GigaOM » Nest Labs

What makers of the ‘learning thermostat’ learned to redesign Nest

Erica Ogg — Mon, 05 Nov 2012 20:32:50 +0000

The Nest thermostat debuted just over a year ago and was a blockbuster hit, selling out faster than Nest Labs could restock its supply several times. But that doesn’t mean the device was perfect. At GigaOM’s RoadMap event on Monday, the designer and founder of the internet-connected “learning” thermostat, Tony Fadell, talked about how after years of perfecting the initial product, the company totally redesigned the Nest in less than 11 months.

When you’re working with a small team of less than 20 people on a first-time hardware product, it’s tough to do things perfectly the first time, Fadell said. Tiny Nest Labs didn’t command the same respect among vendors and didn’t have the volume advantage in pricing that Fadell did in his days running Apple’s iPod division. And that impacted design decisions: the first Nest thermostat that went on sale didn’t have a stainless steel bezel, for example, because it was a little too expensive to source.

The new Nest, which started shipping a few weeks ago, is slimmer but also has a single stainless steel bezel. The difference this time around? “This time we can purchase parts in much higher quantities,” Fadell said. “The first time you make a hardware product it doesn’t usually go the way you think it does in terms of cost. You have to redesign it to get your costs in line.”

It wasn’t just visual stuff that they tweaked though. “We looked at everything we did wrong” the first time, Fadell said. That included software. The biggest complaint Nest got from the first-generation thermostat was lack of compatibility: it worked in about 70 to 75 percent of homes in the U.S. and Canada. The new device promises 95 percent compatibility. (Still that didn’t stop customers from all over the world from installing the Nest. Though it’s only sold in two countries, Nest Labs found through IP addresses on its network that shows its thermostat is being used in 63 other countries, Fadell said.)

The folks at Nest also learned a lot from their learning thermostat. The “auto away” feature knows, for example, when people are going to be away (example: when you generally leave in the morning and when you come back in the evening on weekdays). In the previous model, if a house emptied on a weekday morning, Nest’s algorithm would adjust the thermostat to conserve energy after about an hour and a half.

Based on looking at the data they’d collected over a year and a half, Nest changed auto away so it turns on after ~~an hour and~~ a half hour. Fadell says that can save 1.5 to 2 hours of energy, in someone’s home.

Check out the rest of our RoadMap 2012 live coverage here, and a video recording of the session follow below:

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Nest launches slimmer, smarter learning thermostat

Katie Fehrenbacher — Tue, 02 Oct 2012 13:00:51 +0000

Startup Nest Labs is ready to launch the next generation of its connected learning thermostat. The device, which you can pre-order now and which ships in mid-October, is 20 percent slimmer than the original thermostat, and has new features that make it compatible with 95 percent of heating and cooling systems in the U.S.

Nest launched its original learning thermostat back in October of 2011 to much fanfare and it was immediately sold out for months. The device was designed by Nest CEO Tony Fadell, who was head designer of the iPhone and iPod for Apple, and the connected thermostat has smart algorithms that learn your habits and help you shave off 20 to 30 percent off of your energy bill. Fadell will be talking about the power of design to disrupt industries at our RoadMap conference on November 5 in San Francisco.

The first thing you’ll notice about the new Nest is that it has one moveable ring on its circumference as the physical interface. The previous ring design only took up part of the real estate of the circumference, and the other part didn’t move (see below). Making the ring all one piece makes the device slimmer and more clean looking.

The new Nest:

The first generation Nest:

As you can see, Nest also did away with the grill on the bottom of the face of the thermostat. They needed the grill for the occupancy (motion) sensors that can detect when people are nearby. But for the new thermostat design, Nest was able to switch the grill out with transparent, black plastic that still enables the sensors to “see.”

In addition to the hardware on the front, the back of the Nest is completely redesigned. The team made the circuit design circular to add more space, and Nest used that extra space to add two important new connectors: a spot for a wire called the Y2, which controls a second stage of AC, and the star connector, which enables new wires to control options like emergency heating and a whole home humidifier.

With these new wires, version 2 of thermostat is compatible with most types of heating and cooling systems, including forced air systems, radiant systems and heat pumps. Nest has included all types of new software functions that enable owners of these systems to cut energy in different ways.

The new Nest contains version 3 of its software — version 2 of the software was upgraded in April of this year. The new mobile software also is compatible with Android tablets like the Nexus 7 and Kindle Fire (GigaOM’s Kevin Tofel will like that: His in-depth review here).

The new Nest will cost the same as the original Nest: $250. The original Nest will be on sale for another couple of weeks and is being discounted down to $229 until supplies last.

Nest also updated me on its lawsuit with Honeywell. Back in February Honeywell slapped Nest with a patent infringement lawsuit over seven aspects of Nest’s smart thermostat technology. Nest tells me that the case is currently on hold, and Nest requested, and was granted a stay in the case. Nest also requested a re-examination of the original Honeywell patents in question, and Nest says 5 of the 7 Honeywell patent claims were accepted for reexamination, and those 5 patent claims were rejected.

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“Hundreds of thousands” of Nest learning thermostats sold

Katie Fehrenbacher — Tue, 04 Sep 2012 22:25:29 +0000

Startup Nest only launched its learning thermostat last October but the company tells the New York Time’s Bits Blog that it has sold in the “mid-hundreds of thousands,” of units range. The company — which is the brainchild of Tony Fadell, who helped design the iPhone and iPod for Apple — immediately sold out of the thermostat shortly after launch, leading to long wait times for the product well into 2012.

But now, the company seems to have ramped up production, and at this point, the Nest thermostat is selling through a variety of places including Nest’s online site, the Apple store, big box retailers like Best Buys and Lowe’s and Amazon, among others. Fadell will be discussing what’s next for Nest at our annual RoadMap event, which will focus on design in the age of connectivity and will take place on November 5 in San Francisco (tickets went on sale today here).

Because the Nest device is connected and has smart algorithms, the company can push different software and services to it and see how Nest customers respond, points out the Bits writer. So called A/B testing is pretty common on the Internet, but not really widely used in the thermostat and utility worlds. Nest’s algorithms have also changed slightly as Nest has learned more about its customers.

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Nest scores first utility deal in Texas

Katie Fehrenbacher — Mon, 25 Jun 2012 17:11:48 +0000

The Nest learning thermostat is now winning over utilities, too. On Monday, startup Nest announced that Texas energy service provider Reliant has started offering its learning thermostat through one of its energy efficiency programs.

Customers that sign up for Reliant’s conservation program get a Nest thermostat in exchange for signing a contract for two years of fixed electricity prices. Texas energy service providers like Reliant are interested in offering customers attractive services and devices as a way to keep them from changing providers. It’s a competitive market in Texas, which makes the state an interesting ecosystem for energy startups.

Cracking the utility world is a pretty big deal for Nest. While Nest is first and foremost and consumer-focused company, utilities can act as a strong distribution channel for the thermostat, and can also use the thermostat to collectively curb energy consumption during peak grid events. This type of service is called demand response, and the saved energy per household helps utilities manage their grids during really hot summer days. Nest tells me that Reliant will not be using its thermostat for demand response through this service.

Nest’s thermotat has a ZigBee chip installed in it, so it could potentially also connect with utilities’ smart meters. Nest says that home owners can save 20 to 30 percent on their energy bills using the thermostat, which is one of the highest estimated ways to curb home energy use on the market.

In recent weeks Nest has also expanded its consumer-focused distribution channels, and has started selling the thermostat through Apple’s online site and Amazon’s online store. For a detailed review of the Nest thermostat check out Kevin Tofel’s impressions.

Nest, founded by former Apple designers and backed by tens of millions in venture capital funding, launched at the end of 2011, with its smart learning thermostat. The idea was to create a cool, coveted device that would get people actually interested in their thermostat, and then use learning algorithms to help the customer cut their energy consumption and save money on their bill.

The company was sued by Honeywell earlier this year, but hired Apple’s former legal counsel to fight back.

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Round 3 in the Honeywell vs. Nest fisticuffs

Katie Fehrenbacher — Mon, 07 May 2012 20:40:07 +0000

The Nest thermostat (in cooling mode).

The bare-knuckle boxing match between thermostat giant Honeywell and smart thermostat startup Nest Labs entered round three on Monday, with Honeywell’s official denial of Nest’s counterclaim. Back in February Honeywell slapped Nest with a patent infringement lawsuit over the smart thermostat technology, and in April Nest finally responded with a counterclaim and at the same time brought on Apple’s former Chief Intellectual Property Officer Richard “Chip” Lutton to head up the fight against Honeywell.

Now Honeywell has issued the third filing, and denies Nest’s accusations that Honeywell is harassing Nest with the IP lawsuit in an attempt to stifle innovation in the marketplace. Nest’s counterclaim sought to stop the initial lawsuit and also sought compensation. The Honeywell statement calls Nest’s counterclaim “self-serving,” “based on unfounded opinions and speculations,” and is “intended to divert attention away from the core issues,” of patent infringement.

Nest makes a connected learning thermostat that can reduce customers’ energy bills and launched the device late last year. The product was designed and created by Tony Fadell, the former chief architect at Apple, who led the development of the iPod and the first three versions of the iPhone. The company is backed by funding from Kleiner Perkins, Google Ventures and Al Gore’s investment fund.

Looks like this lawsuit will keep rolling until someone blinks, or just gets really tired of it (or if Nest runs out of money). It took Nest a couple months to respond to the initial IP suit, but it clearly isn’t going to just roll over for the $47 billion-market cap thermostat behemoth Honeywell.

Bringing on Lutton — who was Apple’s Chief Intellectual Property Officer for a decade and left Apple last summer — will likely lead to an offensive-minded approach to the litigation. Lutton was the man in charge of fulfilling the late Steve Jobs’ vow as told to his biographer, Walter Issacson: “I’m going to destroy Android, because it’s a stolen product.”

Honeywell’s reply to Nest’s counterclaims

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Video of Fadell at Road:Map 2011:

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And my unboxing of the Nest learning thermostat:

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The implications of the Honeywell-Nest lawsuit

Ucilia Wang — Tue, 14 Feb 2012 13:00:56 +0000

The thermostat — a household gadget that never used to get much respect — is now grabbing the attention of the tech community because of a lawsuit filed last week by industry giant Honeywell against Nest Labs, a Silicon Valley startup that has used its connection to Apple to cleverly promote its smart thermostat technology. The lawsuit has caused an intense debate on not only the merit of Honeywell’s claim but also the impact the legal fight might have on innovation in the smart thermostat space (will it stifle or protect it?). And, of course, the fate of Nest is now unclear.

We conducted a survey right after Honeywell announced the lawsuit on February 7 and asked GigaOM readers for their views on what will likely be a nasty legal tussle between the two companies. Now, we’ve published the findings of that survey (subscription required), which delves into what readers think will be the outcome of the lawsuit, how the lawsuit will affect the industry, and what will happen to Nest. Two sneak peeks: readers think that Nest could be toast, and Honeywell is the new bully.

To read the complete research note with data from the 200+ respondents, check out GigaOM Pro.

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How the Honeywell, Nest lawsuit could stifle innovation

Katie Fehrenbacher — Tue, 07 Feb 2012 13:00:29 +0000

Honeywell & Opower's iPad smart thermostat app

When tech patent lawsuits land in the middle of an industry they tend to make a loud, dull, thud sound. Nobody particularly likes them (other than maybe the media), both parties can often times end up looking bad, (or at least petty) and patent lawsuits are a guaranteed time and money-suck. But, in addition to all these moderate downfalls, when it comes to a newly emerging industry like smart, Internet-connected thermostats, tech patent lawsuits can also deliver some real harm by potentially hampering innovation.

Of course we’re talking about this week’s shocker: that thermostat giant Honeywell has filed a lawsuit alleging seven different patent infringements against learning thermostat startup Nest Labs. While we’ve solicited your survey results, and you’ve given some great comments on our posts, one thing seems clear to me that I wanted to expand on, and that’s that Honeywell’s patent lawsuit appears broad enough that it could potentially slow down innovation in this space. Here’s why:

Patents need to be non-obvious and inventive enough to be worthy of a patent. Some of the patents in the Honeywell case — like the natural language Q&A patent and the remote control patent — just seem to be so obvious that I’m not sure how defensible they are. As one of our commenters on this post put it: there’s only a few ways to do certain things, so sometimes the obvious way is obvious to multiple people and companies.
Major patent wars can be a damper on investment. Say, a promising young startup is building smart thermostat analytics, but they are looking to raise money next month, and all anyone is talking about around smart thermostats is this patent war. An investor could think twice about funding a company that a massive thermostat maker like Honeywell could set its sites on.
This is a truly David and Goliath scenario. Honeywell has a $47 billion market cap. Nest raised several tens of millions of dollars in venture funding and just launched its learning thermostat. Nest could really struggle if Honeywell pursues this case, even if Honeywell isn’t able to win.
The really large companies like Honeywell, but also GE and Johnson Controls, have been in this thermostat industry so long that they no doubt have researched a wide portfolio of things that they haven’t actually ever been able to commercialize. Honeywell said as much in its latest interview with me. But it’s unfortunate that instead of commercializing some of these products, these big companies will just crush them rather than see them come to market.
Go big or go home. This is one of the trends I noticed at the annual DistribuTECH event in January. This industry is maturing and companies have to grow to compete and survive. Particularly if there are patent lawsuits around.

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Photos: Best Buy’s quiet home energy stores

Katie Fehrenbacher — Mon, 07 Nov 2011 21:21:04 +0000

SAN CARLOS, Calif. – Retail giant Best Buy announced last week that it’s making a modest bet on selling home energy gear to consumers via a new web portal and new Home Energy sections at just three stores nationwide. The three store sections — in San Carlos, Calif; Chicago; and Willowbrook, Texas — were officially unveiled on Sunday, and I stopped by the San Carlos store to see what the experience was like. The reality is that home energy gear can be, well, kind of boring.

The Home Energy section in the San Carlos, Calif. store is placed waaaay at the back on the left side. It’s pretty much the furthest section from the front. The placement is understandable, because the store will likely sell far more video games, music hardware, and computer gear than tools to help home owners cut energy consumption.

The section’s layout did, however, seem to spark interest from shoppers with its interactive layout. Home Energy control panels are connected to refrigerators, lamps, lights, heating and cooling systems, showing shoppers how the digital energy home could be connected. An interactive booth where customers can turn lights on and off and an employee can talk to potential customers enabled shoppers to learn about the benefits and price points of LEDs vs CFLs. For many Best Buy shoppers, it could be the first time they’ve even thought about using these types of efficiency tools to cut home energy usage. There were a few shoppers in the section asking questions, even on an early Monday afternoon.

The Nest learning thermostat sat front and center of the Home Energy section, as it is hands-down the most well-designed product out there (which is as indicative of the generally poor design in this industry, as it is of the gorgeous design created by the former Apple team). But as I reported last week, the Nest thermostat is sold out until 2012, and the Best Buy store didn’t have a single Nest thermostat for sale on Monday.

Overall, on just a single look, Best Buy’s Home Energy section has a lot of potential to educate consumers and grow the market for home energy products. It’s one of the only large retailers in the country paying attention to this market, though we’ll have to see how much volume goes through the section in the coming months, and whether Best Buy will recreate the section in other stores, keep it as a niche in just three stores, or someday shut them down if they aren’t performing.

Here are my photos from the visit:

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Best Buy making a bet on home energy gear

Katie Fehrenbacher — Fri, 04 Nov 2011 19:25:14 +0000

Retailer giant Best Buy is launching a modest push into home energy products, planning to sell gadgets that can help home owners cut their energy consumption, and have lower energy bills. Best Buy will sell the gear via dedicated sections of three of its brick and mortar stores and also through a new Home Energy portal on its website.

Cnet says Best Buy will announce more detailed plans at the BSR conference in San Francisco on Friday. On Sunday, Best Buy will launch the Home Energy sections at stores in Chicago, Houston, and San Carlos, Calif. The online Home Energy portal is live now (check it out and tell us what you think).

Best Buy has been selling the Nest learning thermostat via its online store already, and said in a forum that it has seen overwhelming demand. I ordered one this week via the Best Buy online site, and it won’t arrive until mid-Jan. 2012. The thermostat is sold out until 2012, and Nest had to close its online store.

Best Buy will sell other home energy products in the Home Energy section of its online store, like ThinkEco’s smart plug, Honeywell’s connected thermostats, and Goal Zero’s solar products. Best Buy will also sell more general digital home control products via the section like Schlage’s automated door locking and unlocking system, home control gear from Insteon, Panasonic Surveillance cameras, and iZon wireless networked video apps. I would think that home owners interested in home energy gear would want to package it with non-energy products like wireless video surveillance, alarm systems and security products.

As I said last month, the intersection between the Internet of things and energy is coming. Using networks and silicon to have an influence on home energy and efficiency is the next logical step to the Internet of things. For example, Nest uses connectivity and algorithms to learn your home’s heating and cooling behavior and can shave 20 to 30 percent off your energy bill, through practices like turning off the HVAC when you’ve been gone for two hours (it’s got sensors inside and knows when you’re there or not).

Other consumer electronics giants have been eying the home energy management space. Belkin has been focused on adding energy efficiency to home office gear like smart plugs and lighting. After Google and Microsoft shut down their home energy software tools earlier this year, I put together this list of a dozen companies looking to sell into the home energy management space.

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Nest’s smart thermostat sold out until 2012

Katie Fehrenbacher — Thu, 03 Nov 2011 04:08:42 +0000

The Nest thermostat (in cooling mode).

The iPod of thermostats is sold-out until 2012. Nest Labs, makers of the connected, smart, “learning” thermostat, say on their website that the hot thermostat is “sold out through early next year.” In the meantime, the company has closed its online store at Nest.com.

I just pre-ordered one via the Best Buy website, and mine won’t ship until between Jan. 9 and Jan. 16, 2012. (Sorry, Mom and Dad, your Christmas present will be late.)

Nest says on its site that people who reserved a thermostat via the Nest store, and received a reservation number, can get theirs between Dec. 2011 and Feb. 2012. For people who pre-ordered one on Best Buy and Nest.com, the shipping date on your confirmation email still stands.

I’ve reached out to the company to see what kind of volumes have led to the company selling out til 2012. It’s a $250 thermostat, so regardless, that’s pretty impressive.

The thermostat was created by Tony Fadell, the former chief architect at Apple, who led the development of the iPod and the first three versions of the iPhone, and who left Apple two years ago to start connected thermostat company Nest Labs. The thermostat has a unique design and learning, behavioral algorithms, which can help home owners save 20 to 30 percent on their energy bills. Fadell told me in an interview last month that he wanted to make the device “a coveted, cherished object that sits on your wall.”

Nest has been operating for about a year and a half, has 100 employees, and raised funding from Kleiner Perkins, Google Ventures and Al Gore’s investment fund. The company only came out of stealth on Oct. 24 (about a week ago) to reveal its smart thermostat design and energy efficiency ambitions.

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