Still The Coolest Smartphone Startup in Tech Scene 2025 | Nothing, Carl Pei

EO Studio 0:00 You know, something happened between the founding of Apple and the founding of Nothing. In between, there was 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 are 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? 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 two years. This year is our first growth year. Today, the industry is quite boring. The entire reason why I'm 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. [ on-hold music]

EO Studio 1:08 Yeah. So I was like a first-generation immigrant as a kid. I was born in Beijing, but left when I was four 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 send 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 touchscreen, 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, "W- what are you gonna do?" I just wanna 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 so I just moved there and started exporting stuff from like, uh, going to m- 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. This is not a real job. You gotta go back to school." And, uh, so after a year, I moved back to Sweden to, to go to university. 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, uh, tech companies like Microsoft, like Amazon, like Google. E-commerce was growing. You know, in my three 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 gonna get my university diploma, their reaction was terrible. They were like, "Why? You're not gonna get a job. You can't be hired without a diploma. Go back." My plan was actually to apply for Y Combinator after uni, because 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 Meizu, 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

EO Studio 3:59 just moved to China. [gentle music] I joined the- that company, Meizu. 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, Xiaomi became a separate company and grew very quickly. That founder was... stopped going to work. So I kind of lost respect. If you're gonna be like this, how's the company gonna be successful? You're gonna face a lot of challenges on your journey. I ended up at this other company called OPPO. OPPO is, uh, one of the biggest Chinese smartphone companies, and they're really focused on the offline distribution. And, uh, 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, 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 China market. I'm like, "It's, 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 pa- are paying you is because of the product. So if you disappoint them on the product, you can disappoint them once. Next time, they're not gonna 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 wanna spend my entire life just integrating technology. You know, we, we would buy chipset from Qualcomm. We would buy a display from Samsung. We would buy just different components, and we'd design and package and sell. Like, I'm very grateful for that opportunity, and I learned a lot, but I didn't wanna spend my entire life just doing that. Like, 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

EO Studio 6:30 technology. My initial plan was to travel the world, because I had worked so hard for seven 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, uh, 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 or one of the biggest consumer products in the world, right? Like, like a billion are 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, to a certain scale, then there would be a lot of opportunities to make money on software and services because the hardware would 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'll, it'll go better. It will be worse if you show the deck." So I, I took his advice, uh, because 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 eight weeks, and then by the end of the eight weeks, we had seven million, uh, raised

EO Studio 8:02 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 mind. It really allowed us to take our thoughts into action on, on the computer. So technology always increases, uh, human capability. This is almost like a hard rule. But recently, in the past five or 10 years, we've 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. It makes us doomscroll social media or compare ourselves to other people and feel not that good about ourselves or... But I think nature is gonna correct the path and make technology, 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, just 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 wanna 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. I just didn't feel like we could find the good, like, the right talent. So I was like, "Wait, Europe would 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 products 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 gonna work with startups anymore. We're just gonna 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 gonna 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 eng- engineering inside, and then we, we would also de- design the manufacturing process, so what each stage of the factory has to do to 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. It's where the charging, uh, comes from. So there's a spring to make sure there's co- connectivity. They manufactured the spring incorrectly, so you 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 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 turned the quality around. And for the first batch of users, we just replaced, uh, all their products. But that was a, 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 m- many more components. 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. But, 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 the display. They didn't make the IC. So we had a- 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. We 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 kid 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? Because you, we had paid so, 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 things felt almost, like, um, fatal for the company. In one of the fundraising rounds, uh, it was very tough. I was pitching investors for, like, two 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, two 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 in front of the company just saying sorry to everybody, like, "It, it's not gonna work." And then when, you know, I would wake up at, like, 4:00 AM and just sweating and just, you know, can't c- 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, s- we gotta 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 gonna go party this weekend in Shanghai." A lot of friends all flew to Shanghai and we partied for two nights. We just for- forgot about work, forgot about everything else, and then my mood changed. And then w- when I got back, the funding came. I don't know if, h- it's gonna work for other people, but I think the getting stuck in a n- negative, uh, mindset, you just have to

EO Studio 14:33 break out of it. So when you were using it, o- 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 four 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 a efficiency perspective. I only think about it from a 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 m- way more efficient than everybody else, because it's... 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 gonna be very small. So if your efficiency is the same as a big company, if your tactic is the same, you're always gonna be a small company and they're always gonna 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, a beautiful, thought-provoking Super Bowl ad. They were the first, so they got a- so much free publicity. People were sharing it with their friends or 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 gotta 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 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, 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 this 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 (1) . 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 s- unscrew the bottom, uh, right corner of the phone and just put other accessories on there, and then we took the CAD files, the 3D files, and released them publicly so now 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 c- they come and release something, and then maybe it works, maybe it doesn't, whereas we can build the future together

EO Studio 18:09 with our users. And the biggest change now is, I think, the advent of the AI age, the AI era. There's gonna 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 Palm OS 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 traction, 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 s- 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. Uh, 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 they, 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. S- And if I can figure it out, then you can also figure it out if you want to. It's not gonna be easy. You're gonna face a lot of challenges. But if you're really passionate about it, you can probably even do a better job than me. [outro music]