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Nest CEO Slammed by Dropcam Founder

This story originally appeared on CNBC

Though Dropcam founder Greg Duffy sold his home monitoring camera company to Nest for $555 million in 2014, only now is he publicly expressing seller's remorse.

Duffy wrote a less-than-flattering note posted on Medium about Nest CEO Tony Fadell on Tuesday. He said he was "compelled to set the record straight" after Fadell made negative comments about the Dropcam employees who ultimately worked for Nest, the connected device company owned by Alphabet.

Duffy said Fadell's criticism that "a lot of the employees were not as good as we hoped" is incredibly insulting to Dropcam's team and should be considered "blatant scapegoating."

"Just before we were acquired, Dropcam was in the middle of a record year of sales, had a 4.5-star bestselling camera on Amazon, was rolling into large brick-and-mortar retailers with huge merchandising support, had innovative new products imminently launching, still had most of its financing in the bank, and our investors and team actively didn't want to sell (it was my mistake to sell — but that's a story for another day)," wrote Duffy in the note.

While he cannot publish Dropcam's revenue, Duffy said if the public knew the percentage of Alphabet's "other bets" revenue that was brought in by the Dropcam team, Nest would "not look good in comparison."

"So, if Fadell wants to stick by his statement, I challenge him to release full financials (easy prediction: he won't)," Duffy added.

Alphabet began a new reporting method last month, breaking out results for its main Internet products from those of its newer ventures. The tech giant reported two segments: "Google" and "other bets."

To be sure, Alphabet's "other bets" earned $448 million in revenue for 2015, but the finances of the businesses which comprise that segment were not broken down.

In early 2014, Google bought Nest for $3.2 billion, which gave it a stake in the smart-home market and the "Internet of Things." Nest makes thermostats that learn from people's patterns and smoke detectors that connect to smartphones. The acquisition also came with Fadell as CEO, who is a revered former Apple design guru. Fadell has now also been given control of Google Glass.

Last summer, Nest rebranded the Dropcam product, reintroducing the camera as Nest Cam which is designed to keep homes secure.

Though Duffy left Nest about one year ago, he said the "50 or so Dropcam employees who resigned did so because they felt their ability to build great products being totally crushed."

"There is a lot that I could say about my extreme differences on management style with the current leadership at Nest, who seem to be fetishizing only the most superfluous and negative traits of their mentors. For the sake of the customers and for the talented employees that remain there, I hope they find a way through these struggles," he said.

Nest declined to comment on this story, while Alphabet did not immediately respond to CNBC's request for comment.

Krysia Lenzo

Written By

Krysia Lenzo is a writer at CNBC.