Nest founder Tony Fadell: be ‘sneaky’, always ‘run like a startup’ [LeWeb]

Tony Fadell

Tony Fadell

It seems so small and well, boring. It’s a thermostat. It makes the room warmer or cooler. While it’s important, especially in severe climates, it’s probably not the most exciting device you own.

Yet it’s the product that Tony Fadell was interested in changing. The former Apple employee is called the “father of the iPod” for his work on the music player, and was involved in the design of the original iPhone. His new product is Nest, the thermostat which learns your family’s patterns and changes the temperature so you don’t have to.

Speaking at LeWeb Paris, he explained the process that Nest went through and offered some tips for startups in the hardware space.

Don’t overlook the early adopters

Fadell said that startups should be “sneaky” and keep the details of their products largely secret to build suspense before the launch – and take advantage of early adopters when the time comes. The first people who use their products will probably be the most excited about it, and eager to help improve it. And they may not be customers in the markets that were originally targeted.

The Nest team was surprised by how quickly their product spread around the globe. They were able to track the devices as they passed outside the US and Canada — the only two countries where they are currently on sale, although they hope to launch in Europe soon.

“When we saw these products coming online, they started popping up in 63 other countries where we didn’t ship. They’re in Siberia, they’re in Saudi Arabia… and we were like, how did this happen?” said Fadell. He said that the Nest team crowdsourced information from their first customers, who complained that the device didn’t work the way they wanted it to in their homes. The second generation of the device addressed those shortcomings.

Fadell said that they were particularly concerned about the device’s auto-away feature, which predicts when you’re not home and reduces the temperature to save energy. They didn’t know how long the device should wait to turn off the heat when the family was away, but as more people started using it, they figured out the sweet spot: now, if no one passes in front of Nest for 3-4 hours, it switches to auto away mode.

Run like a startup… even when you’re not

Fadell shared his experience working for Philips in the 1990s, explaining how teams would work for years on projects, many of which were never brought to market. He estimated that only one in 10 products were actually shipped, which had a negative effect on employees, whose work never reached consumers. He suggested rather focusing all the attention on incorporating the work of all employees into the final product. “Apple is still run like a startup,” he said. “Ninety nine percent of products are shipped.”

He also stressed the importance of using existing partnerships and maximising the strengths of each team member. The development of Nest wasn’t a small task — it took a team of 70-80 people to put it together. He said that when he worked at Apple, Steve Jobs drilled the importance of ease of access and a simple user experience into him, and he used that knowledge when building Nest.

Beware the KickStarter hype and expanding too quickly

Startups can thrive and die ridiculously fast. Recent web darlings like Groupon stand as examples of ideas which can become popular incredibly quickly, but can be faced with serious challenges in just months. Fadell stressed that startups should be very careful when expanding internationally, even if they’ve been incredibly successful in their home countries.

“Be methodical, don’t just rush over and think you’re going to dominate like you did where you were. Think about your steps,” he said. “Every country is different, and you have to be very diligent. You need friends and good partnerships where can help get you started.”

Crowdfunding platforms like KickStarter have become the new go-to point for hardware startups with a great idea but without the money to realise it. “It’s not as easy as it looks to create a KickStarter project. Kickstarter is really great for entrepreneurs who want to create something from a really great idea, but don’t know if they have an audience for it,” said Fadell. “The best thing about KickStarter is that it can attract a large audience that go ‘I want this project’.”

But he warned that KickStarter success doesn’t mean your actual product will be successful. While Fadell admits KickStarter is a great way to find an audience, startups may still need to find alternative funders to really be able to pay for the manufacturing, distribution and customer service requirements they may not have anticipated originally.

Fadell says that if startup founders are not scared, they’re not taking a big enough chance or really innovating in a new space. “Go spend a year and learn with your heroes who did it,” he suggests. “Trust your gut. There has to be risks if you’re actually going to have a reward.”

Lauren Granger is currently in Paris covering LeWeb.



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