Nest, which has just been bought by Google, is a World Economic Forum Technology Pioneer company. Shane Richmond talks to its co-founder, Tony Fadell, about how smart thermostats can cut energy bills.

What will your next gadget be? A smartphone? A tablet computer? A new laptop? How about a new thermostat? You probably don’t think of thermostats as gadgets. In fact, you probably don’t think about thermostats much at all, but this might be about to change.

Nest, the brainchild of Tony Fadell – who came up with the hardware design for the Apple iPod in 2001 –is a smart thermostat. It learns your family’s lifestyle patterns, how long it takes for your home to heat and cool, what your preferred temperature is, and then it takes care of everything automatically. It was launched in North America two years ago and the company is now focused on expansion, though Fadell says that other products will follow soon.

You can control the thermostat from your smartphone and access your usage data. Or you can leave Nest’s algorithms to get on with it. Nest can save energy by making subtle adjustments to the temperature. The company has already saved more than 800 million kilowatt hours of energy usage in the United States and Canada.

Fadell had the idea when he was designing and building a home in Tahoe, on the border of California. The new home was environmentally friendly and built for the Internet-connected world, but when it came to a choice of thermostats, Fadell found that designs had barely changed in decades. He recalls: “I was like, ‘how can thermostats be this brain-dead?’.”

Thermostats did not make any use of Internet connectivity, they weren’t smart enough to be self-adjusting, they did little to help homeowners save energy and they didn’t provide any useful data to the homeowner. And so Nest, launched almost two years ago in the United States, came about as an attempt to solve the problem. Fadell wanted a product that would make the homeowner more than just “a slave to the utility companies”.

Fadell credits the iPhone – given its combination of ease of use and power – with making people expect more from every product they buy. “They start looking at the world all around them and wondering why isn’t everything more like an iPhone? Why isn’t my car more like an iPhone? Or my TV?” he says.

The rise of the smartphone was important in another way, too. Component prices have fallen far enough that Nest can basically put a smartphone in every thermostat. That, coupled with near-ubiquitous home Wi-Fi, has been crucial for making Nest possible at its current size and price.

“The hardest thing for us is that we’re interfacing with systems that can be 20 or 30 years old,” says Fadell. “There’s no standard; there’s nothing, so it makes it very, very challenging. And in the US we actually nailed it with self-install. In the UK, unfortunately, because of high voltage, it’s going to have to be a professional install.”

Fadell says the company sees the product as a long-term investment. “We’ve put in a lot of extra technology, which we don’t actually use today, inside the product so that the software can take advantage of it over the course of a decade. We believe in software services and upgrades through software to keep that thing in tip-top shape.”

He adds: “The idea of the thermostat was the tip of the iceberg for everything we’re doing today, which is not just about the thermostat but it’s also about our energy services that we provide already to multiple utilities here in the US and to consumers to incentivize them to save energy and to help with reducing the number of new power plants we have to build.”

Read the Technology Pioneers 2014 report. This interview was carried out in August.

Author: Shane Richmond is a specialist in digital media, who writes about technology for the Forum:Blog. Nest is a 2014 World Economic Forum Technology Pioneer company.

Image: A woman is seen shoveling snow on her sidewalk REUTERS/Jessica Rinaldi.