Tony Fadell's latest invention, the Nest thermostat, monitors your home and adjusts setting depending on your past usage.

Story highlights

Tony Fadell worked at Apple for almost a decade to create the iPod and iPhone

His latest project, Nest, is a learning thermostat which aims to save energy

Nest creates a schedule for temperatures and senses when no one is in the house

Editor’s Note: LeWeb is Europe’s biggest tech conference, in Paris from December 4 to 6. CNN will be reporting live from the ground. Follow our reporters Stephanie Busari and Irene Chapple on Twitter.

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You may not know Tony Fadell by name. But as one of the creators of the iPod and the iPhone, he’s had a huge impact on 21st-century design.

We caught up with the former Apple engineer this week at the Le Web tech conference in Paris. Here is an edited version of our conversation:

CNN: How did you become known as “the Podfather”?

Fadell: I consulted for Apple for about 8-10 weeks, and during that time I put together the iPod concept, the Styrofoam models and the business outline – all the key pieces of the puzzle – and presented it to Steve [Jobs] back in 2001. He green-lighted the project right there and then said I needed to be hired. I had been doing MP3 players and handheld computers since 1990-199,1 and so they sought me out because of my experience. And about 18 generation of iPod and three generations of iPhone later, I decided to leave Apple.

How does it feel to be involved in creating something so revolutionary?

Tony Fadell

I don’t look backwards. I’m pleasantly surprised and I feel really proud of the team and what we were able to accomplish together. But really where I’m focused is the future and where Nest is going. We don’t gloat too much or pat ourselves on the back for very long until were on to our next thing. But it’s really amazing to see how we were able to disrupt the whole world of music and make a whole new experience for customers – and the same goes for smartphones. All of those things were really amazing to be a part of, in designing and working with Steve so closely on the stuff.

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What was it like working so closely with Steve Jobs?

He was exacting. He was always questioning, always curious. Always pushing and demanding more. I knew a lot about product design before coming to Apple, but I didn’t understand a lot about consumer experience design, which is really Apple’s forte. Other people can make iPod- or iPhone-like things, but it really boils down to the shopping experience, the unboxing experience – all of those key consumer touchpoints that are so critical. That’s what I really learned from Steve – and I really miss him, frankly. My wife also worked for Steve for nine years. We met at Apple, so it was a really big part of our lives.

Going from Apple and making these really cool products to making a thermostat – were people surprised when you said: Okay this is the next big thing?

Well my wife’s first reaction was: Are you nuts? How can the iPod guy be doing something so cool and go into thermostats? They’re never going to be cool. But when you start to explain the problem and then you show the solution, it is actually emotionally engaging. And people are really talking about thermostats. So I think we’ve struck a nerve with a lot of people who were suffering in silence with the thermostats they already had which consume so much energy and they don’t know how to use [them] at all.

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What was the creative process behind Nest? Was it a ‘ping’ moment in the middle of the night?

Nest really came out of a process where I was trying to design the most connected and the most green home that I knew of. I was curious of just about everything that goes into a home and building a home. When it came to the heating and cooling system, I discovered there was your thermostat that controls 50-60% of your energy costs every year – and no one knows how to use them and they’re ugly and frustrating.

I was like: this is a problem that’s looking to be solved. And when I looked at all the competition, there was no real competition to do the class of product that we set out to build. It just fell in my lap and I was like: I have to do this. So I brought one of the best people from the iPod team, Matt Rogers, to be my co-founder and created Nest.

What lessons about design have you brought from Apple to this venture?

It was really about experience. With the thermostat, we revolutionized the product itself, absolutely – but we also revolutionized the sale of it. Most thermostats were only purchased by contractors and installed by contractors: what we did was a radically different approach. We’re going to go where the iPhone customer shops and we’re going to go to customer retail. We’re in shops like Best Buy and Amazon in the U.S. We go to those places where people buy to communicate what the value is of this product.

We took a risk saying: maybe the consumer will actually install it. It turns out – because we focused so much attention on getting the installation experience right and making it so easy to install – that over 95% of them are actually installed by users themselves. Which you wouldn’t believe: I thought it was going to be more like 50-60% but that’s not the case. We have 80-year-olds posting videos on the web of them putting it in.

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How does Nest work?

The primary differences [from a regular thermostat] are: Number one, to save any energy using a thermostat before this, you had to program them. And it turned out that it was so complicated – like programming a VCR from the 1980s – that literally only 10-11% of people in the U.S. would ever program their thermostat even once to save energy.

So instead of saying: “let’s just make its easier to program,” we believe there should be a better way. So, literally, we watch your usage, or the device itself, the algorithm, watches your usage: you turn it up in the morning, you turn it down when you go away, you turn it up in the evening when you come home, you turn it down when you go to sleep. We watch those patterns over the weekdays and the weekends, and through this learning algorithm that we call “Autoschedule,” it creates a schedule for you. And our huge set of customers out there have proven to us that 99% of those devices have schedules that save energy, as opposed to 11% before.

Another difference is: sometimes you don’t always know when you’re going to be home or you’re going to be out and you don’t turn down your thermostat. We actually have built sensors into the product itself that recognize when you’re not at home and turn it down to an energy saving setting that you pre-specify.

Then there’s a third type of thing that we’ve done differently: we control the heating and cooling differently to make it more efficient. So in the case of air conditioning, we have a feature called “Airwave” which can save 30% of run time very easily with no change in comfort whatsoever. Across the U.S. and across Canada, that’s been really helping to save energy – and no one has to do anything for that. These are the kind of things that we do. There’s so many more other features and stuff that we could talk about, but those are the major ones.

Who is buying the Nest?

We start with the early adopters: the iPhone generation, the new home owner, newly married with maybe one child. But it turns out we’re selling it across all of the different demographics. We’re finding a lot of families: younger families buying it for their senior citizen parents who are having a difficult time using their heating and cooling or the younger people are remotely controlling their parents’ heating when they’re having a problem or when they’re sick.

We’re also finding that realtors are buying them like crazy. They’re buying them when they’re selling the home to spiff up the home, to make it better for sale. It’s been amazing for me, our press coverage has been in Elle Décor and in Dwell magazine, and in Wired and you name it – we’ve been in GQ and things I never would have believed we would have been in.

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How many units have you sold so far?

A lot more than we thought we would! We’re not stating any numbers but needless to say, we were sold out for five months and it took us a long time for us to get the factories up and running because it just takes a long time to get the right parts from China where they are produced.

Is it only available in the U.S. at the moment?

It’s available in the U.S. and Canada today. But what’s been interesting is that – because they’re connected – we’ve seen them light up in 63 other countries where we don’t sell. What’s happening is, people are coming to the U.S. – or buying from retailers in the U.S. that ship internationally – and they’re exporting it to these different countries. That’s why I’m in Europe this week and next: to learn about that and be able to bring that to those countries as fast as possible. It’s wonderful to see the multitude of customers who really want to help us to get to their locales as fast as possible.

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What are your plans for international roll-out?

There’s nothing we’re talking about in specific times. Right now were on a fact-finding mission to finalize our schedule for that.

You’ve been sued by thermostat maker Honeywell. Where are you at with the lawsuit?

We’re taking it very, very seriously but at the same time, we’re not shy about this at all. When I was running iPhone and iPod I got sued basically every week, so I’m used to this. This is just matter of course for anybody who’s creating leading-edge products. What we can say about the court case now is that it has actually been officially stayed – so it’s not on the court docket – because the claims that Honeywell said we were infringing were actually ruled out by the U.S. patent office. All the activity is at the patent office for Honeywell to prove that their patents are worthwhile and valuable.