emily: he worked alongside steve jobs to revolutionize the way we listen to music and became known as the godfather of the ipod. he spent a decade at apple, then started a company of his own, nest labs, where he promised to invent every unloved product in the home. google snapped it up for $3.2 billion. joining me today is nest ceo and cofounder, tony fadell. tony fadell, so great to have you here.

you were born in michigan, but you moved around a lot. 12 schools in 15 years? tony: there is a lot of positive impact, right? i was able to learn about different types of people. in new york, then texas, midwest, human nature is the same, but the way that this is displayed is different. always being the new kid, you emily: how does this affect your work? tony always being the new kid, : you are always distant from what is going on around you. you are analyzing, and seeing how people are doing it, but you're not in it. you are an observer. that helps because it allows me to step back and analyze the situation, not just in the company, but from a product perspective. emily: your grandfather had a big influence on you. he was a carpenter, right?

joni: yes he was. you guys used to build stuff together. tony: he would hold classes like woodshop or metal shop. when he retired, he still did that with my brother and i. building soapbox derby racers and fixing lawnmowers and bicycles together. we learned from three years old or four years old how things work, how to use tools. i did not know what a computer was until i saw my first one in 1979 or so. emily: you studied computer engineering. at the university of michigan. in 1991, you moved to silicon valley. tony: i worked with another guy to build a startup in high school. we were doing mail order for apple ii. we were designing software and writing it for apple ii. i was frustrated because we did not have the internet. i thought i had to get to silicon valley as quickly as possible. because i would be reading mac week magazine. emily: even back then, you are obsessed with apple? tony: i was obsessed with all things computing in the 1980's.

it first started with apple ii. emily: you worked on some of the precursor devices. general magic and you started your own company and by the end of the decade, you probably knew more about mobile devices than literally anybody on the planet. tony: i kept doing the things i loved to do. emily: tell me about when you met steve jobs. tony: there was a birthday party where i met him for the first time. the next time was to give the pitch for what would become the ipod. emily: you gave the pitch for the original ipod? tony: i was leading the charge in talking about what it was. it was literally a layout of what digital music could be, what the challenges were. there were three different concepts. the one we thought the best was the most expensive, the riskiest one, and steve was very engaged

in it, very much driving. we had a presentation, but he flips through the deck and jumps around. there was no linear format. you just braced yourself for impact. you threw out conjectures and rolled with it. emily: where did it end? tony: we were going to do this and tony, we want you to lead it. i had been in other executive presentations where it would take four months to decide. at the end of it, commit. we have to deal with sony. sony is number one in every audio category, how are we going to beat it. emily: you have become known as the godfather of the ipod. which makes you the father of the entire product line. really, the ipod itself had such

the iphone. really, the ipod itself had such a dramatic impact on everything that apple has done since. tony: it was a big turning point, going from computers to consumer electronics. emily: what was your relationship with the stephen leicht? tony: it was professional. it was friendly, but it was tough at times. it was a great mentor type of relationship, and there were other times when he would call me on my -- whether we were fighting or being friendly, it was all about the best thing for the customer experience, which is what i loved. i would never trade that for anything. emily: i read that it was kind of like father and son. tony: there were times when we were like ok, we are going to take on the world. there were other times that we felt like strangling each other. if there is tension, there is a creation.

you really need creative tension. emily: you quit a couple of times. tony: it was a dramatic relationship. emily: there is a modern mythology of johnny ives as the apple design guide. how do you remember it? was it more of a team effort? sometimes the mythology leads people to believe a certain way. tony: when it comes to design, there is no right or wrong. there are opinions. different people had different opinions and led the charge for certain decisions. there was an effort between myself, johnny ives, the marketing team, we would talk about the future and what it looks like, grappling with those things, and there were certain decisions i can make myself, but there were certain things about what it might look like, and johnny had a big opinion on that. steve, regardless of whether it was me, johnny, or mark, steve always rendered the final

opinion on almost anything that involved the customer. it was very much a team oriented thing. emily: is this a mythology that pits you and johnny against each other. is there any truth to that? tony: there were times when we saw eye to eye, and there were times that we didn't. creative tension makes everything. that leads to a better product. were there tensions? sure. were they personal? no. it was all about making the product, and that is what made the magic happen. emily: -- withid your relationship steve compared to your relationship with larry page? tony: they come from two different backgrounds. they are too talented and smart people. larry less technology and able islarry loves technology and able to see beyond the horizon. he is an aficionado of product. steve is a marketing person. he has a local product.

-- he had a love of product so he would look at it through that eye. i'm in the middle. i'm a product guy. emily: is tony the next steve jobs or the next larry page. tony: i am just tony fadell. it is that simple. emily: what is different between how you run nest and how steve jobs ran apple? tony: trying to understand your customers as best as possible. the difference is, i think it is giving more credit to the team and trying to be more inclusive with getting ideas from people and trying to mold those things and listening to them and not trying to get involved in every little detail. ♪ emily: you ended up poaching some apple employees? tony: i did get a call from steve about that. ♪

emily: 2008, you left apple. 2010, nest was born.

tell me how the plan was hatched. tony: i learned a lot about houses with my grandfather. i was fixing them before nest. when it came to designing a home, i wanted to get into every detail. that is when i found all the problems in the home, specifically heating and cooling. even when i told my wife that i wanted to make a thermostat, she looked at me like i was nuts. i said, no, let me just explain that this is not just a thermostat. they perked up and said you should do it. emily: home security cameras, smoke detector, and google snaps you up. you sell to google $3.2 billion. tony: the first question was whether we should allow google

to invest in the company before the acquisition. through building a relationship and getting to know larry and sergey and various people inside the team, we got more comfortable with the executives and the people we were working with her that. -- through that the investment , process, as well as the preceding two and a half years, so we have been dating for a while. we were dating before we got married for two and a half years and got to know each other. the final part was the last three months, it was this, maybe we should get engaged session. should we get engaged? should we have kids? where do you want to live? what should we tell the kids and what should our last names be? it was all of those little details before we said we were going to get married. emily: was there any part of you that said this is my baby. they could be far bigger than

$3.2 billion. tony: this was never about money. it was about building the right thing. it wasn't about money. the number was nice. this was about a 10-15 year vision. i knew we would need big arms to help us get there. i remember how long it took to go from ipod to iphone, and you need a lot of research to do it. -- resource to do it. just to be standalone, people would say you need to go public or raise funding. i did not want to go public. when you have the gut feeling, well you just had to go with it. it is like when you get married. no wonder. you never know what it's going to be like. you trust your gut. you have done the analysis. at the end of the day, it is an you emotional decision, not a rational one. emily: you worked at apple, it feels like apple, was apple an option? tony: we considered all possible acquisition targets.

through that, they were on the you list. and at the end of the day, been you there done that, google has massive computing power and research around where we are headed. it is a huge part of server technology and software that we need to pull it off. emily: you continue to run nest in my as a semi-independent company. how has your role changed? how have the goals of nest changed since this transition? tony: faster. more. we laid out a 2-3 year roadmap. larry says implement it as fast as you can. i'm not going to go changing it. we believe in this, go. emily: how do you decide what the next new product will ultimately be? tony: sure. first, every day we run into frustrations, things around the home, why is it that way? the next piece is, hey, why

don't you guys make your roadmap and i will make my roadmap, so we have 5-10 different groups that are making roadmaps, and then we compare notes. emily: would you say you're working on 10 different ideas at any given time? tony: there are new products, services, and marketing, i would tell you there are 50-70 things in some state of gestation. emily: how much do you see nest as a consumer technology company versus enterprise solutions? you see potentially infrastructure as a better way to get into homes? tony: this is something i really learned from steve jobs. you cannot be a b-c company -- you have to believe what the customers want to buy. in a b-to-b marketplace, you have to know what they want.

you ask your customers. you just build what they want and you sell it. company and will remain so. emily: you ended up poaching some apple employees. tony: i did get a call from steve jobs on that. i said, we are not recruiting anyone, they are coming to us. there were times, like i said, the love-hate relationship. i said maybe you should try to retain your employees better. then we had niceties. emily: what would steve jobs say about apple if he were here today? tony: he said the iphone would be the legacy product that lives beyond him. right? the iphone is that. that legacy product will take apple for another decade or two decades, right? emily: you are not wearing your apple watch. what do you think so far? tony: i think they did a brilliant job with the hardware. it's just getting started.

iran out and bought different bands. i ran out and bought different bands. emily: it is something you could see yourself wearing everyday? tony: i can see myself wearing it. i just won't charge it every day. emily: so they need to work on battery life? tony: everybody has to work on battery life. ♪ emily: so you volunteered to take on fixing google glass. ♪

emily: so you volunteered to take on fixing google glass. why? tony: why not? seriously. look at things we wear on our heads today. we wear glasses, earrings, we put on headphones, to think that all of a sudden that nothing on her head is imbued with connectivity is shortsighted. we're seeing it on wrists, feet, head, chest.

to neglect it -- we can't toss it away. i think i understand a little bit of the space. it wasn't like i threw myself on the fire and said i would do this regardless. it was a slow process before getting married again. emily: there are some reports out there, more foldable, water resistant, more rugged design, any truth to that? tony: all i can say is don't believe everything you read. they will not be for industries, medical, it will also be for consumers. i did not say that that is what you will be wearing.

i will not ship anything that i will not wear. emily: you are also a car guy. you are one of the first owners of the bmw i-8. i'm assuming you also have a tesla. what is missing from the cars you have? tony: the accessibility in terms of the price points, but we are still 7-10 years away from a mass switchover. emily: what can apple do for the car market? tony: a car has batteries, a computer, a motor, and mechanical structure. if you look at an iphone, it has all the same things. if you try to say in scale that i can make a car with the same components, there is some truth to that. the hard stuff is the connectivity and how cars can be driving. it is all software and services.

when you look at either google self driving car program or the alleged apple thing, it is all through the lens of software first. emily: did you talk to steve about building a car? tony: yes. we had a couple of walks and this was in 2008, what would we build? we were just crazy looking at what a dashboard would be, what what would this be, what would seats be, how would you feel it or power it. at the end, we were so busy and constrained, it would be great to do it, but we can't. emily: was this something that he was like, we are not doing this? tony: there were a lot of things that we said no to. a lot of people said why didn't the ipad turn into a great video camera. tvs are the other one. at the end of the day, what had the biggest boom and impact on the world, cell phones. we said ok, we will focus all of our energy on that.

forget those other things. those are interesting. let's focus on a really big market that could have incredible impact well beyond steve's time as ceo. emily: google is taking on self driving cars as well. tony: it blows my mind every time i go over there and see what is going on. it feels like i am being driven around by a professional driver. regardless of whether it is a taxi or anything, i love those services. most people who drive do not know how to drive. they just don't. they are not professional drivers. even if they do it every day. emily: how do they make these cars safe and well designed and desirable? self driving cars have caught up with consumers. that is what uber is. as far as i'm concerned, they have made this choice. now the question is how to make it better and more pleasurable. emily: what is next for you? do you see staying at google?

tony: i got married. i got married and volunteered and await for google glass. i'm not going anywhere. i love what i do. emily: you said that you regret not being able to tell steve about nest or show steve. what would you say to steve if he were here today? tony: i would just say thank you, thank you for putting up with me. i definitely needed him to help with the mentoring. we needed all the team and all the people who came and joined when there were dark days of apple and there wasn't a lot of money because there were tons of death and nobody buying our things. when you come through that experience together, you have to step back and go, ok. emily: tony fadell, thank you for doing this. it was great to have you. tony: thank you. ♪

♪ >> financial markets listen, seldom is listed as more true than today. the powers of the federal reserve are merging. somewhere in the middle, it is the bank of england. presented its final inflation report of 2015. welcome to bloomberg. he said in july that the timing