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Tony Fadell Q&A: Post-Nest life in Paris, investing in deep tech, and his global search for inspiration



As big names in Silicon Valley go, Tony Fadell is right up there among the biggest. Credited with creating the iPod for Apple, working on the iPhone, and founding smart home pioneer Nest, Fadell has a resume that’s hard to beat.

But here’s the thing: He no longer lives in Silicon Valley. He sold Nest to Google in 2014 for $ 3.2 billion and then left in the summer of 2016 amid the corporate reshuffling that had created the Alphabet structure. Fadell eventually relocated to Paris, where has been living full-time ever since.

He’s now primarily focused on Future Shape, an investment and advising vehicle that began as a kind of side project eight years ago. Before, during, and after Nest, Fadell had been personally investing in hundreds of startups around the world. Future Shape has now backed about 250 startups and has an estimated worth of between $ 500 million and $ 1 billion. But it’s not a VC fund. All the money comes from Fadell.

On December 19, I was invited to interview Fadell on stage in the auditorium at Paris’ Station F startup campus. Station F, which opened this past summer, was conceived and funded by French telecom entrepreneur Xavier Niel. Future Shape has an office there. The event was part of an official soirée for La French Tech, the government program that supports startups. The party was also a kind of send-off for the 365 French technology companies that will be attending CES next week.

The following is a transcript of our conversation, edited for length and clarity.

VentureBeat: What was the origin of Future Shape?

Tony Fadell: I’ve been investing now for over eight years. So it started right when my wife and I left Apple (2008). And we came here and lived in Paris for about eight months back then. And I started investing because I had time … It wasn’t really about making money with the investments, even though it was serious business. It was about learning through the eyes of all these really interesting entrepreneurs doing hard things — learning, and maybe being able to contribute. So for me, it’s about finding really, really smart people wherever they are around the world, having a great discussion with them, and living inside their world. And hopefully learning, and hopefully exchanging ideas to help them get to learn about the experiences I had, help them avoid things or find things. It’s really just this way to get people to give me sort of a job.

I have over 250 investments around the world. And they’re mostly in deep tech. They’re sector-agnostic. We just take our personal money and place it into all of these companies so we get on the tip of the spear, where there is the best team, the best idea for that given kind of business around the world.

VentureBeat: Can you describe the approach and the philosophy of Future Shape?

Fadell: The framework was solely, “Here are the problems I’ve seen in the world that I know about through my adventures, my experiences, and what I am really curious about, what I really care about.” And by doing that, it allowed me to follow my curiosity. That’s how the iPod happened, because I followed my curiosity. That, and the knowledge that I have, tuning in to what I think customers need or problems in the world. Because I learned over time that timing is everything. And understanding where technology is versus the ability of society to adopt that technology. In 1991, we created the iPhone [when Fadell was working for General Magic], just 15 years too soon. And then I just kept on it in different paths until we got to the iPhone eventually. But it took a lot of weaving and bobbing.

VentureBeat: You’ve been investing for many years, including throughout your time at Nest. What’s changed now that you can focus full-time on Future Shape? And why not continue to do that from Silicon Valley?

Fadell: I think now the difference is because I have more time, I pour more into it in terms of having a team. So we have people in San Francisco, we have people here [at Station F in Paris], and we’re probably adding some people around the world as well to be part of the networks and part of the research institutions and incubators, instead of being more like Silicon Valley, where it’s like, “You must come to us.” Frankly, after being in Silicon Valley for 26 years, it was like: There’s a lot of life to live all around the world, so let’s go live life and be where other interesting people are. Because there are interesting people all around the world. And let’s learn from them in their space and learn about the need of that country or that territory to try to generate new businesses there that can actually go across the world. So, it was one part selfish curiosity. Let’s go live in other places in the world than Silicon Valley … Living as an American here, you’re not so comfortable anymore, which is great. It makes me learn.

<bVentureBeat: So you officially live in Paris now…

Fadell: Yes, the last year and half. J’habite à Paris.

VentureBeat: But you have a longer history with Paris. You originally came here after you left Apple. What inspired you at the time to leave Silicon Valley?

Fadell: My whole career has been going to places and working with people and talking to startups that most people would ignore because they are not mainstream. Whenever you go with the mainstream, the way I see it, you’re going with the herd. People zig, I zag. I always try to find the other way to go around things. Because for me, I’m curious. Okay, what if I go there when everyone else is going “What can I find over here?” And then you sometimes stumble on the path that is very different from everybody else. The only reason why Nest happened is because my wife and I and our family went around the world for a year and a half, and we lived in different homes all around the world and I saw all these homes. And when we settled down here, I actually wrote the business plan for Nest because I wasn’t hearing what everyone else was talking about, “Oh, this is the latest and greatest thing … no this is the latest and greatest thing.” You go off on a tangent and you find your own ideas. I found inspiration going to all the different museums here and seeing artists in different periods. Artists had certain periods, and then they’d go take a break. And then they’d go and live somewhere else and then they’d create a new set of art, and then they’d go somewhere else and take a break and get some new inspiration.

And so that’s the way I’ve been doing it the last eight years. And I hope to do that for the rest of my life — and hopefully for my family as well, to continue to get that inspiration and meet new people and pick up new ideas from all around the world. It takes a team and it takes an inspiration to get these next-generation things. And not just copying the herd.

VentureBeat: Now that you’re living in Paris full-time, what’s changed since you first came in 2009? And how did you get connected to Xavier Niel?

Fadell: It’s dramatically different. Eight years ago, we were living in the sixth [arrondissement], and we were tourists. And after the first two months, I’m going stir crazy because we had already been on the road for a year with the family in Hawaii and the South of France and Spain. And my brain was like, “I can’t be retired. This is crazy. My brain needs oxygen.” And so I reached out to some friends that I knew who were global citizens, and I said, “I’m in France. Who should I meet?” Because I couldn’t find anyone. I couldn’t find other entrepreneurs. It was all just big companies. And my friend writes back and says, “You would meet Xavier Niel.” I had no idea who Xavier Niel was. So, 40 hours later I’m sitting in an office at Free, and I’m like, “What is this? Who is this?” I found Nirvana in Paris, France. And Xavier and I were sitting there and talking for like, three or four hours. We were talking about the Apple II days, 300 baud modems, and I’m like, “Oh My God!” and I come running home and my wife was like “What just happened to you? Did you just have an affair down the street or something? You seem too jacked up.” And it was literally because I met Xavier. And through that, and through his eyes, because we would come back every six months, or every year, and then we’d come live here for a month in the summer, I kept hearing about things. And then I started going to École 42. And then I’m like, wait a minute, what’s going on here? And he told me about Station F five years ago. And I’m watching this, and then I’m hearing from other friends that this is going on and this is going on and the app economy is starting. And so every year, I’d come back. And what felt like the Dark Ages eight years ago, now I’m telling everyone, “Do you know what’s going on here?” One day, it’s going to take just one big company that comes out of here or any of these incubators around France. And all of a sudden, it’s going to be even more on the map than it is now. But it just takes one. And there’s enough environment, there’s enough of the right brains and people and the government that something’s going to pop. And I want to be in the front seat watching and helping to see if we can get there.

VentureBeat: A lot of people in the audience tonight are with French startups that will be going to CES next month. Getting to Silicon Valley still seems to part of the dream for French entrepreneurs. What advice do you have for them about CES and Silicon Valley?

Fadell: I understand that. When it was 1988 or ’89, I had to get to Silicon Valley, too. There was no internet. There was nothing. You just had to go. And you heard about these streets paved with gold, and it was all about technology. And then you show up and get to know what it’s really like. It’s very different today than it was when I first got there. And CES as well. My first CES was ‘88. And it’s totally changed, probably three times. Because I went 15, 16 years in a row.

To compare and contrast, Silicon Valley back then was much more like Paris, France is today. It was pre-internet, it was all about corporations and networks in ’89 and ’91. You couldn’t have a lot of startups. You could do enterprise software startups, but it was really hard. And at CES it was only about the biggest brands, and Sony having the biggest booth, and it was all ego shows. Because there was no internet to get the message out. Today, flip it, a lot of the big brands don’t even go to the show anymore because they can have their own events, they can do a lot of stuff online. It’s not capital efficient to do it. These ego things are over. Even the auto companies are pulling back. Now CES has become a mélange of different startups and midsize companies. There are fewer big booths. People are still selling televisions like they have been for 40 years. But it’s a very different kind of gathering. That said, it’s not a place where you’re going to be seen. It’s going to be a place where you get to see a lot of different things and you get to see a lot of bad stuff, too. But you get to get amongst it all and see how vast it is and all the people doing a lot of different things. It’s interesting to build a network around that and see what else is going on.

In Silicon Valley now, it’s so many people, there’s so much stuff going on. But you only hear about the very, very top of the pyramid. You look at the thousands and thousands of startups that go bust every year. Most people don’t hear anything about them. And there are tons and tons. And everyone thinks you need to go there, and make your startup. But if you don’t really have a good grounding and network in Silicon Valley, it’s going to take you years to build it. And so to just say, “I’m going to run over there and do it,” maybe it makes sense if you have a sales office. But for technology and trying to recruit engineers, it’s really, really difficult.

VentureBeat: What would you say to entrepreneurs in France who still feel like they need to get to Silicon Valley to go faster, and especially to raise the money they need?

Fadell: It’s really hard to get that. Look, if you have an incredibly awesome business, it’s going to get into the network and it’s going to be like traveling by fiber-optic cable. And if it’s a great thing, as long as you get the right entry point, a person who’s talking about it, it spreads like wildfire. Believe me, I have more deal flow than I know what to do with here. Not just in France, but worldwide. We have our team sorting it. We still can’t process enough deal flow. If it is good, it will land in the email box of whoever you want it to land on — if it’s really damn good and you really have a good enough vector in the network. So you do not have to assume you have to be in Silicon Valley.

VentureBeat: So entrepreneurs should use CES to network and educate themselves?

Fadell: And network with individuals who can help you with that vector. I will say this: The quality of the business plans I’ve seen the last year and a half in France, in Europe, have been getting better. But to get across that bar, there’s not a lot. They’re still working up to that bar, and they’ve got to hear “no” a lot. But I think they have to hear “no” a lot from the right people. I feel that quality inching up, which is great. But it takes time. Silicon Valley is Silicon Valley because it was 50 years of building Silicon Valley. We’re at the very early stages. You’ve gotta give it 10 years, 15 years, to really see that incredible second-time, third-time entrepreneur, who has really been through all those phases to really then be able to make that big company.

VentureBeat: We’re been hearing a lot about “deep tech” in France and Europe. What does that phrase mean to you?

Fadell: Deep tech is a different way of saying the VCs who have gotten really easy ways of making money because of the social mobile app experiences, those are long in the tooth now. Good luck finding those startups. It’s called going back to the old days, the ’80s and ’90s, the ’70s even, when you had to work really hard and you didn’t know if there was a market because you didn’t have data. And you had to go and get started knowing it’s going to be five to seven [years] before you can see some results. You start with research that comes out or some piece of silicon or some thing that’s going to disrupt the market. Not just, okay, let’s modify this thing and put a mobile app on it and go. It’s very likely these are long investments. They’re still capital-efficient for what they are. But they’re nowhere near as capital-efficient as some kind of hockey stick growth you get with 12 people.

Deep tech is a thing that says you’re going to take a long time to make this happen. And most VCs are like, “Where are the old days, the quick fast days?” It’s really about getting back to the roots, building companies from this technological advantage, a disruptive technological advantage that unseats the competitors that are already in a given market.

VentureBeat: Given the wide range of disciplines covered by deep tech, how do you evaluate the technologies?

Fadell: Typically, given the 30 years I’ve been at this, you know a little bit about a lot of things. And you know how to ask the right questions so you don’t get snowed. And there are certain times when I call up someone and say, “Hey do you know this person, do you know this science?” And sometimes I’ll get all the way to the end and think this is all great, and I’ll talk to one expert and they’ll go, “Let me tell you, this has been tried before, here are the reasons it didn’t work.” And the entrepreneur was blind to that. And after spending three months on diligence, I stopped the deal.

And when you invest in deep tech, you can’t just go it alone. Very few people invest in deep tech. They say they do, but they don’t really have the gumption to do it. They say they want to. But at the end of the day, they don’t like the numbers. They don’t like the long timeline and all the risk involved. So there are a few of us all round the world who band together, kind of like super angels, in a way, or deep tech VCs. And if I don’t know the science, that other person does. Or they know somebody who knows it really well at that university, and so we share these deals all the time. And those things circulate.

And like I said, when it’s a great plan, a deep tech plan, if it gets to the right one of us, it spreads like a virus.

VentureBeat: So when it comes to France and deep tech, what are the strong and the weak points you see?

Fadell: So, I find that there are incredible researchers in all kinds of fields: bio, silicon, RF (radio frequency), all sorts of different areas. The problem is getting those researchers to think like business people and to want to take it on [the entrepreneurial challenge]. They’ll go get someone else to be CEO and take it on. If you think about how it’s done at MIT, if you think about how it’s done at Stanford, it’s literally a revolving door. Professors go to start a startup and then come back in. It’s an endlessly revolving cycle. Because they see all their colleagues doing it. And it took some time for that environment to be created … I don’t see enough of that. There’s great stuff. But how does it get extracted?

And I do think that it’s just a matter of time and, again, a few successes here and there, and it’s going to start that flywheel spinning.

Also, it’s too hard to find these little things. If I’m around Stanford or MIT or Virginia Tech or whatever, they’re just everywhere. You can’t walk down the street without hitting another deep tech startup. Here, you gotta go find them. You might find a researcher. But until you have the deep tech idea with the entrepreneur who wants to go off and do it … it doesn’t work because these are seven- to 10-year endeavors.

VentureBeat: So how do you find these ideas in universities here or research institutions? Is it the institution that contacts you? Or is it the researcher who reaches out for help?

Fadell: It’s people who are in these research institutions or who are in these incubators attached to these research institutions who are going, “I need help.” And they just email someone. They email the right person or they go find them on LinkedIn or whatever, and they say, “Send me a plan.” And they do, and that’s all it takes. A lot of times they’re thinking we’re going to come to them. We’re here, but we’re not going to find every single researcher. You better reach out. The only reason I got to Silicon Valley was because I emailed … well, not email because this was back in the day … but I wrote actual letters and printed them out on a laser printer and sent them over to various companies that I thought were interesting because I read about them in MacWeek, or whatever it was. But that’s the way people found me and I got in. You’ve got to make a real effort when you think you have something great to find the people who you want to work with, who you think can help. And I wish more people would do that. I can’t tell you how many people I get random stuff from from the States. But from here, it’s a little bit less likely. And I don’t think it’s a language issue by any means.

VentureBeat: Any last advice for entrepreneurs in the audience tonight?

Fadell: Failure, failure, failure is going to happen. Learn from your failure. It took seven startups and lots of years of hard work to make it happen, even in Silicon Valley. And most startups, and most successful entrepreneurs, it’s not their first try. And they’re not in their 20s. They’re in their mid-30s to their mid-40s. That’s when success normally happens. And they had lots of failures along the way. So anyone who thinks they’re just going to chase the money and they think it’s going to happen right away … lightening does strike, but it doesn’t strike very often. But if you have that passion — do it. Because it’s an amazing experience. And continue to do it. But you really have to understand, you’re really going to have to try a lot of times, and you’re going to fail a lot of times. Just don’t give up. Just make sure you surround yourself with good people who you’re learning from at all time.

Social – VentureBeat

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