How to Be a Good CEO: Advice From Entrepreneur Tony Fadell

This article is an excerpt from the Shortform book guide to "Build" by Tony Fadell. Shortform has the world's best summaries and analyses of books you should be reading.

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How does a CEO impact every level of the organization? What should a CEO’s attitude be toward other companies? How should you go about selling or merging your company?

In his book Build, serial entrepreneur Tony Fadell offers advice for succeeding in every stage of your career, whether you’re just starting out or a CEO. He draws on his experience as CEO at Nest and Build Collective as well as the journey he took to get to the top.

Continue reading to learn Fadell’s advice on how to be a good CEO.

How to Be a Good CEO

Fadell’s lessons stem from his own career. At Apple, he built several generations of the iPod and the iPhone and rose through the ranks to Senior Vice President. In 2010, Fadell started Nest (along with co-founder Matt Rogers) and became CEO. In 2014, Fadell sold Nest to Google. Today, he spends his time on Build Collective (a venture capital firm) and in the cryptoverse.

If you’re extremely successful, you may one day become CEO as Fadell did. He shares his wisdom on how to be a good CEO, based on his own experience. Fadell explains that your job is now to care about the company. Everybody in your company will now look to you for cues on how to behave, so pay attention to and demand high standards from every department: If you do, lower-level managers will also demand high standards from their employees.

(Shortform note: While demanding high standards is important, be wary of expecting total perfection. In Steve Jobs, Isaacson describes how Fadell’s one-time boss’s perfectionism often resulted in delays, cost increases, and overworked employees.) 

Additionally, pay attention to developments outside the company. Don’t fall into the trap of thinking that any idea that your company didn’t come up with must be bad; if you do, you risk ignoring innovative technologies that could transform your field.

(Shortform note: In The Innovator’s Dilemma, Clayton M. Christensen argues that companies often ignore innovative technologies not because of the CEO’s ego but because these technologies usually appeal to a new market that initially does not include the established company’s main customer. These customers only turn to the innovation later, once the technology improves.)

One day, you may need to decide whether to sell your company. If so, Fadell recommends taking into account three major factors. First, ensure that your long-term goals complement each other. Second, know exactly what potential benefits this merger will provide. Third, evaluate how well your cultures mesh together—if your core values are contradictory, you’ll face issues.

(Shortform note: If you’re considering selling your company, The Hard Thing About Hard Things author Ben Horowitz recommends asking yourself two questions: Is the market still growing, and do you have a realistic chance at being number one in the market? If the answer is yes to both, don’t sell. You’ll likely estimate a lofty valuation for your company that no one will be willing to meet.)

How to Be a Good CEO: Advice From Entrepreneur Tony Fadell

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Like what you just read? Read the rest of the world's best book summary and analysis of Tony Fadell's "Build" at Shortform.

Here's what you'll find in our full Build summary:

  • Entrepreneur Tony Fadell's memoir, from the iPhone to Nest
  • Advice for succeeding in every stage of your career, from beginners to CEOs
  • Tips for building a product-based business and a great team

Elizabeth Whitworth

Elizabeth has a lifelong love of books. She devours nonfiction, especially in the areas of history, theology, science, and philosophy. A switch to audio books has kindled her enjoyment of well-narrated fiction, particularly Victorian and early 20th-century works. She appreciates idea-driven books—and a classic murder mystery now and then. Elizabeth has a blog and is writing a creative nonfiction book about the beginning and the end of suffering.

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