A new report (paywalled) from The Information today told us that Google is working on a competitor to the Amazon Echo, but it also detailed in-depth Nest’s struggle as an Alphabet subsidiary and the apparent horror that was its acquisition of smart home security camera company Dropcam. Before eventually ending his time at the Alphabet company, Dropcam co-founder Greg Duffy apparently told Nest CEO Tony Fadell that he runs the company like a “tyrant bureaucrat”…
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While Dropcam’s investors apparently argued against selling, Duffy was swayed into the deal thanks to his admiration of Tony Fadell as a “product pioneer”. But the problems and conflicts between the two began not minutes after the $555 million deal was sealed. Not to mention the fact that Nest killed Dropcam’s yet-to-be-released Tabs product (which detected whether windows and doors were open) for one of their own called Pinna (which still hasn’t launched), the report says that Fadell immediately put Dropcam’s plans for an outdoor security camera on the backburner.
Tony Fadell had other plans and argued that it would only take a few months for Nest to add some new features to the Dropcam and rebrand it as the new Nest Cam, while Duffy argued it would take nine. It ended up taking a year for Nest to push the updates to the Dropcam, time that Duffy would have much preferred spending on new products.
After witnessing Fadell berate a former Google engineer who was working on computer vision for the Nest Cam “in front of about 20 other people,” and telling him to “pull the algorithm from Photoshop”, Duffy reportedly concluded that Fadell was managing technologies that he simply didn’t understand. He also saw it as a problem that engineers that were working on the projects didn’t feel empowered to speak up, a contrast with Dropcam, which was a company where everyone “felt comfortable sharing their views”, according to the report.
At this point, more than half of Dropcam’s employees have left, with Fadell dismissing the departures saying that many of them were simply inexperienced. “A lot of the employees were not as good as we hoped,” he said. Dropcam was “a very small team and unfortunately it wasn’t a very experienced team.”
In the end, their ex-leader, Greg Duffy, told Fadell he was embarrassed by Nest after threatening to quit. “I think you’re running this company like a tyrant bureaucrat and it’s holding back all progress,” he said. If he was to stay, Duffy wanted to report directly to Fadell and have more autonomous control over the camera division.
“You can’t report to me because you haven’t earned it,” Tony said. And with that, the Dropcam co-founder departed.
Since Duffy’s departure, the report goes on to mention that Nest is trying to embrace a new culture around the idea of “step up”. The company “had a whole Kumbaya,” where it was emphasized how much the company had grown and that not every minute detail had to be cleared by Fadell. Baby steps, though, as it seemingly took a long time for Nest to come to this realization and will surely take time for things to change. Some employees said they still feel they need clearance from Fadell on everything.