Why Tony Fadell left Nest — and Alphabet

Nilay Patel, writing for The Verge:

Fadell has said he made the decision to leave Nest last year, and sources tell me he wrestled with the idea of leaving Nest for weeks before telling Alphabet CEO Larry Page of his plans in December. The impetus, according to several sources close to Nest, was the increased pressure on Nest to deliver profitable results as a standalone unit inside the new Alphabet operating structure, instead of being safely ensconced inside Google and given room to grow. Fadell had been turned into a manager tasked with steadily growing his businesses instead of serving as a visionary CEO, and ultimately he walked away.


“Tony at Alphabet was paying Google employees at Google rates with Google benefits. He was paying Google rents. This is not what a startup does,” says Komisar. “The real story is Alphabet. This isn’t really about Tony Fadell. This isn’t really about Nest. Nest is still full of potential. This is about Google, and Google’s decision to build Alphabet.”

A smart startup will run lean, as if any money spent was coming out of the CEO’s pocket. Easy to yield to temptation when someone else is paying the bills.