YC
How Nothing Founder Carl Pei Built A Multi-Million Dollar Smartphone Brand In Just 2 Years
@ Y Combinator
08/14/24
Takeaways
CP
Carl Pei
08/14/24
@ Y Combinator
I was a big gadget fan when I was a kid, and I was probably one of the first people in Sweden to have the iPod and the iPhone, which I had to jailbreak to use.
CP
Carl Pei
08/14/24
@ Y Combinator
After my iPod broke just after the warranty ended, I was frustrated and discovered a good quality MP3 player from a Chinese brand called Mesu, which inspired me about China's electronics capabilities.
CP
Carl Pei
08/14/24
@ Y Combinator
I created a fan community around the Mesu brand, which led to me being recruited by the company after they saw my profile in the Los Angeles Times.
CP
Carl Pei
08/14/24
@ Y Combinator
When I joined OnePlus, the founder was depressed because competitors were outperforming us, which made me lose respect for him as he never showed up to work.
CP
Carl Pei
08/14/24
@ Y Combinator
I reached out to Oppo while at OnePlus, and they wanted to create a new brand targeting the online market, which led to the founding of OnePlus.
CP
Carl Pei
08/14/24
@ Y Combinator
The original vision for OnePlus was to leverage Oppo's supply chain advantages to sell products online and disrupt the market.
CP
Carl Pei
08/14/24
@ Y Combinator
I wanted to take all the learnings from OnePlus and do it better with Nothing, but initially, the idea wasn't super clear and my seed deck was really bad.
CP
Carl Pei
08/14/24
@ Y Combinator
We calculated that we needed at least $100 million to make a smartphone, which was impossible to raise at the seed stage, and we faced rejection from factories like Foxconn.
CP
Carl Pei
08/14/24
@ Y Combinator
To build trust with factories, we decided to make earbuds first, as they are smaller but still complex, allowing us to sell a lot and gain credibility. The only factory that wanted to work with us was one that had no other clients; without us, they would go bankrupt.
CP
Carl Pei
08/14/24
@ Y Combinator
For the first batch of earbuds, 90% of them couldn't charge properly, leading us to ship replacements and halt production immediately.
CP
Carl Pei
08/14/24
@ Y Combinator
We rented two apartments near the factory and put 15 engineers in them to oversee the manufacturing process directly, which helped us improve quality.
CP
Carl Pei
08/14/24
@ Y Combinator
In our first year, we ended up selling about 600,000 units after addressing the initial quality issues.
CP
Carl Pei
08/14/24
@ Y Combinator
Our brand awareness is still growing, but we have attracted a community of tech enthusiasts and creatives who appreciate our design-centric approach.
CP
Carl Pei
08/14/24
@ Y Combinator
I believe most hardware founders should be 90% focused on operational efficiency and survival, and only 10% on design innovation initially.
CP
Carl Pei
08/14/24
@ Y Combinator
Survival is the name of the game for hardware startups; you need to focus on staying alive before you can innovate.
CP
Carl Pei
08/14/24
@ Y Combinator
The glyph interface was designed to help users be more mindful of their smartphone use by providing important notifications without needing to unlock the screen.
CP
Carl Pei
08/14/24
@ Y Combinator
Building a hardware startup is tough but doable; focus on sequencing your product launches to build credibility before expanding your offerings.
CP
Carl Pei
08/14/24
@ Y Combinator
There's immense satisfaction in seeing people use a product you've helped build, especially when they don't recognize you as the maker, indicating brand growth.