This Hardware Company May Be the Next Apple!

Summary

The video explores Swedish hardware company Teenage Engineering, known for their unique, emotional product designs that build a loyal fanbase willing to pay premium prices. It contrasts them with generic tech startups obsessed with fast growth and replication. Teenage Engineering takes a slow, thoughtful approach to design, aiming to create one-of-a-kind products that tap into nostalgia and human connection. Their tape recorder and other niche gadgets showcase how beautiful, differentiated design - not affordable utility - is key for healthy margins and longevity. The video advocates learning across disciplines to see patterns and try creative experiments with an open mindset.

Takeaways

• 😀 Teenage Engineering is a hardware company known for beautifully designed, niche products like the OP-1 synth
• 👂 They collaborated with Nothing to design the Ear (1) earphones
• 🎨 Their design philosophy values slowing down, thinking long-term, and making unique products
• 📐 They focus on the user experience and emotions evoked by their products
• 💡 Differentiated, beautiful design builds loyalty and allows charging premium prices
• 🚀 Fast growth and VC push for speed hurts design quality and uniqueness
• 🌈 They take inspiration across disciplines like fashion, filmmaking and banking
• 🎹 Their tape recorder product shows how storytelling and emotions can sell niche utility
• 😎 They have high margins as they don't compete on price and features
• 🤝 Partnering with them adds value as users will pay more for the design aesthetic

Q & A

What company designed the hardware and engineering for the Nothing phone?

The hardware design and engineering for the Nothing phone R1 was created by a company called Teenage Engineering.

Why does the author say Teenage Engineering is like the next Apple?

The author says Teenage Engineering could be like the next Apple because they focus on beautiful and innovative product design, which was key to Apple's early success. Their design aesthetic stands out from the norm.

What was Teenage Engineering's first product?

Teenage Engineering's first product was the OP-1 portable synth, introduced at the NAMM show in 2010.

Who did Teenage Engineering collaborate with other than tech companies?

Teenage Engineering collaborated with the Swedish clothing company Cheap Monday to produce work clothes and field apparel.

What gaming device did Teenage Engineering help design?

Teenage Engineering helped design the Playdate handheld gaming device, which features a mechanical crank.

What company did Teenage Engineering partner with in 2021?

In 2021, Teenage Engineering partnered with the tech company Nothing to produce the design aesthetic for their products.

How does unique design bring loyalty according to the author?

The author argues that unique, next level design brings die-hard fans and loyalty, as evidenced by Teenage Engineering's devoted following.

What product did Teenage Engineering make that costs over ₹100,000?

Teenage Engineering released the TP7, a digital tape recorder priced at over ₹100,000.

Why does the author criticize designers for only knowing UI/UX?

The author criticizes UI/UX designers who only know how to make websites and can't design across platforms like video production.

What does the Teenage Engineering founder say about the focus on fast growth and IPOs?

He says the cultural focus on fast growth, IPOs, etc. results in lower quality products, and he would rather go slow and think long-term.

Outlines

00:00

😊 Teenage Engineering - The Apple of Niche Hardware Design

Paragraph 1 introduces teenage engineering, the company behind the hardware design of the Nothing phone. It discusses how teenage engineering follows strict design principles across hardware, software and even apparel. The company doesn't care about the platform but focuses on great design that taps into human emotions.

05:02

😃 Teenage Engineering Taps into Nostalgia and Emotions with Thoughtful Design

Paragraph 2 analyzes how teenage engineering markets niche products like a $1000 tape recorder by tapping into nostalgia and evoking emotions. Their beautiful, nostalgic products have a dedicated fan following willing to pay a premium.

10:03

😉 Differentiation is Key - Avoid Commoditization with Unique Design

Paragraph 3 discusses the importance of differentiation and avoiding commoditization. It contrasts teenage engineering's unique design aesthetic with engineers competing on fronts like front-end development leading to commoditization. The paragraph emphasizes the importance of good margins to enable research and development.

Keywords

💡differentiated design

Differentiated design refers to hardware and product design that stands out from the norm and looks very different than standard or generic products in the market. The video argues that differentiated design, like that done by Teenage Engineering, attracts loyal fans and allows companies to charge premium prices. An example from the script is the unique crank design of the Playdate console.

💡emotions

The video emphasizes tapping into human emotions through product design, marketing, and packaging. Companies like Teenage Engineering are able to spark nostalgia, vibes, and feelings through their retro product designs and descriptive marketing copy. This connects customers more deeply to products.

💡gross margins

Gross margins refer to the amount of profit a company makes after accounting for production and delivery costs. The video argues that generic, overpopulated product categories lead to low gross margins and make it hard for companies to invest in R&D. Differentiated design allows for higher gross margins.

💡long term thinking

The founder of Teenage Engineering emphasizes wanting to build the company slowly over the long term rather than focusing on fast growth and profits. This long term thinking allows them to focus on product quality rather than economics.

💡multi-disciplinary design

The video discusses how good design principles translate across products, services, and disciplines. Good designers have an adaptable mindset to apply their skills across different mediums like hardware, software, fashion, etc.

💡niche consumer electronics

Teenage Engineering operates in the niche consumer electronics space, targeting specific user profiles that have disposable income and appreciate unique, emotional design over mainstream value-focused products.

💡packaging

Teenage Engineering pays meticulous attention to product packaging design, using materials and textures that match the feel of their products. This further stimulates the emotional response in customers.

💡premium pricing

Because of their differentiated, emotional design and loyal fans, companies like Teenage Engineering can charge premium prices for products that would otherwise be considered commodities, like tape recorders.

💡research and development (R&D)

The video argues that the higher gross margins generated by companies like Teenage Engineering give them more budget to invest into further researching and developing innovative products.

💡venture capital

The video advises avoiding venture capital that pushes excessively fast growth, instead arguing for patient capital that allows companies time to develop high quality, differentiated products.

Highlights

Teenage Engineering is a Swedish company known for its unique and innovative product designs.

Teenage Engineering doesn't just design hardware, they also collaborate on clothing, software, and more - design is a skill meant to surpass platforms.

Beautiful, next-level design brings you die-hard fans - that's the value of companies like Apple and Teenage Engineering.

Differentiated design brings loyalty - Teenage Engineering has built a loyal fanbase willing to pay premium prices.

Teenage Engineering taps into people with disposable income who want dedicated, specialty devices - even for outdated tech like tape recorders.

The products tap into nostalgia and emotions through their marketing and modeling, making people feel connected.

The company takes a slow, thoughtful approach to design instead of chasing fast growth and profits.

The founder believes the current startup culture and push for fast growth compromises design quality.

High gross margins allow for more research, development and innovation - key for companies like Apple and Teenage Engineering.

If products become indistinguishable and compete on price instead of quality, profit margins fall.

The more average and generic the product looks, the lower the margins.

The learning process and understanding how the world works allows the founder to make connections across disciplines.

Willingness to experiment and try new things leads to surprise successes.

Fun and uniqueness in the design process translates to innovative products.

Principles are similar across design disciplines even if the final shape and form differs.

Transcripts

so by now everyone's seen the rabbit R1

like it or hate it most people think the

design is amazing but what people don't

know is that the hardware design and

Engineering for the R1 was created by a

company called teenage engineering and

if you dig into the company you'll find

some golden insights about hardware and

design even the nothing one earphones

this is the company behind it ladies and

gentlemen today we're going to talk

about teenage engineering see everyone

wants to build the next apple a hardware

company that makes beautiful physical

stuff but people think that the next

apple will look like apple see when the

first view Apple Max got popular they

look like this but at that time IBM

computers looked like this so Apple was

the different design most people didn't

really like it because most people using

computers were professionals people

didn't fully like it because it was

different from the standard so when we

ask ourselves what's the next apple we

have to look look at design that looks

very different to the norm right now

ladies and gentlemen here are the

Teenage engineering

[Music]

products I couldn't get my hands on any

of this because most of their current

products are out of stock but the story

of the company and their insights are

very interesting teenage engineering is

a Swedish company founded in 2005 by

jper Jens and David the three of whom

had previously led the computer games

company Net Baby World from 1999 to 2003

their first product the op1 was

introduced at the Nam show in 2010

shortly after the release teenage

engineering started doing something

weird for a hardware company they

started producing several accessories

the company follows a very strict design

AOS they collaborated for example with

the Swedish company cheap Munday to make

work cloths and field apparel for them

this company breeds design in all forms

they don't actually seem to care whether

it's Hardware or software or clothes

this is in stark contrast to some uiux

designers who make the same five purple

websites for the same kind of companies

design is a skill that is supposed to

surpass platforms there's a reason that

even the videos Apple produces are

kickass but if you ask a generic uiux

designer to make a video they'll say oh

I'm not a video guy I don't know

anything about this but there are some

more insights about design from teenage

engineering towards the end of this

video let's get back in 2018 teenage

engineering announced a new line of

audio equipment products frequence in

collaboration with Ikea eventually these

sort of Niche consumer electronics

companies start doing business to

business so they started doing B2B

building cool products for businesses on

22nd May 2019 a company called Panic

announced play date which is a new

handheld video game console designed in

collaboration with teenage engineering

the device featured a mechanical crank

it's like a crank which is a signature

teenage engineering Edition at $199

which is about 16,000 rupees the play

date is actually the cheapest way to

experience teenage engineering's work on

February 25th 2021 teenage engineering

announced that it will partner with the

british-based tech company nothing to

produce the design aesthetic of their

products teenage engineering later

worked on the device the Year One which

was nothing's first product now what's

the value of such beautiful design it

makes the product more expensive but as

apple and teenage engineering have found

out beautiful Next Level design brings

you die hard fans that's the value of

beautiful Hardware Die Hard fans look at

this guy who tattooed a teenage

engineering product on his hand if you

go through their Reddit if you go

through there ask me any I'm telling you

the fan base is extremely loyal to them

because differentiated design brings

loyalty teenage engineering has now

become a brand where the minute a

company says we're partnering with

teenage engineering people don't mind

paying the extra premium for beautiful

stuff people now have disposable income

they have little extra cash they can

spend and they don't mind spending a

little more for beauty in their lives

and houses more importantly take a look

at this packaging they have some

Japanese in there because really good

design has to borrow and spin off from

multiple places and multiple cultures

the market that teenage engineering is

really tapping is people who are

deciding that they need dedicated

devices for some stuff like Teenage

engineering put out the tp7 which is a

digital tape recorder see I record a lot

I use recording as a replacement to

writing sometimes and teenage

engineering built this product that just

feels like it'll feel good at a price

the grand price of 1 lakh more than one

lakh for a tape recorder add on top of

that the field bag a small bag for 4,000

rupe with AI getting better A lot of the

errors that you're going to need to

press backspace for are gone so a key

feature of the tp7 is AI based

transcription which automatically

converts what you've said using audio to

text like whisper to transcribe and chat

gbt to summarize and rewrite but the

lesson to learn from this is how the

hell are they marketing a tape recorder

bloody tape recorder at OnePlus lacks

and this is a master class it's all

about touch and feel read this from

their website off the Record picture

yourself in an interview situation the

real on the team pp7 is spinning slowly

the bright red record lamp is lit both

the Reel and the lamp indicates that a

recording is taking place the interview

is going quite well the situation gets

heated you suddenly asked some personal

questions in that moment you gently

place a finger on the Reel and pause the

recording allowing you to continue the

interview off the Record it's like a n

time story that you tell your kids set

with the Vibes and moods see that's the

thing beautiful design high quality

writing and high quality video they tap

human emotions when you see the rabbit

R1 it reminds you of a Pokédex it

reminds many Nerds like me of our past

when you see these products you feel

some emotion because one it's not an

ordinary looking product it's not

average and two because they are

marketed beautifully and modeled around

Nostalgia feelings of the past the

reason you don't feel that today towards

any phone is because you've seen too

many phones they all look the same

you've seen too many cars they all look

the same they're normal they're boring

and that's the takeaway for today

everybody wants to be a designer

designing the same type of website but

design is far more it's about opening up

human emotions when you see a video it's

about can you package the video better

so people are more connected to you it's

not about copying the same current style

website again and again here's a quote

from the founder of teenage engineering

who actually went out and said that the

designers and the design we're producing

as a function of fast growth Venture

Capital this push to IPOs it's not

healthy I'm going to read out the quote

for you we only want to make great

products and when you don't Focus only

on making money and have reached a

certain level everything becomes about

quality right now there's a certain

cultural fascination with fast growth

IPOs and so on but I want to go slow

really slow and think longterm it takes

time to do good things you see this

cultural phenomenon of speed and growth

at all costs is displayed in every

startup they all look the same it's like

fast food it looks good its taste is

consistent but then you feel horrible

afterwards that's the reason I'm not

raising venture capital for my new

company I want to take my time I want to

do it slowly and like a dish that's

being simmered for the flavor I don't

mind the company taking forever to get

the flavor of who I am inside of it one

more insight while doing research for

this video I looked up and ask me

anything that they did on Reddit they

were asked how they come up with these

designs this is what they said we tried

to to create things that's not out there

when we decide to create something new

everyone really needs to believe in it

and to make it great and the best way to

do so is to do as unique things as

possible to keep the inspiration going

we always work until the deadline and

try to add as much fun stuff as possible

it's hard to stop when you have fun at

work so it's a reflection of the fun

they have and the fact that they're

trying to be unique at all times they

don't fit into a mold the Stark opposite

side of this is all the young kids who

have gone to the same types of

engineering colleges for four years are

all going for the same front-end

engineering roles and have no unique

differentiation this is the alternate

parallel teenage engineering has

incredible gross margins the gross

margins of the future are going to be

built on the emotions of people with

disposable income so you're going after

a very specific profile of person who

will buy from you and teenage

engineering is a master class in making

that happen because mostly the utility

of what they build is commoditized the

term commoditize refers to the process

by which products or Services become

indistinguishable from each other in the

same category like Engineers all going

for the front- end role leading to

competition primarily on price which is

all their salaries come down rather than

on features or quality this typically

happens when the market is flooded with

similar products or Services making it

difficult for consumers to discern a

significant difference between them a

tape recorder is cheap even if people on

Twitter point out that they're a status

and luxury item manufacturer people will

still buy the more average your product

looks the less your gross margin so

you're functioning making no profit no

margin you're not able to research and

development your product doesn't look

good and as much as people come out and

say I want to build really affordable

companies I want to give these things

for free over time you realize that when

your gross margin is low you can't

actually do research and development you

can't actually build great products so

you're stuck competing with price with

everybody else and we've seen some of

these stories take place in India

Micromax carbon lava at some point

Micromax is making billions of dollars

in India now they are sub hundred

million in Revenue right so the minute

you build a generic product and say I'm

going to be extremely affordable it's a

very Noble thought and a very Noble

philosophy until you die 5 years later

whereas like apple and teenage

engineering when you have margins but

also build really high quality product

take the time take the process to do it

well then you end up with better gross

margins to make more beautiful products

and actually build a good company while

at it I want to end with a quote from

the CEO in an interview and I took away

a lot from this particular quote I

really like to learn new things the

learning process fascinates me I want to

understand how the world works so I go

from area to area and then I try to make

connections what I have learned is that

many things are basically the same in

different disciplines so if you work

with fashion or design of film making or

even banking you know it's basically the

same principles that have a different

shape but if you've moved from one to

another then you start to see a pattern

everything I do is some kind of

experiment and I've been surprised many

times that if you have the will to try

things chances are that it works thank

you and make sure you subscribe

bye