Gadgetory

our first guest is an awesome dude incredibly smart really good-looking and has I think some very interesting stories to tell so please welcome Tony Fadell we got you simply got you some water whoa we're gonna watch out boys and that's broken this is our thing we keep saying we're gonna replace it but it's more fun to just leave it and also way cheaper yeah Tony Tony thank you for joining us you're a fascinating dude you've done a lot guess I mean you're doing more stuff and I want to talk about some of it here so I didn't do as much before the Internet I actually worked before the Internet what did you do what did you do I was a great engineer you should talk to Paul about this so what did you do actually slept better before the internet did you yeah because you didn't get emails every every five seconds yeah anyway did you ever wake up in a panic in the middle of the night thinking that you need to like check your email absolutely yeah I did the same thing right I refer to as the editors nap but I guess you might have a different name for it insane it is it is insane he no little you got to sleep better you actually could have a weekend there was not this flow rush of information like Oh what do I need to buy now at 2:00 in the morning I'm pretty just or to go out to the forest and you know chop some trees down and I don't know what do people do I I had to do that back in the day yeah you could actually go into the garage and like saw some wood and build something so so you weren't exactly in a garage but you were at Apple a little while ago and you were at Apple during and we bunch of new stuff that we're gonna talk about but I want to talk about this a little bit you were at Apple during a particularly exciting time I mean it's always exciting at Apple it's yeah they were they had some dark years and they came out of the darkness and you were there for like that portion right exactly you were involved in Rhian volved in the original iPod absolutely worked on that I I presented the original model right to Steve did you yes you were like here's what we should do I was a common for six weeks was the wheel there I was a contract for six weeks I presented the the business and the product you know a Styrofoam form and in that meeting we signed off on it and and when went ahead with it and you went you started working at Apple building that yeah just a few weeks later I joined the company and and so who's responsible for the wheel was it you so the response floor wheel was actually a Phil Schiller really Schiller Schiller was the best very smart guy great guy he is a genius hates Instagram now though apparently so so but so you worked on the iPod you worked on a bunch of iPods it was 18 generations so iPod Nano just about every one iPod touch iPod touch iPod clash of all shuffle classic the video iPod the photo I had on is there a mini nano the mini yeah the fat mini is the mini the fat one yeah oh no that's fat nano nano right right and then a dough got really skinny right exactly like weird is good it's yeah the only one I really didn't do was the the one that touched nano that's out now oh yeah the one that's like basically every wants making a watch exactly and but you also worked on the iPhone yes the first three generations so you were there for the inception the creation of the original iPhone absolutely and how did that so how did that go like how where did that come from was that we did Steve you'll run into the engineers I don't know where he would run into did he run anywhere probably not did he did walk in somewhere and see what one asked yeah I want to make this thing here's what it looks like what was it and it was there was all kinds of different just Stations of it actually did three different types of iPhones there was a ipod plus phone and then there was the iPhone and then there was the next generation iPhone man that's the one that actually shipped did he have a keyboard none of them that was there ever there was never a virtual keyboard yeah but like there was never version of like a QWERTY never really it wasn't it was it even discussed well it was definitely discussed it was it was a heated topic really yeah absolutely were there people that were before it and people that were against it absolutely you for it or against it I had known a lot about touchscreens and I've given my 15 years of the time and so I was skeptical I wanted to try it first so you really got a hardware guy you were like let's do a hardware keyboard no I was just I want to try it I want it to work because it made sense that you wanted a full screen you didn't just want a little keyboard what the biggest problem with the the iPod plus phone was that we had a little screen and we had this hardware wheel and we were literally like we were making an iPod and iPod making calls exactly that seems like it would be kind of not intuitive well you could make the old dial well yeah I know a perfect recreation of a phone that hasn't been made in 50 years sometimes you have to try things to throw it away yeah and so but so you were there for that for the original iPhone the 3G and 3GS that's right and then you bail you're like ugh I hate making all these wonderful successful products no no I actually I hate all this money Apple money that after the first year I actually met my wife at Apple and we were there for nine years and we were running and working so hard and we had two little ones a one in a two year old is that common is there a lot of romance on the Apple Campus yeah a lotta Lotta hooking up yeah absolutely really real I have some interesting started real nasty stuff orgies or he's on the I never heard of those but maybe my wife did she was head of HR you are in trouble right now okay and my apologies to your wife first weird story anyhow but so you left Apple in what year was 2000 and fish aliy 2010 okay so not that long ago and then you were like okay I can finally make a thermostat did you ever picture 30 cuz did your go in there and say guys we got to build a thermostat no really not look like Steve I did not put this over the next wave man no thermostat the first person I pitch was my wife and she went what she was like the IBI guy what well it's got it's got a wheel kind of it does you know absolute so okay so you went into business you and you were like I want to make a thermostat what was the what was the was the desire behind that like where where did that come from well really I was I was with my wife designing a next generation home a green home and a connected home a fully connected home I we were starting this design before the iPhone came out and before the iPad came out so I knew I knew that those things were coming and so I was saying when you have a device in your hand all the time your interface to the world how does the world around you change is that is that illegal if you know the product is coming to bill the product based on it was just for me and my wife oh you're like I just doesn't gonna build one we know we were just building a house okay building okay so you were like the iPad is coming and we said okay well how is this house gonna change when you have this interface right and so we went through every single system lights and all these different things and at the end of the day I was going well I want to control your thermostat because this is in Lake Tahoe and you want to change it because it's very expensive to heat and cool the house right and so I wanted to change it from anywhere so I was looking all over the internet for something couldn't find anything and I just said like wife but they boy if I connected thermostats at Home Depot have you tried them Honeywell makes a great Wi-Fi product not that I know of a really tremendous do they not not that I know I don't know I'm not really I honestly don't know that much about thermostats I'll be honest with you before you came along I know I did before you before nest existed I don't think anybody in our industry thought about thermostats I mean maybe if you had to replace one you're like oh better call someone to replace this thermos exactly you did it maybe like every 20 years data everywhere you know my house are like painted over you can't even see the numbers on them isn't that actually it's a common thing and and most people forget that $1500 a year is what you spend that thermostat controls so you're like why is something so underappreciated that costs so much money and uses so much energy so you said you were thinking about you know holding these devices and wanting to control them why not just make a box a simple box and have the control always be on an iPhone there oh that's what a lot of people have said to me and you know what I say and they go oh why doesn't the the cell phone just you know when you go away from your house it just shuts this the house down so great and then you you know when you drive up it turns out again well typically the people you talk to you bring up those ideas they don't have a family they don't have kids they don't have people who are in the house so he goes like does everybody have to have a cell phone how does this all work right so you have to think about the one that you want the kids messing with the thermostat though that's always a disaster they're gonna turn it way up turn it wait and gotta teach him rip it off the wall you got to teach him the nest cannot be ripped off the wall though can it it's actually I don't know maybe it can't afford one and then they were sold out when I tried to buy one and this but now we have one actually have some in stock so let's talk about the nest explain to me it's got a circular control it's kind of it's it's got a dot these guys these guys probably know but let's just go through let's go through this did the steps what does it do well in the net the nest is as simply a round dial and 99.9% of the time all you want to do is turn up or down the the thermostat right do you just want to make it cooler or warmer so very simply you just have a ring and that's it and it's got a display on it and it's got a display on it it's a color display and it just gives you the current temperature and it shows you the target temperature and that's about it it gives you a little leaf on it to show you when you've actually selected a temperature that's more energy efficient than than you typically than you typically select and if you have more than one in your house they can talk to each other they talk to each other and there can control it anywhere from anywhere in the world from a iPad and iPhone and Android phone are the apps or is it just like a it's a it's an app or there's a web browser a web browser app for any Safari or Chrome or and ie and so just hardware startups are really hard I mean that's my understanding it's very difficult to be it is small company making hardware it's hard to give them finance yeah and it's hard to find the talent because most of that hardware talent has moved offshore right most people don't design hardware so what are the how does that work I mean how do you how do you go to you know from thinking of this thing to actually go in and I mean you don't have to give me every step but I mean the obviously had to pitch this to to people with money and say I want to make a thermostat didn't work where people resistant to this idea I mean was it seemed to me like you would go we got the money in less than 24 hours really yeah well I've been in the valley over 20 years I've been doing hardware for over 25 years I've been doing connected services for over 15 years so basically it's nice to have a hopefully a good track maybe the freakin iPod ok give me money and I'll deliver so so you did so you did deliver you sold a ton of these how many did you know how many you sold I guess you would know how many we've sold a lot we are a number we are not sharing numbers but we are breaking all of our what are our targets where we're breaking busting through people are freaking out over this thermistor we sold five months of inventory in 72 hours in the first time you five months of inventory we thought we were going to than the store three weeks later we didn't open for five more months because we had so much demand and now finally the store is open for all comers that is insane pret there brother mr. Herman you must feel pretty good it's great what the first day when we actually at our launch party we just invited a bunch of friends we had 500 to 800 people celebrating a thermostat you now can you can you can like do whatever you want to anybody and just remind them of how well the nest sold and they'll just let you do it you can be like I'm gonna steal your car I created the nest get out of my face you know we did it we did a little bit of leaving I'm leaving dinner in the middle of dinner I don't care what you say Tony Fedele made the nest right you do that I would uh no not really I'd like walk into people's houses and like knock a face off it they would say oh you probably thought well I created the nest so that slowdown in 72 hours don't get me what have you done you don't do that that'd be my first thing that I do sold through but you see the back in stock now they're in so I can go by once you can go to Best Buy and buy one you can go to an Eskimo Pie and they're what's through $250 $249 49 49 I'm sorry and most of them are actually it's not viable to sell for 250 mm-hmm why not just say 250 well it's not - $49.99 it's - 49 okay it's a full dollar safe it's a full day it is a mental thing though isn't it I mean people really do you know there's like that 199 is the sweet spot 99 is the sweet spot - 49 it's like its kind of premium but it's not - 50 is it no but no it's not - 50 right so so you've attracted a lot of attention for nest the nest what do you call it we call it the Nest Learning Thermostat you really every time you talk about it we call it the best kind of a mouthful and does it does learn it I could absolutely learn it sees your patterns your habits your the temperatures of the house and well the first thing is 10% of thermostats installed there's 250 million thermostats in the US only 10% of those or any are programmed to save any energy because it's so difficult to program right and so literally when we now have data that shows all of our nest customers actually by it's by learning have 99 99 percent of them have us schedules that they've actually save energy do you know how much energy they're saving yeah we've seen it early we've seen anywhere between 10% and 60 percent on average is about 20 to 25 percent because they they literally just track your habits when you wake up you turn into one temperature when you when you go away another temperature when you go to sleep a different temperature so we just learn those patterns and then we just play them back and then you share that data to Facebook someday your NASA be like check out this new Zynga game it's a perfect display for like playing Tempest do that something should happen is there any opportunity of a game of Tempest on the Ness cuz I that would be like I'm buying one no question and then I would be like oh I got it's cold in here and that I'm taking what it's later taking you know my wife would be like what are you doing level level 18 and tempest got in my face I do I do get stuck do you do this I mean are you a tinkerer I get stuck doing things where I'm like got to go do this and I pick up a phone for a second and then I'm just like yeah you're lost own out for a loss or absolutely so anyhow as I said the nests attract a lot of attention some of them were very heavy but a lot of it very positive oh here it comes a lot of a lot of people excited about it yes very excited some people are heated some people forgive the pun some people get worked up about it little hot under the collar honey well you've been you've been sued by honey well yes we have for for patent infringement yes seven patent said seven pad seven pads and now Honeywell has been around for a thousand years where I was born the honey was been around a long time manaman and really do you know a lot of companies that make thermostats but I have Honeywell thermostats in my house there aren't I know there are other common sorry well then I snuck up and over and they're old and they've got the dial and I can't see them like I guess it's on so they're suing the crap out of you how does that make you feel validated you know you know look we're we're new guys on the scene we think we're doing something really important and they feel threatened i its appear so yeah it appears so because they didn't call us they didn't say hey hey let's work this out man to man they didn't want to settle they weren't like you know what we see you guys are doing some things that look similar maybe we can try to sit down let's talk and I didn't want to do that they don't want to do that they just wanted to publicly address it address it in a court of law okay and and how do you think you're gonna fair in this well we just issued our response and actually you guys post it on the website we did it very much we did post it I don't with me six page I think response did we put us the whole response yes well we're we like to be thorough and neither Neela is a lawyer so anything that's remotely legal he's like strict like salivating and you know that's like his take his jacket on say I got to go to work he like clears his desk that actually happens do you think I'm kidding it's a little frightening but but so so you're gonna you're gonna go to corner on this over this well that's what they want to do we'd rather not but right but you can but you think that you've got it you got a chance to defend yourself welcome to win you know when we looked at it all seven patents they were clearly invalid and what we've said was a baseless and and and did you say they're worse than a patent troll I have a case is that you're so well yeah let me let me describe what if you look at yeah damn right damn right I said they're worse than a Tony Fadell I created the nest knock over a vase yeah just go for it no literally if you look at IP protection out there you see things like Apple suing HTC and that is all about innovation but apples saying let's play fair and then you look at somebody like Microsoft and you saw what they souling patents and all these other things they treat it as a business but once again they're treating innovation is something that is good to have we just want they want to get paid for it they're it's a business if you look at you know even classic patent trolls they want inner innovation to thrive and exist out there and so why do they want that because they have some patents they would like to get paid for theirs as well in all three cases they want innovation to thrive and be a great thing in our case these guys want to stay the status quo they want to be number one and they want to use basically crap patents against us to try to intimidate us in market intimidate our channel and intimidate our customers they're not they do not win an innovation to thrive they're not like let's find a way to work this out no they're like we're gonna see you out they just threw it into court they never called us right so to me that means who would call you the CEO he was here use the rotary phone I've never Honeywell I wish you would have called me I'm Honeywell dammit I don't know really Honeywell he's actually allied signal oh he's allied signal and he changed his name to Honeywell woody brought Honeywell we're talking bout this backstage that Honeywell was Honeywell and then they were bought by a company called allied signal courage by the way sounds like a total totally nefarious like you allied signal is not something you want to deal with but then they went they became Honeywell yeah they move their headquarters from Minneapolis over to New Jersey and they Jersey and they change their name they're going to die okay they're gonna say guys your house and you're dead man it was wonderful knowing you all right sir z-boys so you're gonna go you're gonna go you're gonna fight this we have to well I know you have to we have to and we are we have the best in the business we actually have the person who was next to me for getting basically sued at Apple every every week chip Lawton who joined the team he was the head of the chief patent counsel at Apple does now joined our team he is now part of us he was been advising us for a year Honeywell is going down Apple doesn't screw around and I'm sure this guy doesn't chip is off so I'm sure you've got a pretty good shot well you know we're gonna be tracking it obviously I mean we're fans of innovation I think this I mean you know for for our readers and even for the editors at the site it's this patent stuff is like it's almost it just seems to be overtaking the industry I mean the fact that we're reporting you know 25% 30% of our stuff and I feel like we're reporting on people arguing about ideas right and it's it's a pretty it's it's a pretty crazy point in our industry I mean does it does it scare you do you feel like innovation is being stifled I mean I it looks like innovation is being stifled I think that it it is being stifled in the smaller companies in the larger companies what they're really doing is they're just fighting about markets and trying to make sure they get either get paid or keep them out of the market you know it makes them innovate differently so it does put everybody on - to think twice about what they're doing and and how they're doing it but and it does enrich the lawyers absolutely enriches the lawyers good time to be a lawyer it's ok it's a very good time for you not just didn't silicon but anywhere because you'll get sued in the Court of Texas and the court of right well I mean yet but but there are a lot of there's a lot of Silicon Valley lawyer there's active right absolutely and you know they're loving it and now you've got one we have we have a great set of lawyers ok so so you're doing the thermostat you're gonna fight Honeywell you take Honeywell down you're gonna you're gonna ruin you're gonna ruin Honeywell I'm quoting you those are your words I can say that and I we're going to put Honeywell in the ground so help Tony Fadell you said those words they're a very big company so what's after the thermostat is there an is there a nest is there is something beyond that the thermostat is well right now right now we actually ship 2.0 of our software and so we are continuing on best it's a tempest exactly actually putting in more energy efficiency into the the thermostat just be as software upgrades that happen in the background but next week we're actually going to announce an energy report that comes with your your thermosets so each month you get a kind of a history of what you've done and how you can save more that's personal but but it makes sense though you've got these things on the walls they're connected they can talk to each other home automation is a place that seems like a likely area or a good area for you to go examine you've consider I mean home automation to me I have a new house it's I think all the time like I just wish there was some like the nest seems like this very self-contained sensible beautiful system for doing something then happens in the house that you don't think about that much is that a place you might go I mean there's a lot you can do in a house if you got things talking to each other have you thought about that oh we think about it all the time I have my Rd house that you know I go through and and a lot of times my wife doesn't like what I do the house would I automate it so I learned through what are you doing to the house yes yes I can't just give anything strobe lights turning beds turning beds yeah boy you're just in a lot of trouble tonight so is that so you would get something you consider we're looking at all the things but frankly you know it's we're still small we're still trying to get enough production out for everyone we're still trying to get to other countries Nestor in all 50 states we've actually seen them light up in Canada all across Europe in Saudi Arabia and Japan so we're still just trying to people are there buying the states and then taking them out all around the world so we still just have to build our market there's a huge appetite for this for huge for thermostat there's billions of things that possibly guessed this well when you look at it thermostats 10 million or sold a year in the US 10 million Honeywell thermostats and your to Bob and you're about to change that yeah well we hope you are changing it all right Tony thank you so much for joining us really appreciate it right now everyone and you gotta you gotta you have to come back you got to come back either when you're in the thick of it with Honeywell you probably bill say anything then but but when you win you come back and talk about it thank so much thank you