Nest was supposed to lead the next computing revolution. Its looking like a bust

I'm convinced it was the industrial design, of making something that normally is a beige box sexy and nice to look at. Something you put on your wall, that is a necessity is now a piece of high-tech artwork that you can admire.

This is evidenced by the fact their smoke alarms, if their "connected home" story were to hold true, haven't done nearly as well. People could care less if their smoke alarms are smart, because you rarely look at your ceiling. You often see your thermostat every day, with most being located on the wall when you walk into your house or apartment.

Evidence: I have many non-tech friends and family who own a nest. They do not use any of the advanced features, maybe rarely. They all say the same thing: they bought it because it looked cool and wanted a "finishing touch" on their house. Maybe did so after a kitchen remodel or something else they did to their house, indicating it was more an emotional purchase fueled by aesthetics and ego.

Based upon this, it is now unsurprising the hype hasn't scaled. The business was kind of a one hit wonder and it's not shocking the company is floundering.

It was that someone was finally taking Apple-level industrial design and applying it to common household goods. That made me very excited, and happy to pay more for it. Finally, a common product was getting better aesthetically, rather than worse.

All the rest was noise, mainly for investors. Unfortunately, it appears that the noise may destroy what matters.

Not only that, but I already have a thermostat. It works perfectly. I've never said to myself, "Gee, I wish I could adjust my home temperature from work, I need an exact 23.5 degrees when I get home". It doesn't do enough for me to justify messing with my HVAC system, that whole "if it ain't broke, don't fix it" adage comes to mind.

The Nest does look cool and has a much better interface for programming a schedule, but it is hardly revolutionary.

In particular, I've been disappointed that the "the Nest will know when you aren't home and automatically adjust!" feature never worked, although that's maybe not a surprise since it's basically magic.

But I got it for free, so I can't complain. It looks cooler than the old Thermostat I had and they send me an email every month telling me how I'm like the bestest person in the world for turning off the heat and opening the windows in the spring.

One of the contradictions of capitalism is that a high-P/E and high-growth company like Google will inevitably close services and squash products that it acquires because it to maintain that high-P/E ratio they will be forced from time to time to get out of any businesses that can't sustain the great numbers that their core business can put up.

At the enterprise level, if I was tasked with vendor management with a company that was acquired by Google or Facebook I would probably call my sales rep right away and be like "you better post a performance bond" or "you better sign an escrow agreement for the source code" or "I talked with a sales rep at company B and he told me this and he told me this (what do you think about that?) and he told me this (what do you think about that?) and he told me this (what do you think about that?) (oh really?) and I would go on with that until he gives me at least a 15% discount or blows up at me and hangs up the phone."

If it was Microsoft I would feel the same way based on historical experience. Not so with IBM. They buy failing or market trailing companies that have something to do with "Watson" or "Cloud" -- generally they don't get any better, but they suffer from at most benign neglect. Generally they did not make the cut or we moved to a competitor years ago, but as notorious as IBM is for discarding employees, it does try not to leave customers out in the cold.

It works well with tech-savvy individuals, but that's a small subset of humanity. It's basic economics.

My company (ElectrIQ Power) is actually in the IoT space, and we've carefully assessed the market before even starting. Fortunately, for us, we're in a unique group where demand is currently small, but increasing at a very high rate. Our revenues are also far greater than would be possible if we were operating in a direct-to-consumer strategy.

I purchased the third party Skylark app and installed it on my phone and my wife's phone so that the nest goes into "away" mode only when we are both out of the house. I think the official Nest app also added similar functionality recently.

After this initial set up, and a week or so of "training" we haven't had to think about setting our thermostat. Our house is just magically at the correct temperature when we are there but our bill is lower than it was before we got it.

This still leaves an opportunity for Alphabet (who knows better than them how to offer a free service and profit off the data?), but leaves Nest in a category similar to Nexus - a line of HW that demonstrates the value / usefulness of the services, but is not really a key profit center for the company. It's not bad, but it's not somewhere I personally would want to work.

The last battlefield is your home. You must have an always on device in your house that listens to your activity and conversations. Since you can turn off mobile phones and smart tvs [1], we need something better. Amazon has Alexa. Google has Nexus Player. Nest is the best, because shutting it down has unpleasant consequences.

[1] Your smart tv is probably smart enough to not really shut down and keep listening [wink wink].

The cock ups along the way didn't help either. Wouldn't touch them with a barge pole now.

Honeywell on the other hand seem to have smarter smart kit, and a decent reputation.

Google didn't acquire Nest to out of an altruistic desire to assist Nest to grow faster to fulfill their mission. Nest was acquired because Google was lazy and saw an opportunity to grow Google's revenue and data-base while at the same time getting a foothold in the nascent but exponentially growing IoT sector, instead of having to build something themselves and compete with Nest.

When I hear about the piles of cash that companies like Google and Apple are sitting on I often shudder to think of all the other "Nest" like companies out there that will be snatched up in the middle of a growth spurt like an organism infected with a virus that injects its own DNA in order to hijack the host organism's biological mechanisms in order to fulfill its own goal of self replication, often killing its host in the process.

Nest was born from Apple culture. The founders left Apple after having worked on the iPod and set out to build another beautiful product. They wanted to build something. And the culture that informed them to make this decision, to take this path, was essential in the manner in which it played out. Acquisitions such as this, that aren't merely hands-off capital injections, by definition change the culture, goals, and products of the company acquired.

So, companies, like Google and Apple, that have massive, massive stock-piles of cash have the luxury to, as a side-effect, at will, change the culture, goals, and products of just about any nascent company, and they most often do so for the purposes of furthering their bottom line, expanding their user base, and growing their data-base.

Everyone else (read: everyone that is not one of these handful of companies like Google and Apple) pays the price by losing out on all the beautiful things companies like Nest could have born into the world.

Because it's not just about products. Products are, in addition to being attempts to solve engineering problems, a piece of our culture, of our social technologies, of our shared experiences. Nest wasn't trying to "solve" thermostats. They wanted to improve the experience of being in your home, for many of us our most sacred or private space.

You can't "solve" everything, because not everything is a "problem".

People buy vases and then put them in the middle of a room with nothing to fill them, because they like the way it makes the space feel. There was no "vase" problem. And there is no "awkward silence between friends in a car ride" problem. That awkward silence is a miracle of a good relationship, when two people know, without saying anything, that something is being left unsaid, and that one of them has the chance to be brave and kind enough to, for the benefit of their friendship, make the unspoken spoken. But Spotify would like to suggest you play their "awkward silence" play-list.

Independent companies creating products they themselves want, and that they are not trying to push onto others, but that they'd love to share with the world, need to resist the urge to take that capital infusion or accept a buyout so they can have access to the network and infrastructure of some grand suitor. It's a deal with the devil almost every time.