4 ms·

The target audience of the Nest is someone who leaves their thermostat on the same temperature setting all the time, whose house is empty a significant portion

by smackfu 13y ago

The target audience of the Nest is someone who leaves their thermostat on the same temperature setting all the time, whose house is empty a significant portion of the time, and who doesn't have the knowledge or desire to buy a manually programmable thermostat. You don't sound like you are in that audience, but that doesn't mean the audience doesn't exist or that the product is foolish.

VLM 13y ago
To give it the fairest possible test I will take your concerns to an optimistic extreme. Given that I can set my thermostat back roughly part time, and most people work 40 hrs, and someone who can blow $300 on a thermostat probably works at least 60 hours, I will triple my theoretical savings to $36/year. Given a zero interest loan that would pay for itself in a "mere" nine years. Google products don't last nine years before being shut down but I will error on the side of optimism and assume this is an outlier. The problem is the 29.99% credit card to buy the $300 thermostat means it really costs $90/yr to buy one... and now we're saving $36/yr instead of $12, but its still an order of magnitude or so too little to run a profit before it requires replacement. Still not seeing it. The target audience is people who can't do math. Or like greenwashing. Or like showing off to other people that they can throw away $300 on a thermostat, or at least obtain a loan to do so. There's nothing particularly wrong with that as a market, either. I read an online article from three months ago that they were selling 40K/month and assuming they get a revenue of $100/unit (rest goes to retailer, warehouse, shipping, etc) thats a revenue of about $50M/yr which isn't bad. A 10% profit on revenue on electronics would be good, so lets say $5M profit per year. Well, I wouldn't pay about $4B today for $5M next year, but aside from that little issue... I don't claim the product, in itself, is foolish at all. As a "hey look at how much money I have, err, had" $300 product, its probably a better long term investment than a $300 cellphone or a $300 computer video card or even a $300 giant TV. Some of the mathematical / economic rationalization is hilarious but that's orthogonal to the foolishness argument.
- clarky07 13y ago
  You act like products can only be purchased with a credit card. That is not in fact the case.
  - VLM 13y ago
    Actually no, I acted like at a zero percent interest rate / zero opportunity cost (which is a little weird) it would take about nine years, and at a typical 30% credit card for your average poor dude was infinity. Everyone will fit somewhere within those bounds. A reasonable opportunity cost might be 3%, I'm too lazy to bother figuring the time till profit because nine years at zero is already too long.
    - clarky07 13y ago
      A few things. First, it costs 250, not 300. Second, an alternative would be much cheaper, but it is non zero. Third, it provides other benefits than just potentially saving money such as a great user interface and apps with which to control it remotely. So say an alternative is 30, the cost is 220, not 300. That takes several years off your calculation. Then having the benefit of an improved interface is non zero. Even if it takes a long time to pay back I plan on living in my house for a long time, and I liked nice things. Now if you want to argue about overpriced absurd things, go with their $130 smoke detector or whatever it is. No thanks.
    - deleted 13y ago
      [deleted]
- deleted 13y ago
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frogpelt 13y ago
IMO, Nest appeals to the people for whom it does the least amount of good: engineers. Engineers and technical people tend to analyze things like their energy bill already. They also tend to love gadgets. A couple of parts of Nest that aren't usually factored in are the convenience factor of using your favorite device to control the thermostat remotely and the cost of your current programmable thermostat. If new home owners choose Nest instead of another thermostat they only have to save $150 to make it worth it. And they can factor in convenience. Another words, it's not a crazy idea to pay a little extra for one these especially if you haven't already been analyzing your energy usage.
- smackfu 13y ago
  Their marketing message is definitely not aimed at engineers: "Programming thermostats is complicated and irritating - but an un-programmed thermostat can waste 20% of your heating and cooling bill. So the Nest Thermostat programs itself."

by smackfu 13y ago

VLM 13y ago

To give it the fairest possible test I will take your concerns to an optimistic extreme. Given that I can set my thermostat back roughly part time, and most people work 40 hrs, and someone who can blow $300 on a thermostat probably works at least 60 hours, I will triple my theoretical savings to $36/year. Given a zero interest loan that would pay for itself in a "mere" nine years. Google products don't last nine years before being shut down but I will error on the side of optimism and assume this is an outlier. The problem is the 29.99% credit card to buy the $300 thermostat means it really costs $90/yr to buy one... and now we're saving $36/yr instead of $12, but its still an order of magnitude or so too little to run a profit before it requires replacement. Still not seeing it. The target audience is people who can't do math. Or like greenwashing. Or like showing off to other people that they can throw away $300 on a thermostat, or at least obtain a loan to do so. There's nothing particularly wrong with that as a market, either. I read an online article from three months ago that they were selling 40K/month and assuming they get a revenue of $100/unit (rest goes to retailer, warehouse, shipping, etc) thats a revenue of about $50M/yr which isn't bad. A 10% profit on revenue on electronics would be good, so lets say $5M profit per year. Well, I wouldn't pay about $4B today for $5M next year, but aside from that little issue... I don't claim the product, in itself, is foolish at all. As a "hey look at how much money I have, err, had" $300 product, its probably a better long term investment than a $300 cellphone or a $300 computer video card or even a $300 giant TV. Some of the mathematical / economic rationalization is hilarious but that's orthogonal to the foolishness argument.

clarky07 13y ago
You act like products can only be purchased with a credit card. That is not in fact the case.
- VLM 13y ago
  Actually no, I acted like at a zero percent interest rate / zero opportunity cost (which is a little weird) it would take about nine years, and at a typical 30% credit card for your average poor dude was infinity. Everyone will fit somewhere within those bounds. A reasonable opportunity cost might be 3%, I'm too lazy to bother figuring the time till profit because nine years at zero is already too long.
  - clarky07 13y ago
    A few things. First, it costs 250, not 300. Second, an alternative would be much cheaper, but it is non zero. Third, it provides other benefits than just potentially saving money such as a great user interface and apps with which to control it remotely. So say an alternative is 30, the cost is 220, not 300. That takes several years off your calculation. Then having the benefit of an improved interface is non zero. Even if it takes a long time to pay back I plan on living in my house for a long time, and I liked nice things. Now if you want to argue about overpriced absurd things, go with their $130 smoke detector or whatever it is. No thanks.
  - deleted 13y ago
    [deleted]
deleted 13y ago
[deleted]

frogpelt 13y ago

IMO, Nest appeals to the people for whom it does the least amount of good: engineers. Engineers and technical people tend to analyze things like their energy bill already. They also tend to love gadgets. A couple of parts of Nest that aren't usually factored in are the convenience factor of using your favorite device to control the thermostat remotely and the cost of your current programmable thermostat. If new home owners choose Nest instead of another thermostat they only have to save $150 to make it worth it. And they can factor in convenience. Another words, it's not a crazy idea to pay a little extra for one these especially if you haven't already been analyzing your energy usage.

smackfu 13y ago
Their marketing message is definitely not aimed at engineers: "Programming thermostats is complicated and irritating - but an un-programmed thermostat can waste 20% of your heating and cooling bill. So the Nest Thermostat programs itself."