Former Apple Senior Vice President Tony Fadell was building a high-end energy efficient home where no expense was spared. The home included cutting edge technology like solar panels and geothermal heating. However, the best thermostat available was still just a poorly constructed white plastic box. With all of the innovation in home appliances, why hadn’t the thermostat kept up?
Fadell quickly recruited some old friends, including engineer Matt Rogers, to help explore the reinvention of the thermostat.
Rogers rose from an intern to a software engineer on the iPod and eventually was on the first iPhone team. After being approached by Fadell, the two dived into the often-archaic world of home thermostats, sensed an opportunity, and founded Nest.
“It started as our frustration and the more we talked to other people, the more we heard their frustration,” Rogers says. “That was the tipping point.”
So what happens when you take the DNA of Apple and design items for the home? We spoke with Rogers about how Nest learns from Apple’s mistakes and the creative benefit of completely changing industries.
How important, creatively, is it to tap into dormant frustrations and solve them?
Sometimes you look at a problem and think: “Actually, I don’t think we could do better than somebody else.” Then it doesn’t make sense. In this case, we knew we could do better. We knew we could innovate. About 10 million thermostats are sold every year, so it’s an enormous market. But there’s this kind of higher cause: people can save energy, save money, and we do something good for the environment.
Was it intimidating to tackle an entirely new industry? You guys had a background in consumer electronics, not home hardware. That had to be intimidating.
We brought in experts, interviewed contractors, and conducted meticulous research. We traveled and took pictures of people’s homes, their thermostat, and how it was installed. We built a library of ugly thermostats around the country.
So on one of your hard drives, there are files and files of pictures of thermostats on walls?
Exactly. One of the things that I did very early with another Nest colleague is install a new thermostat at home every week. We installed every thermostat we could at our own homes to learn the frustrations that people have, the installation experience, everything.
It sounds like you viewed your lack of knowledge as an asset.
Absolutely. Thermostats today have these switches on them that read “heat/cool/auto/off” and “fan/auto/on.” What does “fan/auto” versus “fan/on” even mean? How does a normal consumer understand these things?
It’s similar to the cell phone environment five or six years ago before the iPhone: some people had smartphones that were Blackberrys and they didn’t really work. It was more for a business crowd and consumers found them really hard to use. Now, that entire world has shifted. I think the exact shift happened with thermostats.
But if an iPod doesn’t play my song, I’m a little mad. If my thermostat doesn’t heat my home, I’m ripping it out of my wall. Do those stakes make it hard to ship?
We need to do a lot of early work. It takes weeks or even multiple months to get a design made, so you have to plan ahead. We do a lot of models to make sure we’re happy with what we’re getting. We’re very strong believers that you can’t look at design on a TV. The effect of looking at something 10 feet away versus the actual size is totally different. For any one design, we often do between 50 and 100 models.
How do you avoid getting overwhelmed by all the details? The materials, the texture, the software?
We have a great team. By the time, Tony [Fadell] and I are looking at things the team has already gone through every little detail and they’ve double and tripled checked it. It’s kind of a cultural thing where the entire organization is looking at all the details to make sure everything looks great.
What about the process at Nest would surprise people if they heard it?
When rubber meets road, the hard part is doing the actual work and executing on it. The design is probably 5 percent of our time and 95 percent of our time is execution and getting it done.
How has your process changed going from a huge company like Apple to a startup like Nest?
We don’t have the clandestine, cloak and dagger mentality within the company that Apple does. Design at Apple is behind closed doors and behind lock and key and it’s not something that is discussed with other teams.
We don’t have time to waste, and if we spend all our time behind closed doors looking at designs, and if the engineers realize that what we designed is not buildable, that will be a huge waste of time for us.
As Nest grows, do you plan on implementing some of that Apple-like security?
I think culturally, transparency is very important within a company. It is core to our DNA. When you have secrecy and cloak and dagger, it creates mistrust between teams. “Is that guy authorized to know what’s going on in this program?” There is team rivalry and that breaks down the creative process.
Is there anything you learned from Apple that you are keeping at Nest?
The priority of design. At Apple we used to move mountains for design and to build products. When we were getting started with one of the iPod Nanos, we needed to build more, and the demand was even higher than we thought. So we literally had to move a mountain. There was a mountain next to the factory that inhibited our growth so we had to move it.
You mean Apple used dynamite to move a bunch of rocks and build something there?
It was not a bunch of rocks, it was a mountain. We moved the mountain to build more capacity for iPods and iPhones.