Lenny's Podcast: Product | Career | Growth
01:13:30 · Tony Fadell
[01:13:30] S0: Look, I was building hardware when it wasn't in Vogue in 1995 and '96. Everyone's like, "Tony," and this was in the Valley, "Tony, you're crazy. It's all about the internet. We don't need any hardware." And then iPod comes, and I was pitching new businesses in '99 and 2000. They're like, "Well, that's the stupidest idea ever." Then the iPod comes out, "Tony, you want to leave Apple and start that business you wanted to do with hardware?" And then it was like, okay. Then it was all software mobile stuff again, like, " Okay, we don't need anything," but we can't get to the next level of software if we don't make the next level of hardware. And the revolution has to happen completely. You got to have the mobile network and the mobile network software for the mobile network to work. You had to have the MP3 player and the MP3 format bits to make that work. We're seeing with AI, we got to have AI plus all the data centers and edge compute to make that work. And then over time, the hardware becomes less, it becomes more mundane. Okay, it doesn't change as much, but all the software starts to then... So I've always just been continually going through the things that I love to do and doing the things at the full stack level, because that's where I know is innovation, that's what we had to do at Nest. We had to innovate at the software level, the hardware level, the network level to get the first thermostat out and then the Nest Protect and all that stuff. If we look now, going on, people are like, if you're a SaaS company or if you're a software only company, your software companies' worthless because anyone can vibe code it into the thing. And then they're like, "We're only funding companies that have atoms in their business plan with software." I'm like, "Duh. Where have you guys been?" So it's just funny to watch these cycles go and happen, and it's like, "Okay, all right, you guys can go chase your tails. I'm going to just keep here doing these full system kind of products and businesses." Yes, they're a lot harder, and yes, they cost more money, and yes, they're going to take longer to scale and adopt and blah, blah, blah, but they have staying power for years.
01:15:42 · Tony Fadell, Lenny Rachitsky
And they bring new features that you could have never had if you just did software only because you need, especially, let's say, in robotics, you need new sensors and new this and new that and what have you. Look at Waymo, it's an electric car with tons of sensors and everything. It's a hardware platform. Maybe it doesn't look as streamlined as maybe a smartphone, but it's an incredible hardware platform with an incredible software platform. And that is something that we're going to be able to innovate on, and it'll become a platform for something else, I'm sure, delivery or this or whatever else. [01:16:19] S1: When Evan Spiegel's on the podcast, Snapchat founder, he said exactly this. This is why they've spent so much money on these specs, and he's just like, "This is the only way to survive in software is you need to have a hardware component now." [01:16:30] S0: Yeah, just very interesting. Everything old is new again, and I've been in this game 35, 40 years. You just see it, and you're like, okay, I was there at '99 when the bottom fell out, and AI is different, but there's a lot of similarities, and we're going to have the gen one companies, the gen two companies. And when people really understand product instead of selling technology platforms that people have to figure out for themselves. So it's fun to watch. It's a game.
01:16:30 · Tony Fadell, Lenny Rachitsky
[01:16:30] S0: Yeah, just very interesting. Everything old is new again, and I've been in this game 35, 40 years. You just see it, and you're like, okay, I was there at '99 when the bottom fell out, and AI is different, but there's a lot of similarities, and we're going to have the gen one companies, the gen two companies. And when people really understand product instead of selling technology platforms that people have to figure out for themselves. So it's fun to watch. It's a game. [01:17:02] S1: Okay. Maybe one more question before we get to our very exciting lightning round. What are you most excited about these days in terms of, I don't know, gadgets or hardware or technology that's emerging? Is there anything you're like, oh, shit, pay attention?
01:17:13 · Tony Fadell
[01:17:13] S0: I've been doing this AI plus hardware thing now, not just at Nest, but in many of the startup companies that we funded at Build. And so company like Simbe Robotics, it's Simbe Robotics. We were doing robotics way back, and now it's not a humanoid, but it does inventory of retail stores. And we've been at it, I don't know, eight years now, seven years, and now it's just taking off, and it does have AI, and it has a robotic platform, and it really solves real pain points for the retailers of inventory. And the workers hate doing inventory, counting everything on every shelf, and all that stuff. So it really works, and I love seeing that stuff. We're doing the same thing at Greyparrot with AI and recycling. It's literally figuring out what things should go in this recycling bin versus that and doing it really fast with cameras and all this stuff. And we've been at that for a few years, and we have AI plus textiles. Most textiles have weaving errors, and color errors, and defects, and things like that. And so people still make all of these products, but then they have to incinerate them because they're not perfect at the end because they don't catch the quality problems early enough in the product. And we're doing AI plus cameras to spot all this stuff. And again, another thing. We've been doing AI and drug design now for 10 years at Orionis, and that's taking off. So I'm really interested in not just these frontier models, and this whole other thing is really good AI that you can trust, scoped correctly with this, solving real problems every day as opposed to pipe dream AGI, okay, you can go solve that. I'm going to go and build all these businesses that really matter right now. And we're finally getting traction because people are like what AI and oh, more robotics and now, all of a sudden, we're in vogue, and we've been here really working on our product-market fit, working on our marketing, working on version 3.0 the device and everything, and people are adopting them. And that's what's wonderful to see. And so I'm excited by all that. We have another one like AI Infusion and doing that, or finally doing tons of software with chemical reactions, and now we have a clean agricultural fuel and oils company that is cleaning up farms all around Central America, and we're almost all atoms plus software in some way.
01:19:46 · Tony Fadell, Lenny Rachitsky
And so it's just nice to be sitting here and knowing that we made these bets a long time ago and we're doing it. Now we're not necessarily... I was early on in Groq, and it was cheap then, and it was like, "Yeah, that's the right way to go." And my friends were in Cerebras, and I got into that, and then it's like, but these are long-term plays, and they're finally coming to fruition, but we did invested in it not when it was hyped, and it's... We were doing it back when unicorns valuations were billions of dollars. Today, if you don't have a $5 billion round raised, you're not anything. It's like, okay, well, that doesn't work from a venture perspective. You never get their venture returns. You can't invest in things when the valuations are already nine digits or 10 digits, and you think you're got a small portfolio that's got like... Uh-uh, that's not the kind of game I want to play. So I'm glad that we are well positioned in all these companies that have real good product-market fit, that came in the right valuations, that we can really help and make big change and deliver painkillers, and we'll let everybody else over there play. So that's what's exciting to me. [01:21:03] S1: Oh man, there's this quote that I used the other day on a different podcast that I think applies to you. It's a quote from the Bible that you were made for a time like this. Feels like all the things are converging around the things that you have been doing for so long, and the technology is finally getting exactly as described to actually something amazing.
01:21:03 · Lenny Rachitsky, Tony Fadell
[01:21:03] S1: Oh man, there's this quote that I used the other day on a different podcast that I think applies to you. It's a quote from the Bible that you were made for a time like this. Feels like all the things are converging around the things that you have been doing for so long, and the technology is finally getting exactly as described to actually something amazing. [01:21:23] S0: Same thing happened to General Magic, right? General Magic iPhone too early, and then I just kept adding and adding and adding, then doing the iPhone. So you stick with it. There's too many people who chase their tail and chase whatever the hottest thing is. When it's already hot, it's already too late to be in it. [01:21:39] S1: For people that don't know what you do these days, you talked about all these companies you work with, help people understand what it is you spend your time on, in case they may want to try to work with you on this stuff.