Exclusive interview with the CEO of “Nothing”丨Diversity Company

Editor's note:

When we want to drink Coke, for a long time there were only two choices: Pepsi and Coca-Cola.

When we choose a mobile phone, there is a 90% probability of switching between brands such as Apple and Huami OV.

When we buy sportswear, the first thing that comes to mind is most likely Nike and Adidas.

But the reason why the world is colorful is that outside of these giants, there are companies that do not follow tradition, strive to create differences, focus on design and functionality, and focus on tomorrow.

They have non-mainstream business models, and their designs and products can provide unique user value and sufficient social talk. The point is, they don’t have the baggage of big companies and dare to make progress regardless.

They are "diversity companies."

Diversity is the key to an open world. Ai Faner believes that only companies that truly pay attention to and understand diversity can see the future earlier than more people.

In the column of the same name, Ai Faner will witness with you how these diverse companies reshape the future and define the new normal in the form of exclusive interviews.

This article is the first in the "Diversity Company" column. We will show you how, facing the extremely saturated and relatively solid mobile phone market, Nothing does not hesitate to use its trump cards to carve out a way out by relying on unique designs and products. Where did its founder Pei Yu come from and where he will go.

When you first see Nothing’s products, you will probably have two reactions:

  • This design is really special.
  • Hey, what the hell is the name Nothing?

▲Nothing’s mobile phones and wireless headphones

Three years ago, Pei Yu fought against the opinions of the partners and resolutely named the new brand Nothing. This makes his confessions every time he appears, with a bit of black humor: "Hi, I am the CEO of Nothing."

The free and uninhibited brand name is also the background of its product design. With its strong stylized design language such as transparency, light strips, and polka dots, Nothing’s mobile phones, headphones and other products quickly became popular overseas and won multiple design awards.

In contrast, the old label of "OnePlus co-founder" on Pei Yu is gradually fading, and more and more people know this young entrepreneur born in 1989 because of Nothing.

▲ Pei Yu

Not long ago, Ai Faner met with Pei Yu in Shenzhen. In the two-hour conversation, we did not hear the myth of making wealth from scratch like a cool article, nor did we see a CEO who was always energetic like a textbook.

What we see is a big boy who also needs seven or eight hours of sleep to work well, who also has nightmares due to stress, and who also uses disco to drive away anxiety.

Why do you say big boy? Because of his enthusiasm for technology, pursuit of fun, and the stubbornness of an idealist, he looks like a sincere young man in his early twenties. There is no airs and no clichés. This may be another meaning of "nothing CEO".

The following is a transcript of the conversation between Ai Faner and Pei Yu.

01

Q: How many people are there in the Nothing team now?

A: There are about 480 people in the world. The monthly salary is quite expensive, even though this scale is already very small in the mobile phone industry.

Q: With such limited resources, how do you balance product design and functionality?

A: Let’s do it in stages. When we were working on the first generation of Nothing Phone, we didn’t even have our own software team and needed to outsource it. Thank God if we could make the experience stable. So we have more eye-catching designs in hardware.

Then when we reached the Phone 2 stage, we had our own software team, so we made relatively large investments and returns in basic experience and differentiated experience.

From gimmick innovation to real technological innovation, we have to do it step by step. We actually don’t have much strength now to do a lot of core technology research and development.

If you survey our users now, the first reason they buy Nothing products is design, followed by cameras, performance, battery life, etc. I hope that "design" will always be the primary reason, followed by our technology and functions. We have made some cool things and everyone will recognize them and buy them.

Q: Why did you position Nothing as a high-end brand from the beginning instead of taking the cost-effective route first?

A: I think we are already cost-effective enough. Although we are often complained about on site B, I think our current price-performance ratio is quite high.

We need to focus on volume in the early stage. In this industry, there is no way to do it without volume. Therefore, we need to find a balance point, with a certain amount of volume but also a certain gross profit. Because if there is no gross profit in the long term, you really can’t invest in technology and do innovation.

Q: If you choose a cost-effective brand first, your brand image will be preconceived, and it will be difficult to upgrade it later.

A: But Huawei did it. Huawei didn’t start from the mid-to-low end. I think this is not something that is shouted out or packaged, but if you have technical strength, you will become a high-end brand.

Q: You once mentioned in an interview with The Verge that it is difficult for small companies to enter the consumer technology industry. What do you think makes the barrier high?

A: The value chain of making mobile phones is extremely long. You have to handle the supply chain, production, industrial design, software design, software development, hardware development, and then marketing, sales, and after-sales service. It’s already difficult for a small company to integrate so many different modules, and it’s even harder to do it well.

The water is deep in each module and it's easy to make mistakes. Therefore, whether it is the resources of the supply chain, funds, or the capabilities of the team, the requirements are relatively high.

In fact, this is not good. Small companies cannot enter. There are only some giants in this industry. The business models of the giants are very stable. Why do they do so many different things? Just like Apple was a challenger before, today it only needs to hold on to its position. Small companies cannot compete with it.

Q: Why are the barriers to entry so high and there are so many pitfalls, yet you still want to be in this industry?

A: I think no matter what you do to start a business, it is very troublesome. Even if we open a milk tea shop, it will actually be very troublesome. You have to make a good product, and consumers need to like the product, and then you have to do marketing, inventory, and supply chain.

Anyway, I think nothing is easy. If the pressure is about the same, why not do something more ambitious?

Q: Have you stepped into any big pits?

A: In fact, we have been making mistakes. I think all companies are making mistakes. It’s just to see who can make fewer mistakes.

There was a stage in the past when our production and sales management was not that good, and our product life cycle estimates and inventory risk control were relatively poor. There is also the issue of quality management in India, which faced pitfalls during the production of the first-generation Nothing Phone. Later, we made major changes in the drive factory to solve these problems.

So we are learning at every stage, and now we are learning how to let more consumers know about us in marketing.

Q: Why did you choose to go to the Indian market? The entry barrier is so high. You need to produce in India before you can sell in India. Isn’t it too difficult for a start-up company?

A: If you look at the market structure of India, it is indeed dominated by low-priced products, but Indian consumers very much recognize value. Compared with the Indonesian market, consumers in the Indian market understand technology products better. They not only look at the price, but also look at the value the product can provide.

India is indeed a difficult market to operate in because competition is fierce, including iPhone, Pixel, and some Chinese brands. But I think if you do well in the most difficult market, other markets will also seem easy.

In addition, I think the Chinese market is even bigger. You see, we haven’t touched it, right? So maybe India is not the hardest.

Q: Do you have any plans to develop in the Chinese market?

A: As for mobile phones, we are currently not strong enough to enter the Chinese market. This requires high investment costs. We need to develop our own set of malls or other services. At present, we all use Google overseas, so we don't need to develop it ourselves.

But we want to try something on headphones. We are moving our YouTube content to Bilibili to see how the market responds and then learn from it. I think there should be some consumers who like our brand.

Q: When are you expected to test the water?

A: Just this year or next year.

When I returned to China this time, I was recognized three times on the street, which I had never done before. One of them was a girl who saw us on Instagram. There is a boy who met us on YouTube. There is also a boy who works in a new energy vehicle shop, and he also pays attention to us.

So I feel that some consumers here have already formed some impressions of us, and they all prefer technology or trends.

Q: Although the threshold for this industry is high and the competition is brutal, an interesting thing is that some car companies have also begun to enter the industry to make mobile phones.

A: This is very understandable. Because in the long run, the opportunities everyone sees are the same, which is a new interaction between people and smart terminals. This is a ubiquitous interaction.

But everyone's path may be different. Some companies start with cars, and some start with mobile terminals, but they all lead to the same goal. If so many companies are pursuing an opportunity at the same time, I think there will eventually be a reshuffle. Just look, there's still plenty of time.

Q: If a car company came to you for cooperation and pursued such an opportunity together, would you be willing?

A: Yes, you can consider talking to Tesla, but not yet. I think we are still a little weak now, let’s get stronger later.

Q: I think Musk would like your concept and design very much.

A: After Twitter changed its name to I guess he must have seen our stuff.

Q: Speaking of philosophy, you once said that Nothing’s philosophy is to “only make good products”. How do you define “good products”?

A: Just don’t make rubbish. Ask yourself, is this product something I’m proud of and can I get my hands on? Can I give it to my family and friends without feeling guilty?

Q: Since the establishment of Nothing, you have always advocated "Make tech fun again". How does this vision affect your product design and marketing strategy?

A: In the stage of the company from 0 to 1, this is a better concept, and it is easy for everyone to resonate with it, whether it is the outside world or the internal team.

What I do is very inspired by Nike, that is, whether the entire company can move in a general direction instead of each department doing its own thing.

In many companies, there is a "wall" between departments, causing software design and hardware design to be separated and have nothing in common.

We rely on a core concept to unify and guide the work direction of each department, so whether it is the interaction of product design with light strips or the marketing team holding a press conference, everyone wants to make it more interesting. This can also unify consumers' perception of our products.

Nothing Phone’s light strip has unique recognition

Q: From co-founding OnePlus to founding Nothing, has your vision for product development changed?

A: I don’t know if it’s a change. In the past, it was under a large platform. That large system would have some fixed concepts, strategies, consumer groups, and business models. There is actually no need to change this.

But I want to do more creative things, and I feel that the entire industry has actually reached a not very good stage, so I have to start a startup company to try to solve this problem, which is within a large system. It can't be done.

Nothing has its own ideas about how technology will develop in the future. Although our strength is limited today, we can only get closer step by step.

Working on a large platform, I may not have such freedom. I have to consider a more realistic market: Can this product sell well? Are the business results this year good? Although Nothing also needs to consider these issues, I feel that here we have a real opportunity to change the world. Although the probability is relatively small and it still tests our abilities, we have the opportunity to do something groundbreaking.

Q: You said that the entire industry has reached a bad stage now. In what aspects is this "bad" reflected?

A: Mainly because there is no big progress. If you look at the iteration of mobile phone products, either the camera is slightly better or the signal is slightly better, but productivity has stagnated and progress has been stagnant for a long time.

Technology should essentially improve productivity, such as steam engines and the Internet. When smartphones first became popular, people's productivity was indeed improved with the help of mobile networks. But later I felt that after a large number of APPs emerged, they might not necessarily be of much help to human beings. For example, we spend a lot of time on social media every day, but we become more and more distant from family and friends in life. Everyone will only post the most beautiful side of themselves for the world to see through platforms such as Instagram and Tiktok, which contributes to the anxiety of young people.

Therefore, the direction we focus and explore is to make mobile phones truly improve people's productivity and achieve higher efficiency.

Q: So, Nothing hopes to start the next round of technological revolution?

A: I think it’s best to do it first, otherwise like many companies shouting some slogans, they end up doing very poorly… But I think Apple has launched some so-called revolutions before, such as the iPod, which in my opinion is a A big revolution. Then came the iPhone and the post-PC era, which moved everyone from PC to mobile. Then I think, are there some new eras that we can create together?

Q: In your opinion, what would be the “iPod” of Nothing?

A: We must have an "iPod moment", otherwise it would be meaningless to become a mobile phone brand with a sense of design.

Looking at Apple's iPod moment, it took advantage of some trends and technologies at the time to repackage listening to music into a very beautiful and practical user experience.

Then we have to think about what is the trend of the current era, what new technologies are there, what habits have people changed, and then how to package it into a better closed-loop product? We are still thinking about this. Of course, we don’t have a lot of financial strength or resources to consider our “iPod” now. But this is necessary. If not, the value we bring to society will be limited.

Q: You once believed that mobile phones will still be people’s most important smart terminal for at least the next five years. With the rapid development of AR and VR products and the continuous iteration of mobile computing power, do you still insist on this judgment?

A: Hold on, I haven’t seen any new products that are expected to replace mobile phones. For example, Apple's Vision Pro is a very good productivity tool for creative workers. It is very convenient for making 3D models and communicating online. But I think this scenario is relatively narrow. I don’t think it will replace mobile phones, and I don’t think an ordinary consumer will wear this thing for several hours every day.

Q: What about lighter smart glasses or watches?

A: I think glasses are a bit difficult. People are visual and tactile animals. If they want to see and touch things, the virtual experience of glasses will be a bit awkward.

The watch might have a chance, but the screen is small and inconvenient to operate. Maybe when many interactions can be done by AI, it will be possible.

Q: The vision and touch you just mentioned are CMF when it comes to product design. Mobile phone manufacturers are becoming more and more involved in this aspect.

A: I think CMF should be considered comprehensively when designing products, rather than choosing CMF after the product is well designed. This may be a difference between the workflow of Nothing and other brands.

We are actually very restrained in making CMF. In the past three years, we have only made black, white and gray products.

But we created a sub-brand called CMF. Nothing focuses on the mid-to-high end, and CMF focuses on the mid-range. This also sees an opportunity. No one has put much effort into making mid-range products. So if we put the same thought into making something very different, can we bring some new feelings to this market? ?

Q: Will the products of sub-brand CMF and the main brand overlap?

A: We will launch three products first, one is a cost-effective smart watch, one is a TWS headset, and the other is a gallium nitride charger, all with the design style of Nothing.

▲Three products launched by CMF

02

Q: Nothing has been founded less than three years ago, but it has released two generations of mobile phones and headphones, and even launched a sub-brand. How did it achieve this speed?

A: Although the challenges are great, it is quite easy for us to attract some excellent talents. The current team is the best I have ever worked with. We are starting a business together, and every employee has options, so if we do well, everyone can benefit together.

Q: What are the pros and cons of your team being dispersed around the world?

A: First of all, there are definitely big disadvantages. In terms of communication costs, including language translation and cultural gaps, there are often misunderstandings or different working habits.

But a more diversified team can think about things more comprehensively, and I think each region has its own advantages. For example, the supply chain is mainly in Shenzhen, and India also has some but not much. Over the past two decades, China's supply chain has become very strong. Then hardware development is also relatively strong, so the hardware team is also here.

We have a software office in Taipei, China, because there are many teams there that have worked on Android. The teams in the UK and Sweden mainly do industrial design, and the design inspiration mainly comes from there. Dyson’s former design director is here. There are many financial talents in London, so our finance and brand departments are all in London. It's probably a combination like this.

Q: How do you ensure that global teams can collaborate efficiently?

A: After unifying the goal, everything else is secondary. If everyone is very clear about the goal and agrees with it, just authorize them to work on it, and then go and accept the results.

Before starting my business, I read a book, "The Hard Thing About Hard Things" by Ben Horowitz, and recently read his "What You Do Is Who You Are". There is a story in the book about how Genghis Khan built his military culture, which inspired me the most.

At that time, some gang groups in Mongolia distrusted each other and competed with each other. Genghis Khan first unified the interior and then went to conquer other places. Moreover, he is good at using talents and has an open mind. He can see what his strengths are for people from different cultural backgrounds.

So we are very open now and are learning how to identify everyone's strengths and how to make everyone cooperate better.

Q: Are there any specific methods to ensure that everyone’s goals and vision are consistent?

A: Our approach should be the same as other companies, with different management tools: management meetings, weekly meetings, monthly meetings, and quarterly meetings. At quarterly meetings, we will bring managers from various countries and regions together to build consensus. Besides, I don't think there's anything special about it.

Q: As far as I know, Nothing has many partners. How will this affect your management of the company?

A: It’s too difficult to do it alone. As mentioned earlier, the value chain of the mobile phone industry is too long, so it is a good thing to have more partners. We basically have a complete, end-to-end capability from the beginning. When there is pressure, everyone can handle it better together, but one person may not be able to handle it alone.

Q: What about the cost of communication and decision-making? Will it become higher due to the complexity of opinions?

A: I think having different perspectives is a good thing. If everyone has different opinions and doesn't talk about it, that's the worst case scenario. If you say it, at least after we discuss it, the probability of making a correct decision will be higher, right? If I make the decision alone, the probability of being right may be even lower.

I feel that not only the founding team, but also our current executives are relatively open and challenge each other. This will make our decisions of higher quality, which is a good thing.

Then you talk about how to make decisions, then each of us has our own area of ​​expertise. In the professional field, we give sufficient trust to those in charge.

Q: When selecting partners and core members, what characteristics do you value most in them?

A: As for partners, what I appreciate more is the ability to learn by oneself, because the difficulty of our business will become more and more complex over time. If you don't grow personally, you won't be able to hold on to this matter.

For some senior executives who come later, we mainly judge them based on their abilities. Do they have the abilities our company needs at the current stage? They can help us fill in our shortcomings so that we can enter the next stage.

The second thing is to see if he wants to do something challenging but wonderful, because he can choose to go to a more stable platform, where the salary may be higher and the working hours will be shorter. He has to come from his heart and want to do this with us.

But I found that many people actually want to do it. There are some people in our company who are in their forties or fifties. They may have only done some routine things before, but they hope to take another gamble, fight again, and do some great things in their careers.

▲The founder and deputy director of design of teenage engineering is the founding partner of Nothing

Q: When choosing these core members, do you prefer younger ones or more experienced ones?

A: I think if we choose younger people, the probability of (company) failure is very high. As a startup company, our cost of trial and error is very high.

My plan is this. If this position requires a very experienced person, then we will directly find a very experienced person and don't mess around. But at the same time, we must also train young people to see their shaping power and ability to learn quickly. We have not officially launched campus recruitment yet, but we plan to start this next year to allow smart young people with strong learning abilities to come in and grow with them.

I hope that in ten years, if Nothing is still around, our senior executives will all be promoted from within rather than always looking for them from outside.

Q: Do you think your judgment of people is accurate?

A: As time goes by, I will become more and more accurate. I have made many mistakes before and learned from my mistakes, so I will become more and more accurate.

Q: How would you evaluate a person's self-learning ability?

A: You can talk about it through chatting. For example, is there any difference between the topics we talked about today and half a year ago? Or from a business perspective, a development colleague has become very sensitive to the market and operations after two years. This is actually a big change, and you can discover it through more communication.

Q: How is your own learning ability?

A: I feel okay. My core job is learning, because the challenges we face are always changing.

For example, when I wanted to raise money to start a business, I was very scared at first: Wow, why would someone give you millions of dollars? What if you lose all the money? From that state and understanding, we have grown to now, and we have probably received US$250 million.

To give another example, I used to think that human resources was a very simple position that could be handled by just anyone. I saw a resume that said that he had worked as a human resources assistant. I thought that a human resources assistant should be similar to human resources, so I hired him. It turned out that he couldn't handle anything, and he was very depressed. Then he went to do human resources work by himself, and found that he had a lot of knowledge in this unfamiliar field. Compensation and benefits, corporate development, employee care, and internal communication all have different logics.

In this process, I may not be as arrogant as before. I respect every professional field and tell myself not to think about things too simply.

Q: What is your style at work?

A: I heard that I am difficult to work with. I have to pay attention to many small details. Even if the pixels in an interface are wrong, I will mention them, as well as typos. I hate this kind of thing. I think the things delivered to the market should be close to perfect.

I don’t know if you have ever observed the AOD (Analysis Display) of an Android phone. Before the fingerprint icon appears, it will flash slightly for 0.2 seconds. I asked the team before why they couldn't fix this problem. They said that the hardware has limitations and no one can find the details. Why does it take so much time to fix it and rewrite a lot of code to solve it. I pushed the team for a long time and finally got it done.

Q: I’m a detail freak.

A: I think if you do the details well, you can also do big things well.

Q: Is this true in life as well?

A: In life, I am actually very easy-going and don’t care about anything because it doesn’t matter and I don’t have the energy to be serious.

▲Pei Yu likes sports and casual wear and looks capable and easy-going

Q: Is there a CEO that you admire very much?

A: A lot. I think Elon Musk is very admirable. He wants to bring mankind to a better place.

Tim Cook is a good operator and pays great attention to details. Although there is no innovation, he does a very good job in business.

Satya Nadella is the same. Microsoft used to be a very bureaucratic company, and it was difficult to advance internal affairs. After he came, he was able to transform Microsoft into what it is now and grasp AI so well, which is really amazing.

Q: What kind of CEO do you want to be?

A: You should be yourself. I hope that we can bring value to society, not just a company that makes a lot of money. So in this area, I more approve of Elon Musk. But in terms of company management and attention to details, I quite approve of Tim Cook. Can I make a hybrid? But I think this is a bit ridiculous. After all, our company is so small now and we are still far away from them.

Q: Growing up, did you have any idols?

A: Steve Jobs. I used to have a statue of Steve Jobs on my desk.

Q: What influence did he have on you?

A: He’s the reason I joined this industry. It’s actually quite sad. I believe Steve Jobs inspired a generation of young people to enter our industry. So today, who will do this "Jobs"? There seems to be no more.

So if we can make technology more interesting, I believe we can also inspire a group of today's young people, and then they will join this industry and make this industry more passionate and enthusiastic.

Q: We have observed that talents in the mobile phone industry are flowing to the automotive field. The current industry’s appeal to young people is much less attractive than it was ten years ago.

A: Yes, it’s because technology has become boring, so we hope to make it interesting again. Like when we were kids, holy shit, suddenly an iPod, or an iPhone, iPad, or MacBook Air came out, which felt like some disruptive products. Those companies that were passionate at the beginning have now become boring companies.

Q: What kind of company culture do you emphasize in your company?

A: Our corporate culture has four core values. One is "Be the Change", which means acting as a change, acting as a change, and becoming a change. Because we are an entrepreneurial company, we hope that everyone will be proactive rather than passive.

The second is "Pride in Product", which means being proud of our products. We are a product company. We should not make products that we are not proud of. Every employee is the spokesperson of our products.

The third is to "embrace diversity", and the last is to "survive". You cannot live in ideals, but you must also run the company down-to-earth.

Q: Can such a company culture inspire employees' enthusiasm for innovation?

A: Indeed, in our current company culture, we don’t pay much attention to consumers, and we also don’t pay much attention to innovation. So this is a question we are discussing, how to add them.

We have just discussed the principles of 80% and 20%. In the past three years, our main focus was on "survival" and not enough energy on "innovation". If we can devote 20% of our energy to "innovation", I believe there should be some breakthroughs.

Q: So the brand’s sales volume, including its financing situation, has reached a point where it’s time to consider more “innovation”?

A: Yes, we have many more choices now than before.

Q: Are you still anxious now?

A: How should I put it? I feel like I have adapted, or I am more able to withstand stress than before. In the past, I was quite anxious when faced with business pressure. Even when we first raised funds, we were very anxious. Wow, people trust us so much and give us their money. What if we mess up? Even my parents and friends wanted to invest and support it, so I felt a lot of pressure.

And when we first started recruiting employees, we were like, wow, you came here and handed over your career to us. If you don’t develop well here, that’s our problem. So every stage has its own anxiety, but now that I’ve been doing it for three years, I’m fine.

Q: How do you usually relieve stress?

A: It’s good to sleep more. I went to an event recently, and the 80-year-old boss said something that I thought was pretty good. Someone asked him, would it be a lot of pressure for you to manage such a large market? Then he replied, just treat it like a game, don't take it so seriously.

In the game, you have to solve problems to pass the level. The same goes for running a company. When faced with a problem, you treat it as a process of clearing the level. This is more similar to my previous thinking.

Q: If one day Nothing develops to the scale of vivo and OPPO, how will you manage it?

A: I think the most reference management in China should be Huawei and Alibaba. Their organizational capabilities are very strong.

My ideal situation is that I don't need to do anything, but the company is running very well. The highest state of an enterprise is that you build the company to perfection, but it will get worse if you interfere with it. I think the above two companies are closest to this state.

Q: What kind of company do you want Nothing to eventually become?

A: I don’t know how far I want to go. The further I go, the less reliable it becomes. It’s like trying to draw a cake.

I think although the name of Nothing is a bit funny, the highest state of technology should be Nothing. It is everywhere but invisible because it is completely integrated into your life.

It sounds silly, and today’s technology is still far from it, but that’s what we think.

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