20VC Tony Fadell The Father of The iPod on Mentors, SelfDoubt, Vulnerability, His Relationship To Money, Why Entrepreneurs Need to Be Coachable, Why VCs Need To Be More Direct & Why The First Trillionaire Will Innovate Around Climate Change

Summary Notes


In this engaging conversation, Harry Stebbings interviews Tony Fadell, renowned as the "father of the iPod" and principal at Future Shape, an investment and advisory firm focused on deep technology. Fadell reflects on his entrepreneurial journey, starting from his childhood egg-selling venture to his tenure at Apple, where he led the creation of the iPod and the first three generations of the iPhone, and his role as founder and CEO at Nest Labs before its acquisition by Google. He emphasizes the importance of building trust in sales, being coachable, and the value of mentorship, drawing from his own experiences with mentor Bill Campbell. Fadell also discusses the challenges of discerning genuine relationships in professional settings and the significance of giving back through mentoring. Additionally, he delves into the pressing issue of plastic pollution and the need for a circular economy, advocating for long-term, foundational changes to address environmental concerns. Throughout the conversation, Fadell's passion for innovation and his forward-thinking approach to technology and its societal impact are evident.

Summary Notes

Introduction to Tony Fadell

  • Tony Fadell is a prominent figure in technology, known as the "father of the iPod."
  • He is the principal at Future Shape, an investment and advisory firm.
  • Previously, he was the founder and CEO of Nest Labs, which Google acquired for $3.2 billion.
  • At Apple, he led the team that created the first 18 generations of the iPod and the first three generations of the iPhone.
  • Tony has filed over 300 patents for his work.

"So with that, I'm very, very excited to introduce Tony Fadell, often referred to as the father of the iPod."

The quote introduces Tony Fadell, highlighting his significant contributions to technology and his current role.

Early Entrepreneurial Experience

  • Tony's entrepreneurial spirit was ignited when he started earning his own money through an egg route in third grade.
  • The freedom of having his own money was a pivotal moment for him.
  • His early business endeavors included selling eggs and buying Atari video game cartridges.

"I got my first money when I was in third grade because I had an egg route."

This quote explains Tony's first experience with earning and the sense of independence it gave him, which was instrumental in shaping his entrepreneurial mindset.

Sales and Trust Building

  • Tony learned valuable lessons in sales and trust from his father, who worked for Levi Strauss.
  • His father's approach to sales emphasized relationship-building over immediate transactions.
  • This philosophy taught Tony the importance of making clients successful for long-term relationships.

"Everything's about relationships, not about today, not about the transaction, but about what could happen in a year, five years, or even ten years down the line."

The quote encapsulates the lesson Tony learned from his father about prioritizing long-term relationships over short-term sales.

Discerning Genuine Relationships

  • Tony discusses the challenge of discerning whether people want to form relationships for personal or professional gain.
  • He emphasizes the importance of being upfront about intentions to avoid wasting time.
  • Tony advocates for due diligence and leveraging networks to understand people's motivations.

"I take everything with a grain of salt. Anybody who comes to me cold because I'm like, they probably want something."

This quote reflects Tony's cautious approach to new relationships, highlighting the need to assess the genuine intent behind them.

The Role of Mentors

  • Tony sees himself in the role of a mentor, aiming to give back to the next generation.
  • He believes mentors should offer tough love and honest advice, even if it's not always well-received.
  • Tony credits his success to his mentors and now seeks to provide that guidance to others.

"The only reason why I am here today is because of people like Bill and other mentors that I've had. It's now time to give back."

Tony's quote acknowledges the impact mentors had on his career and his commitment to mentoring others.

Coachability in Founders

  • Tony believes coachability is crucial for founders, especially when they are focused on groundbreaking work.
  • He argues that founders need perspective from outside their immediate focus to succeed.
  • Coachability should not be confused with a lack of vision or mission but seen as a valuable trait for growth and adaptation.

"I think anybody who's trying to do something that the world has never seen before or trying to work with people who've never, they better be coachable because you're going to be so narrowly focused, you're going to be so heads down, you're going to be on a mission that sometimes you're blinded and you need somebody to come from left field to go, wait a second, dude, you're not thinking about this, right?"

The quote highlights the importance of being open to guidance and new perspectives, even for the most driven and visionary founders.## Coachability of CEOs

  • CEOs must be coachable to effectively lead and make decisions.
  • Coachability involves being open to guidance and perspectives that can pull one out of the "weeds" of a problem.
  • A CEO's problems can be personal, company-related, or stem from the macro environment.
  • Uncoachable CEOs may claim to be open to coaching but resist when challenged.
  • Uncoachable CEOs may need to be replaced for the health of the company.

"And if you can't work with a CEO who is coachable, oh my God, I have done that. Right? And it's like they said they're coachable. It's kind of like the relationship we talked about earlier. They say they're coachable, but they really aren't."

This quote highlights the importance of genuine coachability in CEOs and the difficulty of working with those who are not truly open to feedback or guidance.

Giving Effective Feedback

  • Establishing trust is crucial for giving effective feedback.
  • Feedback can be delivered gently or more forcefully, depending on the recipient's responsiveness.
  • Bill Campbell's blunt feedback illustrates the necessity of harsh truth when someone is not listening or learning.
  • In a mission-driven environment, honesty and directness are valued over preserving relationships.
  • The ultimate goal is to accomplish the mission, not to maintain personal comfort or avoid confrontation.

"Now, you can deliver a message the first time in an iron fist in a velvet glove kind of thing. But sometimes the velvet glove is going to come off."

This quote explains the approach to feedback, suggesting that it can start gently but may need to become more direct if the message is not being received.

Boldness and Success

  • Success can lead to increased boldness, but boldness is also necessary to achieve success.
  • Confidence, backed by intelligence and hard work, is essential from the outset.
  • Boldness includes actions, treatment of people, and pushing boundaries while maintaining empathy and kindness.
  • Passion can be mistaken for loudness but is necessary to inspire and lead others.
  • The ability to speak boldly and confidently is often a learned skill rather than an innate trait.

"I think you become more bold with success, but you're not going to get success unless you start making the success happen for yourself."

This quote emphasizes that while success can bolster boldness, one must initially project confidence and take bold actions to achieve success.

Overcoming Self-Doubt

  • Everyone experiences imposter syndrome, especially when attempting new, world-changing endeavors.
  • Feeling nervous or unsure is natural when taking risks and stepping out of one's comfort zone.
  • Learning from mistakes and having mentors is crucial for growth and overcoming self-doubt.
  • The discomfort of pushing boundaries is where personal and professional growth occurs.

"If you don't have butterflies in your stomach each day, you're either not paying attention or you're not pushing hard enough and taking enough risk."

This quote conveys that feeling nervous or uncertain is a sign of growth and engagement with challenging, potentially rewarding work.

Learning from Success and Failure

  • The cycle of "do, fail, learn" is a fundamental part of growth and innovation.
  • The traditional education system, which emphasizes learning before doing, is contrasted with a more practical, hands-on approach.
  • Real learning occurs through action, trial and error, and subsequent reflection and improvement.
  • Historical advancements were made through experimentation rather than theoretical knowledge.

"Do fail, learn. There's no such thing as learn. And then you're going to do no. When you really learn in life is after you've tried to do it."

This quote challenges the conventional wisdom that learning precedes action, arguing that true learning comes from the process of doing and failing.

Future Shape's Structure and Mission

  • Future Shape is not a traditional venture capital or angel investment firm; it is described as "mentors with money."
  • The organization's goal is to assist entrepreneurs working on challenging projects that benefit the environment, society, and health.
  • Future Shape provides both financial investment and mentorship without typically taking board seats or leading funding rounds.
  • The firm's approach is to be supportive and hands-on, stepping in more actively when necessary.

"We're not a vc, we're not an angel. We call ourselves mentors with money."

This quote defines Future Shape's unique position in the investment landscape, focusing on mentorship and support rather than just financial backing.

Investment Choices

  • When presented with limited investment options, cannabis is favored due to its medicinal and recreational benefits.
  • The cannabis industry is seen as having significant growth potential and is less saturated with investors, offering more opportunities.
  • Profits from cannabis investments can be redirected to support other ventures such as ebikes and plastics.
  • The choice of cannabis reflects a strategic approach to investing, where one sector can fuel growth in others.

"Cannabis is actually medicinal and it's a vice. It's both. And so when you can have those two dynamics together, when you can actually help people, whether that's recreationally or medically, and you can have all of the uplift of the recreational side for the medical side, you're going to see that."

This quote explains the rationale behind choosing to invest in cannabis, highlighting its dual benefits and the potential for cross-funding other important projects.## Intrigue Around Plastics

  • Tony Fadell discusses the prevalence of plastics, particularly in countries without recycling systems.
  • He notes the environmental impact of plastics, including their presence on beaches and in biological systems.
  • Fadell emphasizes the false sense of security provided by recycling bins in developed countries.
  • He highlights the economic interests of petroleum companies in producing virgin plastics.

"Plastics. You know, when you live in the US or the UK, plastics are all around you and you have a recycle bin. And you're like, oh, yeah, it's all taken care of, so it just looks great. But if you look closer and my eyes have totally changed now because after living in Indonesia for almost two years and seeing what plastics are like there and what happens in Southeast Asia and the rest of the world where there's not recycling."

The quote explains the contrast between the perception of plastics management in developed countries versus the reality in places like Southeast Asia where recycling is not prevalent.

Misconceptions About Recycling

  • Tony Fadell criticizes the recycling industry, revealing that most plastics are not actually recycled but are instead burned or buried.
  • He explains that the economics of recycling do not support the process due to the low value of recycled plastics.
  • Fadell points out the health hazards of plastics, including their presence in human and animal bodies.

"Oh, my God, we either bury or burn almost all of it. Nothing is really recycled. Why? Because plastic is so cheap. And the petroleum companies just want to sell you more and more virgin plastic."

This quote highlights the inefficacy of recycling and the economic drivers behind the continuous production of new plastics.

The Economics of Recycling

  • Tony Fadell discusses the need for an economic incentive to properly recycle plastics.
  • He reflects on past successful recycling programs, such as the bottle deposit initiative in Detroit during the 1970s.
  • Fadell argues for the distinction between single-use plastics and durable plastics in recycling practices.

"We need to do the same thing for plastics. It's amazing to me that we were so far looking in the 70s back then with $0.10. Just think about it. The ten cent recycle fee was probably worth way more than the crap that was inside of it, sugary water or whatever it was."

The quote suggests that economic incentives have historically been effective in promoting recycling and could be applied to current plastic waste challenges.

Circular Economies

  • Tony Fadell advocates for the transformation of economies into circular models, where waste is minimized and materials are reused.
  • He discusses the potential for new businesses that focus on repurposing materials from waste.
  • Fadell highlights the importance of creating an economy around waste management, including financial mechanisms to support recycling.

"We need to transform our economies into circular economies, not this extract, use and then trash. We need to make it fully holistic."

This quote emphasizes the need for a systemic change in how economies handle waste, moving towards sustainability and reusability.

Investment in Sustainable Innovations

  • Tony Fadell addresses the challenge of securing investment for ventures focused on sustainability and infrastructure.
  • He criticizes the short-term focus of the investment community and calls for long-term commitments to address environmental issues.
  • Fadell observes a shift in investor interest towards ventures with Environmental, Social, and Governance (ESG) goals.

"The only way we are going to fix this planet and the problems we've created because of fast money over the years is to take these long term, long term being seven to twelve year kind of initiatives and investing in them."

The quote underscores the necessity for long-term investments in sustainable initiatives to address the environmental damage caused by short-term financial gains.

Optimism for the Future

  • Tony Fadell expresses optimism about the future, citing the abundance of capital and interest in innovations that address global challenges.
  • He believes that the current era presents an opportunity for transformative changes in society and industry.
  • Fadell advocates for a positive outlook and investment in solutions for a sustainable future.

"We're going to see mobility change right in front of our eyes. It's all turning electric or hydrogen powered or what have you across the board. All these gas stations you see everywhere, those are going to be gone. That's new infrastructure."

This quote reflects Fadell's belief in the potential for significant infrastructural changes driven by innovation and sustainability efforts.

Systems Thinking in Entrepreneurs

  • Tony Fadell discusses the importance of systems thinking in entrepreneurs, particularly those working on sustainable solutions.
  • He looks for founders who consider the full lifecycle of their products and the broader impact of their business.
  • Fadell encourages entrepreneurs to have bold visions and to think about the systemic changes needed for a sustainable future.

"You see people going, well, they talk about end of life, what's going to happen with the product at end of life. They talk about the customer journey. They talk about how they're going to build a platform over time."

The quote illustrates the characteristics of systems thinkers who consider the end-to-end impact of their products and services.## Startup Pitching and Vision

  • Startups often pitch short-term plans to avoid scaring off potential backers.
  • Long-term, bold visions excite investors but are not always shared upfront.
  • It's important to think holistically and consider the broader impact of a startup.

But what I have is I say to them, I'm like, yeah, that's really interesting. But you think about years five, seven and ten. Here's what I think this is going to be. And then all of a sudden you see their eyes light up and they go, yes.

This quote emphasizes the importance of having a long-term vision that goes beyond the immediate few years, and how sharing this vision can ignite excitement and interest from potential investors or partners.

Atoms and Bits in Innovation

  • The combination of physical (atoms) and digital (bits) components is crucial for future success.
  • Funding markets may need to adapt to support innovations that include both atoms and bits.
  • Funding requirements differ significantly between software ventures and those that involve real-world structural changes.

Another thing that you said was kind of the combination of atoms and bits and kind of the requirement of both to really succeed moving forwards.

This quote highlights the concept that modern innovations often require a blend of digital and physical components, which can impact how such ventures are funded.

Agtech and Financing

  • Agtech companies often have to function as fintech companies to make technology affordable for farmers.
  • Financing is key to enabling adoption of new technology by small and medium-sized businesses.
  • The finance industry can profit significantly by providing proper financing to these businesses.

Most of our Agtech companies are fintech companies first.

This quote suggests that for agricultural technology (Agtech) companies to be successful and have their technology adopted, they must also focus on the financial aspects, ensuring that their products are accessible and affordable for farmers.

Relationship to Money

  • One's relationship with money can evolve over time, and wealth does not guarantee happiness.
  • Money should be viewed as a means to effect change, not as a lifestyle or status symbol.
  • The responsibilities of managing wealth can be burdensome and detract from personal freedom.

So my relationship to money now is like, that's just a means to make change happen.

This quote reflects a mature perspective on money, seeing it as a tool for creating positive change rather than a goal in itself or a measure of personal success.

Giving Away Wealth

  • The challenge of wealth is not just in earning it but also in the responsibility of giving it away effectively.
  • Managing and allocating money philanthropically requires time and effort.
  • Wealth can attract insincere relationships.

It's giving it away. Effectively, actually. Yeah.

This quote discusses the difficulty and responsibility associated with philanthropy and the effective distribution of wealth, which can be as challenging as earning it.

Personal Values and Traits

  • Respect is more important than being liked; speaking one's mind can lead to respect and ultimately more business.
  • Children should learn to work hard for meaningful causes, be kind but direct, and take risks understanding the associated ups and downs.

You got to be respected, and you got to speak your mind and be damned.

This quote underlines the value of respect over likability and the importance of honesty and directness in personal and professional relationships.

Reading and Learning

  • "Thinking, Fast and Slow" by Daniel Kahneman is recommended for understanding human decision-making.
  • The book offers insights into political situations, social networks, and financial markets.

Thinking fast and slow by Daniel Kahneman is incredibly important because it teaches you so much about how people think.

This quote highlights the significance of Kahneman's book in providing a deeper understanding of human cognition and its implications for various aspects of society and the economy.

Future Outlook and Plans

  • Following one's curiosity can lead to unexpected and fulfilling paths.
  • The next five years are anticipated to bring dramatic, positive changes with the emergence of impactful companies.
  • There is excitement for innovations that will benefit future generations more than current technological trends.

I follow my nose of what I'm curious about, and so I can't wait to see the dramatic things that are going to happen.

This quote suggests an approach to life and career based on following one's interests and passions, which can lead to involvement in significant and transformative projects.

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