Tony Fadell is an uncompromising product-design guy who knows how to tell a story. The best story he ever told was about the world’s most boring product—the thermostat—and how a mundane dial to turn the heat up and down could be transformed into a thing of beauty and the portal to a new way of living (and worth spending two hundred and fifty dollars on). He told a story about a home—one with connected smoke detectors and security cameras, too—that would sense our presence, respond to our every need, and make the planet greener at the same time, a haven run by a data-connected Internet of Things. Google bought that story, in the form of Fadell’s company, Nest, for $3.2 billion, two years ago. But Google wasn’t buying just the company; it was also buying Fadell. A close confidant of Steve Jobs, Fadell had been mentored in the art of beautiful and elegant products by the master himself.
Now Fadell has left Nest. He’s been replaced by a former cable-company executive, which, at least symbolically, suggests that Google’s grand ambitions to build a hardware-products company to rival Apple may be turning in a more drab, utilitarian direction. The official line from Nest and Alphabet (which is Google’s corporate parent) is that Fadell, who will become an adviser to Alphabet and its C.E.O., Larry Page, left of his own accord. “I’m a guy who’s at the beginning of things,” he told the New York Times in an interview published after he left Nest. “I don’t like to do maintenance mode. It’s not what gets me out of bed.” Other reports, however, suggest that there was a cultural disconnect. A report in The Information, a technology publication, suggested that Fadell was a tough and demanding leader, who alienated those who worked for him. Greg Duffy, the former C.E.O. and co-founder of Dropcam, which was bought by Nest, and who recently left the company, wrote a stinging rebuke of Fadell on Medium in late March. “There is a lot that I could say about my extreme differences on management style with the current leadership at Nest, who seem to be fetishizing only the most superfluous and negative traits of their mentors.”
There were also reports of different sorts of pressures, including Alphabet’s financial demands. Last year, Ruth Porat, who had made her career on Wall Street, came to Google and oversaw the company’s reorganization into Alphabet, a parent company overseeing Google, the search company, as well as the many other corporate efforts, including Nest. “The fiscal discipline era has now descended upon everything,” Fadell told The Information. Unlike the long-term view Google took when it bought YouTube, in 2006, investing in the company and waiting for video’s big-bang moment, Google seemed to have been short on patience and wanted Nest to start delivering profitable products.
In hindsight, it seems that selling Nest to Google at the time Fadell did was a mistake, and that the eventual culture clash was only a matter of time. From its inception, Nest was Fadell. Like a benevolent but exacting dictator, he put together an organization that was focussed on his singular vision. Those who joined Nest knew precisely what they were signing up for—not an easy ride, but a chance to build something special. When Nest announced its decision to sell itself, I was genuinely surprised—mostly because, through many conversations with Fadell, it seemed clear that he wanted Nest, not just its products, to endure. As Randy Komisar, the Kleiner Perkins Caufield Byers partner who invested in Nest, recently told The Verge, “It felt like Tony and his vision could really create the next great hardware services company in the Valley. It was a platform that Tony and Matt could have operated for decades, like Amazon is for Bezos, or Apple was for Jobs, or Google is for Larry.”
When I asked Fadell, back in January, 2014, why he sold Nest to Google, he said, “Google offered a great middle ground—we focus on product and vision and they will help build out the company and help scale it.” That plan sounded good on paper. With Google’s unlimited resources, Nest could become something spectacular: an Apple-like hardware giant married to Google’s Internet infrastructure and data-intelligence resources. It was an idyllic vision that ignored the cultural reality of the two entities. At Apple, the vision and plan for execution came from the top, filtered down to the troops. Nest, with its Apple DNA, was very much a top-down company, where only one person was in charge—Fadell.
Google, on the other hand, has an engineer-driven, bottom-up culture. Some people believe that its enormous size makes it too large to be managed from the top or to change direction at management’s orders. Engineers for the longest time have had the luxury to work on personal projects. The resulting products are often unpolished and are tweaked as they go along. The Google rank-and-file are accustomed to managers with a light touch. Trying to make two cultures work was eventually going to lead to rejection of the transplanted organ.