The Jetsons Fallacy – Part II

Here is Part II of “The Jestons Fallacy” by Shaun Springer, founder of our smart home portfolio company Astro. In this piece, Shaun examines the past year in smart home innovation, disruption, acquisitions (Nest) and the effects of crowdfunding on widespread consumer adoption (or lack thereof). For those interested, Part I can be found here.

I remember sitting at my desk in early January 2014, when the news of Nest acquisition broke. My former associates from Crestron were asking me if the $3.2bn price tag was justified, and even began to speculate about Google’s future plans for the brand.

In a short amount of time, Nest was able to disrupt an archaic thermostat industry. It provided obvious and easy-to-understand value propositions like wireless control, energy-savings, and scheduling. More importantly, it was easier to use than your classic Honeywell thermostat, and didn’t introduce as much complexity as competing devices.

For twenty years the home automation space has been dominated by massive corporations with complex products, and little-to-no innovation. Nest played by a different set of rules; they lowered the barriers to entry for consumers by creating an elegant solution and providing excellent customer support.

Nest built a brand that has immeasurable value, but even with an incredible brand, their products mostly solve problems for the few tech savvy homeowners that have access to expensive HVAC systems. For a variety of reasons, like complex installations, their smart home products have yet to penetrate the mass market.

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Nest Thermostat’s Configuration Utility – While Nest is exceptionally good at making a complex problem look simple, the fact still remains that thermostats are inherently complicated.

Warning: May cause dizziness

Whereas Nest has seen some success with their simplified approach, the smart home space is littered with less successful companies that have catered exclusively to the savvy technophile. These products offer a bevy of features and tech-specs with largely unnecessary integrations to attract the innovators and early adopters. The high tech terms and confusing instructions read like the list of side-effects in a pharmaceutical ad, deterring mass market adoption.

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Photo Credit: Wikipedia

In retrospect it’s easy to see how we got here. These companies are looking to crowdfunding platforms like Kickstarter and Indiegogo to validate their business models and gain traction with early adopters. These are the kinds of communities that flock towards innovative, exciting technologies. To build hype and excitement around their products, products promise complex features that attract these early customers. It’s this emphasis on complexity that fails to translate this interest into widespread adoption.

The mass market consumer wants products that are elegant, simple and user friendly. A recent Savant home automation survey illustrates this point. They found that 69% of those polled were most concerned with ease of use when purchasing a new technology.
Additional research performed by NPD Group found that 78% of Americans are aware of smart-home products, but only 12% report owning one. This shows pretty clearly that the current smart home solutions are missing the mark — the general public does not see these products as easy to use or convenient as they’d hope.

Until companies begin to address the mass-market consumer’s needs, the home automation industry will remain little more than a blip on their radar.

In the next and final installation in this series, I will discuss the key changes that we see coming to the smart home industry over the next ten years, and how Astro will play a key role in shaping that future. Hint: It’s not the Jetsons era yet.