Hey Community. I had the privilege of sitting down with Tim Holbrow, the Chief Financial Officer (CFO) of Nothing, in London to ask a few questions about the company’s business performance and future plans. Tim shared insights on Nothing’s impressive growth over the past few years, the importance of community input, and the challenges of balancing innovation with financial stability. He also discussed the company’s strategic planning, future investment rounds, and the continuous development of new products. I hope you find this conversation as insightful as I did!
Rohit (CBO): Tim, thank you for joining us today. For those in the community who don’t know you, can you give a brief introduction?
Tim: Sure! I’m Tim, the CFO at Nothing. I’ve been here for about a year and a half, though it’s been so busy it feels much longer. I’ve worked in tech companies for the past 25 years, mainly in startups of various sizes. For the first 10 years of my career, I worked for a company called Symbian, which developed the operating system for smartphones in a different era before the iPhone and Android, right at the beginning of the industry. It was an exciting time,people were just discovering why you might want a camera in your phone, then GPS, wifi, etc. Maybe there are some parallels to how the industry is shaping up today.
Rohit: Let’s start with a broad question. How would you describe Nothing’s performance over the past year, and what key milestones did you reach as a business?
Tim: This year, we entered our fourth year of operation. It’s sometimes easy to forget that the company is still very young, it’s incredible to see how far we’ve come. Looking back at the last couple of years and the progression of the business from Phone (1) to Phone (2), and then Phone (2a), each step has been a big leap forward from a business perspective.
We’ve grown and matured as a company, not only in terms of things like the number of employees we have, but also through our experiences along the way. Releasing products, observing how they perform in the market, and incorporating the learnings into new product development. It means that each time we launch we see significant improvements.
I hope you, as a community, can see this progression. We’re witnessing it in terms of the professionalism and the smoothness of our releases, as well in the products themselves. Behind the scenes, beyond what you see in public, there have been improvements in quality processes, logistics, supply chain relationships, channel relationships, and the overall commercial aspects of the business. We are truly building capabilities and moving to the next stage of scale for our business.
Rohit: That’s great to hear. And thinking about this exciting next stage for the business, as an investor and customer, I would like to better understand the company’s current financial position and long-term outlook. Can you share some insights into this, and how you plan to ensure continued support for the development of new products in the years to come?
Tim: Yeah, it’s a really interesting question, and obviously, it’s my job, so it’s close to my heart. Balancing innovation with business growth is a difficult task, especially in startups and growth companies. We need to manage investment allocation carefully, ensuring there is enough funding for developing and deploying new products while also having sufficient cash flow to develop and execute the marketing programmes that drive demand.
In terms of the specifics of our current financial position and the long-term outlook, it’s tricky to comment because it’s not something we choose to publish. We’re a private company so are not required to make these details public, and right now it makes sense commercially to keep our historic and projected financials private.
What you can see publicly is the growth of the business in the diversity and size of our portfolio. In 2021, we launched Ear (1). In 2022, we added Phone (1), and the Ear (Stick). In 2023, we launched Ear (2), Phone (2), and the CMF products. Each year adding new products, building the portfolio size and hence growing the business overall.
We released Phone (2a) earlier this year, Phone (2) is still in the market, plus CMF Phone (1)’s launch date is right around the corner. That’s two brand new phone launches, the continuation of last year’s phone, plus Ear and Ear (a). Our portfolio is expanding, which intrinsically gives us a significant boost in growth.
This increased number of products in the market provides us with wider market access and top-line growth. Selling 100,000 Phone (2a) in one day was an amazing achievement for the team, and we passed 3 million products shipped soon after. Without revealing specific revenue and profitability numbers, this kind of success was huge validation for us.
Rohit: And I bet you have a busy launch schedule ahead. What’s the best recipe to balance continued investment in innovation with long-term financial solidity?
Tim: Innovation for us is mostly about the development of new products and experiences, rather than long term R&D programmes outside of the context of portfolio development, so it’s intrinsically linked with the growth of the business. In order to deliver the continuous improvement in products that we want for our portfolio, and that our customers and community want from our products, we have to be constantly innovating in our designs, evolving Nothing OS, and building new software and hardware features. This portfolio development is also the thing that drives growth and delivers financial solidity. The balance is in how we pace our growth to be sustainable, this comes from careful portfolio planning and budgeting, something that we continuously review through each product lifecycle.
Rohit: It makes sense - I think most of the big companies out there follow the simple road. They don’t take much risk with innovation. That’s where they get their financial stability, I guess. But the companies that do take innovation seriously often struggle. How have you been finding the right balance?
Tim: An interesting feature of our market is that there are probably only 10 to 15 companies in the world that can make smartphones. Aside from us, they’re all huge companies with immense resources. Yet people tend to look to us, the company with the shallowest pockets, for the most innovation in terms of design and product features.
We’re fine with this because we love creating products that stand out. Also, in a way, the fact that our business has lower volumes compared to our competitors means we are in a unique position. We can produce products really focused on the creative people in our audience.
Our larger competitors, with much larger overheads, have to work at much higher volumes and so have to make products with very broad appeal, to a huge range of people, of all ages and across multiple geographies. It’s harder for them to do specialised and more innovative stuff and still appeal to their broad audience. The challenge for us as we grow will be to make sure we maintain the level of product innovation we’ve delivered so far.
Rohit: Interestingly, people and the community are always at the core of Nothing. So, what role does the Community play in shaping Nothing’s long term strategy and decision-making processes?
Tim: If you look at how we build our strategy and make decisions in Nothing, we have a few forums helping us to build these plans at different levels. Our board of directors include senior leaders and investor representatives, they meet each quarter to discuss strategy and high level performance, then we have an internal leadership group that meets each week to discuss more day-to-day operational matters, and once a quarter for a bigger review session for budget and business plan setting. Then there are a fair number of committees that meet through each product lifecycle to discuss the progress of product development and marketing planning both before and after launch.
Of course - we’ve had a Community Board Observer since year one, with you taking on the role in January. Since I joined I’ve been so impressed with the quality of the feedback that the community brings to the Board through the observer role. It’s always a session that our Directors engage in really deeply and yield some of the most useful actions in response to the feedback. I hope you feel positive about how you and your predecessors have engaged with, and influenced, our senior leadership team.
We try to get the community involved in every stage of our other planning processes. Whether through quality testing, feedback during product launches, or interactions on the community forum, the community’s input is so useful as a constant feedback mechanism for us.
And looking at the future, we’re always seeking new ways to engage the community. The Phone (2a) Community Edition Project this year is an obvious example. Additionally, as we move forward with new initiatives, such as the AI roadmap Carl outlined, we will seek more community feedback.
Personally, I’ve got a long history of working with tech products. I was involved in smartphones 20 years ago, in the pre-Apple and Android era. At that time, before apps were really a thing, we were getting community developers engaged in building apps for phones. It was surprising how this community, even when not formally recognised as such, helped drive product roadmaps. We would launch products, observe how people used them, see the features that they would develop, and then adjust accordingly. We can continue this approach with Nothing, as now we engage with the community in a much more structured way.
So, yes, it’s a long history of taking feedback and adjusting our trajectory, because in the end, the community consists of our customers. Our customers are the reason we do this. The input of those using the product will always be crucial.
Rohit: Staying on the topic of community involvement: Community members are eagerly awaiting details on the next community investment round. Can we expect more information soon? And what can investors anticipate in terms of the investment structure and opportunities?
Tim: From our side of the business, community investments and investments more broadly are intrinsically linked with our Corporate Strategy. We have to look at the business plans I mentioned and think through, based on the profitability of our products and the rate of growth we’re confident in, whether we need to raise additional capital to drive the business forward. And if so what kind of capital that should be and how we will raise it.
The last time we did a big funding round was in the early part of 2023. This bolstered our business, giving us the confidence to go ahead with the launch of Phone (2).
We’ve successfully delivered a range of products since then and are improving the performance of the business overall. As a result, our Corporate Strategy is also evolving to meet the new needs of the business, it’s different today to what it was last year. Future fundraising efforts will focus on growth, developing and launching the next generation of products. This means we might not follow the same fundraising patterns as in the past, like seed rounds and follow-on rounds. Instead, we will adapt our strategies to meet the specific needs of each phase of our growth.
As the timing of our community fundraising will align with our general fundraising activities, there is nothing to announce regarding community involvement right now. If we do conduct a community round in the future, we will always strive to make it as accessible as possible to our community members.
Rohit: I appreciate your explanation, Tim. However, I’d like to challenge you a bit around this. Is there really nothing to communicate at this point in time?
Tim: We don’t have a timeframe for it now. As soon as the time is right and we have something to announce you’ll hear it here first.
Rohit: Thank you, Tim, for joining us today and giving the business update for the community. These are some great insights. Any closing thoughts?
Tim: Like I said before, I think the community plays an intrinsic part in what we do. It’s really nice that we had the opportunity to connect in this way and share information. I’m excited to do this again in the future and keep talking about our growth.
