Can Silicon Valley Survive?

BestsellerMagazine.com - CATEGORY Daily Report: TITLE

“Any VC who tells you that you have to move to Silicon Valley,” Fadell says, gesticulating wildly, “is being very lazy.”

Nadav Kander

Given that Fadell has tangled with major Silicon Valley companies and lost twice, it’s hardly surprising that he decided to relocate to Paris. The surprising thing is that he may have found something better. At least that’s the case Xavier Niel makes. Silicon Valley, Niel says, is for suckers. He ticks off the downsides: the sky-high salaries needed to attract engineers, the atrocious traffic, the relative dearth of cultural institutions, the isolation from the great cities of Europe …

I am, to say the least, dubious: France is known for being unfavorable ground for businesses of all kinds—especially startups. It has high taxes, rigid labor laws, and a culture that is averse to the free market. But I have to concede that Niel, a billionaire eight times over, is putting his money where his mouth is. He’s making the case against Silicon Valley in the middle of Station F, a massive complex on the outskirts of Paris devoted exclusively to the care and feeding of startups. The building that houses it all is a former railroad terminal almost as long as the Eiffel Tower is tall and filled with a sea of desks—more than 3,000 in all. Basically, it’s a gargantuan coworking space, one that comes with all the amenities you’d find in a big Silicon Valley company campus—foosball tables, private conference rooms, fancy food courts, a chill zone, beanbag chairs. All of it is owned and operated by Niel.

He operates as its landlord. Young entrepreneurs with an idea have to apply to get in, and if they do, they pay a nominal fee for a desk and plug-and-play access to the entire French entrepreneurial ecosystem. Looking down from all sides are offices of the permanent tenants: angel networks, VC firms, incubator and accelerator programs, outposts of large firms like Facebook and Microsoft looking to hire and acquire. Those tenants pay top dollar for the advantage of being in the same building with all the young guns.

One of the nicest of the permanent offices belongs to Fadell. Future Shape, his fund, is now worth, he estimates, between $500 million and $1 billion. That’s equivalent to a medium- or even large-size venture fund. But the difference is that, unlike a VC fund, Fadell doesn’t have a bunch of limited partners backing him, tracking returns over (typically) a 10-year maturation period. Future Shape is all Fadell’s money, so there’s none of the usual VC pressure to IPO or be acquired. His personal balance sheet is not public, but financial lightning struck him twice: Both he and his wife got a bundle of Apple stock options back when AAPL was dirt cheap, and then he sold Nest to Google for $3.2 billion. “It’s all covered,” Fadell says, referring to his finances. “I don’t have to worry about it.” So the point of Future Shape, for Fadell, is finding those magic products—like the iPhone or the Nest thermostat—that need long runways but might change everything.

“All of these incumbents with these big businesses that have been around for 100 or 200 years can be unseated,” Fadell says, “because technology is the unseating element, the levelizer.” When Fadell talks about “technology” he means something a bit different than the usual definition. He waves off things like email and spreadsheets as mere bolt-ons to existing business models. His thesis is that almost every industry is up for grabs when and if someone like him redesigns the essential hardware with software and services baked in. It’s the formula Fadell learned at General Magic and then applied at Apple and Nest. Everywhere he looks, he sees industries ripe for his particular brand of disruption: logistics and trucking, urban transportation, farming.

It’s an exceedingly familiar rap. Every venture fund claims that disruptive opportunity is everywhere—it’s the very premise of that type of investing—and lots of them claim, for one reason or another, that they don’t push their startups for exits.

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

Fadell indulges in one heresy, however: an insistence that you no longer need to throw yourself at the feet of the Silicon Valley masters, as he did 25 years ago. “If you’re launching a startup today, don’t go to Silicon Valley if you’re not from there,” Fadell tells a group of awestruck students at a coding school that feeds its graduates into Station F. “Don’t do it! You’re at an incredible disadvantage.” It is clear that he’s also talking about himself.

In fact, whatever the audience, whether it’s coding kids or the founders of Founders Forum, Fadell never misses a chance to pooh-pooh the Valley. Fadell made a fortune in Silicon Valley and now has left it for good. He’s putting down roots in Paris. He studies with a French tutor every day and is getting fluent. His two kids are enrolled in the local école, and the headquarters of Future Shape—the new business—are inside Station F.

You don’t need Freud to figure out why. Look past the big wallet and the big ego and you see a guy who has been grievously hurt by the Silicon Valley system—exploited and then betrayed, twice. First by Steve Jobs, who squeezed Fadell for all the juice he had and then publicly tossed him aside. The second time it was the same shit, different company—Fadell was again sucker-punched on the way out. The wave of bad publicity while he was at Nest—the Recode memes, the Information exposé—came after Fadell told Page he wanted to leave Google.

Sure, he might have failed altogether if it hadn’t been for the support of Apple and Alphabet. And by one very important measure, Fadell succeeded stupendously, thanks to Silicon Valley: He walked away from both companies with huge piles of money. Maybe for mere mortals, money would be enough. But it wasn’t for Jobs, who famously plotted and finally succeeded in winning back the control that Apple’s early financiers took from him. Hardware is tough: Putting millions of things in the hands of millions of people requires large amounts of capital. And when someone gives you large amounts of capital, it often means you lose control. Elon Musk, who is two years younger than Fadell, is the first Silicon Valley hardware titan in generations to retain control of his inventions. Fadell seems to yearn to oversee his own dominion. This idea that he had to sell his babies is, I sense, what drives him.

Fadell is almost pathologically compelled to say what’s on his mind, and never in the week I spent shadowing him did he say anything that smacked of self-pity. But by the end of the week, it was clear what this third act of his career is about. He’s trying to challenge a Silicon Valley­centric system that separated him from his creations.

In Paris, he can pick out younger versions of himself, give them money and watch all the possible versions of his life story unfold again and again.

In France, Fadell has a mini-­replica of Silicon Valley outside the Future Shape door. It’s a place where he can pick out younger versions of himself, give them money, and—in a sense—watch all the possible versions of his own life story unfold again and again. “My job is to come here and bring Silicon Valley here,” he says. “It’s that cultural element that people are trying to replicate around the world, of taking risks and believing in yourself and changing the world, and there’s no reason it can only be done in Silicon Valley.” Fadell is the vector, the human tissue culture in a grand cloning experiment—as well as the experimenter, tweaking the rules.

What I see is a guy trying to prove to Silicon Valley that his way was the right way all along—with the irony that he’s trying to make that case in a high-tax country that has, so far, produced very few high tech companies of note. But who knows? It might just work. Station F is not some government-­hatched “development” plan but rather the private gamble of a self-made tech billionaire, and Niel’s stated goal is to have it pump out a thousand additional startups a year into what is one of Europe’s biggest startup cities. “It’s the ambition of all the people here, including Tony, as well as our new president Macron”—the young French president has met with both Fadell and Niel—“to help this ecosystem become huge.”

As for Fadell’s Future Shape, it already includes chunks of some of the more promising non–Silicon Valley companies going—Superpedestrian in Cambridge, Massachusetts; Modern Meadow in Nutley, New Jersey; Convargo in Paris; DICE in London; CashShield in Singapore—and to a person their CEOs have described Fadell’s behind-the-scenes help as invaluable. Judging by the idolization that Fadell gets from young French coders, Future Shape will undoubtedly get early access to the startups that will emerge from Station F and elsewhere. His rock-star status is probably his main advantage as an investor. Will it be enough to beat Valley VCs at their own game? We’ll see.

But in another sense, Fadell’s big bet on Paris has already paid off. Spiritually, he’s back home—to that Midwestern place where he was before he was sucked into Silicon Valley’s vortex. He calls his own shots. He’s a big fish in a small pond. He’s in control. And this time around, Silicon Valley comes to him. “Tony meets more American tech people in Paris than in the US,” Niel says. “Because if you are a big US tech manager, you come to Paris at least one or two times a year—and when they do, they all call Tony!”

By all means, when you come to Paris, you should definitely look Fadell up. He’s a wild man, a maverick, a bull in a china shop, and a lot of fun. But take one bit of advice from me: Whatever you do, don’t let him borrow your phone.

BestsellerMagazine.com, Forum discussion and sharing News from home and abroad. Starting from the ideological, political, economic, social and cultural.

Source : https://www.wired.com/story/tony-fadell-revenge-on-silicon-valley-from-paris

Tony Fadell’s Next Act? Taking on Silicon Valley—From Paris
Startup women from Israel get a taste of Silicon Valley
How the ‘Coach of Silicon Valley’ Determined Steve Jobs Was a Leader
The Red Cross Presses Silicon Valley To Fight Cyberwarfare
The guys behind Silicon Valley's favorite coffee chain reveal the 2 coffee gadgets they can't live without
Tesla Is Immune To Bad Financial Data Because Logic Is Officially Dead In Silicon Valley
Sun Devils in Silicon Valley
Thinking of getting a cat? Here’s what you can expect to pay
‘SNL’ Promo Has Kumail Nanjiani Ready to Host…If He Can Find the Studio
Maurice Carrubba Reinvents the Valley's Iconic Eateries
[LIMITED STOCK!] Related eBay Products