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(CNN)   "Because Google offered me a shiatload of money, that's why"   (finance.fortune.cnn.com) divider line 25
    More: Obvious, Google Offers, Motorola to Glass, Silicon Valley, venture capitals, Google Ventures  
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3736 clicks; posted to Business » on 15 Jan 2014 at 1:06 AM (44 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



25 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest
 
2014-01-15 12:16:08 AM  
Duh!
 
2014-01-15 01:37:31 AM  
Nest Labs is on of the hottest companies in Silicon Valley, combining the Internet Of Things with Apple-style design and an ability to reduce carbon consumption.

Neat.

Now how about you get to the part where you tell me what the fark the business actually...you know, sells, Dan?
 
2014-01-15 01:40:25 AM  

Bumblefark: Now how about you get to the part where you tell me what the fark the business actually...you know, sells, Dan?


You don't actually expect tech reporters to actually tell you stuff do you?
 
2014-01-15 01:58:26 AM  
Groupon and Snapchat still have their integrity.
 
2014-01-15 03:30:26 AM  
Y'know, I'm not very tech savvy, but in can't for the life of me figure out why a thermostat company is worth $3.2 billion. Is this a money laundering thing?
I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?
 
2014-01-15 03:30:41 AM  
"because my product is lame."
 
2014-01-15 03:41:53 AM  

propasaurus: Y'know, I'm not very tech savvy, but in can't for the life of me figure out why a thermostat company is worth $3.2 billion. Is this a money laundering thing?
I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?


Hype is the game nowadays. Get some executive at a large company like Google, Apple, or Facebook sold on your idea and they'll pay because they think that is the going price. The VC firms play this game by claiming insane valuations to drive up the selling price until some sucker comes along with too much money to buy it out.
 
2014-01-15 03:44:07 AM  

propasaurus: Y'know, I'm not very tech savvy, but in can't for the life of me figure out why a thermostat company is worth $3.2 billion. Is this a money laundering thing?
I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?


Well... There are some people out there who think that it's so that Google can get their foot literally inside of your front door to continue their march forward to invade every private aspect of your life. These people are also saying that they are getting rid of any Nest devices in their house too so that Big Brother Google can't watch them poop or masturbate of course so take that opinion with a grain of salt and don your tinfoil hat while you're at it.

Odds are that Google really just wants to try and get a good foothold in the home automation business. Seeing as that's going to need a lot of software and networking experience (which they already have in house) along with the hardware they decided to skip forward in the the hardware design and manufacture process by about 4 years (and avoid the hassle of dealing with any competing patents that Nest already has ala Apple and Samsung) they probably decided that the extra billion or so was worth it in the long run all things told.
 
2014-01-15 03:52:50 AM  
What I don't get about Nest is that they have done ZERO publicity to HVAC people. I get the trade mags. I have an incredibly affluent and tech savvy market. Why do I get American Standard banging down my door to push their over complicated t-stats and never a single word from these people? Congrats on the pile of money, but if you actually wanted to get your product to the end consumer, you're doing it wrong.
 
2014-01-15 03:53:26 AM  

Radioactive Ass: propasaurus: Y'know, I'm not very tech savvy, but in can't for the life of me figure out why a thermostat company is worth $3.2 billion. Is this a money laundering thing?
I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?

Well... There are some people out there who think that it's so that Google can get their foot literally inside of your front door to continue their march forward to invade every private aspect of your life. These people are also saying that they are getting rid of any Nest devices in their house too so that Big Brother Google can't watch them poop or masturbate of course so take that opinion with a grain of salt and don your tinfoil hat while you're at it.

Odds are that Google really just wants to try and get a good foothold in the home automation business. Seeing as that's going to need a lot of software and networking experience (which they already have in house) along with the hardware they decided to skip forward in the the hardware design and manufacture process by about 4 years (and avoid the hassle of dealing with any competing patents that Nest already has ala Apple and Samsung) they probably decided that the extra billion or so was worth it in the long run all things told.


My question is how the company was valuated at $2billion. Do they have 2 billion in sales? Is there the potential to make that much? I'm having a hard time believing that Nest could sell that many thermostats.
 
2014-01-15 03:56:31 AM  

crotchgrabber: What I don't get about Nest is that they have done ZERO publicity to HVAC people. I get the trade mags. I have an incredibly affluent and tech savvy market. Why do I get American Standard banging down my door to push their over complicated t-stats and never a single word from these people? Congrats on the pile of money, but if you actually wanted to get your product to the end consumer, you're doing it wrong.


Because American Standard owns the trade mags. Duh.
 
2014-01-15 04:04:26 AM  

TotallyHeadless: My question is how the company was valuated at $2billion. Do they have 2 billion in sales? Is there the potential to make that much? I'm having a hard time believing that Nest could sell that many thermostats.


Considering what Facebook did with no real product other than some software and an idea I can see how it could get valued that high in the right environment. Don't forget that when they bought Nest they also bought the brain trust that comes with it. According to the link the people are staying there and Google is going to mostly be more on the business end of it freeing up the rest of the people at Nest to work on new products. They do seem to be on the right track.
 
2014-01-15 04:11:01 AM  

wildcardjack: crotchgrabber: What I don't get about Nest is that they have done ZERO publicity to HVAC people. I get the trade mags. I have an incredibly affluent and tech savvy market. Why do I get American Standard banging down my door to push their over complicated t-stats and never a single word from these people? Congrats on the pile of money, but if you actually wanted to get your product to the end consumer, you're doing it wrong.

Because American Standard owns the trade mags. Duh.


The Nest products (or at least the thermostat) is supposedly a simple enough install for a DIY'er to do it. The smoke\CO2 detector probably is as well as long as it's not the wired model (that might take an electrician depending on the location and if it's a replacement or not).

As to marketing I'm guessing that Google is going to be stepping that up pretty soon. It's a big part of what they do after all.
 
2014-01-15 05:53:17 AM  
They sold because if they didn't Google would just develop its own and try crush their company. 2billion is enough for me to work on something or nothing else.
 
2014-01-15 06:26:19 AM  

crotchgrabber: What I don't get about Nest is that they have done ZERO publicity to HVAC people. I get the trade mags. I have an incredibly affluent and tech savvy market. Why do I get American Standard banging down my door to push their over complicated t-stats and never a single word from these people? Congrats on the pile of money, but if you actually wanted to get your product to the end consumer, you're doing it wrong.


Pull marketing.
 
2014-01-15 07:00:31 AM  

Radioactive Ass: propasaurus: Y'know, I'm not very tech savvy, but in can't for the life of me figure out why a thermostat company is worth $3.2 billion. Is this a money laundering thing?
I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?

Well... There are some people out there who think that it's so that Google can get their foot literally inside of your front door to continue their march forward to invade every private aspect of your life. These people are also saying that they are getting rid of any Nest devices in their house too so that Big Brother Google can't watch them poop or masturbate of course so take that opinion with a grain of salt and don your tinfoil hat while you're at it.

Odds are that Google really just wants to try and get a good foothold in the home automation business. Seeing as that's going to need a lot of software and networking experience (which they already have in house) along with the hardware they decided to skip forward in the the hardware design and manufacture process by about 4 years (and avoid the hassle of dealing with any competing patents that Nest already has ala Apple and Samsung) they probably decided that the extra billion or so was worth it in the long run all things told.


If Google is involved in anything, it's pretty well a certainty that, one way or another, it ties into their primary business model: gathering data about anything and everything you do, and selling it off to the highest bidder.
 
2014-01-15 07:31:21 AM  

propasaurus: Y'know, I'm not very tech savvy, but in can't for the life of me figure out why a thermostat company is worth $3.2 billion. Is this a money laundering thing?
I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?


you'll enjoy the pop up ads on you thermostat , google will know when you are  home so the camera want have to wast energy being on when you are not.
 
2014-01-15 08:06:32 AM  
Too bad that thermostat is $250. Not nice when a) you have a hydronic heating system with two zones, and b) no central air so the thermostats wouldn't even be used for half the year.

I'll stick to my cheap Lux programmable thermostats, thank you. Sure, I can't control them from my phone, but I don't really NEED that capability. Besides, there's that dirty word, "cloud." I'd rather control the device directly (or via a VPN) than have to rely on a third-party server. As far as stats/graphing go, I'd rather keep that in-house as well.
 
2014-01-15 08:16:58 AM  

propasaurus: I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?


It does. It teaches you not to expect the thermostat to adjust the room temperature to what you set it to.
 
2014-01-15 08:19:53 AM  

Fubegra: I'll stick to my cheap Lux programmable thermostats, thank you. Sure, I can't control them from my phone, but I don't really NEED that capability. Besides, there's that dirty word, "cloud." I'd rather control the device directly (or via a VPN) than have to rely on a third-party server. As far as stats/graphing go, I'd rather keep that in-house as well.


Maybe you have the know-how to do that, but I can just imagine how for the vast majority of people having a device directly accessible from the Internet would be a nightmare... I mean who even has static IPs at their home?
 
2014-01-15 08:27:54 AM  
Yeah I NEED a $250 thermostat that will tell some third party about my house.

Every time I think of a business idea and then dismiss it as stupid, I am doing myself a disservice. There are plenty really stupid ideas that eventually yield nine figure payoffs.
 
2014-01-15 12:32:10 PM  

propasaurus: Y'know, I'm not very tech savvy, but in can't for the life of me figure out why a thermostat company is worth $3.2 billion. Is this a money laundering thing?
I've seen repeatedly that their 'smart' thermostat teaches you to think differently about your temperature settings. WTF?


Patents and employees.  Just because a company is not making obscene profits, doesn't mean that its assets aren't worth a fark ton of money.
 
2014-01-15 12:50:37 PM  

Radioactive Ass: wildcardjack: crotchgrabber: What I don't get about Nest is that they have done ZERO publicity to HVAC people. I get the trade mags. I have an incredibly affluent and tech savvy market. Why do I get American Standard banging down my door to push their over complicated t-stats and never a single word from these people? Congrats on the pile of money, but if you actually wanted to get your product to the end consumer, you're doing it wrong.

Because American Standard owns the trade mags. Duh.

The Nest products (or at least the thermostat) is supposedly a simple enough install for a DIY'er to do it. The smoke\CO2 detector probably is as well as long as it's not the wired model (that might take an electrician depending on the location and if it's a replacement or not).

As to marketing I'm guessing that Google is going to be stepping that up pretty soon. It's a big part of what they do after all.


I installed my Nest thermostat in about 15 minutes, and I am not the handiest gal on the planet. It is very easy to use, and it looks great. I don't have a giant box on my wall, just a cute little circular thing that most of my guests have to ask what it is when it turns on when you walk by.

Is it expensive? Yes. Is it worth it? To me it is. I like my bedroom to be 16C at night in the winter, but it sucks to get up to cold room on the weekends, when I don't get up at any set time. So I have it programmed to not come on and when I wake up, I just roll over, and use my phone to start the heating process. I like being able to monitor the house temp when I'm away (and it knows when you're away) and I like the monthly usage reports.

It's also turned me into a Thermostat Nazi... my husband will turn up the heat on the actual thermostat, and then when he turns around, I change it back on my phone. It's a little game I like to play with him.

I really hope that all Google does is give Nest money and let them build away.
 
2014-01-15 01:15:03 PM  

TotallyHeadless: My question is how the company was valuated at $2billion. Do they have 2 billion in sales? Is there the potential to make that much? I'm having a hard time believing that Nest could sell that many thermostats.


I just checked, and the thermostats run about $250 each and the smoke detectors are $130 each, retail price.  My rough guess for a new tech product is that after the distributors' cuts and their own costs, they are making ~$19 per thermostat and ~$10 per smoke detector, profit.

If a household buys one thermostat and three smoke detectors, they make $49.  $2billion / $49 = penetrate ~41 million households for a $2billion valuation.

Of course, not everyone will buy both products and future sales are worth less in the present, but there is certainly the potential.  Other things that probably sweetened the valuation are their unreleased products, the momentum Nest already has, and the tie-in value to Google.
 
2014-01-16 09:11:56 AM  
I'm still trying to work out the real value of these things beyond nerd toys. A thermostat pretty much does the job I want already - I tell it what temperature I want and it tries to get to that temperature.

OK - there's one use case I can see for it - I could go on holiday and phone it to switch on just before I leave. And that might save me a couple of weeks of heating water. But equally, I could turn it off and just call my neighbour the day before and ask him to push the button.
 
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