Nest's economics don't work. Why IoT devices should be sold as services | Hacker News Reader

Nest's economics don't work. Why IoT devices should be sold as services

medium.com

9 pointsdconrad6 comments

If Nest moved to a subscription model how do you propose they handle people who stop paying? Do they cut off remote access and write off the cost of the product as a loss?

They could follow the model of phone companies: they only 'give' you a phone if you sign up for a x year contract, may let you pay some sum up front, and cut off your use if you stop paying.

Just cut off access entirely. No pay? No heat/AC.

Nest should do this across their whole product line.

For Dropcam, No pay? We're gonna put your house up as a live feed for others to watch.

Including Nest protect.

No pay? No smoke/CO alarm for you.

The economies change a lot when you can book that revenue up front. Many SaaS startups want to lock in year long contracts even if the total amount is less for this reason. That revenue can then be used to pay salaries, etc. Not everything has to be or should be paid by VC dollars.

Nest may have figured they could build a larger ecosystem in the IoT and Smart Home space and charge monthly at some later point but didn't materialize.

Those who can afford a Nest can also dump it if they choose not to pay. I love my Nest. Bought it one month after the launched. Would I pay $10.00 a month just to reulate my heat only? Hell no! There are so many new alternatives in this space - not as intelligent or sexy looking though. Maybe I build my own. The algorithm is not hard to implement. I am just lazy.

Still love my Nest. Sexy, smart, set-and-forget. But we only mingle in the winter.

I, also, am 100% nest (four thermostats). I, also, would never pay 10$/month/thermostat for this service.

I am not shitting on nest here, but I will say there are others out there now who are as or more intelligent though definitely none as sexy.

That said, this whole article is basically "news at 11, IoT device maker says people should pay more for their IoT devices, buys boat"

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