Matt Rogers and Tony Fadell both had significant roles in creating two of the most iconic technology products of recent history, the iPod and the iPhone. They are out on their own now, running Nest, a startup everyone is talking about and that makes a product no one has talked about for the past hundred years or so. Drum roll please… the thermostat.
If any team can make the thermostat sexy, it’s Rogers and Fadell. Judging from the numbers, sexy might be an understatement.
Did I mention Rogers is 29 years old?
Tony Fadell sought you out and convinced you to leave Apple to cofound Nest. You were 27 years old. This isn't even really a question -- I just hope you'll respond anyway. Who are you?!
I put it like this: I’m a very aggressive product leader and age has nothing to do with it. I’m a very old soul. Even in my early days at Apple I was leading teams. I led my first software team at the age of 23. It comes pretty naturally to me. I enjoy building products and there are very few companies in the world where you can do that. There’s Apple. Apple became such a large company that it made a lot of sense to build our own. Apple has tens of thousands of engineers now. It’s hard for individuals and even teams to have enormous impact and a lot of us miss that.
You had worked with Tony before, what was your vision going into it. Did he come to you and say, “I have an idea to make a thermostat”? Or did he come to you and say, “Let’s start something new. What do you want to work on?”
Actually, I approached him. Tony left Apple about a year before I did. He was traveling around Europe, building a house, enjoying life and thinking about new things. He came back to the U.S. for a week or two to supervise this new house construction and I asked him to lunch. I wanted to start a company and Tony was probably the most experienced guy I knew. I knew going into it that I wanted to start a company with him; I just didn’t know what I wanted to do yet.
I had some ideas about building a smart home or home automation company. Tony was very quick to say, “That’s a horrible idea. Smart homes are for geeks and nerds, not for consumers, it doesn’t make any sense.”
Out of his home construction, he’d been looking at products to save energy. He got solar panels on his house, geothermal heating and all this crazy high-end super efficient equipment and he couldn’t find a thermostat to control it all. If we could build the iPod, we could certainly build a thermostat.
Nest is praised for having more impact than other Silicon Valley "clean tech" ventures. You've innovated a lot here, even down to the screws used to install the thermostat. Can you talk about how you see the creative industry? I don't mean your basic, "What sets you apart" question. I mean, can you comment on the creative process and how you see innovators working today? What frustrates you the most about what you observe?
I think a lot of highly creative innovative companies don’t spend enough time fully developing ideas. In particular, Silicon Valley startups are engineer-led companies. It’s all too easy for engineer-led companies to squash an idea early on in the design process because they think it’s hard to do.
One of the things we had to do –- and this is kind of core to who we are, it’s an Apple DNA kind of thing –- is even if it’s really hard to do, even if it’s impossible to do, fully develop the idea. Figure out how to do it.
All too often people forget about who their customers are and they design things for themselves. Remembering who your consumers are and what their lifestyles are like and how they would want to use the product is really important. We’re not the first company to build thermostats and we’re not the first company to look at saving energy in the home. But I think we’re the first company to do it in an extremely consumer-centric way.
Your strategy seems to be motivated more by behavior than new technologies. Behavior comes first, technology follows. Is this common practice in the development world?
I don’t think it’s common at all. I think a lot of small companies and technology companies are often just that – they’re technology companies with a cool idea or a cool technology in search of a market or in search of a problem. It should be the other way around.
We started with, “We need to solve this thermostat problem. We need to give people the ability to save energy when they’re not at home. We need to solve the problem of having very difficult-to-program thermostats. We need to solve the installation problem and make it possible for people to install themselves without having a contractor come to their house.” Those are the kinds of things we started with.
Nest is doing very well. According to Fehrenbacher last month, you're shipping between 40,000 and 50,000 thermostats per month. Nest predicted a saving of 225 million kilowatt-hours of energy. That's about $29 million dollars in the U.S. How do energy companies feel about your product? I imagine not everyone is celebrating, but maybe I'm being cynical.
Yeah it’s even more than that. We’re doing very well. Part of why we started this company is to solve the energy problem. Half of home energy is controlled by the thermostat. Heating and cooling is enormous –- it accounts for 10% of all U.S. energy. We could have a huge impact very quickly.
I’m sure a lot of people aren’t happy about that. But a lot of people are super happy. If you look at the general public and what they’re pay points are –- rising energy costs –- that’s a huge pain point. Cold winters and hot summers. Energy companies are also heavily incentivized to help drive energy efficiency.
I read vague comments about Nest releasing more products soon –- but no actual info. Can you give me a hint? What’s coming?
We’re working in the space similar to what we did by solving the thermostat problem. Solving a problem that’s critical in people’s lives and central to their home. Their home cannot work without it. The problem has had no innovation, it’s kind of been unloved for many years. Those are the kind of problems we look at. And there are a lot of them. We’re working very hard. There will be stuff coming out soon. I mean, you don’t start a company to build one product.
Is there something you think the media has overlooked in its response to Nest?
We’ve had a lot of interest, but there’s still a long way to go. This is stage one of a very long road. I mean, there are 100.01 million homes in the U.S. We’re going to be here for a very long time. Our mission is very deep.
A lot of people say –- in terms of startup success –- Nest is a successful startup. This is not a successful startup. This is just one step along a very long road.
Do you feel that the future of Nest will be equivalent to Apple?
It’s possible –- anything is possible. Apple’s been one of the most successful companies in history. But that said, Nest competitors are a hundred-year-old conglomerates that build missiles and airplanes. They’re not technology companies, and that’s a big opportunity for us.
You’re 29 years old, but you’ve been at this for a while. What would you say to up-and-coming innovators? What are the most important things to hold on to as you enter this world?
In the very early days, you have to really fully think through everything you’re doing. There’s a lot of buzz around the agile startup. “Get to market fast! Ship quickly! Get customers!” I don’t think that works. If you ship things that are crap, it tarnishes your brand. People will never trust or respect you again.
We went really deep on the product. We did a lot of testing. And we built out a small team –- we built a team. We didn’t want to rush it to market, we wanted to make sure we had the right people to build it.
Do you need to have a certain kind of personality type or vision for that?
I think having a partner is really important. Tony and I talk about this all the time. Two is better than one. I wouldn’t do it alone and he wouldn’t do it alone. Having a partner is different than having senior executive employees. Having a true partner to lean on and talk with and work through problems with –- through the good times and the bad times (because sometimes those can happen on the same day) –- I wouldn’t do it any other way.