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Can the American Heartland Remake Itself in the Image of Silicon Valley? One Startup Finds Out

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I don’t think Fadell is a rock star, but I’m quickly realizing that he is not your run-of-the-mill Silicon Valley billionaire making an early retirement out of an investing hobby either. For starters, he doesn’t even live in the Valley anymore. He has moved to Paris. Permanently. And the more I learn about him, the more I begin to suspect that Silicon Valley’s favorite son secretly hates the Valley. To hear Fadell tell it, he certainly has reason to.

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Fadell’s front wheel goes kerflooey against a half-inch granite curb delineating the edge of the bike lane, and he’s thrown to the ground. The bicyclist behind us swerves to avoid the crash and curses at Fadell while he’s down, splayed over his crumpled bike: “Merde!”

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“You need to be able to jack it into that battery in the bike,” I say, offering an unsolicited design critique.

The iPhone, which came out in 2007, was Fadell’s last chapter at Apple. As the guy who built the iPod, he had earned the right to shape the company’s next flagship product. The phone project started in earnest at the end of 2004. By that time, Fadell and his team had prototyped iPods that could also make phone calls. Fadell’s design used the iPod’s circular controller like a rotary dial. But there was another team inside Apple with a bigger idea—the all-touch screen. And the competition between the two teams at times escalated into full-on corporate warfare.

In the end, Fadell didn’t have much of a choice. The odds of Fuse succeeding on its own were not good. So he put his own dreams in a box and went to work for Apple as the head of the iPod project. The first iPod was not perfect, but it was still way better than the competition—and as it was refined, it grew into a monster hit. Steve Wozniak, who watched it all happen from the inside, credits the iPod with turning the entire company around. “It made our revenues double, our profits double, and our stock double,” he says. The iPod was a hit, and Fadell was a hero inside Apple.

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“If you’re launching a startup today, don’t go to Silicon Valley ifyou’re not from there,” Fadell tells a group of students. “Don’t doit!”

early ’90s. Fadell, a computer engineering major at the University of Michigan, has already tasted entrepreneurial success with a little education-software company called Constructive Instruments that he founded in his dorm room, but he wants more. “I was getting very frustrated being a big fish in a little pond in Ann Arbor,” Fadell says, “and my eyes were looking at the West going, Silicon Valley, Silicon Valley, Silicon Valley.” For a technologist like Fadell, there was no other place. Then, when news broke that a handful of Apple alumni—including the hero-programmer behind the Mac, Andy Hertzfeld—had escaped the mothership and banded together to form a new company, General Magic, Fadell saw his future.

To get the idea off the ground, Fadell rented an office in San Francisco’s Telegraph Hill neighborhood and hired about a dozen people. Then Apple called. This was just after Jobs had returned to the company he founded and was struggling to save it from oblivion. Jobs was looking for a way out of a no-win battle with Microsoft and, like Fadell, had hit upon the idea of a portable MP3 player. Toshiba had just announced the launch of a small-­format disk drive that would give the Apple MP3 player a crucial advantage over the competition. But Apple needed someone who knew the tech forward and backward to build out a prototype. Executives asked him to come in to discuss something—they were cagey about exactly what.

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As if on cue, Fadell is forced to cut his reverie short to take a call from a young journalist doing a story on “the new culture of celebrity in tech.”

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Fadell assumed Apple needed some help designing a next-gen Newton and took the meeting. It was only after he signed the nondisclosure agreements that he discovered that the company wanted him to design a portable MP3 player—the future iPod. In effect, Apple was asking Fadell for help in competing with himself. Yet if Fuse were to have any chance of survival, Fadell had to take the consulting gig at Apple, because Fuse needed another infusion of cash. The traditional sources of funding had shut down because the dotcom crash was already under way.

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Fadell is in full manic panic, and those are the first words out of his mouth as I step into his garden courtyard in the seventh. It’s early in the morning, the day after Founders Forum in London, and I’m being escorted onto the premises by Fadell’s PR person. Today she has scheduled Fadell for a long sit-down interview with me. But all of that has been forgotten, as Fadell has just been hit with some disturbing news. “Fucking Apple,” he says. Fadell clams up after this outburst, but I later hear there is a dispute brewing between one of the Future Shape companies and Apple.

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Fadell has invested in hundreds of startup companies, and I have no idea which of them is butting heads with Apple. However, I do glean enough to understand that there is nothing unusual about the morning’s drama. Fadell is a drama king: The more drama, the better. In fact, Fadell’s PR person is a specialist in what has come to be called crisis PR, and she tells me that with Fadell, “every day is a new adventure.”

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Turning philosophical, Fadell puts on his shades against the bright sun streaming through the backseat sunroof. “It’s kind of like being a film producer,” he says, reflecting on his new role, post-Nest, as an investor. People pitch him, and if he likes their idea, it’s go time.

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