WeWork making cuts; Fadell leaves Nest; BitTorrent spins out Sync

All sorts of changes going on:

  • WeWork plans to cut around 7% of its staff, according to Bloomberg’s Ellen Huet, and has paused hiring. The $16B coworking/coliving startup raised $430 million a few months ago led by Chinese investors, and plans to expand in Asia. It seems that WeWork might be responding to the advice of many investors to cut back on burn as the economy seems to be cooling.
  • Tony Fadell has left Nest following months of bad press and growing friction within Alphabet/Google, which acquired the company in 2014 for $3.2 billion. Positioned as a ‘transition’, the move is more likely the case of Fadell being pushed out. The new Nest CEO is Marwan Fawaz, who was a Motorola Mobility executive vice president, and who oversaw the sell off of that company after Google’s acquisition of Motorola. Looks like Alphabet/Google is positioning Nest for a sale, since Google’s developed its own line of smart home products that don’t play nice with Nest’s technologies.
  • BitTorrent has spun out Sync, its file sync and share technology, into a new firm, Resilio, and Sync will be renamed as Connect. Former BitTorrent CEO Eric Klinker will be heading up the new company, after trying to repositioning BitTorrent as an enterprise software company. It now seems the existing BitTorrent company will focus on a new live streaming app.

With exec departures and reorg, Nest is growing up

About a year ago, Google said it would pay $3.2 billion for Nest, a company that had sold fewer than a million connected thermostats and fewer than 440,000 connected smoke detectors — which it would later have to stop selling because its most innovative feature might also prove deadly in a fire. That was a lot of money for a company that had a lot of potential, but was still facing a lawsuit from a giant in the thermostat world, and was trying to sell a pricey product that the mainstream market wasn’t quite sure it understood.

Now, as it reorganizes in the wake of what looks to be the surprise departure of two executives, the company is doing what it has to do to prove that $3.2 billion price tag. Google didn’t buy Nest for its beautiful thermostat — it bought into Tony Fadell’s vision of a connected home full of better products that would learn from users and improve their lives. Along the way, if it helped Google get into hardware and collect vast amounts of data that might one day help solve energy crises or improve computer vision, that’s all to the good.

Greg Duffy DropCam Mobilize 2013

Greg Duffy, CEO, DropCam Mobilize 2013 (c) 2013 Pinar Ozger [email protected]

But to do that, Nest has to get big — moving beyond thermostats, smoke detectors and cameras. That requires a lot of discipline. So when I saw reports of a culture clash leading to the departure of Greg Duffy, the former CEO of Dropcam on Friday evening, it didn’t surprise me. The report alleged a “culture of meetings,” and Duffy appeared to confirm his departure via a tweet. Duffy wasn’t the only one who left: Nest’s VP of Technology Yoky Matsuoka also left, reportedly heading for a role at Twitter.

This did surprise me, as a Nest employee and official spokeswoman offered to have Matsuoka come to my house to fix my Nest as part of a joke, on a call with me on Thursday. I doubt they would have offered that in jest if her departure was common knowledge at that time. In an article about memos acquired by Tech Crunch after the loss of the two executives, several issues stand out, but all of them point to a company trying to scale up to become a multi-billion-dollar business relatively quickly.

The first thing that jumps out is the crazy work schedule — employees were being asked to work Saturdays until April or May, tied to an ambitious product release schedule for Project Quartz and Black Quartz, which TechCrunch says are two camera updates. Nest’s competition in the smart home space is offering not just cameras, but security systems with embedded sensors and learning systems that can learn who is in your home and react accordingly. I don’t know what Project Quartz and Black Quartz are at this time, but I can look at the market and say that while easy to use, Dropcam’s products aren’t particularly noteworthy compared to other Wi-Fi cameras out there, and bigger names are getting in the game every day.

The work schedule is one thing, and something that I would imagine would prompt a lot of angst, but the second element of the memos was a reorganization dividing the hardware side of the business and the software and services side of the business. Other roles are getting reorganized as well, with what appear to be clearer reporting lines and a definitive “management” layer.

So will this help Nest build the products it needs to sell tens of millions of connected gadgets, and design dozens of devices over the years?

Glass leaves Google X labs, team will report to Nest CEO Tony Fadell

Google Glass is growing up. On Thursday, Google confirmed that it is planning to take its computerized eyewear product out of the experimental Google X unit. Instead Glass will be its own division, and Google Glass head Ivy Ross will report to Nest CEO Tony Fadell.

Tony Fadell is famous for contributing to the birth of the iPod at Apple. He landed at Google after the company bought Nest, his smart home startup, in 2014 for $3.2 billion. Glass isn’t joining Nest, but the team will report to Fadell — which is the biggest expansion in Fadell’s role since he joined Google.

Google is planning to stop selling Glass on January 19, 2015, which means the entire Explorer program is winding down. However, the Glass At Work program will continue.

In the short few years that Google Glass has been available, it’s clearly been a kind of beta test. Google has called its beta testers “explorers,” and with a $1500 price tag, Glass has generally been too expensive and experimental for mass consumption.

google glass angled


Recently, worries about the platform’s future have led a few major developers, like Twitter, to abandon their Glass apps. Google says that a future version of Glass is on its way, possibly powered by an Intel chip. But Google didn’t provide a timeline, beyond that it will “launch when it’s ready.”

Google X is overseen by Google co-founder Sergey Brin, and its offices, according to a 2013 article in Businessweek, are not on the main Google campus.

Ivy Ross took over Google Glass in May after doing marketing work for consumer brands brands like Mattel and Disney — which is a good fit for Glass as it sheds its anti-social image through partnerships with fashionable eyewear companies like Luxottica.

Here’s a video of Fadell talking to Gigaom founder Om Malik at Roadmap 2014.