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Why did SmartThings sell to Samsung?

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Making every home a smart home

It was just two years ago that home-automation company SmartThings began life as a Kickstarter project. Yesterday, Samsung scooped it up for a reported $200 million — a sign of how valuable big companies believe the connected-device market will become. But how will SmartThings integrate with the rest Samsung? And why should we all care about connecting our appliances to the internet, anyway?

We spoke to Alex Hawkinson, SmartThings' co-founder and CEO, and David Eun, an executive vice president at Samsung. The interview has been edited and condensed.

The Verge: You guys were under two years old and seemed to be growing quickly. So why sell?

Hawkinson: Our vision from the very beginning has been to make every home a smart home. When I was starting out I knew the right approach was being easy, but being a fully open platform — and that's been rewarded really well. With the thousands of partnership that were building on our platform, we had a chance a couple of months ago to meet David and his team. It just became clear to me that this was a totally shared vision. We had chance to continue to run on the independent path with a fully open model. But we could leverage the global scale of Samsung and reach a much bigger number of customers more quickly. It's all about scale.

Making every home a smart home

So if I'm a SmartThings customer, what do I need to know? Are you staying fully independent or might some things be changing?

Hawkinson: SmartThings is SmartThings. A really important part of this to me is that we are going to remain independent. Our brand, our approach, our business model, our product model, all of those things are going to remain independent. Practically speaking, nothing changes, except for the better. We were the leading startup in the space, and folks should have no doubts that we are here for the long haul. Samsung is the largest consumer electronics platform on the planet. And we're so excited about what we can do together.

Eun: One of the things we're really committed to is making sure Alex and his team remain independent. We feel like all of our internet-of-things boats will rise with the SmartThings tide. The other thing, as you can imagine, is we're excited about exploring specific opportunities to partner with them.

Let's talk about that. Samsung has some existing "smart" appliances. What plans does SmartThings have for those?

Hawkinson: We haven't announced the roadmap, and you'll be on the shortlist when we start to disclose things. But you can imagine some of the obvious ways. For us there's this virtuous cycle that happens around the platform where the more consumers we have, the more developers are excited to build for the platform. We have that virtuous cycle happening now. As we leverage Samsung's distribution channels, we have a real chance to make it an even more rich and rewarding platform.


You're going to be part of Samsung's Open Innovation Center, which I've understood to be more of an incubator. So why join with them?

"A unique platform for SmartThings"

Eun: OIC is something I launched a year and a half ago. Basically, the mission is to drive different software and services innovations for the company. And our primary focus is with startups. But we have different groups; one is the acquisitions group, which is why we're here with SmartThings. We partner with startups, we invest in startups, and we have an accelerator: we start and incubate our own startups. We are independent from any single division of Samsung, yet we work with all of them. We think that's a unique platform for SmartThings. To be at a healthy arm's length from any single division, so they continue to run independently, yet have access to effectively all of Samsung. That's what OIC does as a mission, which is why at that level it's a great fit with SmartThings. All we do is work with startups and entrepreneurs.

So, one of these startups is working on a piece of hardware that has some connected-device potential. That's when Alex swoops in to tell them about SmartThings?

Eun: That would ultimately be up to Alex.

Alex, it can be easy getting lost inside a big company. How are you going to avoid that?

Eun: They don't have to get lost, because they're not looking to integrate. They're running independently.

"Elegant solutions to universal problems"

All right, let's look ahead a bit. Say I'm not an early adopter. How are you guys making the case that connected devices are something I should bring into my home?

Hawkinson: Every month, we see double-digit acceleration in our business. We're still in the early stages, of course, but we've reached this point where all these universal human needs can be addressed. And it's really not one-size-fits all. If you had a flood in your basement, like the one i had that caused me to start the company, we have a moisture kit. If you're interested in Jetsons-style next-generation home automation, we have the most advanced and interesting applications. If you have a grandmother living at home and you want independent aging and elder-care applications, that's happening on the platform. There's enough critical mass, and there are elegant solutions to enough universal problems, that the primary issue is just awareness in consumers. It's very inexpensive to get these profound benefits. When you put that together with Samsung's global muscle, we have the exposure to help that happen right now.