Part 6: Be CEO
âIn 2014, just before the Google acquisition, Nest spent around $250,000 per employee per year. That included decent office space, good health insurance, the occasional free lunch, and fun perks from time to time.
After we were acquired, that number shot up to $475,000 per person. Some of the increase was due to corporate red tape and increased salaries and benefits, but a lot of it was the added perks of free buses, free breakfast, lunch and dinner, tons of junk food, gleaming conference rooms with full A/V setups, and new office buildings. Even IT was expensive. It cost $10,000 per year to connect each employeeâs computer to the Google Network and that didnât even include the price of the laptop.
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One of the most painful parts of the Google acquisition of Nest was losing our board. We had an amazing board at Nestâstructured and informed, operational and active. We could go to the board, get firm agreement on a clear strategy and plan: yes, weâre going to do this, Iâll get back to you in a week with next steps.
When we were acquired, our beloved board was dissolved and replaced with . . . nothing. We were supposed to have a governing board of several Google execs, but our meetings were either perpetually rescheduled or barely attended. Weâd propose a path forward and everyone would say, âYeah, well, letâs think about that a little bit more.â The can would get kicked down the road to the next meeting that nobody went to and weâd be left sitting
on our hands.
One might look at that and say, âSo whatâs the problem? If the board doesnât give you guidance, then just go do it yourself. Youâre the CEO.â
But that is not the solution. Even the most incredible CEOs in the world still need a board. Not the meetings, necessarily, but the advice of smart, invested, experienced people. Even big projects within a company should have a mini-boardâa collection of helpful execs who can work to guide a project lead and step in if things go sideways.
6.3. Buying and Being Bought
âBut that culture is enabled and driven by the fact that Googleâs search and advertising business pretty much prints cash. Even Googlers call it the âMoney Tree.â Itâs turned Google into a place of wild abundance where anyone can more or less do anythingâor sometimes nothing at all. Theyâve been so profitable for so long and have had so few existential business threats that theyâve never had to cut back or slim down, never had to be scrappy. They havenât had to really fight for anything in decades. Lucky them!
But at Nest, we were fighters. Our culture was born from the Apple way, a culture that survived multiple near-death experiences over its forty-plus years of existence. We were ready to fight for our mission and our place at the table, fight to keep our culture and our way of doing things.
The Google teams with whom weâd planned to integrate and codevelop technologies and products were reluctant to work with us. They kept asking their execs for more details to figure out if they really had to help us at the expense of their own projects. Why? Why? Why do we have to help a team that isnât Google? Over the subsequent months, every time we had to clarify yet again for customers that Nest was separate from Google, our internal reputation took another hit.
I should have remembered what it was like at Apple during the very first months when we started building the iPod. It just didnât occur to meâNest was so much bigger and more established than my tiny iPod team, I thought this was a completely different situation. But it was exactly the same. Back then Appleâs executive antibodies saw us coming to take their time and draw away their resources, so they tried to block our way and ignore our requests.
Thatâs when Steve Jobs gave us air cover, dropped bombs on the teams who were slowing us down, forced the issue, yelled sometimes to make sure we got what we needed. Steve Jobs fighting for us was ultimately what allowed us to succeed.
Google Ventures, now known as GV, was an investor. They knew our financials and had always been extremely supportive, so I wasnât worried about the number. I was worried about which teams weâd work with, what technology weâd share, what products weâd build. Nest wasnât joining Google for the moneyâwe were joining to accelerate our mission. So it was always mission first, money second.
Together with Google, we went through every single functionâmarketing, PR, HR, sales, every part of the company. We established where we could create synergies and where we couldnât, figured out which managers would be assigned to us, how we would do the hiring, which perks people would get, which salaries they could expect, which teams would be working together closely, and how those relationships would be established.
It took a lot of time. In fact I was starting to get a lot of eye rolls. âReally, Tony? You want to get into the details of this now?â Yes, yes, I do. Itâs important.
And it wasâcritically important and usually overlooked.
Most acquisitions are driven and overseen by bankers, and bankers only make the real money if the deal goes through, so theyâre motivated to move fast and get paid. They donât care about getting every detail of what happens to employees right. They donât really care about cultural fit. Not deeply.
When Google gave us new, gorgeous, high-end office space after the acquisition, I thanked Larry Page. I said it was very beautiful. And I told himâand our teamâthat we didnât deserve it.
It felt wrong. We hadnât earned it yet. That building was meant for a profitable company that had already proven itself. It was meant for people who could relax and spend their time arguing about who was going to get the window seat, whoâd get the best view. But thatâs not what Nest was about. We were focused on our mission, on staying late and solving problems and working hard and fighting through and over and around every obstacle in our path.