In the elusive dream of the automated home, visitors ring a doorbell, and it buzzes the homeowner’s mobile phone. Lawn sprinklers take rainy days off. At bedtime, lights turn off by themselves, and the temperature drops to save energy. In the morning, families awake to the smell of freshly brewed coffee.
Microsoft (MSFT) and Cisco Systems (CSCO), as well as smaller companies such as Xanboo and Life|ware, have for years touted the benefits of this seemingly inevitable future and tried to position their products at the center of the connected home. As yet, they haven’t given consumers a reason to pay more just to avoid walking across a room to shut off a light. And, save coffee machines, they haven’t devised systems simple enough for the technically challenged.
SmartThings, based in Reston, Va., aims to finally bring the future into 21st century homes. It’s selling kits with moisture sensors, power outlets, and motion detectors that turn previously dumb appliances such as fans and garage door openers into Internet-connected devices that can be controlled using the company’s smartphone apps. SmartThings is also trying to create the dominant platform for such devices, providing free open-source software tools to thousands of developers and hackers, in the hope they’ll find additional uses that will appeal to consumers. The goal is to connect appliances to each other, to the Web, and to their owners. “All of these Jetsons scenarios that people have envisioned over the years are finally possible,” says Alex Hawkinson, 40, the company’s chief executive officer.
According to home-automation companies’ various visions over the years, devices would be controlled through cable boxes, Windows PCs, or Wi-Fi routers. But many of these systems were complicated and required either advanced coding skills or third-party installers to set them up. “It’s always the market that’s ready to happen,” says Michael Wolf of consulting firm NextMarket Insights. “It’s never quite gotten to the point where a mass amount of customers have embraced it.”
SmartThings raised $1.2 million on Kickstarter, the crowdfunding site, last summer. The growing community of hardware hackers, who have come up with many DIY home-automation projects in the past, was drawn to the idea of an open software platform that could be used to build a new class of connected appliances. In December the 30-employee company announced it had raised $3 million in seed funding from venture capital firm First Round Capital and prominent angel investors including Facebook (FB)-backer Yuri Milner and actor Ashton Kutcher.
The idea for SmartThings first came to Hawkinson in late 2010 on a visit to his family’s vacation home in Colorado. He arrived to find the electricity was out and the water pipes had burst. Hawkinson, a former executive for online marketing firm ReachLocal who has degrees in computer science and neuroscience from Carnegie Mellon University, wondered what it would take to have the house alert him of trouble before it becomes dire. By the next year, he was building prototypes of Internet-connected power outlets and moisture sensors.
The company still faces a chicken-and-egg problem. It can’t get developers and appliance makers to embrace the SmartThings standards without a critical mass of consumers using devices that take advantage of home-networking technology. And consumers won’t get on board unless cheap, simple, and appealing devices such as Internet-connected security cameras, alarm systems, and thermostats are already available.
To seed the market, the company recently started shipping kits to its Kickstarter contributors. The kits let users connect their house lights to their home network so they can control them with their phone. It also comes with a motion detector that doubles as a burglar alarm and a moisture sensor that can alert an owner when the basement floods. All the equipment is controllable with SmartThings mobile apps. The $299 kits include a small white piece of hardware, the SmartThings hub, that connects to the customer’s wireless router and serves as the radio base station for all of these devices. The company plans to make money selling the kits on its website and, down the road, will take a fee from companies that sell devices using SmartThings software.
The high price for consumers is one reason some analysts question the viability of home-automation systems. “Smart-home products often compete with not as smart, but much cheaper, alternatives,” says Sarah Rotman Epps, an analyst at Forrester Research (FORR). “Do I really need a smarter sprinkler if I can buy a functional one with an inexpensive timer on it?”
SmartThings is also entering a market in which one company, thermostat maker Nest Labs, co-founded by former Apple (AAPL) executive Tony Fadell, has recently garnered considerable attention. The stylish Nest Learning Thermostat, which adapts to its owners’ daily routines, is one of the best-selling accessories in Apple stores despite its $250 price tag. SmartThings’ approach—bringing Internet smarts into any device in the home—contrasts sharply with Nest’s strategy of targeting a single product. “When you talk about a smart home or a connected network, people don’t know what they’re getting,” says Matt Rogers, a Nest co-founder. “They want great products that are discreet and easy to understand that will change their lives.”
SmartThings hopes its community of hackers can help deliver that kind of life-changing experience. It recently ran a hack day in Washington, D.C., inviting developers to brainstorm ideas and build prototypes. It’s planning similar events in other cities in coming weeks.
Hawkinson has heard from one developer building an add-on tool that uses SmartThings’ software to connect the FitBit wearable fitness monitor with other electronic devices. The tool lets the wearer program the Fitbit to limit his TV time if he doesn’t meet his fitness goals. Thousands of such scenarios are possible if SmartThings takes off, Hawkinson says. “These are fairly magical experiences to consumers.”
The bottom line: With $3 million in seed funding, SmartThings wants to popularize home automation, a technology that so far has largely failed to catch on.
