By the way, this is very extreme. If you have an idea for a new business or product, you usually don’t have to wait a decade to make sure it’s worth the work.
During most of the 10 years I thought carelessly 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 and have children. I was busy.
But then again, I was also very cold. Super cooler chilling.
Every time my wife and I drive to a ski cabin in Lake Tahoe on Friday nights after work, we have to keep our snow jackets on until the next day. It took the house all night to warm up.
Walking in that frozen house drove me crazy. It was baffling that there was no way to heat it up before we got there. I’ve spent tens of hours and thousands of dollars trying to hack security and computer equipment tethered to an analog phone so that I can turn on the thermostat remotely. I spent half my holidays deep in wires, electronic devices scattered on the floor. But nothing works. So the first night of every flight was always the same: we’d gather on an icy lump of bed, under the frozen sheets, watching our breath turn into a mist until the house was finally ready by morning.
Then on Monday I’ll be back at Apple and working on my first iPhone. Eventually I realized I was making a perfect remote control for the thermostat. If I could just connect the HVAC system to my iPhone, I could control it from anywhere. But the technology I needed to make this happen—low-cost reliable connections, cheap screens and processors—didn’t yet exist.
How did these ugly and adorable thermostats cost the same as Apple’s latest technology?
A year later we decided to build a new super efficient home in Tahoe. During the day I’d work on the iPhone, then come home and research the specs for our house, pick out the finishes, materials, and solar panels, and finally, take up the HVAC system. And again, the thermostat came to haunt me. All of the top-of-the-line thermostats were hideous beige boxes with oddly confusing user interfaces. None of them provided energy. None of them can be controlled remotely. Its cost is about 400 USD. Meanwhile, the iPhone retailed for $499.
How did these ugly and adorable thermostats cost the same as Apple’s latest technology?
The architects and engineers at the Tahoe Project have repeatedly heard me complain about how crazy it is. I told them, “One day, I’m going to fix this—mark my words!” They all roll their eyes – Tony goes moaning again!
At first they were just idle words born of frustration. But then things started to change. The success of the iPhone lowered the costs of complex components that I couldn’t get enough of before. Suddenly, high-quality connectors, screens, and processors were made by millions, inexpensively, and could be reused for other technology.
My life was also changing. I left Apple and started traveling the world with my family. Starting up was not the plan. The plan was a respite. long thing.
We traveled all over the world and worked hard not to think about business. But no matter where we went, we couldn’t escape one thing: the dreaded thermostat. The thermostat is infuriating, inaccurate, power-hungry, thoughtlessly dumb, impossible to program, always—too hot—or too cold—in a part of the house.
Someone needs to fix it. And eventually I realized that someone would be me.
This 2010 prototype of the Nest thermostat wasn’t pretty. But making the thermometer pretty will be the easy part. Circuit board schematics suggest the next step – making it round.Tom Crabtree
Big companies won’t do that. Honeywell and other white box competitors haven’t really innovated in 30 years. It was a dead and unpopular market with less than a billion dollars in total annual sales in the United States.
The only thing missing is the will to make the landing. I wasn’t ready to do a new project on my back. No if. not alone.
Then, magically, Matt Rogers, who was an early intern on the iPod project, reached out to me. He was a true partner who could share the burden. So I let the idea hold me. I went back to Silicon Valley and went to work. I looked at technology, then opportunity, business, competition, people, finance, and history.
It will not be difficult to make it beautiful. Great device, easy to use interface – we can do it. We’ve honed those skills at Apple. But to make this product successful – and purposeful – we need to solve two big problems:
She needed to save energy.
And we needed to sell it.
In North America and Europe, thermostats control half of a home’s energy bill – the equivalent of $2,500 per year. Every previous attempt to reduce this number – by thermostat manufacturers, by energy companies, by government agencies – has failed miserably for a variety of reasons. We had to do this for real, while keeping it simple for clients.
Then we needed to sell it. Almost all thermostats at this point were sold and installed by professional HVAC technicians. We weren’t going to break into this boys’ club. We had to find a way into people’s minds first, then their homes. And we had to make our thermostat so easy to install that anyone could do it themselves.
It took about 9 to 12 months of making prototypes and interactive models, building parts of the software, talking to users and experts, and testing them with friends before Matt and I decided to attract investors.
Real people test the nest
Once we had prototypes of the thermostat, we sent them to real people to test.
She was fatter than we wanted. The screen was not quite what I imagined. Kind of like the first iPod, actually. But she succeeded. It’s connected to your phone. You’ve learned what temperatures you like. She refused herself when no one was home. Save energy. We knew self-installation was likely to be a major stumbling block, so everyone waited impatiently to see how it went. Did people shock themselves? rake? Giving up on a project halfway because it was too complicated? Our testers were quickly informed in: The installation process went fine. People love it. But it took about an hour to install. crap. The hour was too long. This should be an easy DIY project, a quick upgrade.
So we dived into the reports – what took so long? What were we missing?
The testers…they spent the first 30 minutes searching for the tools.
It turns out we weren’t missing out on anything – but our testers were. They spent the first 30 minutes searching for tools—a wire stripper, a screwdriver. No, wait, we need Phillips. Where did you put it?
Once they collected everything they needed, the rest of the installation went through. Twenty, 30 minutes.
I suspect most companies would have sighed in relief. The actual installation took 20 minutes, which is what they will tell customers. amazing. The problem has been resolved.
But this will be the first moment people interact with our devices. Their first experience with Nest. They were buying a $249 thermostat – they were expecting a different kind of experience. And we needed to exceed their expectations. Every minute from opening the box to reading the instructions to placing it on the wall to turning on the heat for the first time should be incredibly smooth. An exhilarating, warm and enjoyable experience.
And we knew Beth. Beth was one of two potential clients we identified. The other customer was tech savvy, loved his iPhone, and was always on the lookout for cool new gadgets. Beth was the one who made the decision – she was dictating what got home and what was returned. She liked pretty things, too, but was skeptical of new, untested high-tech. Finding a screwdriver in the kitchen drawer and then a toolbox in the garage won’t make it feel hot and buttery. Her eyes will roll. You will feel frustrated and upset.
Charging a Nest thermostat with a screwdriver “Turn a moment of frustration into a moment of joy”Dwight Ashleyman
So we changed the prototype. Not a prototype thermostat — a prototype installation. We added a new item: a mini screwdriver. It has four different head options, and it fits in the palm of your hand. He was elegant and cute. Most importantly, it was incredibly useful.
So now, instead of rummaging through tool boxes and cupboards, and trying to find the right tool to get your old thermostat out of the wall, customers simply reached into a Nest box and pulled out exactly what they needed. She turned a moment of frustration into a moment of joy.
Sony laughed at the iPod. Nokia laughed at the iPhone. Honeywell laughed at the Nest Learning Thermostat.
in the beginning.
In the stages of grief, this is what we call denial.
But once your disruptive product, process, or business model starts gaining traction with customers, your competitors will start to worry. And when they realize you might steal their market share, they will resent it. Really angry. When people reach the anger stage of sadness, they criticize, underestimate your prices, try to embarrass you with advertising, use negative press to undermine you, and make new agreements with sales channels to block you from the market.
He may sue you.
The good news is that the lawsuit means you’ve officially arrived. We had a party the day Honeywell sued Nest. We were thrilled. That ridiculous suit meant we were a real threat and they knew it. So we brought champagne. That’s right, f—ers. We are coming for your lunch.
Nest gets Google
With each generation, the product has become more elegant, thinner, and less expensive to build. In 2014, Google bought Nest for $3.2 billion. In 2016, Google decided to sell Nest, so it left the company. Months after I left, Google changed its mind. Today, Google Nest is still active and healthy, and they’re still making new products, creating new experiences, and delivering their version of our vision. I sincerely and deeply wish them success.
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