“We call ourselves mentors with money,” says Tony Fadell, who is principal at Future Shape, a global advisory and investment firm coaching engineers and scientists working on foundational deep technology. He has been coaching founders and investing in their start-ups for the better part of the past decade, and with 250-plus start-ups in its portfolio, Future Shape is bringing technology out of the lab and into our lives.
The idea behind Future Shape, he says, was to “help all of these companies that are doing really difficult things”. Fadell and his crew have identified a few really difficult things that he sees as big investment areas going forward. They include the electrification of everything; the digital connection of everything; the rise of biomanufacturing; and the eradication of waste. Those themes drive some, though not all, of the work in Future Shape’s portfolio.
Everyone deserves a mentor, Fadell believes. For every career crisis, every fork in the road, you need someone to talk to. Someone who’s been there before, who knows exactly how wobbly and conflicted you feel, who can give it to you straight: Here’s how to think about choosing a job. Here’s how to be a better manager. Here’s how to approach design. Here’s how to start a company. Here’s how to run it.
Fadell learned all these lessons the hard way. He started his 30-year Silicon Valley career at General Magic, the most influential start-up nobody has ever heard of, and spent the first ten years failing spectacularly. But then he spent the next 20 building some of the most impactful devices in history – the iPod, the iPhone and the Nest Learning Thermostat. Since his move to Paris a few years ago, Fadell has worked closely with President Macron and his team in helping to build the French Silicon Valley, with the result that France is now home to 26 tech unicorns.
He has enough stories and advice about leadership, design, start-ups, mentorship, decision-making, devastating screw-ups and unbelievable success to fill an encyclopaedia. So that’s what his latest book is. Simply called Build, it’s not a biography, definitely not an autobiography. It’s an advice encyclopaedia. A mentor in a box. He says he was motivated to write the book because he woke up one day and realised that most “mentors” that had helped him along his journey – some he worked with, others supported him with investment and advice – had died. He suddenly understood the baton had been passed to him and so now it was time for him to “help the next generation”, just as he was helped.
The book is a very easy read, accessible to everyone from high-school kids all the way up to boardroom executives. It’s engaging and full of practical advice about negotiating your career and how you can succeed. But most surprisingly, it’s a really honest account that states success doesn’t come right away and there is “a ton of failure along the way”.
Recalling his dynamic working relationship with Steve Jobs, he says: “Steve always wanted to discuss not just the smart decisions we made, but our failures as well, so we could also learn from them and avoid them in the future.” He argues passionately that everyone in business needs to talk about failure more often and “make it a part of company culture”, because “that’s the only way we can learn”.
After all, “you didn’t just get up and walk, you failed hundreds of times before you learnt to walk, or even stand, as a baby, and everybody cheered, you know, even when you tried”. He discusses how this process failure provides “tangible, gritty and raw advice”, which is important because “people have to understand that the shiny things they see on Instagram and TikTok are not how the world is”.
His own personal story is one of inspiration and perseverance. Born to a Lebanese father and Polish mother, he attributes his success to “hunger” and “passion” as well as the “environment you grow up in”. When he found himself in more risk-taking environments, he was able to take even bigger risks than he normally would, especially as there were a lot of environments where he felt totally stifled and he had to just live with it or leave. He believes passionately that it takes both the combination of environment and the person themselves to be able to succeed.
It is when discussing schooling that he sounds most unorthodox. Too often, he believes, schooling can be negative. It is too focused on testing, and testing is about passing and not failing. Maybe, he argues, “you learn because you failed on the test”, but “everything is set up since you are born to make this test, get into this school, follow the formula, and once you’re out of school there’s no more formula, it’s only taking risk”.
Fadell doesn’t follow the standard Silicon Valley credo that you have to radically reinvent everything you do. His advice is unorthodox because it’s “old school”. Because it’s based on human nature, not gimmicks. He keeps things simple: he just tells you what works. He gives you exactly what you need in order to make things that are worth making.
First of all, I asked him about the three most exciting companies that we will be hearing a lot about in 2022. Number one is Menlo Micro, a company that is manufacturing cutting-edge electronic switches which are used in everything from electric vehicles and smart home devices to 5G cellular networks and aviation. “For 40-plus years the industry has been trying to develop the perfect combination of the electromechanical relay and the silicon transistor. Well, Menlo Micro has engineered the holy grail with this Ideal Switch. The Ideal Switch is a tiny, efficient, reliable micro-mechanical switch, with unmatched RF-performance and, counterintuitively, high-power handling of thousands of watts,” he says. “As our world moves to the electrification and wirelessness of everything, Menlo Micro’s deep innovation is already triggering massive cross-industry upheaval.”
Number two among the companies Fadell is championing is Turntide, which is inventing and scaling breakthrough technologies to optimise how humanity uses energy. Its goal is to eliminate the 25 per cent of global electricity consumption that is wasted by legacy electric motors, thus accelerating the world’s transition from fossil fuels.
Number three is Understory Weather, which Fadell calls a climate change-driven, next-generation insurance company that started with smart weather stations and data.
Other companies in the Future Shape portfolio represent Fadell’s belief in biomanufacturing and the eradication of waste. An early investor in Impossible Foods, Fadell thinks that the same synthetic biological processes that could lead to the replacement of meat with alternative proteins could extend to the fabrication of a leather replacement and the development of new bioplastics to replace chemicals currently used today. He was an early convert to Impossible nearly a decade ago, long before the Silicon Valley company’s products could be found throughout the US and before Burger King announced the Impossible Whopper. When he first came on board, early attempts at a plant burger cost several hundred dollars to make. “Biomanufacturing is happening,” he says, “and it’s happening at a staggering rate because we’re embracing the powerful thing on the planet – life. You want to drive the market to where it needs to go. And everybody follows – just like what Impossible is doing.”
While many of the companies in his portfolio are still at a very early stage of development, Fadell says that there have been some exits from the Future Shape portfolio, and he expects more soon. “We’re not in this for the money, we’re in this for the change,” he insists. “If we do this right the money comes. I’m not in the job of convincing LPs – we do it based on conviction.”
Fadell is on a mission to change the world and he wants everyone to play their part. He asks people to think about the future (2050), and about sitting around the dining table with their family. He asks them what would their response be to their children or grandchildren’s questions, especially when they ask what you did to save the planet while it was burning up? How will you answer what you did personally or what you did professionally (by investing in or working at a company or pushing that company to make changes to fix the climate crisis)? “You are either part of the problem or you’re part of the solution,” he declares. “There’s nothing in between.”
His experience with companies in this regard has dramatically changed over the past few years. While five years ago no one seemed to care, he now receives calls from everyone wanting to get into this space. Large corporations, car companies and venture capital firms all want to invest in companies seeking climate-change solutions. For many, especially those in the oil and gas sector, it’s a marketing spin or “greenwashing”, but even that is still better than doing absolutely nothing, he believes. Some do it for the benefit of their employees and their shareholders, but many actually take it to heart and are making things happen. “It’s going to take time to win them over, but people are starting to realise, from both their family perspective and their professional perspective, that’s it’s actually cheaper and better to go greener. If you do it the right way, not only you can save the planet, but it’s also better for business.”
Fadell has an incredibly strong argument when he answers his own question. Nest, a company he founded and which was sold to Google in 2014 for $3.2 billion, makes internet-connected thermostats that help save consumers 15 per cent on energy bills. Tech innovation can help us save the planet without changing our lives at all, and consumers embrace that, he says. “Remember, 60 per cent of all energy produced today is wasted without going into useful work. So, imagine the improvement to the climate if that 60 per cent was taken down to just 40 per cent.”
There is only so much the private sector can do in the way of leadership. When it comes to governments in general, Fadell praises the EU’s “real leadership” whether on the carbon border tax, or renewables, or taking nuclear energy to the next level. But he goes further. Tackling the climate crisis means that governments need to impose stricter operating rules. For example, they should require the externalities each business produces put on its balance sheet and they should mandate companies operating within any national jurisdiction to embrace scope 3 emission transparency standards. Oil, gas and petrochemical companies should be highly regulated, especially when transferring non-climate-friendly assets to “bad actors”, who are going to keep running them. Otherwise, such assets should be shut down.
With the mention of “bad actors”, the conversation moved towards China. Yet Fadell doesn’t think China is necessarily a bad actor. He praises China’s unwillingness to accept plastic trash and waste generated in third countries, similarly with carbon. China doesn’t want to be the world’s dumping ground, nor should it. China is doing more on nuclear and on renewables, but they’re still building vastly more new coal plants in China than anywhere else. But at the same time, they’re going more electric.
Part of China’s success comes from their early adopter culture and part comes from government subsidies to new businesses. “China’s been trying to break into the car business for years by subsidising their domestic industry,” he says. “They could build everything else, yet their biggest problem was not having good engine technology. Now they are easily building electric motors and batteries, and that’s where they are investing a ton of money. They have 300 different EV companies in China, they can subsidise them and they can win a new market with similar technology that they will own, thus locking everyone out. So it’s dual purpose for China, both protecting the environment and owning their own automotive industry and getting away from their dependence from Europe and the US.
“The other thing we have to realise is that there are two fundamental differences between China and more or less the rest of the world, or western world. One is that everything in the western world is about the individual, whereas in China it’s all about the collective or the government or the society, depending on how you want to categorise it. The second thing is what we call stealing and they call sharing. Again, companies can copy each other if it’s for the benefit of the collective, whereas over here it’s all about individual IP rights, it’s about protecting capitalism, and you can’t steal my IP. Two totally different modes of thought baked in for generations after generations. Even though we’re human, we think differently about how to treat each other and how to treat each other’s businesses.”
One area that Fadell is assuredly not optimistic about is the “metaverse”, the immersive online experience that has become the key focus of Facebook, renamed Meta in October 2021. Some tech leaders have predicted that activities in the metaverse will come to rival – and even exceed – the importance of those experienced in physical reality. But Fadell doesn’t believe the hype and argues passionately that the metaverse is a distraction from addressing existential problems in the physical world such as climate change. “Let’s not waste our scarce resources, talent, money on things that are not solving problems. You know, I’ve been dealing with the metaverse and virtual reality since 1988 and I’ve been through three waves of this so far, so I know where it’s headed and it seems like we’re just solving problems that no one has.”
Fadell isn’t the only tech figure who questions the appeal of the metaverse. Tesla CEO Elon Musk told conservative satirical site the Babylon Bee that he doubts the potential for widespread adoption of the metaverse. “I don’t see someone strapping a frigging screen to their face all day and not wanting to ever leave. That seems – no way. I currently am unable to see a compelling metaverse situation.”
Fadell also highlights the potential social harm of the metaverse. With both UK and EU governments bringing forward legislation to tackle online bullying, he argues, online trolls exist on Twitter and TikTok, because “you don’t have to look into the other person’s eyes when you’re saying things to them”. He believes the metaverse only makes that inclination worse.
So what should be in the UK government’s energy strategy? Pointing to the model of President Obama’s “qualified small businesses” – a scheme that enabled people to invest tax efficiently in small businesses – Fadell wants “better tax breaks” for people who choose to invest in innovative and cutting-edge businesses working on climate crisis solutions. Second, with the planning process being a nightmare everywhere, he believes there ought to be a dedicated organisation for enabling big projects to get off the ground quickly. Thus he wants “fast lanes to be introduced for energy storage, for nuclear reactors, for new transmission lines, in fact anything that’s going to help tackle the climate crisis and build the infrastructure we need. We can’t take ten years. We don’t have it.” Third, he encourages governments to back certain big initiatives, such as small modular nuclear reactors, providing match funding as equity. “Governments can be investors… it doesn’t have to just be grants”.
Praising the way governments and the private sector worked together during the Covid pandemic, he says “what was achieved in four-12 weeks with new vaccines was amazing”. He is looking for them to replicate this approach in tackling the climate emergency”.
Fadell has infectious energy. Days after speaking to him, I was struck by how big his vision is. Now that he is based on this side of the Atlantic, Boris Johnson should get Fadell to London (the UK already has 116 tech unicorns). He should offer him a free hand and appoint him as his personal tech envoy.
