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Dropcam's Nest regret: More internal disputes at Google's Alphabet

Just a few weeks ago, Google surprised everyone by announcing that it was selling Boston Dynamics, a unit that creates advanced robots that can do amazing things. Google’s excuse at the time was financial: Boston Dynamics was unlikely to produce a marketable product anytime soon.

But this didn’t really add up. Google’s other projects like driverless cars, or the mysterious life-extending lab Calico will not generate profit anytime soon. So why give Boston Dynamics the boot? A leaked internal email indicated that Google’s PR were worried about the public perception the ‘terrifying’ robots were creating. But that’s not all. There were also reports of internal conflicts such as leadership and collaboration challenges between teams.

Now, Tony Fadell, CEO of smart-home startup Nest and Greg Duffy, founder of security camera company Dropcam are going at each other publicly about their internal problems. Nest acquired Dropcam in 2014 for $555 million. But the pairing has clearly not worked out, especially after Fadell’s comments that Dropcam employees “were not as good as we hoped”. In a Medium post, Duffy has responded by saying he regrets selling to Nest and that before they were acquired, “Dropcam was in the middle of a record year of sales, had innovative new products launching, and still remained a really great place to work”.

Whatever the truth may be, I think Google’s Alphabet clearly has a management problem. Boston Dynamics was seemingly doing fine until Google executive Andy Rubin’s departure. It was soon after that the internal conflicts began. Now there's more discord with tales of Fadell’s “tyrant” management style.

But I also think the Boston Dynamics sale shows that Google’s Alphabet is taking a firmer stance on revenue-generating projects. When Google acquired Nest for $3.2bn it had big hopes for the company. Nest was going to give Google an edge over the smart home for the future. But Nest hasn’t released a product since 2013 and one report has even said buying Nest has been a total disaster for Google. Perhaps the pressure to generate revenue has gotten too much – and finger-pointing has begun. The appointment of new CFO in Ruth Porat, as reported by Business Insider also suggests Google’s change in direction – and perhaps a more prudent approach to its moonshot projects.


Also read:

Google’s Boston Dynamics sale shows power of public perception

Google, Alphabet and the Try-Fail-Try-Again Economy


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Ayesha Salim

Ayesha Salim is Staff Writer at IDG Connect

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