Tony Fadell recently spent eight hours standing on a stepladder watching a neurosurgeon perform brain surgery. “I was right there. I got blood on my shoes,” he says, the excitement audible in his voice. It was a birthday present to himself (others have included racecar driving and a parabolic flight).
It is hard to imagine what gift you could buy the man who made his fortune inventing the iPod and the iPhone before leaving Apple in 2010 to create Nest, the smart thermostat company, but this sounds like most people’s idea of a nightmare – why would anybody want to watch live surgery? “Because it’s a computer,” he says. “The brain is a computer. I’ve spent my life figuring out how a computer brain works, but what about a human brain? When I want to figure out how [something] works, I tear it apart and see what’s inside – and that’s what I got to see.” He tells of how the surgeon separated the two sides of the brain, located the optic nerve (the woman was going blind) and reduced a calcification pressing on a cell wall.
Fadell, 45, has been tinkering with things since he was four years old, initially in his grandfather’s workshop in Detroit, where he grew up. “He would have my brother and me build and fix all kinds of things with him – be it a birdhouse, a bicycle or a soapbox racer,” Fadell says, “he taught us not to be afraid of them. He would say, ‘A human made these things and a human can make them better.’”
Fadell has flown to Britain to promote his company – and to speak on stage with Stephen Fry at the Hay Festival. He arrived only the night before, but he is perky and animated at 9am, ordering simply a mint tea when we meet at a London hotel. He is dressed in an expensive-looking white shirt, jeans and Christopher Kane Chelsea boots with an Ikepod on his wrist (despite its Apple-sounding name it is not a gadget but an expensive Swiss watch).
It was the launch of the first home computers that fired up Fadell’s imagination and entrepreneurial spirit. When Apple released the Apple II Plus, their second generation computer, priced $1,195, Fadell thought, ‘I’ve got to get one of those,’ he says. “My grandfather had always bought me tools, like hammers and drills,” Fadell says. “I told him I needed this tool. He said, ‘Whatever you earn, I’ll match.’ So, for two years I worked really hard as a caddie and paper boy and we got it together.”
His parents (his father was a sales executive for Levi’s jeans and his mother a hospital administrator) encouraged their then nine-year-old son to go to summer school to learn programming. His father’s job involved setting up sales accounts around the USA, moving the family each time, and so Fadell attended 12 schools in 15 years. Computers were his way of making friends. At the age of 16 he formed a company with another boy selling Apple II equipment by mail order, working out of his friend’s parents’ basement. “Then we started developing programs to make [the equipment] easier to set up and install.”
In 1987, Fadell went to the University of Michigan to study computer engineering, where he set up two more companies, the first selling an enhanced microprocessor (the chip containing the brains of the computer) for an Apple II that he had designed (which he eventually sold to Apple), the second selling educational software. By 1991, when he graduated, some members of the superstar team that had helped Steve Jobs build the first Apple Macintosh in 1984 had formed a new company called General Magic, based in California, and were developing a new kind of hand-held communications device. “I wanted to work with my heroes, so I just turned up at their office at 8.30 one summer morning. There were five people there, who had clearly been there all night. They said, ‘We’re not hiring.’ Three months later I went back and got a job.”
He was their 29th employee, the youngest, at 22, and the “lowest guy on the totem pole”. But, as the company swelled to almost 300, and Fadell “took on every job that needed doing”, he became increasingly integral to the business.
The hand-held communications device had attracted $1 billion worth of investment and was expected to be a big hit. It had wireless email, voice and fax communications; you could download applications and buy products from it. It was, Fadell says, “the iPhone 20 years earlier”. But, when it came out, three years later, it sold fewer than 8,000 devices. “It was an utter disaster,” he says. “I was really mad. Didn’t we understand what we were building?”
Fadell thought he could improve the product. But, when he showed his new designs he was told it was a great idea, but they would stick with their existing device. Frustrated, he pitched to other companies. Doug Dunn, the CEO of Philips, liked the idea – and Fadell. In 1995, he made Fadell, then aged 25, his chief technology officer. But, after bringing out two personal assistant devices with Philips, in 1997 and 1999, that again failed to sell (he blames Philips’s marketing), Fadell left to start a new business on his own, Fuse Systems. A music fan, he wanted to develop an MP3 player: While the devices existed, they weren’t widely used. He built a team and secured initial investment. “But, it was right in the crunch of 2000 when the whole [dotcom] market tanked; there was no money,” he says.
FFeeling hopeless, he went skiing for the weekend. “My brain was fried. I was like, what am I going to do?” Then, just as he was about to get on a ski lift, poles in hand, he received a call from Apple, which asked him to come in as a consultant for a short period of time. The company had heard about his MP3 device and, at his first meeting, in February 2001, announced it wanted him to develop a portable MP3 player for Apple, to support its new music library, iTunes.
Fadell had six weeks before presenting his idea to Steve Jobs. He took designs he had been working on at Fuse, researched chip sets – electronic components in the circuit board – and built a model out of Styrofoam (weighted down with his grandfather’s fishing weights). “The battery, the hard drive and screen were all one size. I just stacked them together like a sandwich, and it fitted in my pocket, so I thought, right, done,” he says. Fadell’s design had buttons to change tracks, but, in the meeting, Philip Schiller, now the senior vice-president of worldwide marketing at Apple, suggested a jog wheel. “It was like one from an old VCR. I said, ‘I know how I can connect that. I can do it.’”
Fadell was made an official Apple employee in April. With a small team of 27 people they worked “night and day at incredible speed” until the launch of the first iPod, on October 23, 2001.
Fadell’s working hours – more than 100 a week – weren’t conducive to a love life. But, in February 2002, a colleague set him up on a blind date with Danielle Lambert, who was the head of executive recruitment at Apple. Fadell was told to wait in the main lobby on a Friday night. “She came and sat down, and we spent three hours talking about everything,” he recalls, “all there in the lobby.”
After only 12 weeks, Fadell proposed. “It was a surprise to me, too,” he says, laughing. “It was a Monday morning at 7.45. I looked out into the front yard and saw a rose after a night of torrential rain. I thought, this is so perfect.” They got married six months later and now have three children.
It was parenthood that prompted Fadell and Lambert, who is now mainly a stay-at-home mother but takes on some HR projects, to leave Apple. “One day, we came home from work, and my eldest, who was two, was crying like crazy. Something had happened, and he wouldn’t let go of the nanny. My wife was a wreck. I thought, we’ve got to reset this.” By this point, Fadell had overseen 18 generations of iPod, three generations of iPhone and lots of accessories. “All this stuff. It was great, but I wanted to do something different,” he says. He stepped down as the head of the iPod and iPhone divisions in November 2008, but stayed on as a consultant until 2010. As he could work remotely, he took the family on a round-the-world tour for a year and a half.
Since 2006, Fadell had been designing a dream holiday home in Lake Tahoe, California, and building work started in late 2009. He wanted it to be an energy-efficient home, complete with geothermal pumps, solar roof panels and well-insulated walls. As he was designing, he made a list of problems that were frustrating him. At the top of the list was the humble thermostat. “While I was designing my home, I was living in different houses all around the world and I saw thermostats that were just as bad as the ones in the US, or houses that needed them but didn’t have them. I realised that this was a worldwide problem. I thought, let’s fix it.”
He discovered that people in the US spend about £700 (Rs 43000) on heating and cooling per year – about 50 per cent of their total energy bill; in Britain, heating accounts for nearly two thirds. “That’s a lot of money, but everyone ignores the thing you control it with,” Fadell says. He wrote down the problems with a traditional thermostat, from being hard to programme, to not knowing when the house is empty. Plus, a design stuck in the 1970s. He wanted to design “a beautiful thermostat that helps you save money without you making any behavioural changes, which could be controlled by a smartphone. That was the big idea.”
It would be a thermostat for the iPod generation. He talked to one of his old employees, Matt Rogers, who was still at Apple. Rogers, 31, was excited about the idea and in May 2010 quit his job to co-found Nest Labs in Palo Alto. They hired a garage (“yes, literally, with a roll-up door”) and recruited colleagues to work, initially without pay until Fadell was able to fund the company (he has previously said that after leaving Apple, financially he did not need to ever work again). The average age of the ‘employees’ was 40 – old for a start-up. “A lot of them had made their money at Apple or elsewhere, so they just wanted to do something that was really cool with people they’d worked with before and liked.” The company now has more than 400 employees, including specialists on artificial intelligence and a woman who was awarded a MacArthur ‘Genius Grant’ for her work on robotics.
Hours again were “crazy”. “But, as my wife says, we’re all diseased in some way – this is just what we love to do,” he says, grinning. “When we see an idea we like, we’re obsessive-compulsive. It’s like a drug.” What is he like as a boss? He laughs and thinks for a moment. “I’m a no BS kind of guy,” he says eventually. “You’d better do your homework and if not I’ll call you out on it and I’m very detailed in terms of my analysis. But, when someone brings up a great idea, I will say, ‘Awesome idea, let’s look at it.’”
On October 25, 2011, Nest Labs unveiled the world’s “first learning thermostat”. With its sleek metal dial and large digital display, it won nods of approval from the design world. But, it is more than just pretty. After three days of use, adjusting the temperature either on the device on the wall or via a smartphone, the thermostat learns its user’s preferences. It automatically detects when the house is empty and turns down the heating (or cooling in the US). It tells users when their heating is at an energy-efficient level and provides personalised reports on their energy use – encouraging slight behavioural change. Fadell says that users can save 20 per cent on their energy bills, meaning that the thermostat, priced at $249 (Rs 15,000) in the US and £149 in Britain, could pay for itself within a year.
In the meantime, the team had been working on redesigning another “unloved” home device”: a smoke and carbon monoxide detector, Nest Protect, that speaks to you to report an alarm, rather than beeping, and can be silenced with the wave of a hand (although this feature had to be disabled for a couple of months while the company fixed a fault).
When I first met Fadell, in November, shortly after Nest Protect had launched in Britain, he showed me on his iPhone that he could see the smoke detectors working in his sons’ bedrooms 5,000 miles away. He says now that becoming a father has changed what he wants to create – products to protect the family and the future world they will live in – as well as the way he designs them. “Tech people say [to me] why have a thermostat at all; why don’t you have phones control everything? But, I say, homes are for families, and you have to make sure you design for the family, not just one person: kids, your wife, your grandparents need to be able to use it.”
Like the iPod, Nest products have simple interfaces, but there is no doubt about the amount of technological advances packed into each one – the company has filed more than 200 patents, with another 200 ready to go. Google was interested in buying Nest Labs from the start (Fadell had shown Google co-founder Sergey Brin an early design at TED 2011), but Fadell said no. Instead the company led two rounds of funding. Then, in July 2013, Google asked again. Discussions intensified over Christmas (“we had 20 relatives staying, my wife was pregnant and I was in my bedroom on the phone all day”) until it was announced in January this year that Google had bought Nest Labs for $3.2 billion (Rs 19,000 crores), its second highest acquisition after buying Motorola Mobility for $12.4 billion (Rs 75,000 crores) in 2012.
When we meet, Fadell is only 14 weeks into the partnership. But, he is excited. “I knew there were all kinds of interesting things going on at Google, but now that I’ve seen them, my mind has been blown, in a great way. They have all these amazing projects and people that the world doesn’t know anything about. I’m like a kid in a candy store. It’s an idea factory.”
Work remains all-consuming for Fadell. Despite cutting his hours, he still does 60-70 a week. In his free time, he crams in five-mile runs four days a week, boot-camp-style workouts two days a week, yoga, 50-mile bike rides and skiing. Plus, he likes to read – physical books, not on a device. Perhaps amusingly for other parents, he also worries about the amount of time his sons spend in front of a screen. “Yes, I worry about it. Computers are great tools, but they need to be applied to the physical world. I play Lego Mindstorm and Minecraft with the boys, and they use Scratch and Lightbot [coding programs]. But, if they just want to spend all day watching Pokémon, then that’s a no.” Toys at the table are strictly against the rules. “Sometimes, when we catch our kids on [their iPods] my wife says to me, ‘You’re to blame; seriously, you’re the one to blame.”’
But, it’s not all hi-tech toys. Behind his house, he has a workshop where he makes things with the boys – he shows me a picture of his son with an electric sander making a soapbox derby car. And, his children, far from being wowed by his achievements in Silicon Valley (last month Time magazine named him one of its 100 most influential people in the world), appreciate this the most. “My son said to me the other day, ‘Daddy, you’re making things with us like your granddad did with you,’” Fadell says. “I almost cried.”