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SPEAKER_06: The premise was that each of us might come up with an idea for a new sort of technology company, a smartphone app specifically. And that if a designer could make the vision of such a product seem real, that would entice investors or developers and engineers that could help bring that to life because that's something Google kind of was doing internally. And they wanted to see if that was something that they could multiply externally.
SPEAKER_08: And presumably, like most of the people in this program are like, okay, what kind of app can we build that can attract attention and presumably can make money? I would imagine that's how most people were thinking, right? Well, there's a kind of like a golden metric that was really what was most important.
SPEAKER_06: And that was how many hours a day someone spent with a product. So if you could make something that was sticky, you know, that people would use for hours a day, there didn't really need to be an inherent business model, because you could start collecting all sorts of data and selling advertising. And that was sort of the kind of business model that so many smartphone apps in particular had already embraced. This is like the height of that kind of thinking, I think, with after Facebook kind of just
SPEAKER_08: blew up. People are like, don't worry about how you're going to monetize, just focus on getting signing up users, and then we can make money off them in different ways. Exactly. So what about this was in 2014 was troubling to you, to either of you, if at all? Yeah, I think that's exactly why we decided to do something different.
SPEAKER_03: It was almost nerve wracking watching people use their smartphones in public, you know, in a park, in a train station, restaurant. If you just look up, it's almost bizarre that everyone is touching and staring at a little screen instead of, you know, enjoying a conversation, making eye contact or actually pay attention to your kids. That's the reason we feel like the goal to maximize people's time, attention, and data, is just not fair. The reason I quit the job is just because I don't understand why we need to make a new phone every two months, every three months.
SPEAKER_08: You quit your job as a phone designer because you felt like, why are we making a new phone every few months when this last one is perfectly good? Yeah, like just because there was a slightly better camera, let's make a new phone or because
SPEAKER_03: we could rotate a phone this way, that way. You know, it's like, but who needs that? And does anyone actually look at how people use it? Like I remember this feeling that my smartphone is the source of anxiety when I look at it, because I know if someone calls me after 10 p.m., there's something bad happening outside of the world, right? So I just remember this feeling that smartphone being the source of anxiety. Yeah. So you guys are in this incubator program for Google.
SPEAKER_08: And at what point, Joe, did you start to think, hang on, maybe there's something else to think about here. And how did you find Kai, who clearly agreed with you?
SPEAKER_06: Yeah, I think it was, you know, in the program, we were doing user research and asking people about their relationships with their smartphones. And no one was saying, I wish I spent two more hours on my smartphone. In fact, people were kind of had these, you know, over the top, I almost wish I could just go off the grid forever kind of sentiment. And I found myself as a freelancer, checking my email when I was at the beach trying to change a song and seeing some email that I could do nothing about. And I said, you know, why is it that I bring everything with me everywhere? I thought back about, you know, even further AOL Instant Messenger and kind of dial up computers of my childhood. There was only one room in the house that you could access the internet. And there was this very clear distinction between online and offline time. And I think the smartphones became so ubiquitous that we almost forgot we have the agency to actually sign off from time to time. And when I talked to Kai about the idea, he immediately resonated. And it was, you know, kind of felt like something we might be able to do together with his background. Yeah. Tell me about the idea.
SPEAKER_08: I mean, you said to him, hey, let's forget about working on an app. Let's build a phone that doesn't distract you. Is that what you said?
SPEAKER_06: I mean, it was basically like, instead of making an app to keep people on their smartphones, what if we make a phone to get people off their smartphones? Almost taking the app into the physical sense. And, you know, Kai's first reaction was, it's really, really hard to make a cell phone. You don't want to make a cell phone. But we started talking about what this might look like and pitching it to peers in the program with us. And we got a really deep polarizing reaction. Yeah. Kai, what did they say?
SPEAKER_03: Well, it's really interesting, as some of them would say, this is going to change my life. And some other group of people would be like, this is, why do I ever need that? My smartphone, it's perfect. It does everything for me. There's nothing wrong with my smartphone. But I think everyone had a reaction. You either love it or you hate it. And I think that's every designer's goal, just to create something that actually relates to the individuals.
SPEAKER_08: All right, so you guys decide to partner up and see if you could create a phone that didn't distract you. Once you agreed to kind of work on this, what was your first step? What did you, did you guys start to sketch it out on paper? What it might look like? What did you start to do?
SPEAKER_06: Her first step was really actually trying to test the hypothesis that people might enjoy taking a break from their smartphone. So we actually got a couple flip phones and we set up call forwarding for about two dozen people over the course of a couple weeks. And whether it was either a weekend or just an evening, would ask them to leave their smartphone. Calls would forward to this new flip phone, but they would only have access to nine contacts. What we saw from that was pretty amazing. Kind of describe this initial anxiety, like tapping your pocket, checking the flip phone a couple of times every few minutes. But after a certain point, there's this kind of magical moment where you are present and it's incredibly refreshing and rejuvenating. And they described feeling ready to come back to work with a clear head. And then when we actually looked at the flip phones, we realized that no one used them at all. It was really this kind of peace of mind that God forbid there was an emergency. My mom, my cat, partner, whatever. I was reachable, but that the actual value that we brought them wasn't in any one feature, but actually in the lack of features. And both of you obviously have design backgrounds and Kai, you literally designed smartphones.
SPEAKER_08: So you basically knew how you could do this, but you guys decided, let's do Kickstarter because that's a good way to raise money. You need money to do this. So you launched Kickstarter and you got $400,000. You get 3000 people back this project. And with that money, what were you able to do? Because I'm thinking you got to send 3000 phones to people. Wow, that seems like a lot more than $400,000. Yeah, that's not even enough.
SPEAKER_03: Not even a fraction that we needed to build the device. So what did you do?
SPEAKER_06: Well, a big part of the Kickstarter wasn't just the money, but actually the traction that could be used to inspire partners or investors to see the value in this that people were willing to contribute at such an early stage. And that was a huge momentum push for us.
SPEAKER_08: We're going to take a quick break, but when we come back, Joe and Kai confront some big challenges creating what they call a phone away from phone. Stay with us. And you're listening to how I built this lab.
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SPEAKER_08: One more thing before we get back to the show. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And it's totally free. Hey, welcome back to How I Built This Lab. I'm Guy Raz. So it's May of 2015 and Joe and Kai's light phone has generated a lot of interest and backing on Kickstarter. And with that support, it's time for them to take their design from the drawing board and figure out how to make it real.
SPEAKER_03: Yeah, so we, I think we started by just getting phones from Amazon or Alibaba and break it apart and try to, you know, Frankenstein, build a phone that looks like what we're trying to do so that we have a physical prototype we could show suppliers as well as our investors. And the crowdfunding campaign was really helpful for our suppliers to understand what we're trying to do and how many people or is there a market for this kind of a product? You know, suppliers was like investor. You know, they could build any other product with their capacity, but they have to decide, okay, I'm going to, you know, take a shot with light phone. So getting the first couple of suppliers on board were really critical for the part of manufacturing.
SPEAKER_08: Describe that first light phone. I mean, what did it, what was the promise? What would it do?
SPEAKER_06: We called it your phone away from phone. Right. Okay. So it wasn't necessarily trying to replace your smartphone, but to just say, hey, for, you know, a couple of hours a day or maybe for a weekend or, you know, while working on a certain project, you might want to go light. What that actually meant was that the original light phone was a simple 2G cell phone that had its own SIM card. And we made software that would kind of make it seamlessly feel like it was your, an extension of your smartphone number, your calls forward to the light phone. When you called someone, it would display as if the call was coming from you and it would allow you to leave your smartphone behind and just take the phone aspect out of the phone.
SPEAKER_08: Okay. So you start working on it and this is not, I mean, this ends up taking quite a long time. Did it take longer than you had anticipated to actually develop it and then deliver it to the Kickstarter backers?
SPEAKER_03: Yeah, for sure. I think we estimated a year and a half. I feel like it took us almost two years to actually get the product out, which we appreciated that people were being very patient with us. Mostly.
SPEAKER_08: And so when you finally delivered these phones, I mean, there was mixed reaction to them, right? Because it was on a 2G network originally and there were some challenges with it, right?
SPEAKER_06: Definitely. And aside from any technical challenges, it's quite the ask for the end user. So I think what we saw a lot of was almost like a gym membership where someone wants to go light, but is struggling to actually integrate that kind of experience into their day-to-day life. So this phone comes out in 2017, January of 2017, and you ship, I think about 15,000 units
SPEAKER_08: before you had to kind of put a stop to it. And there was a waiting list. Like people were actually even selling some of these on the secondary market for like two, three times the price.
SPEAKER_06: Yeah. And that whole time we were taking pre-orders, which was, you know, help keeping our lights on and we were incredibly grateful that people would be willing to spend money for a phone that might not be delivered for one to three months, depending on where we were in that kind of timing.
SPEAKER_08: And that $400,000 that you raised, I mean, did that take you all through this period of time or did you have to seek other sources of financing?
SPEAKER_03: It took us to the first stage, which is paying our suppliers to do the design work and getting samples built. I think we needed 2 million more just to actually go through the process. So we raised money from the mission-aligned investors along the way to help us deliver.
SPEAKER_08: And clearly this was going to be just the first iteration. I mean, you clearly had an ambition to make a more sophisticated phone and that would be the Light Phone 2. And in 2018, you launched another campaign, this one on Indiegogo for the Light Phone 2, and that one raised about $3.5 million. What did the Light Phone 2, what was that phone going to be able to do?
SPEAKER_03: Well, I think we learned so much from the first Light Phone. Our users were telling us that they wanted to go light more often, meaning use Light Phone more often, but they don't have Uber, they want text message. They want this one or two more things to make that experience more enjoyable or have that peace of mind knowing they have those tools. I think that's when we started to revisit our philosophy saying that the goal originally was trying to give people that peace of mind so it could break away even just from time to time. So what if we offer our users a couple more utility tools? If that enables millions or more people to try Light Phone, that's what we wanted to do.
SPEAKER_08: So tell me about what this phone does, the Light Phone 2.
SPEAKER_03: It has phone calls, you can send text message, you can write text message. Now we have music, MP3 player, podcast, you can get simple direction. We have hotspot as well as calendar and notes. You could take text notes or voice memo.
SPEAKER_08: And so I guess eventually you'll be able to hail an Uber with it?
SPEAKER_03: Hopefully Lyft, the ride-sharing tool is something that we're trying to do, but that requires the ride-sharing company to collaborate with us.
SPEAKER_08: So tell me a little bit about building a phone company. It's not easy. This is a huge challenge. And you are basically saying to people, look, smartphones have taken over our lives. We're losing our time and our attention to these devices. And so you've got to convince a certain number of people to adopt the product, but you have to build them too, which requires a lot of money. And I guess over time that became a focus. You had to raise more money to make these phones, right? Yeah.
SPEAKER_03: Yeah. We got to raise a lot more money than we originally planned it just to make the light phone too.
SPEAKER_08: So when you told investors about this idea, how did you convince them to back you? I mean, presumably some of them were like, well, I don't think people are going to use these things.
SPEAKER_06: I mean, there's definitely the concern about, is this just a niche product? Is this, you know, does there any actual mass market adoption? I think anyone that's been interested in investing in the light phone does feel morally there's something really beautiful going on with light phone and that we have this sort of honest and transparent business model that's so kind of unique. As a matter of fact, one of our investors from Foxconn, the company that make iPhone
SPEAKER_03: and Samsung, so we were in the meetings explaining what light phone is, what light phone is trying to do. One of the executive from Foxconn was saying, guys, I need this phone. My family's are torn apart by smartphone. My kids don't talk to me. We're all on our phone on a dining table. I need this phone. And I think that emotional connection drove a lot of investors to us because of the business model that every app, every social media are deploying. Doesn't matter what you do. Doesn't matter what product you're trying to create. As long as you're making money from advertisement or users data, there's no way out. You will have to maximize their attention and time.
SPEAKER_08: You know, one of the things I struggle with because obviously, you know, for people who feel like their phones have kind of come to control them, and I think a lot of people listening feel that and I certainly have days where I feel like that. But on the flip side, like I just I think about yesterday, I went to San Francisco to lunch with a friend, and hailed an Uber. And then I looked at a map app to see how long it would take me to get there. I got to the restaurant a few minutes early. So I checked my Gmail quickly answered a couple of emails. So it was like time efficient. And then changed. I did my wife texted me and needed me to transfer some money in our bank. And I did that for my phone. And on the one hand, 10-20 years ago, I couldn't do any of that. And maybe, probably, I stopped to notice things around me more, for sure. And I think there are elements of the world we lived in then that were better. But on the other hand, there's incredible efficiency. And so I have to wonder that we've just gotten to a point in human history where these things kind of won. Well, we're not disagreeing that smartphones is efficient, and it's a very helpful computers
SPEAKER_03: that help us do things. But at the same time, Joe and I, we're not asking people to give up technology. All we're trying to say is that we should have options. We should have tools that are intentionally designed, just like a hammer or a screwdriver. You use it, you put it back, and you don't think about your hammer 24-7. You don't hold your screwdriver and swipe your screwdriver for five hours a day. Why can we reimagine the mobile device that does not have the components of attention economy, but has all the modern utility?
SPEAKER_08: When we come back after a short break, more from Joe and Kai about building their minimalist smartphone, the light phone. Stay with us. I'm Guy Raz, and you're listening to How I Built This Lab.
SPEAKER_09: Hey, welcome back to How I Built This Lab.
SPEAKER_08: I'm Guy Raz. My guests today are Kai Tang and Joe Hollier. They think that we need to redefine our relationships to our smartphones, which is why they built a minimalist version of a smartphone called the light phone. There was a... This is... Now, I'm sure lots of people listening know about this, but there was a famous study probably 20, 30 years ago. It was a study into memory, and it studied London cab drivers. And you may know about this study. Definitely. But London cab drivers had remarkable memories. And that's because there was a time where to be a cab driver, and maybe even to this day you have to, I don't know, you have to memorize every street in London. I remember in the 90s, you get in a cab and you would just say a street, and the driver would know. And I drive to... Like on the weekends, I go hiking, and I still use my GPS app to tell me where to go. And I'm going to the same places. And I thought about this recently. I thought, I can't believe that I'm relying on the GPS. It's kind of scary because I've been there a hundred times.
SPEAKER_03: I definitely think we're losing some brain muscles with the technology we have. I don't even remember my parents' phone number or my girlfriend's phone number. I don't... I can't remember phone numbers. And we rely on GPS to go everywhere, even just a couple of blocks away. Maybe it's a good thing. Maybe this boring task that's being replaced by technology is a good thing for us that we can live our life better, or we can actually talk to our friends while the computer is doing those things. But that's not what's happening. Kai, do you exclusively use the Light Phone?
SPEAKER_03: Yes. Both Joe and I use Light Phone exclusively. We do have our iPad or computers for everything else. So it's a separate tool for different purpose. If I know I need my iPad to do things that Light Phone doesn't do, we will carry that tool with us. But other than that, like commuting, taking a walk down the street or having dinners, I'll just bring my Light Phone.
SPEAKER_08: Tell me about... I know you've raised up to, I think, about $11 million in total. Is that right? Yes. Tell me where the company is now. I mean, it took Tesla 15 years to get profitability. So Rivian and some of these other electric car companies won't get profitability for another 10 years probably. I have to assume that you're not yet profitable.
SPEAKER_03: We are break even at the moment with the sales from our website, with the support from our users. We don't do advertisement. So all the sales are word of mouth. And Light Phone, it just becomes such a conversational piece to a lot of our users that if you have it with you, usually people ask, hey, what's that? What's your smartphone? Why don't you use a smartphone? So the whole conversation becomes why I don't use smartphone? What's the problem? And what's the relationship between us and technology? And our website sales is sustaining our operation and our R&D at the moment. We do have investors that are supporting us, but we're trying to keep it as private as we can and stick to our agenda and our value.
SPEAKER_08: Where do you see the most potential for growth? I mean, I know that there was a school in Massachusetts, I think, that banned phones and then they basically said, okay, everyone can have a Light Phone. Is there a sector, a category of people in particular who you think where you see growth for this product?
SPEAKER_06: I've been really pleasantly surprised by the wide kind of range of users that have found value in something like the Light Phone. We get a lot of families not just buying it for their kids, but actually like the parents, maybe they have like a newborn wanting to be more present and a better role model.
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SPEAKER_06: We have celebrities that are buying the phone as something to kind of keep some separation between them and the internet at large. We have a lot of artists and musicians that see it as a kind of like peace of mind space for their own practice. And then, yeah, this recent school has been a really inspiring new angle because we've had dozens of schools in conversation since about promoting a similar kind of policy, or at least trying to make it more accessible. And actually, the Buxton School was kind of an amazing case study for us. We were in Massachusetts. It's a small private boarding school. And I think what was really amazing was that they banned smartphones for the faculty as well as the students. So that there was this kind of like level playing field, it wasn't just like, do as I say, not as I do. And the school just saw fantastic results, especially when it came to things like meal time. I think, you know, the classroom, it was pretty expected that, you know, with people being more attentive, but I think the real magic was seeing kids integrate and mingle in meal time and around the campus.
SPEAKER_08: Is there a world where the next iteration has the same features, but maybe adds a camera, not a camera that's going to go to social media, but just a camera to take photos?
SPEAKER_03: Yes, I think that's part of our plan. So camera is a great tool to capture the moment to documenting your life or even just a receipt. I think that's a very useful tool. If we do have a camera in Lightphone, it will be a tool that allows you to capture those moments, but we will not allow sharing or commenting or liking to be part of that experience. Because, you know, if you take a film camera, you take a photo, you don't think about sharing or where to post that photos, right? That's a great tool. And that's kind of inspiration of how we think a camera might work with Lightphone. Yeah, I think the thing we want to avoid the most is when you see someone at a beautiful
SPEAKER_06: monument or, you know, an overlook on a trail and they take the photo, but it's almost as if they didn't even see it with their own eyes because now they're looking down trying to put the right filter, the right caption. And it's one thing to capture that moment for seeing it and remembering it, but if you're not present when you're taking the photo, I think that's missing the point. How many people work for the company now?
SPEAKER_03: We have around 15 employees.
SPEAKER_08: 15. And so, and you do no marketing at all. It's entirely just word of mouth.
SPEAKER_06: We do a lot of projects and initiatives, but what we don't do is spend money on Facebook meta platforms or Google ads. It's really about things that our users can help spread, making videos or we recently just did a campaign where we made a fake company called the Alliance of Big Tech. And we use that to kind of say, do not buy the Lightphone for all of these reasons. And we sent about 700 shirts to some of our earliest users, a kind of great grassroots way to start a lot of conversations about the phone. And I think as Kai kind of mentioned before, the conversations about the phone, whether or not someone immediately purchases it, it's not just like, how does it work? You really start to talk about the internet at large and what it means to be a human in 2023 and they tend to stick with people. So a lot of our new users have heard about the Lightphone for three or six months or even maybe longer. And so a lot of our marketing is just kind of feeding them more anecdotes, more examples of how other users have fitted into their life to make that less intimidating of a jump. We talked about how you launched this phone and the idea came in 2014 when this problem
SPEAKER_08: of this sort of attention economy was clearly it was already a problem, but very few people were thinking about it at the time. And over the last few years, movies like The Social Dilemma, documentaries about the attention economy have come out. There's more attention being paid to it, but the problem is worse. So let's sort of fast forward 10 years from now. Do you think that something will change? I mean, will there sort of be a groundswell of action by like Gen Z-ers who are like, no, we're not taking this anymore. We want our attention back and we're going to not buy smartphones?
SPEAKER_03: It's funny you mentioned Gen Z because that's actually one of the biggest surprise to me. I originally thought that our user will be older generation or my generation, 35 to 40. But no, it turns out like 75, 80% of our customers are Gen Z, a younger generation who are really brave to say no and willing to give it a try. And 10 years down the road, I think smartphone is just a glitch. Our behavior with smartphone right now, it's just not normal. In my opinion, technology needs to be invisible. It shouldn't be the focus of our life every day, 24-7. Wake up with it, sleep with it, go to bathroom with the smartphone on hand and ignore your family and friends and the tree, the cloud around us. And I think eventually a lot more people will be looking for a different option.
SPEAKER_08: It's Kai Tang and Joe Hollier, co-founders of the company Light and creators of the Lightphone.
SPEAKER_07: Hey, thanks so much for listening to How I Built This Lab. Please make sure to follow the show wherever you listen on any podcast app. Usually there's just a follow button right at the top so you don't miss any new episodes and it is entirely free. If you want to contact our team, our email address is hibt.id.wunderi.com.
SPEAKER_08: This episode was produced by Casey Herman with editing by John Isabella, research by Alex Chung and music by Ramtin Ereblui. Our audio engineer was Neil Rauch. Our production team at How I Built This includes Alex Chung, Elaine Coates, Carla Estevez, J.C. Howard, Chris Messini, Liz Metzger and Sam Paulson. Eva Grant is our supervising editor. I'm Guy Raz and you've been listening to How I Built This. Hey, Prime members. You can listen to How I Built This early and ad-free on Amazon Music. Download the Amazon Music app today or you can listen early and ad-free with Wondery Plus and Apple Podcasts. If you want to show your support for our show, be sure to get your How I Built This merch and gear at wonderyshop.com. Before you go, tell us about yourself by completing a short survey at wondery.com slash survey. Hey, it's Guy here. And while we're on a little break, I want to tell you about a recent episode of How I Built This Lab that we released. It's about the company TerraCycle and how they're working to make recycling and waste reduction more accessible. The founder, Tom Zaki, originally launched TerraCycle as a worm poop fertilizer company. He did this from his college dorm room. Basically, the worms would eat trash and then they would turn it into plant fertilizer. Now, his company has since pivoted from that and they recycle everything from shampoo bottles and makeup containers to snack wrappers and even cigarette butts. And in the episode, you'll hear Tom talk about his new initiative to develop packaging that is actually reusable in hopes of phasing out single-use products entirely and making recycling and TerraCycle obsolete. You can hear this episode by following How I Built This and scrolling back a little bit to the episode, Making Garbage Useful with Tom Zaki of TerraCycle, or by searching TerraCycle, that's T-E-R-R-A-C-Y-C-L-E, wherever you listen to podcasts.
