Nothing’s Carl Pei on Building a $1B Smartphone Company, Why He Left OnePlus After 10 Days of Retirement, and Why He Thinks About Death Every Week

[00:00] You know, life is finite, so I just had a really tough time grappling with that idea. I still think about it quite a lot, actually. When I think about nothing, and I think when a lot of people think about nothing, they think about the transparent design. You guys have really become synonymous with this beautiful design language of the earbuds, the phones. Tech products are becoming more and more homogenous, less and less dynamic. Every generation is pretty similar to its predecessor. People historically have maybe been keen to categorize you. You know, first you were sort of like, they make earbuds, now it's maybe smartphones.

But I sense that you think of what you're doing. [00:30] in a more capacious way. If we think about like a more longer term future, say 20 year time horizon, we want to make tech fun to inspire human creativity. Longer term, I don't know how many years it'll take or if we're going to see it in our lifetimes, we should be able to discover other types of intelligent life. And hopefully by then, humans are pretty competitive with whatever, whoever else is out there. And I think that creative muscle is the key to unlocking that.

[01:00] What smartphone do you use? An iPhone perhaps? Maybe a Samsung or a Google Pixel? [01:06] For a growing number of consumers, the answer is: [01:09] Nothing. [01:10] That's the name of the London-based startup founded by today's guest, [01:13] Carl Pei. [01:15] In our conversation, [01:16] Carl and I explore what it takes to build an Apple Challenger in 2025. [01:21] How Nothing's transparent designs have helped it to break through [01:25] in such a hyper-competitive market, [01:27] and why Nothing's products have found such a strong customer base in India. [01:32] We also talk about Nothing's multiple near-death moments on its way to a billion-dollar-plus valuation.

[01:39] Genghis Khan's managerial prowess, [01:41] And why building AI-specific devices... [01:44] is so difficult. [01:45] I'm Mario. [01:46] And this is The Generalist. [01:49] Every revolution in AI creates one question that never changes: Can you trust the output? [01:55] AI for work is incredible, but without trust, it's just leading to faster mistakes. The challenge isn't building an AI that can answer questions, it's making sure those answers are right. [02:06] That's where Guru comes in. [02:08] It's the AI source of truth that connects everything your company knows. [02:12] So, every insight, every answer, every recommendation [02:16] is grounded in verified knowledge, not outdated information or hallucinations.

[02:21] When your teams and your AIs share one trusted foundation, everything moves faster. [02:26] with fewer redos, fewer blind spots, [02:29] and more confidence in every decision. [02:31] Because in the age of AI, truth isn't just power, it's protection. [02:36] See what Guru is doing for thousands of companies like Spotify, DHL, and Stripe at com. [02:43] That's com. [02:45] Carl, I'm super excited to have you here and to chat about you. Great to be here. [02:50] There's so many places that I've thought about starting this conversation, but one thing that, uh, [02:56] came up for me was [02:58] When I think about nothing, and I think when a lot of people think about nothing, they think about like the transparent design.

You guys have really become sort of synonymous with this really beautiful design language of the earbuds, the phones. And you also talk a lot about. [03:11] technology sort of being fun again. [03:14] And when I was researching your background, one of the things that I came across was that your first company was like building a website for... [03:22] Pokemon Game Boy walkthroughs. [03:25] And I imagine at the age you were when you were writing that, like the Game Boy was the translucent Game Boy. Is that where that like sense of fun comes from in the design language?

So first of all, it wasn't a company because I was 12. I didn't really know what a company was. [03:42] I just learned to build websites about things I was passionate about, and Pokemon was definitely one of those things. And actually all our products today, [03:51] internal codenames are all Pokemon. Oh, that's right. There's a Pokedex. [03:54] But my first Game Boy was actually the translucent purple one. [03:59] uh [04:00] I didn't make that connection until now. Okay. So maybe, maybe it impacted me in some subconscious way, but we never thought about it that way.

Okay. That's really interesting. Well... [04:12] Maybe a good place to start is what nothing is, because I've heard you say in some other interviews that, you know, people historically have maybe been keen to categorize you. You know, first you were sort of like, hey, they make earbuds. Now it's maybe smartphones. But I sense that you think of what you're doing in a more capacious way. [04:33] I think it all depends on what time horizon we talk about. Yeah, it's super fun to be misunderstood as long as you keep [04:40] progressing and evolving.

[04:42] And it's not the... [04:45] it's not other people's fault that you're misunderstood. It's basically they look at what you do and [04:50] Therefore you are this thing, so it's normal. [04:53] So we don't have any problems around that, but... [04:56] I think if we think about a more... [04:59] longer term, future, say 20 year time horizon, [05:03] We want to make tech fun to inspire human creativity. [05:06] and [05:08] make tech fun part is [05:09] Kind of... [05:11] clear for people like [05:12] tech products are becoming more and more homogenous, less and less dynamic.

Every generation is pretty similar to its predecessor. The inspired creativity part might still be a little bit [05:24] confusing or vague to people. [05:26] The way I see it is that [05:29] As humans, one of our superpowers is creativity, like both on an individual level, but also on like a species level. [05:35] and by creativity I mean the ability to solve problems. [05:39] and, [05:40] we would love to create products that are not only fun but help this creative process. But it's not just kind of writing or art or design.

[05:48] It's solving problems on a broader sense, like, [05:52] I see our software engineers as creatives as well because they're [05:55] solving problems in novel ways through code. [05:58] um [06:00] If we're able to do this, I think that has a net benefit on society because... [06:04] If people can... [06:06] exercise and manifest their ideas in a better way. [06:10] It should be a net positive. Longer term, I don't know how many years it'll take, [06:15] or if we're going to see it in our lifetimes, [06:17] We should be... [06:19] able to discover other types of intelligent life.

[06:22] And hopefully by then, [06:25] you know, humans are pretty competitive with whatever, whoever else is out there. And I think that creative muscle is the key to [06:33] Unlocking that. [06:34] Do you think a lot about [06:36] you know, the, the far frontiers of the world, space of, you know, intelligent life, [06:41] Yeah, both like very far, but also like very... [06:46] in the present, like minute things that are... [06:49] so minute that it annoys my team. I feel like I can zoom in and out quite [06:54] Easily, [06:55] Yeah, I was talking about these kind of things like...

[06:58] very far things, even [07:01] in [07:02] Middle school? [07:03] And, yeah. [07:05] people around me couldn't really have a conversation with me. They just kind of wanted to talk about Pokemon or... [07:11] Naruto or whatever. Yeah. [07:13] Where did that come from for you? Was that like, I don't know, science fiction, a thing that fed into that? Just something that seemed to come naturally? Don't know. You know, I had a very hard time sleeping as a kid. [07:23] I was always thinking about... [07:25] What else, like... [07:28] what's beyond, like, [07:29] I'm in this apartment or house in my room, but like, [07:33] Then you have countries, then you have [07:35] Earth and you have planets, is there an end to how much you can zoom out?

Like I kept thinking about that, you know. Mm-hmm. [07:41] Well, [07:42] This is great because I actually do want to talk about [07:44] some of your origins, I always think it's really interesting to hear how [07:49] really impressive founders and entrepreneurs sort of [07:52] the things that influenced them from early on that are maybe obvious and not obvious. Um, both of your parents were Alzheimer's researchers, right? In this Twitter sort of, uh, you, you did like one of those things where you're, you know, I'm bored on a flight, ask me anything question.

Uh, [08:08] You talked about, I think, what motivates you, and the answer you came up with was death. [08:13] And something that I've noticed with a lot of entrepreneurs is this like really acute sense of their own mortality. [08:19] And I sort of wondered... [08:20] is, [08:21] having two parents that are actually like constantly thinking about degeneration of some kind, like created that sensibility in you? Like where does that acute awareness come from? Yeah, I was like six or seven. [08:35] And I kept thinking about, you know, [08:38] both from a space perspective, like what's beyond space, [08:40] but also from a time perspective, what's beyond.

And it was very clear that [08:44] you know, life is finite, so I just... [08:47] had a really tough time, uh, [08:49] grappling with that idea. [08:51] And I even one time told my mom, "Hey, why did you give birth to me? Now I have to die." That kind of stuff. [09:00] And I imagine, what if I could be a rock? [09:04] A rock can't live forever. [09:06] Actually, not forever because... [09:08] Once the universe explodes, then it's not there anymore. But I think none of that really makes sense as a grown-up.

But I guess my mind was very... [09:18] active. Then there was this Steve Jobs speech at Stanford where [09:24] He talks about death as being the best invention of life and [09:27] looking himself in the mirror every day to ask himself, [09:31] You know, if this was the last day I would be alive, would I still do these... [09:34] things that I'm about to do today. I still think about it quite a lot actually. [09:38] Like... [09:39] A couple times a week, I'll wake up in the middle of the night and be like, [09:43] Well, [09:44] Life is finite.

[09:45] I'm already 36. Me too. [09:48] Oh, nice. Yeah. I'm as, uh, it's good. Ticking a lot. [09:53] And like... [09:54] "Oh, I still gotta do all these things." [09:56] And, uh, [09:58] How much time do I have left? It keeps coming up. 36. [10:02] Do you feel like you're at par of what you expect for yourself? You know, a little behind where you want to be given what you expect, you know, further than you... [10:13] Have you made better use than you'd hoped or not yet? I think I'm pretty at peace with where things are.

And I think maybe that's a theme for people in their 30s. I don't know what your experience is. I think that's right. [10:24] But when I was younger, when I was 17, I told myself I need to be able to retire by 25. [10:30] So that... [10:32] didn't happen. So maybe I'm a failure compared to [10:36] my expectations as a 17 year old. Or you maybe realized like actually retirement would be like totally miserable and you would just do exactly what you're doing. [10:44] Yeah, I also say that to comfort myself.

Like, [10:49] If I retired, I would still do the same thing. Yeah. Because now it's... [10:52] I'm having fun. [10:53] and just like traveling going to luxury hotels and resorts and [10:58] eating Michelin star restaurant food and drinking great wine. [11:02] That'll get boring pretty quickly. Yeah. Yeah, I think I remember actually this was from... [11:08] from researching you, you did sort of try and do that for like 10 days after you, [11:13] uh, leaving the company before nothing. Right. Yeah. Cause I worked there. I, [11:19] for seven years and I was only 24 when I started.

That was like my 20s and just kind of gone in work. [11:28] And [11:30] We worked like six days a week for most of the time. I felt like I had done a lot career-wise, work-wise, but... [11:38] What if I could take like half a year off? [11:40] Travel the world. [11:42] And it sounded like a really good idea, but... [11:45] Yeah, it just got really... [11:48] really boring after a while like after a week i was like wow this is [11:52] Same thing over and over again. [11:55] Wake up.

[11:56] figure out why to have dinner, go to the pool, [11:59] read a book, and I felt this... [12:04] I felt super stressed, actually, being in that environment. It's like... [12:09] Time is ticking. [12:10] And I'm just... [12:12] doing nothing. So for me it's more relaxing to work than to [12:17] be on an extended holiday. I didn't know it at the time, but a week later I found out. I understand that. I think I can do, I could probably do longer than 10 days, I suspect, but [12:29] Not not that much longer.

I think once you do a few days by the pool, you do sort of hit a point where you're like, OK, you know, what's next? [12:37] You grew up sort of between... [12:39] Sweden, the US, and were you born in China? I was born in China, left when I was four. [12:46] moved to the States for two years and then to Sweden. [12:49] And the two years in the States sounded like they were like quite formative in a way and maybe difficult. Maybe, yeah. Maybe in hindsight. [12:57] So we lived in Staten Island.

I didn't know that it was... [13:01] not the best place when I was a kid, but now as I've grown up people have told me, "Wow, that's a really rough [13:07] place, but I don't have a lot of bad memories. I remember [13:11] The only bad memory is like a... [13:14] an American kid. [13:16] um maybe two years older than me it's like very big it was a sitting and he was sitting on me that's kind of the only thing i remember oh gosh that was bad yeah that doesn't sound great yeah uh yeah and i imagine also probably you're an unusual kid in in almost any environment given the things that you were thinking about but i imagine if i had to pick a few places on earth that maybe especially might not be [13:38] filled with young kids who are thinking about the far future.

Staten Island might be a good choice. Yeah, maybe. But actually, my personality was very different. [13:47] I was very talkative and very extroverted. Oh, really? So my parents had to go to school and, you know, [13:54] sit with a teacher and [13:56] hear about how talkative I was, how disruptive I was in class, [14:00] But then when we moved to Sweden, maybe because I was moving around too much, [14:04] and I didn't know the language back then, I became more quiet. [14:08] Ah. [14:09] Wow, fascinating. And that sort of stayed with you?

Or now do you find yourself somewhere in between? [14:15] I'm in between now. I'm like, um... [14:17] this, this, what is called MBTI? Oh, there's the Myers-Briggs. Yeah. I'm kind of, uh, [14:23] in between on introverted and extroverted. It changes depending on the day. Oh, really? Okay. I think last time I did it, I was an INTJ. [14:31] Yeah, I think I'm I or E and TJ as well. Oh, nice. Yeah. I can't, I can never tell how much I should put stock in it at all, but it is sort of interesting to push against, right?

There was a few articles when I was reading about your background where they talk about how you as a child were like very aware of. [14:50] the atmosphere you're growing up in Sweden, but also like the amount of growth and [14:56] you know, the speed of sort of economic growth in China and the way these articles are written, it almost presents it as if that's like a totally normal thing for a kid to be aware of. I'm curious, like how. [15:07] that actually was on your radar that you were sort of like hey [15:11] Something's very different happening in China that is not part of my world here in Sweden.

[15:16] I think you would see it in the press. Like, I went to school every day, and on my way to school, we have this free newspaper that we can read. [15:24] during the commute and you will see news about the growth of economies around the world [15:29] So back then, China came up pretty often. [15:32] And then we would speak about it at the dinner table. [15:36] So it was always kind of a theme. [15:39] Like hey, there's a lot of growth happening. [15:41] And I just got really curious about it.

[15:44] Were you going back to China to see family in the summers or not really? [15:48] Like maybe once every two, three years. Yeah, but that was in a very kind of controlled environment. [15:55] going from the airport to the... [15:58] to whoever relative we were visiting? [16:00] I didn't really get to explore it on my own. [16:03] And then it sounded like you probably missed or jumped through a few years of school because you left high school at 15. [16:10] I left high school at maybe 17. Okay. Yeah. Or 16, something like that.

Was that when you sort of then went to go live in China for a period of time to sort of understand what was happening there economically? [16:25] Yeah, so back then, so after that Pokemon website, when I was 12, I just kept making a lot of websites. [16:30] That's where I really wanted to learn how to make money online. [16:34] And was that the first way you made money online? The Pokemon site didn't make any money, but it got some traffic. But I created a bunch of other websites. [16:43] as well and the big the first like real money i made looking back it's not a lot but [16:49] I sold Naruto, like another anime.

[16:52] website for 4.2 thousand [16:55] Dollars? Oh, wow. [16:57] For like a 15-year-old, that was a lot of money. Yeah, totally. And back then, money was worth more than now. So I was always really interested in business and... [17:05] you know, having heard all the news about the Chinese economy growing, I just wanted to [17:10] go and see it for myself, like really see it for myself, explore. [17:14] without my parents being there. They were super worried, like... [17:18] What's your plan? Like, do you have a 12 month plan? Where are you going to be every month?

What are you going to do? [17:24] but I didn't know how to make a plan like I'm just gonna go and explore you know I haven't been there so how can I make a plan so I didn't make a plan. [17:31] I just went and met people and started doing stuff. And so you arrive in Guangdong when you were 17 or so with just, hey, I'm gonna see what this is like on the ground and what I can do. [17:45] Yeah. [17:46] And in the city I was in back then, [17:49] El Zhuhai, it's not a...

[17:51] Big city. [17:52] There was an electronics mall. [17:54] So I just kind of went to the mall every day to see what the new gadgets were. [17:59] and started haggling on the price. I bought a few for myself to test them out. Then I started selling them, like exporting them. [18:07] I didn't know how to start a company. [18:11] I didn't know how to do international bank transfers. [18:14] I literally went to the ATM with my Swedish, [18:17] Bankard? [18:19] and withdrew a bunch of cash. [18:22] So I was wearing shorts because it's pretty hot there.

[18:24] You could see me like with a huge bulging pocket full of cash. [18:29] full of money going to the computer market haggling and buying stuff. [18:33] carrying boxes to my apartment. [18:35] Then I would shoot videos. [18:37] Like unboxing videos. [18:39] and tutorial videos is how the product works, like these are all the features. [18:43] And those videos were the main sales material. [18:46] when I was selling them on eBay and later on my own websites. Oh, wow. Interesting. So you already sort of had some of... [18:52] that marketing sensibility that, you know, I think you see a lot with nothing.

You sort of were aware that [18:57] You know, there's... [18:58] There's going to be these, you know, these different sales collateral that I need to include. [19:03] Yeah. And I guess in hindsight, I really put my money on the line, right? Yeah. Like if it didn't, if I bought all this stuff and I couldn't sell it, then I'm pretty screwed. As part of this same Twitter AMA, someone I think asked you your favorite entrepreneur, and you said Genghis Khan, which I thought was a really interesting answer and speaks to a sort of [19:22] level of ambition, [19:24] Were you a really competitive kid?

Maybe even the opposite. [19:29] Looking back, I was probably quite an annoying kid. [19:33] Um... [19:34] I was very... [19:36] dismissive of... [19:39] Everything. [19:40] Like, oh, this lesson is very boring. Oh, if you want to get good grades, [19:46] All you have to do is raise your hand and ask like two, three questions every lesson. And then you stand in line after the lesson. [19:52] to [19:53] pretend to be interested in the class. [19:56] So I kind of saw the game and I just didn't choose to do it. That was my thinking back then.

It's kind of immature, but... [20:06] So not competitive. I didn't really care about my grades. And I think in high school, [20:11] My grades were not very good. And in Sweden, you have to, there's no test like SAT. [20:16] It's your... [20:18] Every course has a grade and then you average it out over three years. [20:21] So I was about to graduate, I'm like, [20:24] wow, I gotta shake my grades up. [20:27] And I only kind of focused in the last two weeks, both by studying hard and trying hard, but then [20:33] There were also like hacks.

[20:35] We took... [20:36] some teachers out for drinks and that gave us a better relationship with the teacher and [20:41] kind of helped grease the wheels a little bit. [20:44] So I don't know how to summarize it. I was more... [20:49] kind of more arrogant kid, I think. And I spent a lot of time [20:53] Um, [20:54] you know, doing my own websites and not going to school and playing games. I would kind of, [21:00] So I would leave first. And then my parents would go to work. And then I would...

[21:04] Just circle back home. [21:05] Couldn't be on the computer the entire day. Then they'd come home after you were supposed to be back from school anyway, so no one's the wiser. Right. That's so funny. What happened while you were in China such that you reached a point where you were like, hey, it's fun to export electronics, but actually this isn't going to be my life's work? My parents didn't like it. Okay. [21:27] They're like, hey, you don't have a degree, you're not going to university... [21:31] What you're doing now is just like a small thing.

It doesn't really matter. It's... [21:35] It's not serious. [21:37] why don't you go to school? Just kept repeating that and [21:42] Well, yeah, maybe they're right. [21:45] And it just happened that... [21:48] the best business school in Sweden. They were opening up a new course. [21:53] And... [21:54] Very few people knew about the course. [21:56] So my grades wouldn't have gotten me into the main... [21:59] course. [22:00] but it got me into this new course because it was the first year the program ran. [22:04] And there wasn't enough competition. But in the end, it sort of sounded like, [22:09] It was...

[22:10] Probably not the right. [22:12] way to spend your time anyway because you [22:15] didn't seem to think too highly of it as a course, right? It didn't prepare you for the future from the sounds of it. But I do think it was good to get some structure. Because if I had continued just [22:26] Selling stuff online. [22:28] maybe the ambition level would have kind of plateaued after some time but [22:33] getting some structure in like the real world. [22:36] might have been good in hindsight. I was quite disappointed in that school because I was like, hey, this is the...

[22:42] The best business school. One of the best in Sweden. One of the best in Europe. One of the best in the world. If I study here, I'll... [22:50] I'll be well equipped to face the future. [22:53] And back then, the three big trends that I saw in business was [22:58] the rise of e-commerce, [23:00] This was 2000... [23:02] 7, 2008. 2008 e-commerce was growing. 2008 I think it was 10% of total retail already and you could see like a [23:10] Pretty high CAGR. [23:11] high growth rates, [23:13] The second thing was the rise of tech companies.

[23:16] Because back then if you looked at the inner brand, top highest value brands in the world, [23:21] Top 50, top 100. Yeah. [23:23] all the new companies on that list were tech companies. [23:27] like Amazon and Google. Yeah. [23:29] So I felt like that was, you know, a major trend. And then was the Chinese economy, because I had just spent a year there. I could see it. [23:36] firsthand, you know, things were happening. I expected to learn something about these three topics, but [23:42] Three years later, we didn't touch upon them at all.

[23:45] So I was like... [23:46] Hey, aren't you supposed to set up [23:48] Young people, [23:50] for a good future. [23:52] Your business school? We should become business people? These are the [23:56] main trends like [23:58] But instead we learned like very old things, like I think still good foundations like statistics, macroeconomics, microeconomics. But what about the future? Yeah. [24:08] It was interesting to me that you spent sort of three years going through that program and then you you seem to drop out like almost at the very last moment before you would get your degree.

[24:19] And it made me wonder... [24:21] Do you consider yourself a really stubborn person in some way? Or was there some principle that you sort of felt like, [24:28] You know, this wasn't valuable to me, so I almost don't want to get the diploma almost for the sake of it. Because pragmatically at that point, almost you're like, well, I've, you know, there's almost some amount of sunk cost. I should just finish it out. But something about that didn't make sense to you. I haven't found the right words. Like, is it arrogance?

Is it self-belief? Is it? It may be both, right? It may be people. You know, it echoes back to when I was in middle school, like not really. [24:54] respecting the system, [24:56] University was also like... [24:59] I just always believed that things would work out. [25:02] sooner or later. Why do I need this? [25:06] And then the arrogance part was like, [25:09] If I become famous, I'll be able to do it. [25:11] The school shouldn't get credit because you didn't teach me anything. [25:15] So like, it shouldn't say that I graduated from this school.

[25:18] And then also laziness. I played a lot of League of Legends. [25:22] during uni, missed a lot of class. And I told myself, you know, if the school didn't teach me anything, they shouldn't get credit, but I was actually just playing computer games. After university, you sort of have this seven-year spell at OnePlus, which we sort of briefly touched on. And, you know, it's such a, I'm sure, formative experience, you know, put you in the world of smartphones and consumer hardware. When you look back on that period, what were sort of the most [25:50] I don't know, formative lessons that you then had to bring into nothing.

[25:53] I was a really bad people manager. Really? Why? [25:57] I mean, I had never done it before. And as the team grew, it just became... [26:02] more and more difficult for me to navigate. [26:04] And I gave myself a lot of shit for it. Like, why are you so bad at management? Why are you so... [26:09] Why don't you know how to do this? [26:11] But I think in hindsight, it's fine. Like you're 24 or 25. [26:16] Of course you're going to be a bad manager. You need to [26:19] pick up these are like real skills you need to pick up over time and you need training you need to learn i think that was like the big

[26:25] thing for me. I always beat myself up for being a bad manager. I think another thing we really cared about was the product. [26:33] because [26:35] We were also known back then for being great at marketing. [26:39] And because we had like a system where you had to be invited to buy the phone. [26:43] and that that got viral we generated like a billion dollars in sales just through [26:48] you know, user to user imitations. Wow, crazy. [26:52] But we always reminded ourselves that it's all about the product. Like if you're [26:56] If you create all these high expectations, [26:59] and you hype it up, and you don't deliver, then...

[27:02] nobody's going to trust you anymore. [27:04] where are you going to get the future growth from? [27:07] I think that's something that's... [27:09] Stuck with me since then. [27:11] On the management piece, [27:13] Clearly there is so much that, you know, is a skill to be learned from that. What were the parts of it that, I don't know, [27:20] weren't obvious to you back then, but that have become more so over time. [27:25] There's so many things, but I think maybe one core concept... [27:29] has been situational management. [27:32] There's no one size fits all solution, it always depends on the situation.

[27:36] It depends on your situation of where you are in the company lifecycle. [27:41] Early stage, mid stage, late stage. Yeah. Very different. It's industry- [27:45] dependent. If we run a software company, maybe we would shape it in a very different way. [27:50] more flexibility, more freedom, [27:53] higher talent density, but also more importantly, like every person should be managed differently. [27:58] One style doesn't [28:00] really fit all but when you're a beginner you just [28:03] try and just take what you learn from the books and just implement. Yeah. [28:07] Interesting.

You've said that you quit... [28:11] on or around your 31st birthday, sort of as a gift to yourself. [28:15] What was the gift? [28:18] I thought the gift would be like freedom. Freedom. [28:22] you know, you worked hard in your 20s, [28:25] 30s is a new chapter. [28:28] And take some time off. [28:31] Have a think. [28:32] And time off for you was those 10 days before it got too boring. At that point, when you're, you know, I don't know where you went, Greece, Sardinia, you know, Italy, whatever. I imagine a sort of, you know, white lotus-like stint.

And... and... [28:48] Did you know, hey, I'm going to go back to smartphones, consumer electronics, or was it just like, I can't. [28:53] you know, I can't do this. I need to be building. They didn't really know. [28:57] what I wanted to do, thought about a lot of different things. [29:01] And, um, [29:02] So after that, [29:03] 10 days, I went back to Sweden. [29:06] and started talking to entrepreneur friends and luckily [29:10] the community is quite small and also quite, uh, [29:13] Friendly? [29:15] So although I only knew one or two people, but you know very soon I got to meet almost everybody.

[29:20] I think the only people I didn't meet were the King founders, the Candy Crush. Oh, yeah. Because I think they had moved to London or something. Okay. [29:28] and Karna. [29:30] I don't know, just never... [29:32] never got around to getting the intro or something, but I met everybody else basically. [29:37] And I was like, just asking people, how do you start a startup? [29:41] Because OnePlus, we didn't have to raise our own money. [29:44] And raising money was so... [29:46] strange to me it seems so strange like why would people give you a million bucks or like a couple million dollars what if you lose all their money [29:53] Why would anybody take a risk like that?

It just seemed very foreign and this was 2020. [29:59] Five years ago. [30:00] But after speaking to all the Swedish founders and communities, that's kind of how I started to get a feel of how things work and how we structure, how we face things. [30:10] And I remember that being a very confusing time as well because... [30:15] All of a sudden... [30:16] I worked in a more or less structured environment before. You kind of knew what you had to do, but like raising money, [30:23] There were so many ways of thinking about it.

Everybody had their own strategy. [30:28] depending on what kind of company [30:30] they were building and how they [30:33] What kind of values? [30:34] They hadn't. So it's very confusing. A lot of new information, like contradicting information. The first two weeks were like... [30:41] kind of brain fried feeling, you know, [30:44] But eventually I found a strategy that works in our context and raised the seed round during my time there. I definitely want to hear about that strategy. But there was something when I was reading about this where in a bunch of places you were like, [30:58] People told me that my deck was bad and my deck really was bad.

[31:03] What was so bad about it? It looks like a high school student made it. Really? Yeah. I wouldn't show it anymore. Oh, you should. You should release it. I had a friend who said, hey, look, just... [31:13] Go and speak, don't show the deck. [31:16] you will get a better outcome. Like I'm very, I like people who are direct, [31:19] when it comes from a good place. So really appreciate that feedback. And that's how we kind of went about it. [31:26] When nothing IPOs or something like that, you should release that deck and see how far you've come.

So what was the strategy that made sense for you? Because it is a category that, [31:35] on the one hand, [31:36] is you know [31:38] the biggest or one of the biggest consumer categories in the world, but on the other is all this competition. A lot of people maybe think there's not as much room for an insurgent. So how did you sort of like put those pieces together? For the fundraising? One thing we did was [31:56] We only took founder money in the seed stage. [32:01] because my assumption was that this was going to be a very tough journey.

[32:05] and I wanted people who had done similar or other things, complementary things before, [32:10] so that when things get hard in the future, I could call them up. [32:14] and get some advice. [32:16] Another thing we did was... [32:18] Pretty controversial. We did an uncapped note. [32:21] Hmm wow really because this is hardware? [32:25] hardware, [32:26] is very capital intensive. [32:28] and [32:30] I didn't want to dilute me and the team to like nothing. Yeah. And like very quickly. Yeah. [32:35] So that got some pushback. I bet. Yeah. So I guess those were the things.

But I think now... [32:41] in a more mature stage, [32:45] or growth stage, [32:48] It's not something we're actually thinking about, but some of my friends are thinking about like a... [32:53] new structures like what if they have this company but they want to start another company in parallel [33:00] How should you do it? Like one key decision you make is, [33:03] whether you clone the cap table or not. If you clone the cap table, you lose out a lot of the equity. Yeah. [33:09] But it's a very fair thing to do because...

[33:13] you're going to probably leverage some resource in your own time, plus some resource from the previous company. But that's what I mean by like philosophical or... [33:21] values. [33:23] driven [33:24] Yeah, totally. [33:27] You decided to build nothing in Europe and specifically in London. [33:33] Why did that feel like the right [33:35] place for this company when Europe has really not created many great consumer hardware companies [33:42] in recent memory? So I spent 10 years in China. I saw firsthand how strong the supply chain and hardware engineering had gotten.

[33:51] And actually, a lot of credit should go to Apple because... [33:54] I don't know if you read the book, Apple in China? No, I haven't. Because there were manufacturing there and they had to bring up the capabilities of the ecosystem. [34:03] So a lot of that, you know, what I saw back then was [34:08] was work that Apple had done basically to level everything up. It was tough to get talent when it came to creative fields. [34:15] so I wanted a change of scenery. [34:18] Europe seemed like a good place because in hindsight, it's more like comfort because I know Europe a little bit better than the States.

[34:26] So the assumption was, you know, there should be a lot of creative talent in Europe that we couldn't find when I was... [34:32] living in China. [34:34] And if we find these people and we add the Chinese supply chain efficiency to the equation, [34:41] It will be a tough company to compete against. [34:44] it would be hard for a purely [34:47] Silicon Valley company to [34:49] get the same efficiency. [34:51] And we're seeing that, by the way. [34:53] And it's hard for a Chinese company to create a brand. [34:55] they're more efficiency focused, so [34:58] That's how we thought about it in the beginning, and then over time, [35:01] I think London has also risen up as a good hub for AI.

[35:04] There's some great, great AI talent. Later on, we saw that, you know, London is also a global financial hub. So there's good finance talent. [35:12] Um, [35:13] But the core idea is the same. Like, how do we find... [35:17] For the things that we're about to do or are currently doing, where do we find the best talent, irrespective of... [35:22] of where they are in the world. [35:24] And that's a bit like the Genghis Khan. [35:26] example like I think that's what was really special. [35:29] about, uh, [35:31] about how he went.

[35:33] on his entrepreneurship journey. He was a good talent scout? He was very open-minded in terms of culture because [35:40] Back in the day, the Mongolian culture was very tribal. [35:44] We only trusted your own tribe. You didn't even trust other Mongolians. Yes. [35:49] But as they were conquering, so first of all, he united [35:52] - Mongolian. - The steps. [35:54] steps. [35:55] And as they were conquering new lands, they saw that the conquered people were good at different things. [36:01] So for instance, back then, [36:04] I think the Arab countries and Chinese countries, [36:08] I don't know if it was different countries or not, but...

Empires at that point. Yeah, the different sort of civilizations. They were more like agricultural societies, and they had already developed tax collection systems. So when the Mongolians conquered them, they just... [36:22] They were super open-minded. [36:24] Even with money, right? Like... [36:25] you trust outsiders to handle your money, [36:28] And they reallocated these people to all over the world, helped them collect tax. [36:33] And later on, I think, [36:35] Genghis Khan converted to Buddhism after discovering Buddhism. [36:39] Super open-minded, daring to work with different cultures, [36:44] finding [36:45] things to learn from different cultures.

[36:48] It's funny, I've had... [36:49] This week. [36:50] two conversations about the Mongolian empire with founders, and both are really around how [36:57] almost it's an underrated empire, let's say, where [37:01] It was just this tiny tribe, right? Like in a really inhospitable part of the world that manages to stretch across Eurasia. [37:09] uh, [37:10] have you read the conqueror series no apparently that's i haven't read it either it's now on my list after talking with this other person that it's apparently an amazing historical fiction retelling of like the entire it's fiction or it's historical fiction so it's written like a story but you know it's really based on on the facts of it that's apparently i have a big book on uh caesar that i haven't started okay so that's sort of next yeah the thing i always think of of of genghis khan and i haven't read these books so probably i'll know more things is that apparently [37:40] clutching a blood clot, and that was part of his mythology.

Is that like this really powerful person? I'm not sure how true that is, but it sounds good. Yeah, yeah, who knows, right? But you always, I feel like a [37:52] these leaders, there's always this sort of mythology that gets, that's created around them. You create stories to help you govern, I think. Hmm. [37:59] or at least in the past. Yes. [38:01] No, but totally today too, right? Every founder story... [38:05] gets in each retelling a little bit more mythology, right? Don't you think Elon's stories at this point are [38:11] Maybe, [38:12] half true, half mythology.

Don't know. I never met him, but he seems like a very smart guy. Not even his retelling. I mean, like even the reporting on these things, like everything. I think that's just human nature that we always amplify. Maybe. Yeah. I think sometimes it's by design, right? But in Elon's case, I'm not sure it's by design. I see what you're saying. Yes, I think that's fair. I think sometimes people... [38:34] are more overtly [38:36] mythologizing themselves in those ways right coming back to [38:40] to nothing. [38:42] One of the things that I've [38:43] come to really strongly believe is that every legendary company has at least one near-death moment [38:49] And you had one really early, right?

A lot. Yeah, a lot of near-death moments, especially in the beginning. The one that comes to mind now is our first product, [38:58] the Ear One earbuds. So first of all, everybody rejected us. [39:02] in the supply chain for making phones. [39:05] They were like, "Hey, there's been a bunch of these you guys, like startups, [39:10] In the last 10 years, we worked with a few. They all failed. We all lost money. [39:14] we're not going to work with startups anymore. We're going to work with like big customers like Apple.

So go away. Not worth it for us. Not worth it. And then... [39:22] We're like, okay, let's make earbuds, then it should be more possible. It's cheaper to make and [39:28] Then we got rejected by every earbuds factory as well. [39:32] And they were like, hey, there's 3,000 no-name earbud brands on Amazon. What's the difference here? Yeah. [39:38] And so we ended up working with, there was only one factory that was willing to work with us and that factory was [39:44] um they didn't have any other customer that's why they wanted to work with us because they were on the blacklist [39:49] of the major customers for [39:52] having had product failures in the past.

[39:55] So we work with them out of necessity to create this very strong launch momentum. [40:02] And as we're shipping out the products, there was like an 80% defect rate. That felt like a near-death moment, right? We raised money. [40:09] really up the [40:12] the expectations on us and then just couldn't deliver on the product. We [40:16] quickly. [40:17] rented apartments next to the factory. [40:20] But our own engineers, like we only had, I don't know, five or ten people. [40:25] And they became factory managers. [40:27] to manage each [40:28] step of the production line.

[40:31] And that got the quality up. We replaced all the defect units. [40:35] We were shipping a lot of free replacements back then. [40:39] to [40:40] Because these early consumers took a big chance on us. [40:43] We're just like... [40:44] soft them out and [40:46] recovered from that moment. But the profit and loss statement didn't look as good as we had planned. [40:54] What was the… [40:56] maybe the most recent moment or you know yeah one in your later history where [41:02] you still felt like, hey, this could all go away.

Like, you know, these are still the stakes here. Every day is like a rollercoaster ride, or maybe every week. Every week is like a rollercoaster ride. But I think the big one was probably... [41:16] Series B in 2000... [41:20] 20... [41:21] two maybe 20... [41:24] 22 or 23. I forget. Something somewhere in that. Yeah. It was when the market was beginning to cool down a little bit. Yeah. [41:30] Couldn't raise. [41:32] had [41:34] my calendar filled with investor meetings every day. [41:37] and that was my only job. [41:40] And every meeting was very challenging.

Like I would get challenged on the strategy. Like what if [41:45] What about this? What about that? What about this? [41:48] I try my best to answer all the questions, but [41:50] After two months of like... [41:52] Constant questioning. I also lose confidence. Yes. No term sheets. [41:57] constant questions and it just felt like it just got worse and worse because i lost confidence the meetings got worse and that felt like a [42:04] near death moment because I started having nightmares like... [42:07] waking up at 4am and not being able to [42:10] All asleep again?

[42:11] And the nightmares would be about shutting down the company. Like, all hands. [42:14] sorry guys, it's over, like that kind of dream. Then I called up a few friends and we went to [42:21] went partying for a weekend and uh [42:24] I guess then I got to step out from the day-to-day negativity. [42:28] and I just got really tired, like too tired to be depressed. [42:31] and kind of snapped out of it. And the round actually quickly came together after that. Wow. What was the domino like? Did you just find someone finally who just got the pitch or got you in some way?

And yeah, we had then like a few weeks later, we had two term sheets. [42:48] Maybe because I was in a better mood. [42:50] And no longer in this negative spiral anymore. Yeah. [42:54] So interesting how those things can happen. [42:57] It seems from the outside, like the sort of first maybe real breakout hit was the 2A phone. Is that sort of how you think about it? Or like what were the big inflection points in Nothing's Journey? I think our first earbud, despite the early quality issues that we fixed, was the 2A phone.

[43:15] We sold almost 600,000 of those. [43:18] units, yeah, so... [43:19] And this was also in the middle of COVID where the supply chain was uncertain. [43:26] and component costs increased mid-life cycle of the product, and we increased the price from $99 to $149. [43:34] but it still kept its momentum, so that was like... [43:37] a good proof point, I think. The Phone 1, like a brand new design that nobody had seen before, got a lot of attention. [43:44] From a revenue perspective, 2A was a great product. [43:48] It's a good product but [43:50] It wasn't as like...

[43:52] fresh as the phone one. That was the first time the world had seen anybody anything like that. Yes, that makes sense. A big part of [44:00] of the differentiation comes from from the design and you've talked about how design is sort of like, you know, maybe the easiest or the best first form of differentiation. When did you sort of like realize that because it's. [44:12] Maybe obvious when you look at nothing today that that maybe is the philosophy, but I don't think that's a conclusion that a lot of other people would would make when they think of consumer hardware automatically.

Right. It was very clear. [44:23] for us in the beginning, this is how we should do it. [44:26] I think the context is like... [44:28] Are you in a mature category or a nascent category? [44:32] When you're in a nascent category, your main goal is... [44:35] EMF, like... [44:36] Find product market fit, build something that people actually want. [44:40] But in a mature category, in our context, there was already a billion smartphones sold every year. So we knew that there was... [44:45] EMF for this form factor. [44:48] Then the question becomes, how do you differentiate and carve out [44:51] and wedge yourselves in.

[44:53] carve out a piece of the market for yourself. [44:55] And then for us, design was the fastest way to [44:58] do it. And other people are sometimes looking at us and maybe also copying the transparent design language, but they're in a [45:05] Nascent. [45:06] product category, [45:08] they should just think about whether they're copying the right move or not. [45:12] Yeah, so if you're coming up with a, I don't know, some special AI device that no one knows if anyone's ever actually going to use that, deciding to make it look like nothing, you're sort of missing the point.

Yeah, just make it useful. A big part of the way that [45:29] nothing seems to approach design also comes from this sort of relationship and partnership you have with teenage engineering which [45:35] independently of always being interested in what nothing was doing, I always thought, wow, whatever teenage engineering is doing is so interesting. It's this, you know, for folks that [45:45] Listeners that haven't heard of it, it's this Swedish company that makes... [45:49] like really beautiful audio products and other things, but there's a really distinctive sort of playful design in everything they do.

How did that connection come together and how did it become... [46:00] I guess, such a deep relationship. [46:02] Earlier on in 2018 or 2019, a Swedish friend wanted to introduce us. [46:08] And I kind of brushed it off. [46:12] I'm like, what's that? [46:14] We are still a growing brand. [46:16] We need to work with more established, more credible brands. [46:20] Thank you. [46:21] why don't you introduce us to Dior or Gucci? Like why this kind of super niche [46:25] thing it's not going to help. [46:27] But I got convinced to still take the meeting and it was just a different vibe.

Like they were so creative and the designs were so cool. [46:35] And that's when the relationship started. And when I had the idea to start Nothing... [46:41] I met Jesper, the CEO of Teenage Engineering. [46:45] And it was just like a really chill conversation. 40 minutes, shook hands. We figured out the deal a bit later, but... But 40 minutes shook hands on like, we should do something together? We just... [46:55] We just shook hands and then we figured out the commercial structure. [47:00] But it wasn't that hard to get to common ground because we had already aligned.

[47:05] We just wanted to do something at scale. [47:08] and [47:09] I didn't know it at the time. [47:11] But in hindsight, Jasper has been a [47:14] has been quite influential on my life. [47:17] because he used to be an advertising director, like a commercial director. So some of the best advertising that I grew up with that was constantly on TV, [47:27] I still remember to today. [47:29] were envisioned by him. [47:30] What were the ads? So this will only make sense to people who grew up in Sweden, but there's like a painkiller ad with a little guy who like sings about the properties of the painkiller.

[47:41] super like, you just remember it because it's so catchy. There's a Swedish beer [47:45] brand that's all about the feeling of sweeter summer. [47:49] Because Sweden has a... [47:50] the archipelago. [47:52] very beautiful during the summer, like sailing and... [47:56] drinking beer with friends, barbecue, that kind of feeling to sell a beer. [48:01] not selling the product but selling like the the feeling [48:05] Those were two really iconic ads that he did. How do you work with teenage engineering today? And yeah, what are the... [48:12] the feelings that maybe they've brought into the way that you think of, of nothing.

[48:16] When we started, we built the brand universe together. [48:20] Like our first product was not a hardware product, it was a book. [48:25] like a brand book. [48:26] And we have this kind of thought exercise of, [48:30] You know, imagine if Apple didn't exist, what would the [48:34] leading tech company, consumer tech company looked like, [48:38] because it's too easy to be sucked into their vortex because they're the biggest and [48:42] whenever they do something all the other brands kind of just follow. [48:46] In a way, I think, you know, [48:48] Here we have a Dyson store.

[48:50] opposite of Selfridges. It's kind of like an Apple store, but in all black. We just wanted to get away from that type of thinking, like be influenced. So stepping out, [48:59] building a mood board from [49:01] different creative fields outside of electronics, [49:05] like movies, architecture, art, and finding our universe through that. So the first part of the book is like a mood board, and the second part of the book are... [49:13] design explorations for future Nothing products. So that's kind of what we built together in the beginning. [49:19] That set the tone for the product design.