Is the Nest Learning Thermostat Disruptive Technology?

There’s my thermostat now, a squared-off plain looking fellow named White Rogers. He hangs over my shoulder and mocks me three or four times a day for not being smart enough, or responsible enough, to program him. "Hey! I’m BUSY HERE, TRYING TO TRANSFORM THE MARKET FOR ENERGY EFFICIENCY, and you, Mr. White Rogers, are a daily pain in my side. I can’t read you. You don’t even know what time it is, but I do, it's time you get dumped! I’m going over to the Apple store to pick up my own personal HER -- a Nest Learning Thermostat. She understands me. I can communicate with her. She glows."

On the surface, Nest has built an eye-catching beauty. "Wow, hey Baby, I saw you from across the room. Aren’t you that supermodel thermostat that I’ve heard so much about?"

Anyone could have - should have - made thermostats user friendly and beautiful years ago. So what took so long… anyone, Honeywell?The true innovation behind NEST Learning Thermostat is machine learning, artificial intelligence, sensing and control – all the attributes of a true robot.

From the robotics perspective, acquisition of Nest Labs fits with Google's robotic 'moonshot' initiative: http://venturebeat.com/2013/12/24/where-is-googles-robotics-moonsho...

Nest Thermostat learning technology development has been led by a neuro-roboticist and 2007 MacArthur Fellow, Yoky Matsuoka. Google can probably leverage Nest Labs' assets across multiple business sectors: utility DSM; virtual power plants; Internet of things; home automation; robotics; big data; and, why not advertising, too?

There has been some outcry from privacy advocates envisioning HVAC contractor ads on Google’s Nest thermostat dial. Maybe so, I imagine Nest will soon be able to sense when your AC is about fail and solicit you to call the contractor for repair before it dies on the hottest day of the year.

From the new product development standpoint, Nest gives Google a strong vertical market opportunity for home automation, Internet of things and the coming robotics revolution (autonomous vehicle anyone?) because the thermostat/home energy management market is underserved.

Google could make headway with Nest because it’s easy to adopt as an affordable stand-alone device that offers high financial payback. It requires no behavior change. Indeed – it relieves consumers of financial burden of high energy bills while doing social good for the environment -- powerful drivers for substituting appealing new technology in place of the ugly junk now hanging in 119 million homes.

The Nest Learning Thermostat looks like an innovation that could help transform the market for home automation (and energy efficiency) to “cross the chasm” from innovators/early adopters to gain traction with the early majority. This could be an opportunity for the Home Performance industry to grow through consumer engagement as part of the home automation ecosystem.

A possible paradox with Nest Learning Thermostat is that it could help achieve high levels of consumer engagement with energy efficiency, even though it is a device that autonomously manages home energy use. The technology is so sexy that even disengaged energy consumers may be enchanted to do more energy efficiency upgrades…. Or, on second thought, maybe they'll just buy more robotic gadgets, like a self-driving car. Who knows? Google probably already has that data, too.

Nest Learning Thermostat may well be a beachhead for disruptive technology in consumer technology at home. Vigilant home energy organizations can leverage emerging technology to grow the home performance market with innovative products and services.
http://www.alabamawise.org/a-personal-robot-learns-to-manage-home-h...

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Comment by James Roche on February 24, 2014 at 7:06am

My name is Jim Roche and I am a service tech for H.O. Services.  We are currently Nest Certified referred contractors and have performed dozens of installs for Nest and customers of Nest.  I really enjoyed reading the article.  It hit home on a lot of thee most imp0ortant topics.  One thing that I would like to add is the excellent representation given by Nest Tech Support.  They will work with customers and companies alike in a very professional manner to help solve the problems and have a good track record of "drawing the line" as to when a technician needs to become involved. 

Comment by Joachim Preiss on January 24, 2014 at 6:00pm

Hardly anybody thought of their thermostat as being dumb and unattractive before NEST showed up. Many people thought thermostats could be improved and that their user interfaces were stuck in the stone age, but not many worked on improving them - until NEST.  

Had the NEST been offered by Honeywell, it would not have gotten anywhere near the attention of a unit created by ex-Apple folks. Whatever Apple or ex-Apple people do is a big deal. It's a brand thing. The Apple connection brought it on the front page of most publications and news outlets. Honeywell would not have been able to achieve that, nor would it be their style.

The fact that NEST has been given a 2+ year grace period to fix bugs, correct incompatibilities, and add important features that were missing is unheard of with other products.

But it has also brought the internet of things and home automation into the spotlight and forced many other big names to accelerate the development of their connected devices.

The for thermostats outrageous $249 price tag is part of the marketing, that brought them even more attention. Their target audience are not customers who look at a T87. But only Apple dared releasing a thermostat at a $249 MSRP. Since then others have followed.

I was surprised that it took so long until NEST got acquired. The price tag certainly excluded many buyers, but a year ago even they might have been more 'affordable'.

Comment by Bob Blanchette on January 24, 2014 at 4:45am

Agreed, it's totally a firmware/software issue. That makes it obvious to me that Nest didn't do enough research in real world HVAC systems. Reversing valve issue got "fixed" on the last update, but must be configured in "advanced settings". The other issues have not been addressed.

Comment by Dennis Heidner on January 23, 2014 at 11:21pm

Bob,  in defense of NEST,  the thermostat does have a lot of processing power in it... My guess is that they have allowed for a download of a firmware update to solve some of the problems.  And more importantly some of the algorithm runs in the "cloud"

However - I believe potential competitors also have the advantage of seeing those potential problems and beating NEST at its own game... plus adding features for more zones,  occupant sensed (dynamic) HRV/ERV controls and more...

NEST has effectively provided the "market" research that many companies can piggy back off of...

Comment by Bob Blanchette on January 23, 2014 at 2:48pm

The Nest has some major technical flaws, especially for heat pump systems.

1: No ability to adjust temperature swing/cycle times. A feature virtually every other quality thermostat has.

2: No ability to use emergency heat and aux heat without reconfiguring the thermostat each time.

3: On multi stage equipment and heat pumps the system "stages up" but shuts completely down when it reaches setpoint instead of "staging down".

4: Power stealing technology that creates issues with some systems.

5: Reversing valve on heat pump systems cycles with each compressor call instead of changing with mode.

That was a short list of the biggest flaws, there are others also.

Comment by Dennis Heidner on January 23, 2014 at 11:44am

If the NEST thermostat was selling for $49 and no additional fees,  it would be disruptive.  But it isn't.  There have been numerous home automation systems with learning abilities for items such as thermostats -- available for many years.   Some quite simple to use, and they never took hold.   Price along,  opportunity, and many other esoteric items are required to come together for an effective disruptive consumer device.   The current high price will slow down the adoption.  That means competitive devices will have an opportunity to undercut and perhaps replace the NEST thermostat entirely.

Lest we forget - it was just a few years ago that Google had introduced "Google Meter" which allowed residential customers look at their electric consumption in near real time.  That service has since been discontinued.

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