Tony Fadell, the engineer who helped invent the iPhone, founded Nest and now runs an investment firm that has backed more than 200 startups, has strong opinions and is not afraid to shout about them.
Here are two for starters: Europe is going to lead the climate tech revolution — and investing in the metaverse is a harmful “diversion of resources”.
The world, says Fadell, is experiencing a “Holy Shit moment” as it grapples with the Covid-19 pandemic, a “horrifying, devastating war” in Ukraine and looming environmental disaster.
But, ever the optimist, Fadell says that these massive challenges also create extraordinary opportunities. A new generation of purposeful startups is inventing creative solutions to problems that will not only improve our planet but may turn into trillion-dollar businesses, too.
“Everything is going to change over the next 20 years,” he says. “Every product you use today will be changed.”
Future Shape Fund
Fadell’s Future Shape investment and advisory fund, which writes cheques between $250k and $25m but declines to reveal the overall scale of its investments, is heavily focusing on climate tech startups. It’s already invested in alt-meat giant Impossible Foods and synthetic diamond producer Diamond Foundry in the US, and is actively exploring investments in a cleaner environment, better crops and healthier seas in Europe too.
Earlier this month, Paris-based Future Shape participated in the $73m Series B by Sweep, the French carbon management platform, which Fadell claims is a world leader in its field. It's also invested in Nothing, the smartphone manufacturer that aspires to rival Apple.
Other public European portfolio investments include Aectual, a Dutch carbon neutral 3D-printing company, and Aryballe, a French odour digitisation startup.
“If you are a cleantech investor the best place to go is right here in Europe and that includes the UK,” he says. Europe enjoys more progressive environmental regulation, more progressive companies and more progressive societies than most other parts of the world. “It is wonderful to be here.”
As a private fund, with no outside LPs, Fadell says that Future Shape can move fast and focus on the long term. Its aim is to help “incredible scientists and engineers” take their ideas from the lab into real life. “We call ourselves mentors with money,” he says, focusing a lot on helping entrepreneurs tell their stories in compelling ways.
As someone who has worked closely with Steve Jobs, has successfully played the startup game and has now become an active VC investor, Fadell says he is constantly asked for advice. In response, he has summarised what he has learnt in a book called "Build: An Unorthodox Guide to Making Things Worth Making", published next month.
“Every day at Future Shape I get tons and tons of the same questions. The selfish reason for writing the book is so I don’t have to say the same things over and over again,” he laughs.
The religion of Silicon Valley is reinvention, disruption — blowing up old ways of thinking and proposing new ones. But certain things you can’t blow up. Human nature doesn’t change
"Build" is a jaunty book, dispensing as much life advice as startup coaching. It covers the standard fare of how to achieve product-market fit, build a business and raise money. But it deals with the human side as well: how to overcome startup growth breakpoints, deal with assholes and know when to quit. “In the end, there are two things that matter: products and people,” Fadell writes.
He acknowledges that much of his advice is old school. “The religion of Silicon Valley is reinvention, disruption — blowing up old ways of thinking and proposing new ones. But certain things you can’t blow up. Human nature doesn’t change, regardless of what you’re building, where you live, how old you are, how wealthy or not,” he writes.
He also accepts, in our interview, that the best way to learn how to run a startup is to start running a startup. “There is no startup school. You have to get a PhD in it by doing it.” Failure may be an inevitable result of inexperience but that also provides the best learning experience. “It is only failure if you do not have another go. The first iPhone was a disaster. But we just kept going,” he says.
What excites Fadell as an investor today is how business is becoming democratised as more entrepreneurs can access cheap technological tools, easy finance and global markets. “I think that we can widen the universe” of entrepreneurs, he says. What has also changed since the last cleantech boom and bust of 10 to 15 years ago is that governments and consumers are now “screaming” for action on the environment. Carbon border taxes can provide an economic incentive for green investment, too.
He is, however, worried that surging investment in the metaverse will suck energy out of climate tech. “The metaverse is a false choice. It is a diversion of resources. Either you are part of the problem or part of the solution. If you invest in the metaverse you are part of the problem,” he says.
VCs can make money from moving around digital bits, but it is only by moving around physical atoms that we will solve the climate crisis.