Inside the Nest: iPod creator Tony Fadell wants to reinvent the thermostat

It’s called the Nest Learning Thermostat, and on the outside it looks utterly familiar apart from its brushed metal shell: it’s just a round silver dial with a color LCD display in the center that mostly just displays the temperature in large, friendly numbers. Like any other thermostat, you set it just by turning the dial, and the display turns red or blue to indicate whether it’s heating or cooling, with an estimate of how long it’ll take to hit your desired temperature. A green leaf appears on the display when you’ve set it to an optimal energy usage setting; the idea is to make users "search for the leaf" and thereby save more energy. It is a deceptively simple product.

What you don’t see are the two motion sensors, temperature sensor, and the Wi-Fi connection that tells the Nest what the outside weather is like. The more you adjust the dial and simply live in your house, the more the Nest learns about your preferences and schedule, and the more it programs itself to properly control your heating and cooling — and the more energy you save.

Fadell smiles as he explains all this. "Other thermostats suck," he says.

To understand why Tony Fadell is building the world’s most high-tech thermostat with a team that includes several former iPod and iPhone engineers and an artificial intelligence researcher who’s won a MacArthur Genius Grant award, you have to imagine that you’re him: flush with cash after nine years leading mobile devices at Apple, and wandering the world with your family. You’ve just spent six months in Paris on a whim. You’re building an ultra-green home in Lake Tahoe, with a $15,000 heating and cooling system. When your architect shows you the archaic $350 thermostats that control the system, you’re not only genuinely offended by their lack of innovation, but you have the ability, time, and means to make your own.

The amazing thing about Tony is that he tells this story as though it’s the most natural thing in the world — as though anyone faced with a similar set of circumstances would immediately start trying to build a thermostat. Actually, that’s not the amazing thing. The amazing thing is that after a while you start to believe him.

"Most thermostats are built by plumbing companies," Fadell tells me. "But you really need to understand how to build a phone to make them better." His pitch to Nest co-founder Matt Rogers and their other team members was simple: a breakdown of how much energy a thermostat controls (50 percent in a typical home), the size of the potential market (150 million residential thermostats in the US alone, and another 100 million commercial units) and how much technology would be needed to make an impact (lots). "In a span of 25 to 30 seconds people are like ‘how couldn’t I do this?’" It’s 20 minutes into our meeting and now I’m fired up about thermostats too. Let’s change the world, one leaf icon at a time.

Everyone in the office who sees the Nest thermostat wants one immediately, even though most of us don’t have thermostats in our tiny New York apartments. Part of the appeal is that the device looks not only futuristic, but also familiar — just like the old-fashioned thermostats most of us grew up with.

Fadell’s not buying the connection. "I don’t think it looks like a thermostat. I think it has a beautiful form for its function." Fadell also bristles a little when I note the similarities between the iPod’s legendary scroll wheel and the Nest’s control dial. "I think there’s a lot of symbology around it, but frankly, if it was best for us to have made a zig-zig, we would have a zig-zig product." But there’s still some relation: Fadell tells me later that the Nest’s circular keyboard used for entering Wi-Fi passwords is related to an early rejected design for the iPhone.

That’s not to say that Nest won’t be introducing new products over time, but Fadell is passionate when he talks about remaining focused. "The problem with Silicon Valley is that you all want to impress your friends — you want to make the next thing and revolutionize it. But you have to make a strong business." Fadell looks out at the Manhattan skyline and says that he always wanted to be an architect; that buildings stay beautiful forever but digital devices are quickly obsolete. "You look at hardware or software five years later? They’re crap. You would never use them again. People use architecture all the time."

His voice rises. "What is our form of architecture? What is the thing that lasts of beauty? That’s the business. We want to make multiple products that all relate together, so that the business is there to continually drive innovation. It’s not just ‘hey, we took the hill, let’s go find another hill.’ And then this dies."