Netatmo finds smart homes niche with French style
Wireless Technologies

Netatmo finds smart homes niche with French style

Matthew Broadway, COO of smart homes equipment startup Netatmo, isn’t backwards in coming forwards. In the course of a rapid-fire 30 minutes on the phone we cover lots of ground from the history and future of the company, to the competition, to manufacturing, design and Broadway’s past jobs that include HP, Garmin and a 10-year stint at British product engineering and innovation icon Dyson where he recalls a company in the throes of change.

“What we knew about algorithms, doing embedded software and so on was fairly limited,” he says. “What they didn’t know about airflow and fluid dynamics wasn’t worth knowing but on the software side they had to go out and find talent at any cost.”

Of Sir James Dyson, the publicity-magnet Brexiteer entrepreneur, he says:

“James is not the easiest person in the world to deal with but the company has done a hell of a lot. They struggled though; they had to shift their entire approach.”

A man of conviction, some of Sir James’s confidence and willingness to make public pronouncements might well have rubbed off on Broadway. But why move to Netatmo after a career at larger outfits?

“Good career planning is all about timing,” he says and he was “convinced by the technology” at this five-year-old, 140-person, Paris-headquartered maker of digital security cameras, weather stations, air monitors and thermostats. But what of the opposition, made up of a Who’s Who of tech titans, each of them desperate to own the smart home?

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Broadway says “there’s no way we compete with Apple”, stressing a partnering model that sees full HomeKit integration and 70 per cent of Netatmo users accessing products from iOS devices.

What about Google which signalled its intent by buying Nest for $3.2bn a few years ago?

“Google Labs really aren’t the competition. The clever game is not getting into an investment war with Google because we can’t win. If they want to spend a shit lot of money creating the category that’s great. We think our products are better; we have far more innovative products than Nest.”

Broadway says there’s a massive direct-to-consumer retrofit market for thermostats and there will continue to be for a decade.

“But more and more will come already connected,” he adds. “I predict that in four to five years it will be impossible to buy a boiler with a smart thermostat.”

 

Roads not taken

Broadway says that in another world Nest could have been an even closer partner after Netatmo CEO and co-founder Fred Potter saw an opportunity in the smart home.

“Fred had a conversation with them that didn’t go anywhere so he built his own product,” says Broadway.

That twist of fate also has echoes of Dyson where Sir James had “tried to sell the concept of a cyclonic cleaner to just about every vacuum cleaner” company before going it alone.

‘Internet of Things’ is “a terrible term … nobody knows what it means outside the industry”, Broadway says with characteristic certainty. But the smart domestic appliances market is for real and smaller companies can prosper if product and market focus are precisely calibrated, he believes.

An example is the domestic weather station: a category, says Broadway, that occupies “a big niche, but small enough for the big guys to ignore”.

In my ignorance I’d thought that “weather enthusiasts” might be niche within a niche but Broadway says that’s not the case. In some markets weather stations are as common as kettles and they appeal to gardeners and owners of irrigation systems as well as hobbyists – Germany is a huge market. And by meshing together a network of these personal stations, weather forecasters will want to purchase data because they provide a more precise indicator of local weather than the big industrial stations can offer.

weather-station-devices-print 

Retail therapy

Netatmo’s modus operandi is to move fast but not so fast as to foster gimcrack products. Broadway says it takes about two years to take a product from idea to market and “anyone who does it faster is taking a hell of a risk … Credible retailers are wise to that and have more sense than to get involved.” That’s an attitude that has helped Netatmo get retailers like John Lewis, Maplin, Amazon and PC World on board.

Just as annoying as rubbishy products might be the hoopla over consumer IoT (that phrase again) devices based on daft ideas. (This is partly the media’s fault too.)

“That annoys me about CES,” Broadway says. “It’s increasingly difficult to get people to talk while silly ideas get column inches.”

Netatmo has raised almost $39m in funding but Broadway does not expect a big departure from the current focus even if building infrastructure holds intriguing possibilities.

Striking product design has already been ticked off thanks to a relationship with Philippe Starck.

“We do a lot internally and we work a lot with Starck and the Paris design elite,” Broadway says. “It’s got to be something [consumers are] happy to have in their homes. It has to pass the ‘wife test’ - will your wife let you put it in the home?”

So in this sense Netatmo is a bit like Nest?

“Everyone compares us to Nest but I personally compare it to Dyson or to Garmin.”

 

Standard behaviour

There are so many efforts to create standards in smart homes and the wider Internet of Things but Broadway is confident that it’s an area that’s shrinking down with Apple’s HomeKit and Amazon’s Alexa core. “Standards are more use than they are a pain,” he says. “Standardisation is a good thing and has always been a good thing… markets move far better if everyone is putting their efforts into them.”

Security remains a concern so Netatmo has gone in a different direction to many with local storage rather than using the cloud as a hub. That adds to the bill of materials but keeps down the threat of malware or data theft. Netatmo does send that aforementioned data from weather stations but it’s anonymised and on an opt-in basis.

“We’re totally transparent about this – it’s your data, your content, your images and unlike Nest I don’t want to charge you again.”

Commendably frank, Broadway says that by 2020 it’s “highly likely” Netatmo will be part of another company and if not it will be pursuing an IPO: “We didn’t build it to flip it but if we got an offer that was too good to refuse…”

 

Also read:

Samsung buys into smart homes

Lessons from Nest and Nutanix

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Martin Veitch

Martin Veitch is Editorial Consultant for IDG Connect

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