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Biz Model for Nest's Smart Thermostat
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Nest Business Model Presentation

My team created a new business model for Nest Labs using the business model canvas. We decided to introduce a new service to be integrated with Nest Protect and other Nest products. This service, called SafeNest, will operate as a safety and security system for a low subscription fee. To use SafeNest customers must have a Nest Protect. Hardware used to enhance the SafeNest service are sensors and a specialty Nest/Jawbone bracelet we invented called Nestlet.

The purpose of this service is to increase consumer investment in the Nest system. As the leader and pioneer of the "Internet of Things," our strategy is to grab as much Home Automation market share as possible, as quickly as possible before our Apple launches the HomeKit. This service will also steal market share from the Home Safety and Security market (ADT, LifeAlert).

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Nest Business Model Presentation

  1. 1. Anthony Cutrofello Matt Fineran Meagan Eng Bernie Guzman-Lopez
  2. 2. Company Background Founded by Former Apple engineers Tony Fadell and Matt Rogers in 2010 First product - Learning Thermostat in 2011 Google acquired Nest Labs on January 14, 2014 for 3.2 billion dollars Currently not publicly traded By summer 2015, Nest plans to sell 85,000 thermostats monthly
  3. 3. Nest Products Nest Protect Nest with Pendleton Blanket Nest with Clean Bottle Nest Thermostat Dropcam
  4. 4. Trends Societal “Going green” Buying local Do-it-Yourself Social responsibility   Technology Millennials – early adopters “Internet of Things” Mobile   Economic Millennial spending power é     Industry Smart Home market é Energy efficiency/LEED certified buildings     Automated  entertainment    and  security  systems    
  5. 5. KP •  Nest Pro •  Google •  Government •  Utilities Companies •  Distributions •  Home Appliance Developers KA •  R&D •  Production VP •  Innovating home accessories to be more energy efficient, convenient, secure and safe by reducing cost, and being customizable CR •  Nest Pro •  Customer support CS •  Family Households Owners or Renters Technologically Advanced Middle to Upper Class KR •  Research and Development •  Talented Employees •  Intellectual Properties CH •  Home Depot •  Lowes •  Apple •  Target •  Nest Online •  Best Buy •  Amazon •  Online Electronics Retailers C$ •  Manufacturing and Distribution •  Marketing and Sales •  R&D R$ •  In store Sales •  Internet Sales •  Google Current Business Model
  6. 6. SWOT Strengths •  Interconnectivity through wifi •  Backed by Google Weaknesses •  Few product offerings •  Recalls on previous products •  Google’s public image Opportunities •  Apartment complexes/ office buildings/hotels •  Growing Smartphone industry •  Security services using current products Threats •  Competitors •  Renters •  Viruses and hackers - Nest platform and products
  7. 7. Challenges Competitors Na1onal  share  of     first-­‐1me  home-­‐buyers    is  slipping   Minimal investment in the home’s infrastructure Solution Renters Grab  as  much  market   share  as  possible  as   quickly  as  possible  by   crea1ng  a  grab-­‐and-­‐go   ecosystem  of  smart   devices  and  appliances   for  the  home.  
  8. 8. Stakeholders Profit People Planet
  9. 9. Recommendation Used with Nestlet and Sensors Monthly subscription emergency service Sensors detect security threats Nestlet Modified Jawbone Bracelet
  10. 10. New Business Model KP •  Insurance Companies •  Emergency Services •  Nest Pro •  Google •  Government •  Utilities Companies •  Distributions •  Home Appliance Developers KA •  Providing Smart Home Services •  R&D •  Production VP •  Innovating home accessories to be more energy efficient, convenient, secure and safe by reducing cost, and being customizable •  People, Planet, Profit •  Providing a service to focus on human safety, Protecting the planet with our innovative technologies, Gaining profit through this service CR •  Nest Pro •  Customer support •  Safe Nest Automation Service CS •  Millennials (17-34) •  Family Households Owners or Renters Technologically Advanced Middle to Upper Class KR •  Server Systems •  Research and Development •  Talented Employees •  Intellectual Properties CH •  Home Depot •  Lowes •  Apple •  Target •  Nest Online •  Best Buy •  Amazon •  Online Electronics Retailers C$ •  Manufacturing and Distribution •  Marketing and Sales •  R&D •  Communication servers R$ •  In store Sales •  Internet Sales •  Safe Nest Subscription •  Nestlets •  Google
  11. 11. Strategic Partners First Responders Fire Rescue Police EMS Reduce response times Improve accuracy and efficiency
  12. 12. Insurance Providers Insurance Providers Premium Reduction Incentive 15-20% Reduction
  13. 13. Pricing $30 Pack of 10 sensors $100 2 Nestlets $90 Nest Protect SafeNest Starter Pack $190 ($220 Value) $20.00/ Month
  14. 14. Pricing Basic Plan $36.99/ Month Basic Plan $29.95/ Month $66.94/ Month SafeNest The same services as ADT + Life Alert $20.00/ Month
  15. 15. Integrated Marketing Communications WHAT?   WHO?   HOW?   SAFETY   MILLENIALS   CHANNELS    
  16. 16. Advertising Short Commercial spots on Youtube Parents are always trying to make everything safer for us. Now, let’s give back.  Get your parents a Nest Protect with Safe+Nest.
  17. 17. Cause Marketing 5% of our annual subscription fee will be destined to their local fire departments Fire departments can allocate these resources to address their main issues It’s all about giving back…
  18. 18. Public Relations
  19. 19. Product Placement Modern Family Chicago Fire Arrested Development The audiences of these shows comprise substantial millennial viewers and reflect their overall social and cultural attributes
  20. 20. Distribution Safe Nest Signup online at nest.com Nestlet Apple, Home Depot, Lowes, Target, Amazon, nest.com
  21. 21. Social Media #SafeNestSelfie 1 winner per social network Take a selfie with your NestProtect and post to social media with the hashtag #SafeNestSelfie for a chance to win a Nestlet.
  22. 22. Guerilla Marketing •  Dance to “Staying Alive” •  Nest Protect with Safe Nest saves lives   Time Square Fire Fighter Flash Mob  
  23. 23. Evaluation Insurance   Rate   Reduc;ons   Number  of     SafeNest   Subscrip;ons   Number  of     Nestlets  Sold   Key Performance Indicators
  24. 24. Contingency Plan Initial revenue generated from SafeNest will be allocated to a precautionary War Chest Preventive measure to solve any potential issues encountered with first generation adoption of Safe+Nest We will be prepared!
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My team created a new business model for Nest Labs using the business model canvas. We decided to introduce a new service to be integrated with Nest Protect and other Nest products. This service, called SafeNest, will operate as a safety and security system for a low subscription fee. To use SafeNest customers must have a Nest Protect. Hardware used to enhance the SafeNest service are sensors and a specialty Nest/Jawbone bracelet we invented called Nestlet. The purpose of this service is to increase consumer investment in the Nest system. As the leader and pioneer of the "Internet of Things," our strategy is to grab as much Home Automation market share as possible, as quickly as possible before our Apple launches the HomeKit. This service will also steal market share from the Home Safety and Security market (ADT, LifeAlert).

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