The Coolest Smartphone Startup in the Scene Today | Nothing, Carl Pei

you know something happened between the founding of apple and the founding of nothing in between there's like 40 years of time and in this 40 years the most important thing that happened was that regular people started using the internet now that there's so many smart people out there in the entire world not just silic valy how do you connect people and how do you build a company together with the people out there how do we erase the barrier between company and community community member and employees are the same thing that's how we compete with apple

hi everyone my name is Carl I'm the CEO and co-founder of nothing I think nothing is a company that's often misunderstood you know in the beginning people thought we were a earbuds company now people think we're a smartphone company we've only been making phones for 2 years this year is our first growth year today the industry is quite boring the entire reason why I am a part of this industry was because of some of those more inspiring products in the past then somebody else has to become a creative company that's how we thought about it

yeah so I was like a first generation immigrant as a kid I was born in Beijing but left when I was 4 years old you know Sweden is known for high-speed internet back in the day so I got a really good internet connection and I got a laptop when I was 12 we had a really good teacher at school who taught us coding in HTML so I started making websites since I was 12 music I've done anime I've done games like just all types of websites as as long as we can get the traffic up

I didn't even know who Steve Jobs was during the iPhone announcement I think the first Apple keynote I watched was actually the first iPad keynote I saw the iPhone I just had to buy it and it was only available in the US so I had a American friend buy it for me at AT&T and then sent it to me and I had to jailbreak it but it was such a great experience like it's so different from anything else the multi-touch the capacitive touchcreen like it's magical so I grew up in Sweden uh but in the

news there was always news about the Chinese economy growing fast After High School I actually went to China for a year my parents were really scared like what are you going to do I just want to go and see it for myself I I there's so much news about what's happening I picked a place where I didn't have any relatives in South China because I knew all the factories were in South China and I so I just moved there and started exporting stuff from like uh going to markets buying stuff and selling it online clothing

and MP3 players it was a really crappy brand we made nobody knows about it but my parents were really upset they were like this is not serious it's not a real job you got to go back to school and uh so after a year I moved back to Sweden to to go to university so actually I went to the best business school in Sweden and you know at that time this was around like 2008 some of the biggest things that were happening in the world were the rise of tech companies like Microsoft like Amazon like

Google e-commerce was growing you know in my 3 years at school we spent zero time on any of those three topics best business school spent zero time on tech companies zero time on E Commerce we learned theories from like 100 years ago like macroeconomics microeconomics how to manage a factory labor input uh Goods output and stuff like that so I was like school is supposed to set you up for success in the future right and the world is changing and we're not like what's this so I I didn't write my thesis so I didn't take

my diploma and I left when I told my parents I was not going to get my University diploma their reaction was terrible they were like why you're not going to get a job you can't be hard without a diploma go back my plan was actually to apply for white combinator after uni cuz one of my friends was back then the youngest founder to have gotten into YC at the same time I really like gadgets I really like Hardware so I had gotten to know a Chinese smartphone company the first one it's called meu and I

got to know their leadership team and as I was contemplating how to pitch YC they they called me to just move to China and join them and I'm like yeah why not and also I was a little bit lazy I didn't have to write the application so I just moved to China I joined the that company mesu their founder got depressed because uh there was another company that grew really fast at that time called xiaomi he felt like he was first but xiaomi grew much faster and they almost made a partnership so because they couldn't

do a partnership shiai became a separate company and grew very quickly that founder was stopped going to work so I kind of lost respect if you're going to be like this how's the company going to be successful you're going to face a lot of challenges on your journey I ended up at this another company called Oppo Oppo is a one of the biggest Chinese smartphone companies and they really focused on the offline distribution and Oppo started OnePlus and I was in the founding team of OnePlus I mean I was a really young person at that

time I was 24 years old and the original idea of OnePlus was to compete with xiaomi in China online xiaomi was online right they were the first to sell smartphones online direct to Consumer I'm like hey let me do International like nobody's doing International right so there was like a senior executive team for the Market I'm like it's a free opportunity nobody's doing it so I got to do it and I I didn't know how to build a team my first team were all English teachers but I think we got really lucky because just one

year later we had done 200 mil in Revenue Global and then China team only did 100 so we're like wait a minute maybe the opportunity is not in China it's Global so then you know the entire company started focusing on International markets one takeaway from the OnePlus days was that at the end it's all about the product you can build a Cool brand you can build great marketing you can do fancy stuff but the reason why people pay are paying you is because the product so if you disappoint them on the product you can disappoint

them once next time they're not going to come back so I think most of the energy should be focused on creating the best possible product experience but like I learned that I didn't want to spend my entire life just integrating technology you know we we would buy chipset from Qualcomm we buy display from Samsung we will buy just different components and we design and package and sell like I'm very grateful for that opportunity and I learned a lot but I didn't want to spend my entire life just doing that why can't I be a part

of defining technology why do I just have to integrate other people's ideas and it was just a gut feeling at that time right I didn't know too much about share price or financial statements and stuff like that but now in hindsight if you look at the share price of the most successful companies they're tech companies not integrator companies but I just knew I wanted to do something more valuable be a part of Building Technology and not just integrating other people's technology my initial plan was to travel the world cuz I had worked so hard for

7 years so I did that I started doing that I went to uh Greece I went to Italy and then I was living in like very nice hotels and eating at Michelin star restaurants but after like 10 days it got really boring I felt like I was wasting my life I went back to Stockholm so we we decided to make smartphones because that's all we knew uh that's the industry we came from it's actually the biggest one of the biggest consumer products in the world right it's like a billion sold every year and the more

important thing is like these smartphones are the most important device we have it used to be the PC or the laptop but if you look at the time spent and the money spent this is the most important device so we knew that if we were able to build a smartphone business and grow it to a certain scale then there would be a lot of opportunities to make money on software and services because the hardware will distribute the software I had never raised money before so I was like I started meeting some friends who introduced me

to other people and everybody gave me some advice one of my friends is like uh he's Estonian so he's very direct he looked at the deck he's like don't show the deck just just talk and it it will go better it will be worse if you show the deck so I took his advice cuz the deck was indeed terrible we almost called the company essential we even bought the essential trademark from Andy Rubin but then we were like wait this is not this is somebody else's we couldn't come up with anything better so we just

chose nothing I stayed in Stockholm I think for 8 weeks and then by the end of the 8 weeks we had 7 million uh raised for our seed I mean my dream is to be able to shape the future of technology today we're still just making very traditional smartphones with better design and better software but I think there's something new on the horizon but first if you take a step back what is technology technology has always enabled humans to do more right since the invention of the wheel or the fire or electricity or the personal

computer right Steve Jobs called the personal computer the bicycle for the mine it really allowed us to take our thoughts into action on the computer so technology always increases uh human capability this is almost like a hard rule but recently in the past 5 or 10 years we broken that rule because the smartphone is not empowering people to be better or do more smartphone is a stupid machine it makes us more stupid makes us Zoom scroll social media or compare ourselves to other people and feel not that good about ourselves or but I think nature

is going to correct the path and make technology ology uh serve people again and then if you go to 2020 when we started nothing it felt like the tech companies became evil and society and media was writing that they were evil it's like the oil and gas companies of the past something changed and I just wanted to find that feeling back again like how can we inspire people to be optimistic about the future execution wise our entire thing has been about buying time we want to be a tech company right but Tech takes time and

money to develop so we can't develop Tech in the beginning the easiest way to differentiate in the beginning is through design it's fast you don't have to do R&D you just have to have some really creative people some great ideas and then you can just you can make a product that looks different and I was always a bit frustrated when we had to do something creative that just didn't feel like we could find the good like the right Talent so I was like wait Europe could be good for creativity maybe they don't have a lot

of industry in Europe but at least they have creativity so I decided to base the company here in the UK so we started with the design language then the just came from that the positioning we wanted to take was something we call technical warmth so very raw very machine like on one side but also very human on the other side that's the balance we try to strike a lot of entrepreneurs before us they all messed up when they tried to make a smartphone so when it was our turn to make a smartphone nobody believed in

us they were like hey there's been five or six entrepreneurs who made smartphone companies that failed immediately and we took a bet on them we lost money on them we're not going to work with startups anymore we're just going to work with established companies we were like okay too bad uh let's make something else and prove ourselves that we can design Something Beautiful something unique and something people want that's why we started with earbuds when we started making earbuds nobody wanted to work with us also and nobody believed in us we could only work with

the worst Factory in the world like this Factory had no other customers they would go bankrupt if they didn't work with us that's why somebody took a chance on us because they were going to die this Factory was terrible you know our engineering team would design the product not just the exterior but also the interior the mechanical and all the engineering inside and then we would also design the manufacturing process so what each stage of the factory has to do deliver the product even so the factory couldn't follow the process you know on the earbuds

there's a metallic connector between the earbuds and the case is where the charging comes from so there's a spring to make sure there's connectivity they manufactur the spring incorrectly so it couldn't touch the earbuds so the first batch of earbuds we shipped couldn't be charged 80% of the products we we shipped were faulty in the first batch we halted the the production immediately I was like okay now it's game over right this first product raise money failed but luckily we moved fast we rented two apartments outside of the factory we put 15 engineers in those

apartments so every day our Engineers were on the factory floor basically acting as Factory managers to supervise each station so that it's manufactured according to our spec and then we turn the quality around and for the first batch of users we just replaced uh all their products but that was like already then there was a near-death experience for the company and uh we sold almost 600,000 of those smartphone is like much more complicated than earbuds right there's many more components it's like there's so many levels we have to beat to build a smartphone we just

play the game like what's the next thing to do what's the next thing to do the first few levels are easy like let's do a a partnership with Google Android that was quite easy the hardest thing was that there's a IC chip between the display and the motherboard very small chip that connects the two like Samsung display would have the the IC chip connected to the display Samsung didn't have any stock we couldn't buy from Samsung we had to buy from another supplier and they only made a display they didn't make the IC so we

had assembled all the components but we didn't have any IC we paid all the cash to prepare for the manufacturing a lot of cash phones are expensive to make it just lacked one component and we couldn't manufacture the product basically at that time we went to everybody I I went begging to all our competitors most of the smartphone bosses CEOs or whatever met me at that time some kids trying to ask for IC chips and they were like why should I give you any any of my chips probably talked to like 50 to 100 people

eventually we got some supply for the IC that was also a near-death moment right cuz you we had paid so much money for the supply and we couldn't even manufacture the product the biggest lesson is just to push through every time I felt the world was falling apart or I couldn't take it anymore I just pushed through and then looking back like half a year later to what happened half a year ago it's doesn't matter it's something small you know but at the time a lot of lot of things felt almost like um fatal for

the company in one of the fundraising rounds it was very tough I was pitching investors for like 2 months and every meeting would be challenges like oh what's your vision why would this work why would this not work have you thought about this have you thought about that it's okay for a few weeks but for like 2 months just getting challenged every single day and you're not sure you have the right answer after like two months I started having nightmares every day like in in the dream it was me standing front the company just saying

sorry to everybody like it's not going to work and then you know I wake up at like 4:00 a.m. and just sweating and just you know can't can't get back to sleep and that went on for a long time and the fundraising went even worse because I couldn't get enough rest and I'm like okay we got to change something at that time I was still in Shenzhen and uh I called up a lot of my friends I was like Hey we're going to go party this weekend in Shanghai a lot of friends all flew to

Shanghai and we partied for two nights we just forgot about work forgot about everything else and then my moon changed and then when I got back the funding came I don't know if it's going to work for other people but I think the getting stuck in a negative uh mindset you just have to break out of it so when you were using it obviously you're jumping from Android to iOS which do you prefer the truth is um you know I did a review for the iPhone that one did 4 million views organically but ever since

then the I've never been able to do better than that our YouTube is kind of just like satisfying my inner child that was the idea basically I think about marketing purely from an efficiency perspective I only think about it from an efficiency perspective I think every consumer brand that's grown from a small brand to a big brand has had to fight unfair you've had to find a way to be way more efficient than everybody else because the logic is very simple if everybody spends 10% of their revenue on marketing and you're a small company your

revenue is small your budget is going to be very small so if your efficiency is the same as a big company if your tactic is the same you're always going to be a small company and they're always going to be a big company so for me marketing is only about efficiency creative creativity if done right that drives efficiency up a lot of people think remember the Apple uh Super Bowl commercial as a case study for great advertising but actually it's it's very it was very high efficiency why because at that time nobody had created a

beautiful thought-provoking Super Bowl ad they were the first so you got so much free publicity people were sharing it with their friends were talking about it but now there's no efficiency there anymore because every brand is trying to do something creative at Super Bowl so you got to find the high efficiency opportunities of today that's what we're working on every day in terms of our marketing when I was younger and I was a fan of these tech companies I always wanted to learn more about them how do they think how are they thinking about building

products what's their strategy but it was so hard to learn more about those companies behind the scenes Community is really interesting because you know something happened between the founding of apple and the founding of nothing in between there's like 40 years of time has gone by and in this 40 years the most important thing that happened was that regular people started using the internet now no matter where you are are in the world you can have access to all the best information like 40 years ago you had to be in Silicon Valley to get to

know about the world today you can be on any small island somewhere in the middle of nowhere and you get the same almost the same level of access to information now that there's so many smart people out there in the entire world not just Silicon Valley how do you connect people and how do you build a company together with the people out there that is the long-term vision of the community like how do we erase the barrier between company and community community member and employees are the same thing and we build thisan company together with

the smartest most passionate and most creative people from all over the world so that's why we also allowed our community to invest in the company we wanted them to be a part of the financial Journey from the beginning until and not just from the IPO time into the future in regards to the phone 2A Community Edition project it's like okay we made the phone 2A now it's your turn to make it I just wanted to see what what level of creativity we have out there I think our teams are really delivering in terms of making

Tech fun again recently we just launched the cmf phone one so the cmf so the color material finish of the product the users can decide themselves packaging of the product the wallpaper of the product the marketing plan of the product we just handed it over to our our communities I just wanted to see what level of creativity we have there and with a removable back cover and you can play with it you can unscrew the bottom uh right corner of the phone and there put other accessories on there and then we took the cad files

the 3D files and released them publicly so not everybody can do 3D printing and build on top of that that's way more fun than a traditional iPhone right that's how we compete with apple apple is like just sitting in their basement trying to figure out the future for themselves and then they they come and release something and then maybe it works maybe it doesn't whereas we can build a future together with our users and the biggest change now is I think the Advent of the AI age AI era there's going to be a new type

of operating system a new type of uh operating system without apps like today we're still like app based it's been this way for a long time the Palo West days the Symbian days they were all like this but if the future of computing is without apps then the companies who have apps today they also have to change now they're very much ahead of us in terms of the company scale and the faction but if everybody has to start from the beginning again then we also have the opportunity to win this race we we can never

win the traditional smartphone race we can only use that to establish our business but if everything is changing then everybody who has a smartphone has a chance to create the future so what I'm really excited about is to be a part of shaping what the future of Computing what the future of operating systems look like don't start a startup just to look cool or you think that like this is a cool lifestyle it's not a cool lifestyle it's like I got a lot of gray hair now I didn't have any gray hair before but I

wouldn't trade it for anything else it's great but it's not for everybody it's also really nice to see somebody walking on the street wearing your product or using your product it's a feeling that cannot be replicated by anything else I think and it's even better if they don't recognize you if they don't recognize you it means your brand is growing and the founder doesn't matter anymore and and they they're just exploring the product finding the brand so although things are hard sometimes there's also really good parts about it so you know we talked about how

hard everything we're doing is but but I think at the end of the day I'm just a normal guy like anybody and if I can figure it out then you can also figure it out if you want to it's not going to be easy you're going to face a lot of challenges but if you're really passionate about it you can probably even do a better job than me