Spending last weekend together with Matt Rogers (Rogers on Twitter) from Nest was exiting. We talked a lot about technology, innovation and how it happens. Through Matt Ocko (Ocko on Twitter), a very connected businessman in the bay area I also got to know Tony Fadell (Fadell on Twitter). Matt Rogers and Tony Fadell both worked at Apple for many years. Tony is known as one of the fathers of the iPod and he hired Matt Rogers to do the iPod mini. Tony left Apple in 2008.
While building his new home he was looking for a thermostat that was functional and looked nice. Hi could not find any and together with Matt Rogers he set out to design one.
In May 2010 Fadell and Rogers co- founded Nest in a garage in Palo Alto (like Apple did).
I have visited them two times and I just have to write about this as I think it will be a new Apple. Their creativity is second to none and the speed they are moving are just amazing. After 4 years they have more then 400 employees and sell a lot of products. I remember when they launched their thermostat a while back with this video:
Recently they also launched the brand new fire detector Nest Protect.
There are two things with their product I like and that I think are setting them apart. They look nice, and they are very adaptive to the user. By using smart algorithms their products adjust to the environment and the user over time, giving the products more tailored performance and improved experience.
Nest has hired a lot of their engineers from Apple and I think this is an important success criteria. To hire people that you know are good, and that you know have done it before always speeds up your way forward. This will always improve the likelihood of success and attract good investors to support a fast growth.
I asked Matt how hard the people at Nest worked to be successful. His answer was “whatever time you go to the office, weekday or weekend the office will be full”.
And their office is by no means luxurious. They keep the cost down on everything they do to reduce their spend.
I believe this is the model to adapt. To start a new company with a group of 8—4 workers is not going to work. To start a new company means keeping the cost down and the work hours up. The amount of work is unlimited and you just cannot effort all the heads you would like.
On the other hand the employees need to be able to share the pie when it gets bigger. They need to see this as an opportunity to earn money so they later can be more independent and relax or start another company. I am not saying that money is everything, but let´s face it: It is important for an employee that dedicates so much time to build a company to get a significant reward.
Here is where the US model works better then the Norwegian one. In US stock options and shares in the company are much more common, although we see more of this in Norway as well. This is how they keep the American dream alive in people and get them to work hard to achieve it. The first employees at Nest will make good money. So will all their employees if they succeed. So will the employees at Tesla which is another company I admire a lot. In my view Elon Musk Musk on Twitteris a new Steve Jobs. A visionary that works extremely hard to achieve his goals.
But keep in mind that they do not do it for the money. They do it because they have a passion for innovation and want to improve something they believe should be better.