For most of the 10 years I thought about thermostats, I had no intention of building one. It was the early 2000s, and I was at Apple making the first iPhone. I got married, I had children. I was busy.
But again, I was also very cold. Freezing cold.
Every time my wife and I drove to our Lake Tahoe ski lodge on a Friday night after work, we had to keep our snow jackets on until the next day. The house took all night to warm up.
Walking into that freezing house was driving me crazy. It was mind-boggling that there was no way to warm it up before we got there. I’ve spent tens of hours and thousands of dollars trying to hack security and computer equipment tied to an analog phone so I can turn on the thermostat remotely. Half my vacation was up to my elbows in wiring, electronics strewn across the floor. But nothing worked. So the first night of every trip was always the same: we snuggled up on the ice block of a bed, under the icy sheets, watching our breath turn to mist until the house finally warmed up in the morning. .
Then on Monday I would go back to Apple and work on the first iPhone. Eventually I realized I was making a perfect remote control for a thermostat. If I could just connect the HVAC system to my iPhone, I could control it from anywhere. But the technology I needed to get there – reliable low-cost communications, cheap displays and processors – didn’t exist yet.
How did those ugly, crappy thermostats cost nearly as much as Apple’s most advanced technology?
A year later, we decided to build a super efficient new home in Tahoe. During the day I would work on the iPhone and then come home and dig into the specs of our house, choosing finishes, materials and solar panels and eventually tackling the HVAC system. . And again, the thermostat came to haunt me. All the high-end thermostats were hideous beige boxes with weirdly confusing user interfaces. None of them saved energy. None could be controlled remotely. And they cost around US$400. The iPhone, meanwhile, was selling for $499.
How did those ugly, crappy thermostats cost nearly as much as Apple’s most advanced technology?
The architects and engineers of Project Tahoe heard me complain again and again about the madness. I said to them: “One day, I will fix this, write down my words! They all rolled their eyes – here comes Tony complaining again!
At first, they were just useless words born out of frustration. But then things started to change. The success of the iPhone has driven down the costs of fancy components that I couldn’t get my hands on before. Suddenly, millions of high-quality connectors, screens and processors were being produced, at lower cost, and could be repurposed for other technologies.
My life was changing too. I left Apple and started traveling the world with my family. A startup was not the plan. The plan was a break. A long.
We traveled all over the world and worked hard not to think about work. But no matter where we went, we couldn’t escape one thing: the fucking thermostat. The infuriating, inaccurate, energy-guzzling, recklessly stupid, impossible to program thermostat, always too hot or too cold in one part of the house.
Someone needed to fix it. And finally I realized that someone was going to be me.
This 2010 prototype of the Nest Thermostat wasn’t pretty. But making the thermometer look good would be the easy part. The circuit diagrams indicate the next step: go around.Tom Crab
Big companies weren’t going to do it. Honeywell and other white box competitors hadn’t really innovated in 30 years. It was a dead and unloved market with less than $1 billion in total annual sales in the United States.
All that was missing was the will to take the plunge. I wasn’t ready to carry another startup on my back. Not then. Not alone.
Then, like magic, Matt Rogers, who had been one of the first iPod Project interns, contacted me. He was a real partner who could share the load. So I let the idea take me. I came back to Silicon Valley and got to work. I researched the technology, then the opportunity, the company, the competition, the people, the funding, the story.
Making him look good wasn’t going to be difficult. Gorgeous hardware, intuitive interface, that’s what we could do. We had honed those skills at Apple. But for this product to succeed and make sense, we had to solve two big problems:
We had to save energy.
And we had to sell it.
In North America and Europe, thermostats control half of a home’s energy bill, or something like $2,500 a year. All previous attempts to reduce this number – by thermostat manufacturers, by energy companies, by government agencies – had failed miserably for a host of different reasons. We had to do it for real, while keeping it simple for customers.
Then we had to sell it. Almost all thermostats at that time were sold and installed by professional HVAC technicians. We were never going to break into this old boys’ club. We had to find a way to get into people’s minds first, and then into their homes. And we had to make our thermostat so easy to install that literally anyone could do it themselves.
It took about 9-12 months to create prototypes and interactive models, build software, talk to users and experts, and test it with friends before Matt and I decided to pitch investors.
“Real people” test the nest
Once we had prototypes of the thermostat, we sent it to real people to test.
It was bigger than we wanted. The screen was not quite what I imagined. Kind of like the first iPod, actually. But it worked. It has connected to your phone. He learned what temperatures you like. He refused himself when no one was home. It saved energy. We knew the self-installation was potentially a huge deal breaker, so everyone waited anxiously to see how it went. Are people shocked? Start a fire? Abandon the project halfway because it is too complicated? Soon our testers reported: The installation went well. People loved it. But it took about an hour to install. Crap. An hour was way too long. It was meant to be an easy DIY project, a quick upgrade.
So we dug into the reports – what was taking so long? What were we missing?
Our testers…spent the first 30 minutes looking for tools.
Turns out we weren’t missing anything, but our testers were. They spent the first 30 minutes looking for tools – the wire stripper, the flathead screwdriver; no, wait, we need a Phillips. Where did I put this?
Once they gathered everything they needed, the rest of the installation flew away. Twenty, 30 minutes max.
I suspect most companies would have sighed with relief. The actual installation took 20 minutes, so that’s what they would tell customers. Awesome. Problem solved.
But this was going to be the first time people interacted with our device. Their first Nest experience. They were buying a $249 thermostat – they were expecting a different kind of experience. And we had to exceed their expectations. Every minute, from opening the box, to reading the instructions, to installing it on their wall and turning on the heater for the first time, had to be incredibly smooth. A buttery, warm and joyful experience.
And we knew Beth. Beth was one of two potential clients we defined. The other client was into tech, loved his iPhone, was always looking for cool new gadgets. Beth was the decision maker – she dictated what went into the house and what was returned. She also loved beautiful things, but was skeptical of super new and untested technology. Looking for a screwdriver in the kitchen drawer and then the toolbox in the garage wouldn’t make her feel warm. She would roll her eyes. She would be frustrated and annoyed.
Dispatching the Nest thermostat with a screwdriver ‘turned a moment of frustration into a moment of pleasure’Dwight Eschliman
So we changed the prototype. Not the thermostat prototype, the installation prototype. We added a new element: a small screwdriver. It had four different head options and fit in the palm of your hand. It was elegant and cute. More importantly, it was incredibly convenient.
So now, instead of rummaging through toolboxes and cupboards, trying to find the right tool to remove their old thermostat from the wall, customers have simply reached into the Nest box and pulled out exactly what they needed. He turned a moment of frustration into a moment of pleasure.
Sony made fun of the iPod. Nokia made fun of the iPhone. Honeywell mocked the Nest Learning Thermostat.
In the stages of grief, this is what we call denial.
But soon, when your disruptive product, process, or business model starts gaining traction with customers, your competitors will start to worry. And when they realize you might be stealing their market share, they’ll be pissed. Really pissed off. When people get to the angry stage they go wild, they cut your prices, try to embarrass you with advertising, use negative press to undermine you, make new deals with sales channels to shut you out of the market .
And they could sue you.
The good news is that a trial means you’ve officially arrived. We threw a party the day Honeywell sued Nest. We were delighted. This ridiculous lawsuit meant we were a real threat and they knew it. So we brought out the champagne. That’s right, f—ers. We come for your lunch.
Nest is googled
With each generation, the product has become sleeker, slimmer and less expensive to build. In 2014, Google bought Nest for $3.2 billion. In 2016 Google decided to sell Nest, so I left the company. Months after I left, Google changed its mind. Today, Google Nest is alive and well, and they’re still making new products, creating new experiences, delivering their version of our vision. I wish them deeply, sincerely.
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