00:00Carl Pei, the CEO of Nothing. First and foremost, thank you so much for joining us here.
00:05Thanks for having me.
00:05Thank you. Yes, so an incredible location here at the World Government Summit.
00:09Now, I wanted to start off with your launch, which was in 2020.
00:13You've achieved this incredible unicorn status over just four years.
00:17Tell us a little bit more about the concept of Nothing and how it's grown as well.
00:23Yeah, for sure. Maybe taking a step back.
00:25You know, I was a big tech fan ever since I was a kid.
00:27I got the latest gadgets, for instance, the first generation of the iPod.
00:31And those products made me really inspired about technology in general, but also about consumer tech.
00:37And that's the reason why I'm in this industry.
00:39I've been in this industry my entire career.
00:41But over time, it just got more and more boring.
00:43The products got more and more similar.
00:45Every new generation was basically the same as the previous generation.
00:49And all these companies that were more innovative had gotten really big.
00:53When I was younger, Microsoft was the uncool company.
00:56But now I think Apple has become the uncool company.
00:59And we just wanted to do something about it.
01:01I thought, you know, there must be other people out there like me who's tired of all these big company
01:07products.
01:07And they want something with more personality and more creativity.
01:10So what is the sort of concept behind it?
01:12It's about passion.
01:12It's about fun.
01:13And it's bringing all of this back into technology.
01:16Can you give us sort of any examples of what makes this fun?
01:18Yeah, our mission statement is make tech fun to inspire human creativity.
01:22Because I think ultimately creativity is our superpower as a species.
01:26And for me, creativity is not just about arts.
01:29It's about the sciences as well.
01:30It's about solving problems in general.
01:32And I think Apple, when they were a younger company, they really created tools for creative people.
01:37They had tools like iMovie and GarageBand for music.
01:41But today it's like it's not really accelerating our creativity anymore.
01:45So that's what we really wanted to focus on.
01:47We're just a five-year-old company.
01:49The first couple of years, we really chose to focus on a different design.
01:53So if you look at our products, they're kind of transparent.
01:56They have this retro but also futuristic look that's very distinct.
02:01And if you ask our users why they bought the products, design, and both on the hardware side and the
02:06software side,
02:07those are the primary reasons.
02:09Over the last five years, we've been able to attract the youngest user base out of this entire industry.
02:15The average age of our user is around 26.
02:17If you contrast that to a company like Samsung, their average age is about 45 and increasing.
02:24So I think we have a very fun and unique position and opportunity in the market right now.
02:29Well, it seems like you're doing everything right.
02:31I mean, achieving unicorn status in just four years is phenomenal.
02:36How have you managed to do that?
02:37Yeah, I think first of all, we're vastly undervalued because also our revenues are around a billion.
02:44So the multiples are quite cheap.
02:48Secondly, I think valuations are not that important because ultimately company building is a marathon.
02:54We should measure progress in decades and not short-term milestones because you might be a unicorn today and then
03:02you kind of mess up and you're gone.
03:05And we've seen so many cases of that in the past as well.
03:08I think it ultimately boils down to serving people.
03:12Like who are your customers and what value do you bring them?
03:15For us, you know, we're a consumer product company.
03:19Our consumers, they work, they get a salary, they pay tax, and with the money they have, they choose to
03:26buy our product.
03:27They're not buying a demo product.
03:29They're not buying a prototype.
03:30They're buying something that they're going to use for years.
03:32So it all boils down to the product quality, whether it delivers value.
03:39I mean, it's pretty simple.
03:41At the end of the day, businesses need to deliver value to their users.
03:44I think if you do that, then you can become a unicorn, decacorn, or whatever.
03:49It doesn't matter that much.
03:51So, I mean, the technology sector, though, is such a highly competitive market.
03:55How are you navigating all of that and making sure that you sort of lead the pack, so to speak?
04:00We're pretty much an idealistic and pragmatic company at the same time.
04:07So before starting this company, we studied the landscape.
04:11And basically everybody who tried to make consumer devices in the last 15 years have all failed.
04:18And we wanted to avoid failing.
04:20So by studying them, the conclusion was that they went a little bit too fast.
04:25They might have had great visions and great product ideas,
04:29but they didn't really build up the fundamentals of the business
04:32because it's quite complicated to do what we do.
04:35It's not making a mobile app.
04:37From going from like an idea for a product to the supply chain to the manufacturing to the engineering
04:41to the sales and marketing to the customer service, like the chain is very long.
04:46So we approached it from like a very pragmatic perspective.
04:49Let's just build the foundations first before we innovate.
04:52So out of our five-year history, I think the first three years was just about building the capability foundation.
04:59The third year onwards of year four and year five was about scaling.
05:06And now we're at a stage where we're going to start innovating
05:08because if you think about our industry, a lot of changes are going to come.
05:12AI is a big topic.
05:13It's going to change the hardware devices, but also the software devices
05:17or the software systems that are running on these devices.
05:20And now we've become really well positioned for this
05:23because if you're a very small company with a lot of great ideas,
05:27you don't have the engineering infrastructure
05:30and the go-to-market infrastructure to really commercialize those ideas.
05:34If you're a really big company, you're already profitable.
05:37You need to report earnings every quarter.
05:39It's also very hard to steer the ship.
05:42So being a mid-sized business at this stage feels like the perfect mix between agility
05:48and also capability to capture the opportunities of what's coming next.
05:52Well, speaking of supply chains,
05:54how are you managing and navigating global trade at the moment?
05:57We've got geopolitical issues, we've got higher tariffs, higher prices.
06:02Is that affecting you at all?
06:04First of all, philosophically, we are a product company.
06:07We just want to deliver the best products to our users.
06:10And there's a bunch of things outside of our control, geopolitics being one.
06:15So for us, it's about being neutral
06:17and just doing what we have to do to adapt to the circumstances.
06:21For instance, we had to increase our prices for U.S. consumers a little bit last year.
06:27And we do a lot of our manufacturing in India because India is a big market for us.
06:33So the goal doesn't change, deliver great products,
06:35but we just adapt to the circumstances as they happen.
06:39So speaking of these different markets,
06:41I know that Western Europe, India, the U.S. now are very big markets for you.
06:45What are your expansion plans, especially in Europe as well?
06:48Yeah, I think India is quite big for us.
06:51It's pretty straightforward how we expand.
06:55Europe is actually also growing like 100% year on year for us.
06:59I think the European consumer is a little bit more conservative than the Indian one.
07:03It takes a little bit more time to gain the trust.
07:06But we have a plan for the European market.
07:08U.S. is currently very small for us.
07:10It's a low single-digit percentage of our total pie.
07:14I would love to grow it to 30% to 50% of our total volume in the next couple
07:19of years.
07:20Last question, really.
07:22Any new products that you can tell us about that you're developing?
07:25A new phone, some headphones I hear are in the works.
07:28What can you tell us?
07:29Yeah, we have a big YouTube channel, actually.
07:32And on that channel, I've announced that this year we do not have a flagship phone
07:36because I don't think you should just make a flagship phone every year for the sake of it.
07:40We don't have...
07:42It's going to be quite boring if you don't have a lot of upgrades generation to generation.
07:46So far, we've upgraded our flagships every two years.
07:49So no flagship phone, but for our mid-tier phone, there's going to be a lot of improvements.
07:53And we're going to invest more into the audio headphone category this year.
07:58This year will also be the first year where we start delivering some of our AI-native product ideas.
08:03That's more on an exploratory side of things,
08:07but I think that's the most exciting part of our business.
08:09Well, thank you so much.
08:10We cannot thank you enough for joining us.
08:11Thanks for your time.
08:12Enjoy the rest of the summit.
08:13Thank you so much.
08:13Thank you so much.
Comments