It's been a tough week in the connected home business, as evidence of a potential shakeout has started to rear its head. Wink is potentially up for sale, while smart lighting/security company Leeo just had a big round of layoffs.
If you don't already know (but I think you do by now), hardware is hard folks. It can eat the best entrepreneurs alive, and in new categories that require market education, it can be doubly treacherous.
I was talking Phil Dumas this week, CEO of Unikey, a company which, perhaps not coincidentally, purposefully avoided becoming a hardware company with its software licensing model for smart lock/digital key technology (they're the company powering the Kevo smart lock). Since Phil and I are both old timers that remember the first dot-com bust, we were doing our best Statler and Waldorf impressions and talking about how we're seeing some similar signs among hardware startups.
He told me "we're in the middle of IoT 1.0.". He went on to explain that we're in a period where many of the companies that will fail are making standalone hardware products, many of which don't work together. IoT 2.0 is where, he felt, companies would eventually figure out how to make all of these products work together.
I agree. I do think the foundations for IoT 2.0 are being created now in HomeKit, Alljoyn, Weave, Bluetooth Mesh, SigFox and more but, like Phil, I think it's going to take some time to figure out. The only question is how long and which companies will survive the battle.
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Onto this week's news and analysis...
I hate to be the bearer of bad news, but I think we're in for a little turbulence in the smart home market. Not because the market isn't growing. It is. It's just not growing in a way that can make every investor, startup and big tech company happy. This isn't completely unexpected. Markets - especially new consumer technology markets as they are searching for defining use-cases, form factors and hero products - take time to figure themselves out. The smart home industry is trying to figure itself out. Read More
While I, like many, love the idea of Quirky, the analyst in me always thought it's an extremely expensive business they must be running. After all, hardware creation and manufacturing is hard, let alone trying to develop an entirely new platform in the smart home space in Wink where they're fighting with the likes of Google and Apple. So when I saw in this piece in Fortune that said the company is considering changing "its relationship" with Wink, it made me think they would probably would take a buyer or at least a strategic partner who can fund the entity going forward. Read More
With both WWDC and the Nest press event in the rear view mirror, I'd have to say the news out of each event were on the tame side of the speculometer. For HomeKit, it's become pretty apparent that Apple's slow and very soft launch is essentially a form of non-delay delay. There was no new Apple TV, and the actual HomeKit products in market today you can count on one hand. Nest, on the other hand, had something new to talk about to offer in their new security camera, and they also offered up a refreshed Nest thermostat and the Nest Protect, but I hardly think it was worth a standalone press event. Read More
VentureBeat had a scoop this week about smart night light/security company Leeo laying off a big chunk of employees. The original piece had layoffs at half, but in confirming the layoffs Leeo put the number at 30%. It's always shocking to see these types of layoffs so soon after a funding round - the company raised $37 million nine months ago - but it probably is a sign of both over-hiring and tepid demand for a company that has had to pull double-duty of both creating end-user awareness for its brand as well as educating potential customers about a fairly new approach to home security alerting. Read More
Arrayent, a smart home and IoT platform company with clients such as Whirlpool, has announced a new CEO. The timing was a bit strange, at least for me, since I had just talked to Dyer last week on the Smart Home Show and there was no mention of him stepping down as CEO. Not that they need to tell me anything, but it's weird that Dyer's been out talking to myself and Farstuff folks right before this dropped. Read More