They have over 100 people, and if rumours are true have quite significant backing. Which is particularly interesting as it's hard to see on the surface where their margins come from on a device most could consider as novel and expensive.
Though there are potentially gains to be had from a smarter thermostat, the headline figures in their white papers will most likely never be realised in the real world. Most reviews and bloggers seem to get caught up in focusing on the simple heating and cooling experience.
The company on makes sense once you look at it in the context of the larger market. The silent but important features are zigbee integration (current unused), and excessive processing power. We are just on the cusp of huge smart-grid rollouts in many western countries. British gas in the UK has decided on the zigbee standard and are starting to roll out over 1000 new meters a day; with government backing for an £11bn rollout to 27 million households by 2019.
In light of these rollouts, the energy companies will be looking to capitalize on their investment (which will be mostly funded by the consumer, via higher bills). The hardest part is figuring out what the consumer face of the smart grid should look like. Expensive 'home hubs' and touch screens are a red herring - the future is distributed (every household members phone etc), yet you still need a link between the rather 'dumb but integrated' meters, and devices in the house.
In my opinion nest's game plan is to become that link. Your thermostat controls around 50% of the energy usage in your house. Eventually it has the potential to control 100%. With smart GPS integration into your phones it becomes realistic to have houses that react silently to it's various inhabitants patterns and blend those needs with the energy grids demand levels; now this is a valuable proposition. If you're an energy company absorbing several billion because of government pressure, suddenly the hardware cost of a nest doesn't seem so bad, especially if it can be offset or laid off over time.
edit; footnote - All figures are rough (off the top of my head)
I'm curious what you find so interesting about it. I've had an Ecobee thermostat (http://www.ecobee.com/solutions/home/smart/) for years and have even done silly hacks with it like integrating it with my wireless access point to detect when I'm home (http://jcs.org/ecobee) and making a SiriProxy plugin to be able control it with an iPhone (http://flic.kr/p/aNuGaF).
But even before the Ecobee, programmable and even WiFi-enabled thermostats have been around for many years and they have not gained any significant traction. My dad owns an HVAC company and they've only sold 1 or 2 Ecobee units in the years they've stocked them, with most people just opting for a schedule-based programmable thermostat.
What makes the Nest so much different? Is it just that it's pretty? Right now, their website says it costs $250. For the average person, that's probably at least a few years of energy savings needed to justify that cost.
You bought an Ecobee thermostat, integrated it with your access point, and made a SiriProxy plugin.
This is awesome but think about it for the general consumer. They just want shit to work.
This is what makes Nest different.
That's like asking:
- Why is the iPod different from all the mp3 players on the market?
- Why is the iPhone different from all the smart phones on the market?
- Why is the iPad different from all the tablets on the market?
None of these questions are easy to answer in full, if they were Apple would have more serious competition. The simple answer is:
Because the overall experience of owning them, for the average person, is better than with the alternatives.
I suspect the current hype about the Nest is due to two reasons: 1) Apple people made it, and Apple is newsworthy right now; 2) it doesn't look like other thermostats, it looks easy to use and unique. I think that right now the Nest's aesthetic is getting it traction, time will tell if that's enough to get it sales.
Homes HAVE to get smarter. The market dictates this. But up to this point, the cost to gain ratio has been far out of balance, not to mention the approach of poor quality touch screens and feature lists that read like a 1999 computer spec :) I agree nest is too expensive at $250, but I doubt that it will hold that price tag for long, partnerships are coming I'm sure.
It's a little like asking what made the iPhone different to the nokia of the day, or Dropbox to FTP. It's more about market timing, pricing and user experience than anything in a spec.
What else? Put bluntly; timing, founders and funding.
Am I mistaken in thinking that the Ecobee is significantly more expensive than the Nest?
That's an interesting point. Here in Ontario we have smart electrical meters so that the hydro company can charge you different rates depending on the time of day; running the A/C during work hours is more expensive than running it at night, and so on. It would be interesting if household devices were aware of these cost-of-power schedules so that you could put laundry in a dryer and set it to "dry in the 12 hours, whenever electricity is cheapest".
Running the washing machine at night when it's cheapest may not be desired, rather running it when no one is home and it's off peak. Turning on alarms, switching off lights, dropping temperature automatically. Allowing individuals in the household to have their own work patterns and temperature presets etc.
The key point is that it has to be effortless. No complex interfaces or setup. Plug, play, forget. And only in the next 12-24 months do enough technologies hit critical mass to make it economically feasible.
How this sill interact with the ZigBee push for IPV6 integration, for the Smart Energy profile at least, is anyone's guess.
Not that the company I work for really cares either way. Power companies are looking at smart grids, white good manufacturers are looking to include network functionality, and several people want to be the bridge between you and all of this. But as long as most people building ZigBee devices use our chips, we're happy.