Tony Fadell Leaves Nest Labs after Months of Management Controversy

Tony Fadell—father of the iPod and cofounder of Nest, Inc.—has stepped down from his position as head of Nest Labs, the hardware division formed by Google parent Alphabet. The departure comes after months of criticism and controversy over his management style and a lackluster record of new product releases from the division. It also continues a track record of former Apple top executives who have less success outside that company.

Tony Fadell

Tony Fadell

Mr. Fadell has enjoyed what was arguably the most success after he left Apple. He founded Nest with Matt Rogers, another former Apple engineer, in 2010, some two years after leaving Apple. That company made a big splash with Nest Learning Thermostat, and Google bought Nest in 2014 for US$3.2 billion.

Compared to other former Apple executives like Jon Rubinstein, Ron Johnson, and Scott Forstall, that buyout made Tony Fadell the star student outside of Apple. But two years after the purchase, and after Nest was reorganized to be Nest Labs, Mr. Fadell churned up major controversy from disgruntled employees who complained about their boss publicly.

Nest was also criticized for failing to deliver new products, and for having trouble with some of the products it did release, like the Nest smoke and carbon monoxide detector, which was recalled. The one major new rollout Nest had was a new camera from the Dropcam team acquired under the Google moniker and added to Nest Labs.

All of which makes his stepping down from Nest Labs appear somewhat ignominious, though it does appear to be voluntary. Mr. Fadell tweeted two very positive goodbye messages, and he is officially being retained as a "consultant" to Alphabet CEO Larry Page.

He also gave an interview to The New York Times ahead of his departure on condition that it be withheld from publication until after that departure was announced. In the interview, he defended his record at Nest in part by touting double digit revenue growth despite the lack of new products, and said that while some employees complained about him, they were a small fraction of Nest Labs' staff.

He also made a very compelling admission, saying, "I'm a guy who's at the beginning of things. I don't like to do maintenance mode. It's not what gets me out of bed."

Accordingly, what is most likely to define Mr. Fadell's legacy is what he does next. If he could be at the heart of a third successful product, any controversy at Google will likely be viewed as a minor hiccup or a learning experience (i.e. don't stay long once your new company is purchased).

If not, he will most likely be lumped in with other Apple superstars who don't do as well when they leave the company.