Nest’s time at Alphabet: A “virtually unlimited budget” with no results

(credit: Ron Amadeo / Nest)

Nest CEO Tony Fadell wasn’t officially “fired” from Nest, but it certainly feels like it. Nest and Alphabet announced Fadell would be “transitioning” to an advisory role at Alphabet, dropping both Nest and Fadell into a sea of negative press. In just the last few months, Nest has had to deal with reports of an “employee exodus,” a string of public insults from Dropcam co-founder and departing Nest employee Greg Duffy, news that even Google supposedly didn’t want to work with Nest on a joint project, and fallout from the company’s decision to remotely disable Nest’s deprecated Revolv devices. Alphabet and Nest both seem to know the announcement about Fadell’s “transition” looks bad: the news dropped on a Friday afternoon, a popular time for companies to dump bad news they hope no one will notice.

It’s hard to argue with the decision to “transition” Fadell away from Nest. When Google bought Nest in January 2014, the expectation was that a big infusion of Google’s resources and money would supercharge Nest. Nest grew from 280 employees around the time of the Google acquisition to 1200 employees today. In Nest’s first year as “a Google company,” it used Google’s resources to acquire webcam maker Dropcam for $ 555 million, and it paid an unknown amount for the smart home hub company Revolv. Duffy said Nest was given a “virtually unlimited budget” inside Alphabet. Nest eventually transitioned to an Alphabet company, just like Google.

In return for all this investment, Nest delivered very little. The Nest Learning Thermostat and Nest Protect smoke detector both existed before the Google acquisition, and both received minor upgrades under Google’s (and later Alphabet’s) wing. A year after buying Dropcam, Nest released the Nest Cam, which was basically a rebranded Dropcam. Two-and-a-half years under Google/Alphabet, a quadrupling of the employee headcount, and half-a-billion dollars in acquisitions yielded minor yearly updates and a rebranded device. That’s all.

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Ars Technica

 
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