SmartThings - Internet of Things - wireless startups - Fierce 15 2014

Fierce 15

Where it's based: Washington, D.C.
When it was founded: 2012
Website: www.smartthings.com

Why it's Fierce: SmartThings, the consumer brand of Physical Graph Corp., is working to become the app store for the Internet of Things age--and it has made some dramatic progress in its efforts. Backed by around 60 employees and $15.5 million in venture funding from the likes of Greylock Partners and Highland Capital, SmartThings so far has sold tens of thousands of its Hub smart home product. But more importantly, it counts 5,000 developers building apps and devices for its platform, more than 100 different certified device types in its catalog--from remote door locks to motion sensors--and hundreds of "use cases" in its app store.

But what exactly does that mean? It means that--thanks to SmartThings' IoT platform--a developer can create an application (or "use case" in SmartThings parlance) that makes a connected speaker start playing your favorite song when you get home from work. Or a developer could create a use case that would make your Internet-connected lighting system flash every time you score a new Twitter follower. Or a developer can create a use case that sends your phone an alert when the mail arrives (thanks to a sensor in the mailbox).

"There's all these sort of magic scenarios," said Alex Hawkinson, founder and CEO of SmartThings. "We try to create a wonderful connection between the consumer and their home."

Hawkinson said SmartThings is his effort to ride the Internet of Things trend and Physical Graph Corp. will likely stay in the home automation market for the foreseeable future, but could potentially expand into other markets too.

"This is really the third wave of the Internet," Hawkinson said, explaining that the first wave involved search and the knowledge graph and the second wave involved social media and the social graph. With physical things like lights and door locks connecting to the Internet, "there needs to be a physical graph."

Hawkinson said SmartThings makes money through the sale of its own home automation products, but is rapidly transitioning to platform strategy where it takes a cut of the revenues from the connected services and devices that are sold by third parties through its store. And, Hawkinson said, the company is currently gearing up for a third revenue stream thanks to its expansion into partner licensing: SmartThings has already signed a deal with Cross Country Home Services, which sells TotalProtect home warranty plans, where CCHS will sell a SmartThings' Hub to its customers that can not only monitor home functions but can also call for repairs if something breaks while still under warranty. "It will change the way services are identified and purchased in the home," Hawkinson said, adding that CCHS is just the first partner in SmartThings' partner licensing pipeline. "There's going to be others," he said.

What's next: When asked what is next for SmartThings, Hawkinson laughed: "A lot," he said.

Hawkinson said that SmartThings plans to add new devices and device types to its catalog as well as new use cases to its store, and will also update its Hub platform by the end of the year.

Further, he said that in the third quarter the company plans to begin selling premium services like installation and warranty offerings.

"It keeps getting better because there's an ecosystem of people creating great things for it," Hawkinson said of the company's platform.

And what of Apple's HomeKit plans or AT&T's Digital Life services, both of which are scheduled to open to third-party developers in the coming months? "We see it as very complementary to what we're doing," Hawkinson said. "It opens up more consumer awareness. … In general we feel really good about it all."

SmartThings - Internet of Things - wireless startups - Fierce 15 2014
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