Look Out, Nest: Startups Go After Connected Devices for the Home

Xconomy San Francisco — 

[Corrected 2/11/14, see below] Google’s recent purchase of Nest gave huge validation to the promise of the Internet of Things—a $3.2 billion endorsement. But if a $249 thermostat and $129 smoke and carbon monoxide detector (multiplied by all the bedrooms in your house, plus the kitchen) seem a little too inaccessible, or you’re not looking to give Google even more of your intimate data, just wait. In the years since Apple alum Tony Fadell first started Nest, the technology behind its products has gotten cheaper—and startups are ready to get in the hardware game.

In November 2013, Spark CEO Zach Supalla started a Kickstarter campaign to make smarter lighting. When it failed, he realized that his company should build on the best part of what they had been doing and refocus to give other people the tools to make their own functional, connected devices. “There are all these amazing opportunities for creating smart, connected products,” he says. “It feels like there’s a lot of consumer demand and excitement, but there tend to not be that many new products that achieve the potential they could have.”

So Spark entered Shenzhen hardware accelerator HAXLR8R and set out to create the Spark Core, a small $39 Wi-Fi development board that would let tinkerers connect their own devices to the Internet. In May of 2013, Spark started a new Kickstarter campaign, with the Core as its focus. The company was hoping to raise $10,000. Instead, it brought in $568,000. [Corrected 2/11/14: In a previous version of this story, the preceding paragraphs mistakenly indicated that Spark entered HAXLR8R before its first Kickstarter campaign, not after.]

Spark started shipping the Core to customers around November of last year, and soon, they ran out of stock; potential buyers will have to wait until March before they can receive their own cores. Right now, Spark’s customers are individuals, entrepreneurs, and professional engineers, and Supalla expects that smaller companies looking to create connected devices will be interested in the Core and other products like it.

To demonstrate the utility of its product, Spark has been throwing hackathons in its Minneapolis office to create fun, wifi-enabled devices. The team hacked a Roomba to change it from an automatic device to a remote controlled one (removing some of the utility, but hey, it’s fun), and also managed to build a smart thermostat with the same functionalities of Nest’s for about $70. The company detailed the process on its blog, for other makers to try it out. Spark was able to create the device relatively cheaply because the parts that go into it are constantly falling in price, and they didn’t have to pay for labor. According to Supalla, one of the reasons Nest’s device is so expensive is all of the infrastructure work and investment that went into building the company over several years. “Nest needed to build the cloud platform on which its products would live,” he says. “That took millions of dollars of investment. That’s no longer necessary. We’re trying to provide infrastructure upon which they can build great products.”

The $39 Spark Core Wi-Fi development board.

The $39 Spark Core Wi-Fi development board.

San Francisco-based Birdi is doing the opposite, going straight to creating its own connected smoke and carbon monoxide detector. The idea was born out of Hurricane Sandy. CEO Mark Belinsky was in Williamsburg during the disastrous storm, but his grandmother was stuck in Brighton Beach. She had decided to stay in her home, despite the fact that it was located in the evacuation zone. By the time Belinsky managed to reach her on his bike, her power was out and she was heating her home with her gas stove.

“I was really freaked out,” Belinsky says. “I wanted a solution that would call her on her land line and say there was poison gas in her house. I also wanted someone to call me and say, ‘There’s an issue with Grandma, go help her.’ Looking around, there was no product like that on the market.”

Belinsky had spent the past few years working on encryption and privacy software, but decided to try to tackle this problem at a hackathon in New York with his co-founder, Justin Alvey, an engineer. They took second place and won $1,500, which they used to buy more parts. A couple months later, they founded the company (then called Canary) and applied to incubator Highway 1, which helps start-ups move from prototype to production.

Now, Birdi has built a prototype (pictured above) that can not only warn users that smoke or carbon monoxide levels have risen, but also alert them when a natural disaster like a hurricane is coming, help track air quality levels, call or text with a warning, and call the police or fire department in an emergency. And when battery levels are low, they’ll mail over new ones, and if necessary, direct users to a partner who can help them change them, like a TaskRabbit. “We want to be the repository for safety in your home. We know where you’re located, and can send push notifications to let you know what’s going on,” he says.

Belinsky and Alvey have also been careful to make sure that the device is useful for people without smartphones; if there’s a fire, they want to be sure that a kid home alone would get an accessible warning in the form of a recorded message sent to a home’s landline. “It all goes back to Grandma,” Belinsky says. “It will call the home phone and explain the problem and how to protect yourself.”

Birdi co-founders Mark Belinsky (left) and Justin Alvey (right).

Birdi co-founders Mark Belinsky (left) and Justin Alvey (right).

Birdi is currently working to raise a seed round, and also recently launched an Indiegogo campaign to help fund production. As of Feb. 7, about 36 hours before the end of the campaign, the company was already more than $16,000 over its $50,000 goal. The company expects to ship the Birdi Smart Air Monitor by October. Indiegogo buyers could order it for $99, but once it’s on the market it will sell for $120, slightly less than the Nest device.

Though the comparison is an obvious one, the biggest hurdle to bringing the Birdi device to market wasn’t the looming shadow of Nest, Belinsky says. It was just that “hardware is really, really hard.” But with the rise of crowdfunding fueling successful devices like the Pebble watch, and the price of components constantly falling, it will be easier and easier for companies like Birdi and Spark to bring devices to market.

“One of the biggest problems in the industry is that the products have always sucked,” Supalla says. “Most of the time you come out with products that are pretty shallow in terms of what they can do. They have terrible interfaces. They’re often expensive and require installation and customization by a contractor. I think to some extent Nest’s largest innovation in the space just making a product that doesn’t suck.”