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LEAVING THE NEST

The founder of Nest is leaving Alphabet after only two years

Mike Murphy
By Mike Murphy

Technology editor

Tony Fadell, who invented the iPod and helped to design the iPhone, announced in a blog post today that he is leaving Alphabet, where he had been CEO of Nest, the internet of things company known for its smart thermostat and smoke alarm that he founded. Google, back before it became Alphabet, bought Nest in 2014 for $3.2 billion, which Bloomberg reports was the company’s third-priciest acquisition to date.

Fadell will be leaving the company he co-founded six years ago immediately, but will continue to advise Alphabet founder Larry Page, a representative for Nest told Quartz. Marwan Fawaz, a former executive at Motorola Mobility, will be joining the company to replace Fadell.

When Google reorganized under the holding company Alphabet, it spun Nest out into a standalone division under an “Other Bets” section. While Fadell initially had a positive start to 2015, being put in charge of the Google Glass project, internal issues and a lack of new products from Nest seem to have weighed on the company’s goal of bringing the connected home to the mainstream. There were organizational issues reported within Nest, with some claiming that Fadell created a “toxic” work environment, and others being fired for posting complaints about Fadell on Facebook (paywall). Fadell’s management style was also criticized on Medium by Greg Duffy, the founder of Dropcam, which Nest acquired in 2014, adding he regretted selling his company to him.

Alphabet has not disclosed how many Nest smart devices have been sold since it bought the company, but chief financial officer Ruth Porat said on the company’s most recent earnings call that “our other bets are all very early stage, but continues to be the best seller in the category.” (Recode reported that Nest generated revenue of about $340 million last year, below Alphabet’s expectations for the company.)

In 2015, Nest had recalls of its smoke detector, and Fadell called it a “grueling” year when the company released its latest product, the Nest Cam. Google recently unveiled a new smart home device, called Google Home, at its I/O developers conference last month, which ostensibly has no connection to its the multibillion-dollar smart home company.

At least Fadell will now have a lot more time to spend with his family, and play around with go-karts.

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