Earlier in the day Honeywell, the company behind practically every thermostat in the country, filed a lawsuit that alleges Nest, a company that builds a learning thermostat, of patent infringement. So why on earth am I congratulating them for being sued?
Finding a great market
The very fact that Honeywell is suing them for patent infringement is sign that they have found a big market potential here. It is not just about "smart" thermostats that look beautiful too. It is about trying to change the status quo of the home appliances market. Anybody in their right minds and with a bit of math can figure out that someone like Tony Fadell will not be entering a small market like thermostats to make a whole lot of money. Thermostats are just an entry point. Have a look around your house, from the water heater to the Fridge and tell me if you feel they are in dire need of innovation. That is what Nest is in this for. The name Nest itself is pretty brilliant if you ask me and very well thought of. when you see it in light of extending to a whole range of high-end beautifully designed products for your "nest".
It is not about the silly patents or the idea
If this interview by Honeywell's President of some big-name-division is to be believed, they killed off this very idea 20 years ago.
We found that consumers prefer to control the thermostat, rather than being controlled by the thermostat.
So why bother suing someone over something you figured does not work anyways? Does it not make more sense as a strategy to let them continue working (or in your eyes waste time) on an idea that you had rejected eons ago? This is where the fun begins.
The damn distribution model
It's not that Honeywell does not have similar products (though incompetent) of it's own. However, try hard as you may, you will never find them in your local hardware store. Honeywell sells it through HVAC contractors. Also the products linked above are, from a strategy point of view, made for "enterprise" customer. So that leaves an entire distribution model of local hardware and retail outlets wide open for a company like Nest to come and eat the pie. This is, I believe, the primary reason Best Buy is also included in the lawsuit, since they sell Nest thermostats in their stores.
So Nest is not here to sell thermostats. It is here to change the way you think about appliances and home devices in general. It is here change the way a common person buys them and what they pay for them. And for that, they deserve huge congratulations. Think of them like being in the business of making iPods when everyone was trying to sell crappy MP3 players. Oh, wait.