I find the back story or social process of how talented people move around fascinating and I recently read a number of investigative pieces that caught my eye.
The first piece is by Mark Ames: The Techtopus: How Silicon Valley’s most celebrated CEOs conspired to drive down 100,000 tech engineers’ wages.
The secret wage-theft agreements between Apple, Google, Intel, Adobe, Intuit, and Pixar (now owned by Disney) are described in court papers obtained by PandoDaily as “an overarching conspiracy” in violation of the Sherman Antitrust Act and the Clayton Antitrust Act, and at times it reads like something lifted straight out of the robber baron era that produced those laws.
The piece of the story that interested me wasn’t the conspiracy to hold down wages, it was the conspiracy to not hire each other’s engineers seemingly “greased” by Bill Campbell, a member of Apple’s board, an adviser to Google with deep connections in Silicon Valley.
Meanwhile, Eric Schmidt served on Apple’s board of directors until 2009, when a DoJ antitrust investigation pushed him to resign. Intuit’s chairman at the time, Bill Campbell, also served on Apple’s board of directors, and as official advisor — “consigliere” — to Google chief Eric Schmidt, until he resigned from Google in 2010. Campbell, a celebrated figure (“a quasi-religious force for good in Silicon Valley”) played a key behind-the-scenes role connecting the various CEOs into the wage-theft pact.
Tony Fadell was the key engineer on the iPod at Apple (eventually VP of the iPod division) and worked on the first iPhone. He and his team (which included Nest co-founder Matt Rogers) were at the epicenter of the rebirth of Apple after Steve Jobs returned and it can be said that the iPod, especially with a Windows version of iTunes which came later, brought more people into the Apple ecosystem than anything had before. Fadell was a star at Apple. jony Ive was also a star as he designed the first iMacs. Apple was coming back from the dead and these three people (along with Steve Jobs) were directly responsible: Jony Ive, Scott Forstall, and Tony Fadell.
Tony Fadell didn’t get along with Jony Ive or Scott Forstall who were both very close to Steve Jobs. This piece by Jay Yarrow lays out a bit more on this: Why Didn’t Apple Buy Nest? A Feud Involving Jony Ive Could Have Something To Do With It.
He [Fadell] was supposedly sidelined at Apple after losing a contest to build the software for the iPhone.
Fadell lost that battle to Scott Forstall who was the head of what evolved to be the iOS division at Apple. Fadell was forced out of Apple or quit and later Forstall was also forced out as he too didn’t get along with Ive.
Could Fadell or Forstall have gone directly to Google on exiting Apple? Executives at this level are given a large enough parachute (stock and money) so that they willingly sign non-compete deals that prevent them from going to another company for a period of time. Or, Fadell (and later Forstall) could not go directly to Google because of the unspoken deal that Jobs, Schmidt and others had to not hire each other’s engineers (to hold wages down). I think had Google attempted to hire Fadell right away Jobs would have been on the phone to Schmidt complaining about it.
Fadell leaves Apple, builds a house, gets the idea for a better thermostat and starts Nest with Matt Rogers, hires many of their key engineers from Apple (not sure how this got under the secret deal radar) and Google invests in them almost immediately.
It was just a matter of time before Google bought Nest, they probably planned to all along. Romain Dillet sums it up here: Nest Team Will Become Google’s Core Hardware Group.
While Nest first became popular with its thermostats, Google didn’t buy the company for these devices. First and foremost, the company wanted to snatch the great product team.
Before the Google purchase Nest could do their thing on their own, get some products out, build a name and customer relations on their own without the umbrella and possible liability of the Google brand. Now that Nest has their tentacles out being associated with Google might make some paranoid but it’s almost too late: the brand is established and Google is no doubt hoping that the paranoia about data collection will pass. In the best of worlds, this is a natural pairing and Google will give Nest a far reaching infrastructure to build and connect products in while Nest will give Google one of the best product engineering teams in Silicon Valley.
The question is, did Eric Schmidt, who was on Apple’s board at the time Fadell’s star was rising, make a deal with him to eventually get to Google under the radar of the secret non-hire agreement. If it is discovered that Google planned to get Fadell all along and did it this way because of the secret agreement, it will provide more evidence of the fact that the agreement exists at all.
Of course, my entire post here may be way off base but even if it is, oh, how I’d like to read the screenplay Aaron Sorkin could write about this. And, if you think this is messy, check out how the musical West Side Story came to be. It’s not quite what you might think.