Is your Smart Home product being shutdown? Just buy the company!

With Smart Home products connecting to the cloud, if a company decides to end support for a product or is required to close due to final troubles, there are few courses of action. The easiest one is to give up, and switch to another brand, or promise yourself you’ll never use one of those “Internet of Shit” products. The second one is quite more time-consuming and you’d have to work with the community to reverse-engineering the product and give it a second life, but obviously, this does not solve the supply issue since the product will not be manufactured anymore. Today, I learn about a third one: simply gather a small group of users, and buy the company!

That’s basically the story of Smartlabs’ Insteon Smart Home products. Smartlabs was in bankruptcy proceedings. its cloud turned off, and products not working since April 14. Some members of Home Assistant community worked on Insteon integration with the open-source home automation framework to help people keep on using their powerline nodes, USB adapters, and hubs. Companies in bankruptcy will usually try to find buyers, but in this case, it appears a small group of (well-off) existing Insteon users decided to gather the funds to buy what’s left of the company, with many of the services already restored.

Here’s the announcement on Insteon website:

We are a small group of passionate Insteon users that have successfully acquired Insteon. Like many of you, our homes are powered by Insteon’s amazing dual-mesh technology and highly configurable products.

Most of you discovered that the Insteon Hubs began coming back online. Our first priority was getting the hubs online immediately before we had access to this site, the email service provider, social accounts, etc. Every day more customers were giving up hope so it was critical to get that restored as soon as possible. We are aware not all functions are back online but we are actively working on it. We hope you understand this urgency and appreciate your patience.

Going forward we are committed to responsibly re-building the Insteon business. Our commitment to you, as part of the Insteon family, is to listen, communicate and be as transparent as possible in everything we do.

Please stay tuned for updates here as well as on twitter, facebook, reddit and elsewhere. If you are an Insteon Hub account holder, look for an email in the coming days.

Thank you all for your patience. We look forward to sharing this new journey with you.

Best regards,
Ken Fairbanks
CEO, Insteon Technologies

According to his LinkedIn profile, the new CEO is a member of an investment committee that manages a family of seed-stage venture capital funds that provides startup funding for promising new Southern California ventures”, so it might have helped with getting the funds, although I’m not sure that specific committee was involved in the purchase of Insteon. One way Insteon will become a self-sustainable business is through a yearly subscription fee ($39.95), and indeed I’ve seen many products that fail over time to the lack of recurring revenues. Some IoT and Smart Home companies expect new hardware sales will sustain the business, but as the company grows maintaining cloud architecture becomes unsustainable. The best might be to offer free and paid tiers for more advanced features, as some users may not be happy with having to suddenly pay a yearly fee.

Via MisterTechBlog

Jean-Luc started CNX Software in 2010 as a part-time endeavor, before quitting his job as a software engineering manager, and starting to write daily news, and reviews full time later in 2011.