Tony Fadell: evaluation

Transcript context

…Hermann Hauser. So his question he wanted me to ask you said, "Ask him how he decides what is worth building." Okay. Well, Hermann's great. I've known Hermann since 1987, probably before most of your listeners were even born. But Hermann... Just for context, Hermann was the creator of Acorn Computer, which was the Apple II of the UK back in the '70s. And then he created with his team the ARM processor. So Acorn RISC... So ARM means Acorn RISC Machine from Acorn Computer. And so he was one of... one of the founders of ARM. And so I was talking about processor. Anyway, so that's... so how do... so Hermann and I go way, way back. So the thing is, how do you solve or figure out what is worthy to be built and what's not? So the first thing is I start from pain. Some people start from other directions. I always start from pain. That's what I learned is what are people's pain right now, or you can see it on the horizon, they're going to have pain, and not too far away, but how do you solve for that pain? And typically those pains were because when those products were created, either it was unintentional consequence or it was a limitation of the technology at the time it was created, and it kind of just... it evolved, but it never revolutionized itself. And so it just evolved, and that same pain kind of was it, but it gave you enough of a painkiller for the other problem that having this new pain was worth it. And so I always kind of start with, "Okay, where's our current pain, and are there new technologies to solve that pain? " And like in the thermostat case, Nest, was we could use AI to learn so it can learn when you're there, when you're away, what temperatures you're like, so you don't have to program it, so you can save energy. So the big pain was being either comfortable or saving money because 50% of your energy bill was in this heating and cooling unit that you hated the interface, you didn't know what it was, you just paid the bill. And so it started from that pain and said, "Okay, well, programmable thermostats weren't innovative, but they weren't used." Everyone... A lot of them had it because the energy company would give you rebates for it, but no one knew how to use it because it was arcane. It was- ... give you rebates for it, but no one knew how to use it because it was RK and it was programming a VCR. And so what I said was, "Oh, wait a second, what if it could learn your patterns?" And that was AI. And so now let's put that together in a much cooler looking attractive package that costs five to six times more than the things that you're buying today. But that was the crazy opinion-based decision was, okay, yes, it's going to cost 249, but it's going to save you 800 to $1,200 a year. So it could pay for itself literally within a year or two. So that was the big idea. And AI was brought to bear on that old problem and hopefully solve it in a new way. save you 800 to $1,200 a year. So it could pay for itself literally within a year or two. So that was the big idea. And AI was brought to bear on that old problem and hopefully solve it in a new way. So it starts with the pain, longtime pain, maybe habituated away pain that you have to discover and new technology bonded with that to then bring innovation in, revolution in, and then redefine the space in a way, which is what we did, which is not with just the product but how you installed it. It was always installed by third party installers as opposed to yourself, how you bought it, which was you bought it through the installer, you didn't buy it in Best Buy or somewhere else. So we had to reinvent many different pieces of the puzzle to get Nest to be the Nest. It wasn't just the product. It was all the other things. Just like the iPod wasn't the iPod or the iPhone wasn't the iPhone. It was the iPhone plus the app store, iPod plus iTunes and then the iTunes music store. So you have to think about the full thing you're trying to build, not just the one piece, even though that's what you might remember, you have to remember it's a system that you're going to innovate with.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.