not crazy GMO technology but it’s right on the verge and it’s going multi-continent. So, it’s just on that thing and people are like, “What is that? What is it?” It’s underground. But we’ve been working on it; the team has. I’ve been working with them for a while. But the team has been working on it five, six years now. We’re finally there, and it’s going to be in total brightness as a full business in the next two to three years, because it will be everywhere. But it’s taken a long time. So, that’s hopefully an example of what I mean.
Let’s see another one. I think transportation is a big one. We’ve been talking about self-driving cars. We all want it to happen. We all understand the need. Society’s not ready for it. The technology’s not even ready for it. Everybody’s been saying, “It’s coming in 2019, 2020.” We have automakers saying, “We have full self-driving or we’re going to have a software upgrade for full self-driving.” No, we are not. The stuff isn’t ready; it’s not even nearly ready.
I think, just like people, we have to learn to crawl before we walk, and walk before we run, and run before we sprint. Cars are going to be the same way. And it’s not just the technology. Cars are all about different speeds, in different locations, at different times of day, under different environmental conditions. We’re going to do the same thing there.
Do you think we’re going to all of a sudden make a highway vehicle that’s going to work tremendously well in cities? No. Today, we have some self-driving capability on highways, in very controlled digital situations. If we look at countries around the world, there are driving modalities that are very analog, not digital. The U.S., for the most part, is a digital transportation system.
HANS TUNG: Emerging market’s not.
TONY FADELL: Emerging market’s an analog one. China is in-between. There are cities that are digital, and there’s other ones that are analog. To think that we’re going to be able to address all of this in version 1.0, or even 5.0, is absolutely insane. When I see people investing like crazy and they’re saying, “Oh, we’re going to have self-driving taxis,” they’re going to be the worst taxis in the world. You’re not going to want them. They’re not safe. So, I like the e-Mobility stuff, with the bikes and the scooters and other transportation things. But self-driving? I like self-driving in campuses on slow speeds, where you can only do this stuff, where it’s highly controlled, it’s highly digital. It only has to work under certain environments. It still has a steering wheel on the thing, so somebody has to get in to keep it running during the day. We’re going to have those kinds of on-ramps.
For people to say that it’s going to be autonomous driving in three years, we all have different expectations. It’s all marketing. It’s all kind of craziness. It’s not what reality is going to shape it to be. Just like the iPhone, we had it in 1994 with General Magic. People didn’t understand the need. We understood the need. But the technology’s not right yet. Basically, we don’t have the technology and the regulations and all the other things. So, that is much too early.
Now was that saying you shouldn’t invest? No. But you have to invest smart, and you have to understand what can be deployed when. Now people are talking about fleet mobility management solutions, software solutions, for autonomous vehicles. I’m like “Oh my god, that’s going to be 2030 by the time we need that stuff,” or 2027 or something like that. We can’t even make a car, an EV-based car, that won’t run long range enough without all the computers, let alone when you have all the computers and all the sensors. And they’re still already too expensive. There’s so much to go.
So, that’s an example of something that’s happening today. That if you smartly define it, yes, it will happen. But the way it’s being defined and being built, it’s so far out there that we all want it because it’s cool science fiction. But it’s not happening. It’s all driven by marketing and shareholders, and people think they’re going to make a ton of money right now. They’re just chasing a dollar; they don’t understand all the social implications, governmental, and the technological ones.
HANS TUNG: How about vertical indoor farming?
TONY FADELL: Another thing that I think is very interesting. But you have to look at the business model. You have to go back and go “How much is it costing to produce these vegetables or these fruits in which location? What are the alternatives?” It sounds sexy and it’s interesting for a marketing thing. But when you come down to the business aspects, you know, some of these vertical farmers go “I’ve sold a thousand containers.” It’s because everyone’s trying one. I always say that if we put anything on Indiegogo or anything, you can sell between 10,000 and 100,000 of anything to anyone because there’s enough early adopters. But they’re just demoing.
To say it’s going to truly be a business, we’re so far away from that. Now do we have to try it? Absolutely. But the valuations, a lot of these things are getting well out of hand. They just seem cool and everybody’s like “Yeah, it sounds cool,” but the reality is we have to look at the economics, because it’s not going to be carbon-based because we’re going to be getting rid of logistics services. There are all of these other elements that have to happen to incentivize, to make these things more cost-effective, and they’re not today.
And you have to really look at the numbers. I’m as bullish as anyone about all kinds of certain things but I always go back to not the sales numbers but the real hard unit economics to really understand “what are we really solving here?”
HANS TUNG: What are you betting on?
TONY FADELL: Yeah, what are we really betting on? Because that’s the thing that’s not going to change. If you can’t get the economics right, regardless of
HANS TUNG: You can’t scale it.
TONY FADELL: You can’t scale it. And I always look at the economics from a scale point of view, not just “It’s going to be hard. We’re only making a thousand of them, so it’s really expensive, so we’ll never get to 100,000.” Like solar panels took for years. From the ‘70s, we had solar panels, but it’s finally taken off in the last 10 years. Because everyone’s like “We’ll never scale.” I’m not worried about scale anymore. If we figure out the unit economics, China or another country is going to go off and figure out how to make –
HANS TUNG: Cost-up?
TONY FADELL: The cost-out happens so much more quickly. But what’s the real fundamental reason why something should exist? Look at that. Look at those details.
HANS TUNG: We think there’s a fine line in indoor vertical farming that could be different. We’ll show you. We’ll talk to you about that later.
TONY FADELL: Okay. I can’t wait to hear more.
JENNY LEE: Maybe switching gears a little bit. So, Tony, you’ve been a very successful entrepreneur as well for 25 years, and the last 10 years making investments. How do you strike the right balance between taking on the role of a coach to the founder, you saying, “Hey, you know, this is something that’s cool, I can just come, get in here and solve the issues within, I don’t know, a day,” versus just trying to coach the guy to get it in a year?
TONY FADELL: You’ve probably seen it in some of the companies. Sometimes you have to bite your tongue. The first time is just like you can ask them questions, and then it goes – you can either see in some entrepreneurs, it’s just like “Why did you do it that way? Did you ever consider this? Or did you ever think of that?” And either kind of a bit flips in their brain and they go, “Oh, my god,” and literally within hours or days or weeks, they’ve changed their whole presentation. Or it’s like six months, nine months, a year later, it still hasn’t sunk in. Not that I have all the ideas or anything, but at least coming back to you with a “I thought about that, and here’s why I don’t think it’s going to work.” Or we rule it out right then and there, like “Yeah, I really thought about it. Yeah, that’s not going to work.” So that you can really understand.
And I like to do that in the process of when we’re thinking about making the investment and challenging them there to see if they’re mentorable at the time of the investment, because that’s the time when you have the most leverage. When your investor’s like “Oh god,” roll the dice then and you have no leverage, in a way. Because I’m not worried about missing the next deal, I mean, me, this is about fun and it may change the world. It’s about working with great people who really want to work together, so I don’t worry about passing up deals. A lot of investors are like they want to have their best foot forward and they want to say, “I’m entrepreneur-friendly and I’m not going to challenge to a certain extent.” For me, I go the whole 180 degrees. I challenge them from day one. I’ll send them a hundred questions, going “What’s that about?”
JENNY LEE: Yeah, I’ve seen those e-mails.
TONY FADELL: And I want to see how far until they’ll break, in a way, not that I’m trying to like – but I want to see how far they’re going to go and how deep and how fast they’re going to respond and how detailed they’ll respond, because that’s going to tell you what their normal way they think about problems or how they communicate or whatever. And if they can do that, then it’s a great litmus test for what I think is going to happen over time. They go “I never thought about that” and they claim “No, we haven’t gotten there,” as opposed to someone who always says, “Oh, yeah, we thought about that,” or “Yeah, we’re going to do that too.” They just have to say, “No, we didn’t think about that.” And you go, “Okay.” I know that they’re real because they said.
HANS TUNG: They’re honest.
TONY FADELL: They’re honest. Right, exactly. So, yes, it’s that kind of thing.
JENNY LEE: So, do you get moments where you feel like this problem is attractive enough that you want to do it yourself?
TONY FADELL: There are a few. There are a few moments. Everyone asks me “Are you going to get back in the game one day? Are you gonna go back?”
JENNY LEE: That’s a different way of asking. Always a capitalist.
TONY FADELL: I wasn’t going to get back to it, and Nest was something that I thought of and I couldn’t let it go. It took nine months for me to finally kind of commit to doing it, because I had a look at it from every angle because I really wanted it to be right. I had been at that point over 20 years of, you know, multiple startups that failed or were marginally successful, years and years at Apple running like crazy. So, to throw yourself into it again when you didn’t have to, you’re already financially fine and all that stuff, to throw yourself into it, you have to make sure all the variables are there. Not that I’m risk-averse but I like to risk-mitigate and make sure I really understand what the real opportunity is but what are the real risks before diving into it.
So, when I look at these other businesses, I have a different calculus I use for when I’m going to be the CEO versus when other people are the CEO and I think I can help them and invest and get them around certain obstacles because I’ve been there before and I think it’s a good business. But is it something good enough that I would want to tear myself away from my family and all that stuff, since I already had been doing it for effectively now 25 to 30 years, depending on how you count? So, it’s very hard for me to want to engage and say, “Oh, I wish I could do that,” because I know how hard it is.
And I have to tell you it’s a young person’s game to really be an entrepreneur. And by young, I mean you have to be in your 30s. You know, 20-year-old CEOs, there are some of them but they’re usually not successful. It’s got to be their second or third time. That’s just the reality of it. Sometimes they get lucky. But most the time, it’s in your mid-30s to early 40s is when you’re really successful. You’ve really figured out, you’ve failed enough times, you’ve learned. So, I’m not in that category.
JENNY LEE: Unfortunately, I’m not as well.
TONY FADELL: So, that’s where you come back, to mentor. So, my calculus for me to do something is very different. When I see something and I go “Oh, my god, if I was 30 again, would I be the entrepreneur?” Yes, I want to invest because I get to go and have a fun ride with that entrepreneur, being a mentor alongside them and helping them with their board and their investors and everything else. So, I get to be in all this, I can have a lot of fun, and I get to be young again. At the same time, I get to help them and I get to almost be CEO without being so young. Right?
HANS TUNG: It’s one of the reasons why Jenny and I like being in VC.
TONY FADELL: Right. At some point, everyone has a different reason for when they are going to get involved with the risk level. I’d much rather take my time and help 200 entrepreneurs. than just do one company with a lot of people. But it’s tough. You know how it is. I always would love to go back to college or high school and say, “Yeah, I would love to play football again like I used to.”
HANS TUNG: Let’s make a little team and try to coach it.
TONY FADELL: Exactly. Great analogy.
HANS TUNG: So, you’re based in Paris; you’re traveling throughout Asia. When you see all the different markets, what are the differences and similarities amongst the founders you choose to back across these geographies? What kind of lens do you use to look at investments in different geographies?
TONY FADELL: Well, I think looking at the investment is very different than looking at the people. Human nature that I found throughout all our travels is the same everywhere. Everybody wants to care for their families, everybody cares about their communities, for their governments or countries and everyone else, they care about themselves. Human nature is the same. So, it’s very easy to go and find entrepreneurial talent. That’s very similar. They’re mission-based, they work hard, they’re proactive, they can communicate well. And you can find that on every continent.
When it comes to investments, though, you have a very different calculus in how you choose to invest in a company in China versus the U.S. versus Europe, because each of them is in different stages. One thing we learned way back when, during the time at Apple, we did the iPod. Apple wasn’t doing well at the time the iPod came out. It was a critical and somewhat success in the first year or two years, but it was all Apple-focused. You could only have a Mac to use an iPod. So, what you had to do was you could only market it to more or less the U.S. audience, a little bit of Japan. Nobody in Europe was really using Apple Macintosh or any of that stuff.
So, we worked and we modified it and all that stuff, and by year 3, we made it work with a PC. So, we took it to Europe, because it could work with the PC, and we took it to the rest of the world, people are starting to go, “Oh, I want to try this iPod thing.” That first time we hit the European shores or the Asian shores with it, we used the marketing as if we were still marketing in the U.S. after three years. We forgot that the markets themselves didn’t really know what an iPod was. They really didn’t know what 10,000 songs in your pocket was. They didn’t know all these things. So, the first six months when we launched it in these other countries, we didn’t tailor the marketing to understand the market. We tailored it based on “take what we’ve done in the U.S. and copy it.” We had to bring those people up to speed. And so, what is this long way of saying what it is, is you got to understand the dynamics of each market to understand if an investment really makes sense.
Today, I’m fundamentally deep tech, and deep tech means it’s coming out of research institutions. That’s where I like to invest. It’s not about social mobile; that’s over now. There are certain things that are over, but deep tech’s really hot in Europe. Deep tech is just starting. It’s mostly kind of the U.S. two to three years ago, you know, business process automation and alternative business models and that stuff, and innovating in that market. China is much more about scale. It’s not about deep technology, as I define it, but it’s about taking something where you have a good market, that you’ve figured out the unit economics, and pressing the button to get the capital and scaling it up to billions of people. So, it’s all about execution, it’s all about customer acquisition costs, about “how do you cement that kind of thing?”
So, you have to look under that calculus. At some point, that calculus is going to move to the U.S. again, and then it’s going to move to Europe. So, these things are always out of phase; each of these regions are out of phase. If you look at Southeast Asia investing, it’s very different than all of those.
Again, entrepreneurs, easy to determine. Whether that entrepreneur has a business that’s investable and that makes a lot of sense is very locally driven and you need to have great partners in each of those areas to help you do the due diligence to understand it. It’s great to learn about these things, but it’s hard to sometimes pull the trigger when you don’t really have all the data to make the investment. So, it’d be like the way you would as if you were investing in the U.S. for 10 years or 20 years.
And that’s what’s so great about GGV is that you guys have been here and now you’re going even further into other markets, investing ahead of the curve and learning this stuff, just like you should be creating startups ahead of the curve – not too far ahead, right?
Investment is all about seeing the next horizon; entrepreneurs are all about seeing the next horizon, and then finding those things and nailing it. So, it really takes people on the ground, great understanding, because you just can’t cookie-cutter and copy things from place to place. It doesn’t work that way.
HANS TUNG: A lot of VC firms try to globalize when it was way too early to do so, and a lot of them have sort of retreated. I think for GGV, for us, quite frankly we benefit from the penetration and proliferation of iPhones and Android phones. When you have so many smartphone penetration in a lot of markets, it becomes easier to scale the biz model that’s worked in one country to the other, especially in emerging markets where there’s a high degree of urbanization and rising middle class in a smartphone penetration.
TONY FADELL: Absolutely. There’s a lot of similarities you can do. Finally, there’s 4G in India, and finally there’s 4G everywhere and it’s cheap enough. It’s cheap enough.
HANS TUNG: That’s key.
TONY FADELL: So, you’ve got to look at the infrastructure, and then you have to look at the ARPU and figure out what is really the discretionary capital that each of these families has and where can it be deployed, or for that matter, the IT budgets for each of these companies, because everybody around the world has to digitalize. Right? Families too. The question is: What’s the cycle? Where are they? Where’s the acceptance?
Just like when I was coming back to the iPod, the timing is critical in each of these things. When everybody just says that they can move their business model from one continent to the next really easily, “Oh, yeah, it’s just a language change,” that drives me nuts. That’s the kind of entrepreneur who sometimes they need to be mentored and other times they just say that because they’re selling it, trying to prop up their value. And I’m like “Forget it.” It’s just like smattering AI on every single president. AI is just a new form of social mobile or whatever it is. “I’m the Uber of.” “I’m the AI.” But it’s like “No, sorry, ain’t gonna happen.” You got to be much more thoughtful than that.
ZARA ZHANG: Would you say would-be entrepreneurs should first train at big companies or should they jump straight into entrepreneurship? You yourself have been at some big companies.
TONY FADELL: Yeah. I have some real lessons learned on that. If you’re going to be a great entrepreneur, you better know what sales and marketing is, not just what engineering is or operations or finance. You need to know pretty well what each function does and how they interrelate. At a massive company or corporation, are you going to learn that? No way. You’re going to be a cog in the machine. At a startup of five people or ten people, are you going to know that? Absolutely not. What I’m for is those small 80-150-person startups, not more than that, where you can go in in the first two years, you can watch it grow, what kind of stress goes on in the environment when they’re growing at 20 people per quarter or 10 per quarter.
When you can go and have lunch with the marketing person and learn what they’re talking about, or the finance person, and you can start to get some sense about it – because you’re not learning this stuff in school. No business school is going to teach you this stuff. They’re not going to tell you about the failures. You’re going to hear about the successes and the real big failures and then the not, one, it’s dynamic and it’s really happening. It’s just case study.
You got to be there. You got to learn. You got to learn by doing. Learn by doing means learn by doing with others who are knowledgeable and experienced with a good enough team.
If you just got out of school—and this is what happened to me. I started my own company, and I didn’t know what I didn’t know. And that’s why it was so great about me going to General Magic; I got to see everything. Maybe I wasn’t that thoughtful at that, but that’s where I landed and I was employee #30 at this company. But we grew to 200 in a very short period time. You got to meet and learn and become part of many pieces of the organization. That’s your real PhD. When everyone says, “I have a PhD,” it’s not a PhD in entrepreneurialism. It’s a very neural thing that doesn’t help you create a company.
You got to really be able to speak the language of all these different divisions and different types of people and know enough when you need something. Not that you know who the best experience professional is or how to do that, but start to understand, and you can only do that by doing and working in a company.
HANS TUNG: It’s usually B or C companies that have raised two to three rounds of financing, 50 to 200 people.
TONY FADELL: Exactly.
HANS TUNG: So, small enough that you can talk to almost everyone but big enough that you have different functions emerging all right.
TONY FADELL: Exactly. And you’re going to go through some failures. It’s not going to be about maintenance mode. “Oh, yeah, we just need to have this.” It’s like, no, there’s like real fighting to try to win the market or fix this problem or whatever, and it’s really ugly and gory – because that’s where you’re going to learn. It’s fun. It’s fascinating.
So, yeah, do not go to a big company, a huge one. Do not go to a little tiny one. Go to something where you can really add value but they’re going to teach you probably more than you’re going to be able to bring.
JENNY LEE: Those in the J-curve.
TONY FADELL: Yup.
ZARA ZHANG: I remember you’ve said before that Nest would have never happened if I didn’t get out of the echo chamber of Silicon Valley. So, how did Nest happen and why did you move to Paris in 2009?
TONY FADELL: One of the biggest reasons why I’m here in China, why I’m traveling throughout the world, to Southeast Asia, why we’re living in Paris, is that you don’t know about other people’s problems unless you live them. A lot of people say, “Oh, yeah, I can go in…” From Silicon Valley or whatever else, everything looks like it’s all solvable for there. It’s absolutely not the case. The reason why you start a startup – you know they didn’t all get created in Europe and then they got shipped over to the U.S. when the U.S. started. Everybody has different problems to solve with different needs and different ways of being. And even though you might think “Oh, that car’s the same as that car over there,” there’s regulation differences galore between the two different cars here in China, you know, a Buick here versus a Buick in the U.S. There are so many differences that you need to be able to live them.
The other thing is you habituate. In other words, you get used to your environment. So, after being in Silicon Valley for, at that point, 20 years, you kind of see everything is the same. They’re all shades of the same thing. You see the same problems; you see everything else. When you get outside that bubble and you go to a different place where fundamentally everything’s different, it knocks you off your thing and you have to re-evaluate everything and relearn how to live and learn how other people go, “Why did they do it that way?” We did it that way. “Is it smarter?” I always thought that’s the way it’s always been. It’s like a big company. “That’s the way we’ve always done it. We’re going to continue to do it that way.” You’d be like “Wait a second, I’m over here. They do it differently, and that’s some smarter.”
Like I just thought the U.S. political system was really smart. But living in France and seeing how they elect the president, oh my god, I’m like “This is genius compared to the US.” I never knew it could be better. I was like “This is so smart.” And so, when you have that kind of an experience and you go “Wait a second, there are smart people all around the world.” They may not be marketed and the media might not be focused on them, but go and interact with them.
Most times, people are like “Come meet with me and move your startup near me because I know better.” No, no, no. You got to go the other way and go meet with people, because technology has been democratized, communications has been, all of this stuff’s been democratized. Everyone can get access to it. Now it’s about going to the markets and making those markets happen. So, if I wouldn’t have done that, I would not have seen the problems, I would have continued to solve what everybody else thought were the problems.
What I love is the other thing that happened—this was in Paris in 2009 when we were there—was I went to different museums. When you’re in Paris, there’s hundreds of museums and you start to see a pattern. A pattern emerged where if you looked at Picasso or Michelangelo or any of the great artists, you start going “Wait a second, they lived in this city for a while, then they took a little bit of time off and they lived in this city for a while, and then they lived in that city, and they had different inspiration and new art or new things that they were working on.”
It was all about refreshing and pressing reset on your brain to get new inspirations, new ways of looking at the world, to come up with new and creative solutions or ideas. So, you’re like “Wait a second, I’m in Paris. I see this, I see the artist, they did this.” I’m like “Duh, I got to do the same thing.” And that’s when, bam, Nest happened there, came back to build it, and now I’m traveling the world, seeing other things, and I’ve got some really cool things that I want to do now, you know, traveling in this area of the world as well as in Europe and going “We’ve got to build some of these other companies. I’m trying to find investments around that stuff,” because I would have never seen it in Silicon Valley, or frankly, in Paris or in Europe, unless you travel to the place where
HANS TUNG: For example?
TONY FADELL: For example, we were talking about this earlier, which is if you think about Southeast Asia, it’s very much like Europe was before the EU, before the European Union. There are different currencies, people are traveling around, middle class is now being established and it’s traveling around, commerce is happening within, inside a block, and things need to move more quickly. So, what technology, what things need to be built for that region, that trading region? It’s not all going to come in and out of China to the rest of the region. It’s not. I’ll go to Europe back and forth. It’s going to be traded inside that block amongst themselves. What needs to be built in that, inside of that?
And to make it more fluid, reduce the friction. Because I don’t think, given this whole wave of populist behavior, there’s going to be another EU created anytime soon. There might be trading blocks, but there’s not going to be a new kind of political system put on top of things. So, given that, how are our businesses going to adapt to that? What businesses can be started in that? That’s going to be really wild and interesting to watch, and it’s just now getting there, as you see things like Go-Jek and Grab. In other words, starting to go to multiple countries in that region. Pretty interesting.
ZARA ZHANG: So, what we’re now seeing in Beijing, what has surprised you or impressed you the most about your current trip to China and what’s your overall impression of the China’s ecosystem.
TONY FADELL: China, it’s underestimated. I think a lot of people want to continue to “Oh, it’s the China of 15 years ago.” It’s an incredible opportunity or an incredible threat, depending on how you look at it. I hope that while there has to be the right reckoning and balance between superpowers in the world and trading blocks and all that stuff’s got to get itself worked out, we still need to cooperate, we still need to work together, and we still need information to flow and the knowledge of all of different people to flow freely between each other.
It’s really important because we live on one planet and we cannot be hunkering down. Especially when you look at the IPCC report from last week, saying global climate change is going to affect us in 12 years, not 30 years, we’re going to have to be working together on this. I would rather see countries compete to make the world better than to lock off each other and then we starve each other of the innovation that goes back and forth.
I know that’s vague. But China is an incredible opportunity for the world because it can set the standards and help to bring scale to a lot of these industries that are going to need it to help us with climate change, just like we did with solar panels. Rightly or wrongly, forget solar panel dumping and all the other stuff, if people played the game right and they played by the rules and we don’t have a global currency meltdown because of currency wars, we can help the planet go much more quickly together than apart.
If we have global currency wars and global trade wars, we’re going to slow down tremendously the revolution we need to get to a CO2-less environment. Otherwise, we could lose 10 or 20 years on our way because we’re sticking our head in the ground and saying “us is awesome, we’re going to do it our way.” We can’t do it. It’s one planet. There’s no Mars. Sorry, that’s market. There’s no Mars, there’s no moon, there’s no space. We’ve got it. We’ve got to solve it. We’ve got to solve it together.
And so, for me, China is going to be a huge win, especially as more cities are developed. And the rest of the world—or at least in what some people consider the modern world, China is very modern—the U.S. and Europe, or North America and Europe, there are no new cities being created. Here, they’re being created, and you can use the new technology to create those. And you can figure out new ways of being and do that more so than the Middle East, more so than Africa, because you have all the pieces here.
So, I hope that the technology that’s going to be created and the cities that are going to be created are going to be models to help us get out of this because we’re going to need it. The population, yes, it’s slowing around the world but it’s not slowing fast enough. It’s not going to solve it. We’re going to need experimental cities and a lot of different innovation for this DNA to mutate enough times to find our way out of this.
HANS TUNG: And China’s the best place to try it.
TONY FADELL: And so, China is an incredible opportunity to help save the world, even though, yes, there do need to be reforms. But this is where everyone can lead together and not be divided about things.
HANS TUNG: Well said.
JENNY LEE: I think we’ve talked about how the world is changing, entrepreneurship is changing. Tt’s getting more global. Capital, as well, is getting more global. So, you’ve had so many interactions with investors in the U.S., in Europe, in Asia as well. Any inputs, advice, for folks like us? You said that we are the dockside, right?
TONY FADELL: Look. In the world, there are good people and there are bad people. There are good businesses and bad businesses. There are good leaders and bad leaders. In the world of capital, it’s the same. At the end of the day, entrepreneurs should only take money from people they respect, from people who can add value, not just a brand name. It’s about a person-to-person relationship with a partner or a mentor. It’s not just the firm, it’s the person you’re going to have on your board. It’s going to be about hopefully a person you can call in the middle of the night when you’re in utter panic to get advice, and that you trust them and they’re not going to use it as a weapon against you, that it’s a trusted partner, someone you want to go have lunch or dinner with, that you wouldn’t mind having your families get together at some point. Obviously, there’s always business relationships, but at the end of the day, it’s got to have a personal relationship because it’s all about trust.
And it’s two ways. When you get an investment from someone, they’re trusting you to return that. But you’re also trusting that they’re going to believe in you. It’s not just a business transaction. Because with all the failed startups out there, because there’s still going to be tons more, this is about a long-term relationship. So, even if a startup doesn’t work out, there are so many entrepreneurs that I’d back again because I saw him in the tough times, through the hard times – because that’s when you really know a person, is when, whether it’s on the investor side or on the entrepreneur side, when it’s tough times, that you can push each other, you’re there for each other. And you know that in 20 years, you’re going to call each other and go “Hey, I’m here. You know, when it was tough you were there for me, I’m there for you.” Whatever it is, no matter how much we read in the media and all the BS and social networks, taking people down and everything, it’s about that relationship at the end of the day, not what the media says or what’s the latest thing on Twitter.
So, the reason why I’m successful is because of the relationships I hope I’ve invested in. This is not about transactions, it’s about relationships. And it’s a two-way street. Because you’re getting married. Look, the investor’s getting married to an entrepreneur. And an entrepreneur is getting married to a partner, not a VC firm. And a VC firm is made up of really good partners, if they’re really good.
So, yeah, there’s bad actors out there and bad firms. You’ve got to be much smarter as an entrepreneur and you’ve got to be much smarter as an investor to make sure that it’s not just “I’m putting my money into something because, oh, my god, it’s the next hottest thing.” It’s because you really believe it. And at the end of the day, it’s not about who gives you the biggest pre-money valuation or whatever. You’re going to see it in the terms, you’re going to see in how fast they work together, how fast they get back to you, how much value they can add, and it requires both sides. Because an entrepreneur with too much ego, forget it, I will never invest in that. And the VC who thinks that they’re the new CEO on the board, you don’t want that either.
So, look, take capital from good folks and only invest in good folks, because, look, inevitably, a lot of things are going to go south, it’s not going to work out like we all want it to. You get one in five, one in ten, is a great homerun. We don’t hear about all the failures, but they do happen, and you got to be there for that. And let’s just remember it is about people and relationships, not about transactions and money.
ZARA ZHANG: So, we’re going to proceed to the final part of the interview, which is a round of rapid-fire questions. The first one: Who is an entrepreneur you admire the most and why?
TONY FADELL: Right now, the best visionary-operator, all-around kind of businessman, quiet, smart, everything, Jeff Bezos. Jeff, without a doubt. I watched his site go up the first time; I think it was in 1994. And to see the long-term thinking, the absolute long-term thinking there, very Chinese-like in many ways.
HANS TUNG: I’m glad you said it. That’s how we feel.
TONY FADELL: The ability to keep rolling the dice and saying, “I’m not going to give back the money and buy shares back from shareholders. I’m going to continue to invest in myself.” That’s an amazing thing to watch where it’s at. And of course, now he’s got a huge responsibility to the world. To not just show how business is done right but to show how to be done in a socially conscious manner is a whole new phase for them, because they can make a lot of great changes for the world and in many directions. So, I’m looking forward to seeing the next phase of Jeff and where he goes with that. But what he’s done in the last 20 years –
HANS TUNG: Amazing.
TONY FADELL: Absolutely. Hats off. It’s undeniable.
HANS TUNG: You don’t have to answers this question, or if you do, we’ll have to broadcast it. But everyone would think or call Elon Musk the next Steve Jobs. What do you think about that?
TONY FADELL: I think they’re two totally very different people. I’ve met and spent time with Elon, and I spent a lot of time with Steve. They are very different people.
HANS TUNG: How so?
TONY FADELL: Let’s just leave it at that.
HANS TUNG: Okay, next question.
ZARA ZHANG: What’s something you read recently that you would recommend, either a book or article?
TONY FADELL: Well, they’re two older books. Some people might think they’re older but they’re absolutely – I think about them on almost a daily basis, and a third book as well from a design perspective. But there’s from Daniel Kahneman; that’s Thinking Fast and Slow. And the other one is Sapiens. Sapiens just rocked my world. So, those two books. Sapiens is so much about society, and Thinking Fast and Slow is so much about the individual. And when you combine the thoughts in both of those books and where we’re going with societies, where we’re going with the individual, and where we’re going with the individual as a computer, an AI thing, you put those together and it’s a synthesis for helping you understand the world in a better way, to help you make better decisions as a leader for where we need to go as a society of people, and a society of people that company-evolve with machines. So, I take those.
The third book that I’d recommend—and this is only from seeing things in a different way, to get out of your space, if you can’t move to go see things differently—is a book called In Praise of Shadows. I don’t know if you know it, but it’s only a 60- or 70-page book and it’s by a Japanese author in 1930 who wrote down all of his comparisons of the old Asian Japanese world to the more Western modernized world, when things were becoming electrified and machines lights and everything were coming to Japan, and the differences between them. And you can then see like “oh my god, there’s a different way of living” and maybe the way we’re living today isn’t the most effective way. There might be some older things or some different ways of looking at things. So, it makes you rethink your surroundings and help you tune into that what is it that I’ve habituated, that I’ve kind of suppressed, that I need to go look at again and re-think of in a new light to get your mind flowing again for creative juices.
ZARA ZHANG: What do you do for fun?
TONY FADELL: What do I do for fun? I love to bike. I love to run, yoga. So, I do yoga a lot. Music, without a doubt. I can’t get enough music. Music, music, music. Concerts, going to a lot of concerts. What’s also fun now for me is watching my kids grow and going out surfing when I know the kids can surf better than me. I try, but they’re already like well past it.
HANS TUNG: That’s impressive.
TONY FADELL: So, fun for me is watching them grow, and our family grow. But the other thing that’s fun is watching these startups grow. They’re all little kids in a way, and watching them mature and watching the leaders, not just the entrepreneur, the founder, but watching the management team grow and seeing them go through different phases and you’re like “Wow!” It’s really amazing to watch. So, those are all fun things for me and I’m only doing the things I like in my life because they’re fun, because I don’t have to do anything I don’t like.
HANS TUNG: Your answer got me thinking of another question, which is, a lot of people who do well or achieve a lot in life are quite intense and operate at a faster speed. But when you try to manage a large organization, people operate at different speeds. So how do you reconcile that to get everyone moving in the right direction without burning a lot of them with the level of intensity?
TONY FADELL: It’s a really great question, but it’s all relative. Sometimes you can push too hard because that’s what you want. You also have to remember that good decisions don’t just happen fast; it does take some time. So, you can have analysis paralysis, but you also can’t make knee-jerk reactions based on gut. There are fact-based decisions and opinion-based decisions, and leaders need to know the difference.
Opinion-based ones should be made by a core team or one person and continue that, and fact-based ones, as long as you don’t get an analysis paralysis, it should be fast, and so they make a good enough decision. You know what the basis was of making that decision; you can undo it if the assumptions change. So, if you’re working 100 hours a week, 120 hours a week, no way. Look, it’s not going to happen. It’s not sustainable. That’s what happened when I was in my 20s, and I had to reboot my life because of it. I think Elon Musk is learning that right now. You can’t work that hard. You’re not going to make a decision.
So, your organization needs to move fast. You set up the main goals, they set up the sub-goals, and then they give back to you the tasks and the work product, the deliverables and the timing, and then you can negotiate over that, and you push. And what normally happens is one team says, “I can move this fast,” the other team says, “I can move that fast,” and they have to work together because there are no teams that work in the silo. So, they’re normally “push you, pull me” kind of experience as long as you have it laid out, but you have to agree on what the parameters are and those things up front. It sucks, it’s not fun, and things change all the time. But until people understand that relationship and that bonding, and that they each have to work with each other and under some kind of schedule of deliverables, that’s when the whole thing gets moving.
It’s your job as a leader to set the mission and set the major goals. Let them come back with the details and make sure you all agree. But then each team’s going to push each other, and as soon as it comes up, it’s like “You want me to get involved? I can help him push him along if you like and I will.” And if it happens enough times, then you’ll know you need to replace the person.
Or sometimes they rise to the challenge. But typically, I see if you hired well enough, people will rise to the challenge as long as you’re not, number one, overdoing it, like going too fast. You can explain your decisions. And that you’ve set up some framework for a scheduling so that everybody understands their interdependencies so everything can move faster. So, you got to have good tools to make that happen. But they all have to relatively be on the same page. If not, you’re going to find out very quickly to trim off those people.
And then the other one, when you’re at a certain enough size, is you make sure you have mentoring inside the company so that the mentor, third-party mentor—not internal—third-party mentor comes in and can then be that advocate for whichever party is moving too fast or moving too slow or whatever, to help you normalize what’s really going on, because all that you’re going to do is get a lot of people pointing to each other. It’s this blaming and blaming and blaming. And the more times I get people blaming, I always say, “Look, you can come and complain to me as much as you want. Okay, both of you, show up in my office. I’m going to make a decision that neither of you are going to like. So, you guys figure it out before you get in this meeting.”
Meetings should never be about the arguments inside the meeting unless something new happened or it’s some disaster planning or who knows what it is. Those things should be all worked out, just like a great board meeting. A great board meeting goes really smoothly because all of those individual issues got worked out well before the board meeting and the board meeting is a formality. Large team meetings are also the same way. We talk about the big things and we get through with the big decisions, not the little stuff, the squabbling.
So, that’s about being a professional and learning that and having a mentor there to help those people learn that because you really have a lot of young teammates and they start doing the old pointing fingers and everything. They don’t understand what it means to be a true professional. That’s just lack of experience in a team, but that can be learned quickly if you have the right tools and processes.
HANS TUNG: As a follow-up question, all of you in the Valley obviously believe in work-life balance, and I also thought that you can’t really make it work like Chinese speak which is, at least 996, which is the name of this podcast, which is 9 a.m. to 9 p.m., 6 days a week. That is not possible, and you think that –
TONY FADELL: No, that’s not possible.
HANS TUNG: To do innovations in the environment. But between those two kinds of arguments, where do you think truth lies and how could some of the team move fast, work hard, and still innovate?
TONY FADELL: First, they have to understand what their true value and differentiation is. If you understand what your differentiation is and the value, then you work really hard on that and you have to work double time to build it till it gets to a certain extent. There are certain crunch periods when it’s a week or two weeks where we’re all shipping something or something’s got to happen. Yes, there’s going to be extra time and, yeah, it could be 996, it could be 997, whatever it takes. But it can’t be that all the time because, again, just like you can be in the echo chamber of a city or an industry, you can be in the echo chamber of a company, and you can never get to see what reality is like outside and know what the real problems are because all you’re doing is solving, coming in, and probably you don’t even remember what your own problems are, again, inside yourself or inside your family.
So, everybody needs time to process. I always say, “Sometimes you need to slow down to speed up.” That means having the proper checkpoints, product development checkpoints, proper board meetings, the proper communications. It doesn’t mean it needs to be lots of red tape and tons of processes, but you got to slow down in some cases to be able to go faster, so that you don’t make the mistakes. And that’s about, again, experience management as opposed to “we’ll just work faster and harder and we’ll get it solved.” It doesn’t work that way. Because you’re going to do that, and like you said, you’re going to end up burning up. It’s just not going to work.
I’ve seen that a lot in startups and young managers. I also see it a lot where I’ve been in various places in China. It’s not thoughtful. You got to step on the gas and step on the brakes sometimes. And frankly, some of my best ideas and best solutions to problems have happened when I’m away from it, for just even a few hours, when I go for that run. Don’t go for a run and have music on. Don’t go for whatever and be distracted because you’re sitting there walking and you’re still on your phone. You got to have a shutdown time. It doesn’t mean sleep, and it does mean having another meeting. Literally, I call it “Tony time.” I got to have Tony time. There’s nothing. I turn everything off. It’s just like “Okay.” And I’m not thinking about, it but all of a sudden, boom! The solution to the problem shows up in your brain. People think that working harder is going to solve it. It’s not always. Most of the time, it’s not.
HANS TUNG: But the world’s increasingly extremely global. Do you worry about the mindset of Silicon Valley as being not hungry enough or not aware enough of what’s going on?
TONY FADELL: I think that people are a product of the culture they live. Just like I needed to get out of Silicon Valley after 25 years, it’s great, nothing wrong with it, but I get to learn new ways. I think that each person should understand that there’s great things about all kinds of places and there’s not so great things about that. Nowadays, because of the democratization of technology, you should go to different places and see how they innovate and see how they build their companies and how they get along. I’m not saying you got to do it much but you got to have more than one data point to know the right way to do things.
A lot of people who are in Silicon Valley for whatever ask me “What would you do right now if you were me?” And I said, “You’re in your 20s. Go somewhere, go anywhere.” Go to China, go to Korea, go to Europe. Go somewhere else for three months. Just go live there. Go see what it’s all about, build a network outside, so you get a new baseline of what’s going on around the world so you come back with fresh ideas and you’re valuable to someone. Even if you have to go back for whatever reason, you’re valuable because you have a different perspective than what everyone else says. What do colleges look for? They look for people who are differentiated. Differentiate yourself. It’s not going to happen when you’re in the same place all the time. Go differentiate yourself and go challenge yourself somewhere else, and go learn about a place or learn about a new sect or learn about a new thing. So, you come back and you’re more valuable for yourself and more valuable for other people around you.
ZARA ZHANG: Tony, thank you so much for your time.
TONY FADELL: Thank you. This is great. It’s a lot of fun, a lot of fun.
HANS TUNG: Thanks for listening to this episode of 996.
ZARA ZHANG: GGV Capital is a multi-stage venture capital firm based in Silicon Valley, Shanghai, and Beijing. We have been partnering with leading technology entrepreneurs for the past 18 years, from seed to pre-IPO, with $6.2 billion in capital under management across 13 funds. GGV invests in consumer new retail, social Internet, enterprise cloud, and frontier tech.
GGV has invested in over 290 companies with more than 45 companies valued at over $1 billion. Portfolio companies include Airbnb, Alibaba, Ctrip, Didi Chuxing, Domo, Hashicorp, Hellobike, Houzz, Keep, Slack, Square, Toutiao, Wish, Xiaohongshu, YY, and others. Find out more at ggvc.com.
We also highly recommend joining our listeners WeChat group and Slack channel, where we regularly share insights, events, and job opportunities related to tech in China. Join these groups at 996.ggvc.com/community.
HANS TUNG: If you have any feedback on this podcast, or would like to recommend a guest, please email us at firstname.lastname@example.org.