I interviewedDan Lieberman from SmartThings, a 3-year-old startup. Dan Lieberman has a very diverse background and expertise in technology development and has worked at RealNetworks, Cisco, frog design (to new a few) before joining SmartThings about 3 years back. Dan joined SmartThings as strategy director and technology architect but has recently moved to research and standards.
SmartThings is a platform solution for smart (or connected or automated) homes; homes which are equipped with lighting, heating, access control and electronic devices which are interactive and can be controlled remotely with a phone or computer. Smart homes typical consists of a central unit called the Hub which communicates and controls the various sensors and actuators such as motion detectors, temperature sensors, electrical switches, security cameras, light bulbs distributed all over the house.
Smart home is a relatively new market, which has sprung up in the last five years. However, even in this short time frame, a host of established companies such as GE, Philips, Belkin and small companies have entered the smart home space with smart devices (sensors and actuators which go into homes) offering, which has made this market highly fragmented and competitive. With so many different sensors and actuators from different companies, there is a lack of interoperability between different devices, which leads to very poor user experience for smart homeowners. As a result Smart home technology is still very nascent with limited adoption.
SmartThings understood this key aspect of the market from the beginning and positioned itself as a platform solution. SmartThings developed their own hub, the central device, which communicates and controls all the smart devices in the homes and interacts with the cloud platform and a smartphone app. The hub looks like a typical Wi-Fi router and plugs into the existing routers through an Ethernet cable. The hub supports ZigBee and Z-Wave, the two commonly used communication standards for smart devices and can communicate and control majority of smart devices. The hub connects to a secure cloud solution through the existing Internet infrastructure and the cloud and the smartphone can be used to control the smart devices.
The key motivation for users to transform their house into a smart home is use cases; the smart home should accomplish something their current home setup does not. For example, a smart home with security cameras, motion sensors, automated locks and alarms is a great sell as a secure home. SmartThings focused on couple of such use cases and sold starter kits, which consisted of the hub (with complementary cloud solution and smartphone app) and a few (5-7) sensors to enable different use cases. Additionally, they understood that for their platform to be successful, they needed a developer base, which would develop applications for their platform. This was essentially the app store/play store model, interesting applications on SmartThings platform would lead to more customers buying and locking down to their platform.
SmartThings developed their technology with software/application developers as their central focus. The developer applications and all the intelligence was pushed into the cloud and the hub just served as a gateway to pass commands between the cloud and the smart devices. SmartThings developed an abstracted API, which enabled the developers to write applications without the need to worry about the end devices. For example, if a developer wanted to control light bulb, he/she can just call it LightBulb1 and the platform would associate it with the available light bulb irrespective of the manufacturer and the communicate protocol used by the smart light bulb. This ease of application development attracted the developer community.
SmartThings acquired it first set of customers (and investors) i.e. both home users and developers through a Kickstarter project. Their Kickstarter campaign was hugely successful; in fact it is among the top funded projects on Kickstarter. As it’s common with all Kickstarter projects, product delivery was delayed. During this time, SmartThings used customer forums, website and email to give regular updates, receive feedback and keep user in the loop. This created a strong customer relationship and a valued and trusted user community. SmartThings primarily focused on organic marketing and gave traditional online tools (facebook, twitter) a miss for most part. They invest a lot of resources on customer engagement and awareness using video series, content marketing on blogs, articles and posts to promote SmartThings and smart devices in general. They hired a top PR firm and ensured that every positive article on smart homes had a SmartThings reference which was easy given their Kickstarter popularity.