Message: Google Is Sitting On A Timebomb With Its Nest Disaster
Google Is Sitting On A Timebomb With Its Nest Disaster
Usually a Reddit post about the state of a company would have to be taken with a pinch of salt. In this case the fight at Google over Nest has spilled out and is now being widely discussed. In some cases, by people close to the company. So what’s going wrong at Google, Alphabet and specifically the sub-group Nest?
Well, let’s start with what Tony Fadell said that sparked an argument in which Dropcam co-founder Greg Duffy. Fadell heavily implied that the staff at Dropcam weren’t much good, Forbes’ Aaron Tilley has a full story on this, but the quote in particular is that the Dropcam people “were not as good as we hoped”.
This clearly enraged Duffy – who left Dropcam in January last year – who then responded in a Medium post where he claimed that the truth was somewhat different. He speaks of his regret at selling the company – for $555 million in June 2014 – and that 50 or so people resigned from the merged Nest/Dropcam did so because they felt their ability to work had been crushed. Nest, he goes on to say, has failed to put out new products and, according to his research, has lost some 500 employees since it was acquired by Google.
Switching to the now deleted Reddit post by user “throwawaynest” (a temporary account designed to preserve anonymity) the commenter says: “we dare you [Nest] to tell everyone just how much of that $340 million (the reported revenue of Nest) was due to a simple Dropcam rebrand”. The implication here is that people aren’t buying thermostats and smoke alarms and that it’s the Dropcam product, now called Nest Cam which is boosting the revenue. And Duffy agrees with this in his post too, he says “but if you knew what percentage of all of Alphabet’s ‘other bets’ revenue was brought in by the relatively tiny 100-person Dropcam team that Fadell derides, Nest itself would not look good in comparison”.
The Reddit post continues to talk about management giving orders, changing their minds when the product is delivered and then berating the teams for not doing their jobs properly. The user says people are crying in bathrooms and it’s putting a strain on employee health and personal relationships.
Then this week we’ve also heard that Google is pulling the plug on Revolv, a smart hub that itacquired in October 2014. And when I say it’s pulling the plug, I mean it literally. Those $300 devices are going to be bricks in May when Google shuts the backend services needed to keep them running. Customers are, rightly, pretty furious. And worse, this says nothing good about Google’s attitude to companies it acquires.
The decision to kill Revolv might point to Nest preparing to launch its own product. Obviously the Nest team has been busy prepping new devices – another post on The Information – talks about four new products, including a hub and a way to detect people entering and leaving the home. The idea at the core of this, codenamed Flintstone, has apparently changed direction several times over the years, again, giving credibility to that Reddit post.
So where does this leave Alphabet/Google/Nest now? Well, the company’s problems here are potentially serious. For one, it may face legal action from owners of Revolv hardware who feel their investment has been killed way too early. Secondly, it sounds like Nest isn’t making much money, and if the Reddit poster is to be believed it’s making a lot less than its budget of $500 million. And, again, most of that coming from Dropcam sales and services. This won’t bring down Google, but it might create problems with future budget and investment from Alphabet.
Nest has also been plagued with hardware reliability issues. On April 3, 2014 Google stopped selling Nest Protect, the fire alarm, and recalled all 440,000 units sold. I wrote about a video by a man called Brad Fitzpatrick which showed Nest Protect sounds its alarm constantly with no way to silence it. Even worse, Fitzpatrick was a Google employee telling people not to buy the buggy product.
Even Nest’s flagship product, the smart thermostat, has been reported to have problems. In one case heating a house to 76 degrees while being set much lower. That BI article also links toAmazon reviews telling of similar problems.
http://www.forbes.com/sites/ianmorris/2016/04/06/google-is-sitting-on-a-timebomb-with-its-nest-disaster/2/#3a667c1333a2
New Message
Please
login
to post a reply