It's time for everyone to take a deep breath on the Tony Fadell and Nest story.
On Friday it was announced that Fadell would be leaving Nest and transitioning into an advisory role at its parent company Alphabet. Naturally, the media cycle kicked into high gear, going so far as to question whether or not this will prelude an irreversible stall in the smart home industry.
That the state of Nest and the state of the broader smart home are synonymous in the eyes of many is a testament to what they've accomplished.
They were the first to create a product and experience that translated the power and appeal of the smart home beyond the tech-savvy hobbyist to the mainstream consumer. They're still one of only a handful who have done it right.
User Experience is Key
That same success (not to mention Nest's $3.2 billion acquisition in 2014) created lofty and unreasonable expectations as to the speed with which it should blanket the market with new hero devices. Is the fact that they haven't a fair way to judge their success? Not necessarily.
In the long term, the winners in the smart home aren't going to be the ones that are continuously releasing new hardware. They'll be the ones who took the time to create a truly great user experience. Nest first showed us that in 2011 when they reimagined what was possible with a hitherto forgotten home device.
If you look at some of the great companies of this era - Airbnb, Slack, Uber (and Nest) - none of them are focused on applying technology to a traditional business model. They are about taking a business where that has already happened, and applying user experience to it.
None of them were "firsts" in the traditional sense, they were just the first to create a fluid experience that seamlessly aligned with the consumer mindset - a crucial component of driving mass market appeal.
It's Hard to Get Connected Devices Right
The power and the problem in the smart home is created by the intersection between hardware and software. To make great connected products, a team must do both really well at both the technical and experience level. Nailing that matrix is how Nest was able to disrupt incumbent thermostat makers in the first place (remember that there were other connected thermostats before Nest).
Perfection from end to end takes time. For every dimension you add to your product, the complexity increases exponentially. It is common sense that hardware is slower to iterate on than software, but what is sometimes overlooked is that the management of software development becomes tougher when hardware is factored into the process. The app, the backend, the firmware, and the hardware of connected products must all work in lockstep. It's way more complicated than your run of the mill app.
Speed isn't a bad thing. Quick iterations are how you grow a product from a theory to a fine tuned machine. However, we have become so used to software-based product cycles that we have lost sight of the value of taking time to iterate pre-release. Because the upfront capital requirements of hardware are so much higher (tooling, inventory, supply chain), de-risking the process by taking a little more time to perfect up front is a smart decision.
We have to remember that there is a whole continuum between fast and slow, instead of just blindly assuming that if you're not the first horse out of the gate, or constantly unveiling something "new," you're out.
Pitfalls of Great Expectations
Expectations for Nest are high, and we're losing sight of the big picture as a result. Google paid a premium for Nest and Alphabet now wants to reap the reward. Understandable. Nest has faced its fair share of struggles the past few months. It's called growing pains, and Google has experienced them too (see AdWords v1).
Nest is attempting to make increasingly complex and interconnected products, while maintaining the same quality of experience they're known for. They have more to lose than anyone if they create a product with a sub par experience. There's no "beta" phase when it comes to connected hardware and they are managing to that high standard, instead of compromising the fundamentals that made them great in the first place.
Long term, they will need to justify the price Google paid, but it would be premature to close the book on them today. Like many companies faced with the same pressures before them, they will rise to the challenge.
It would also be remiss to speculate that the troubles at Nest are indicative of a broader stalling in the smart home industry (not helped by the media sensationalizing and tapping into the schadenfreude of people who watch the space closely).
The smart home is still in early days. It's still evolving. It will take time to deliver on its promise.
Many visionaries have hit turbulence when trying to live up to lofty expectations, only to continue on and do incredible things. It is worth listening to those who have been around long enough to not get caught up in the hype cycle before deciding what Fadell's legacy at Nest will be.
Ultimately, Nest's accomplishments made it a lot easier for the companies that followed it - Wink (a long time Nest partner) included - to get a foothold in the smart home. Those accomplishments wouldn't have been possible without Fadell. His next move will certainly be one to watch.