Samsung Buys Kickstarter-Funded Internet of Things Startup For $200MM

jfruh writes: In September of 2012, SmartThings took to Kickstarter with the promise of delivering an "Internet of things" package to backers, including a hub device that would control various home gadgets via the user's smartphone. They aimed to raise $250,000. They got $1.2 million. And now they've been bought by Samsung for a reported $200 million, as the South Korean electronics market tries to get a foothold into this emerging market.

Comments

Re:$200MM

[fisted]

It's obviously $200 worth of M&M's

I'm interested in this sort of thing for my house

[rthille]

But I'm sure as hell not going to run my door locks over wireless with some consumer product that's produced as cheaply as can be for the mass market.

On the other hand, I know that roll-it-yourself security is almost always broken.

So, I deal with having to reach into my pocket to get my keys, and turn on lights with a switch rather than automatically.

Somehow I survive.

I'm going to trademark the Next Big Thing

[BarbaraHudson]

The Internet of People!

After all, if Cloud Computing is just Client/Server with a new shiny, and the Internet of Things is just like the old "stuff connected via the internet", maybe someone will give ME a couple of hundred million.

Hesitant about Kickstarter and hardware

[Anonymous Coward]

Between this and the Oculus I just really don't feel like I feel sound in Kickstarting any sort of hardware these days. The reason I kickstart a project is so someone can get their idea to market without having to sell out to a large corporation. Certainly not to fund the R&D phase so a big multinational can waltz in and scoop up a finished product.

Re:Hesitant about Kickstarter and hardware

[Solandri]

This is the problem I have with the current crowdfunding options like Kickstarter. All the risks of providing venture capital, none of the benefits. They're being pitched as if you're pre-buying a product the company will make once it receives enough funding. But really what you're doing is providing them venture capital. Normally when you provide venture capital, you get partial ownership of the company. (Not all kickstarters work this way - e.g. artists who agree to draw pictures for funding. But as you point out, the companies pitching hardware do.)

I'd really like to see a crowdfunding site which takes venture capital out of the realm of multi-millionaires, and puts it within reach of the common person. People complain that the rich just keep getting richer. Well, judiciously investing venture capital is one of the ways they do that. The nature of the business is that startup companies aren't gonna waste their time on you waving around your $20 investment, while someone with a $2 million bankroll will be wined and dined. Crowdfunding could really change this IMHO. Startups may not care about your $20 investment, but a hundred thousand people wanting to invest $20 each and they'll be interested. At least it'll be a helluva lot more productive than getting low- and middle-income people to play the lottery. (The low- to middle-income folks currently unable to provide venture capital are frequently the customers of the products it produces. So they should on average pick good product ideas, making it positive sum, whereas lotteries are zero or negative sum.)

Re:Hesitant about Kickstarter and hardware

[dbc]

Who modded this insightful? Geez.. here are some clues:

#1: Sorry, when you risk what amounts to lunch money, that is not the same as venture capital risk. Nobody cares about lunch money. Somebody still cares about the $2 million round A money going down the toilet. VC's are judged on performance across a portfolio.

#2: Kickstarter isn't venture capital. You are promised a product, not a piece of the company. Get over it.

#3: Startups don't wine and dine anybody. They shamelessly beg with their hand out. VC's buy the would-be founders cheap lunch, literally, while they listen to the pitch, if you get that far.

#4: You have no idea what the rules and regulations are around "qualified investors". Legally, having more than 30 or so investors is a nightmare that no start-up can manage and still get work done. No startup can afford enough lawyers to do the SEC work needed to have more than a few "qualified investors".

#5: Kickstarter money is not the same as VC money because VC money comes with advice and connections. A VC needs to bring more than "dumb money" to be useful to a startup. Your $20 is worse that VC "dumb money". It is clueless money with wildly distorted expectations.

Kickstarter has changed the VC model, but not the way you think. Kickstarter is the new test market. It is how you show the VCs that your idea has traction, and to get the idea out in front of people to get it noticed. A successful kickstarter is the way you get somebody on Sandhill Road to buy you a sandwich while you pitch.

So the fact that you are disappointed that you didn't get a piece of the company for your lunch money that you spent shows that you really, really, don't undertand Kickstarter's place in the world. Your $20 is just you at the mall taking the "Pepsi Challenge". Your $20 is a market research data point. Which I, personally, find very motivational and empowering. Kickstarter is filled with ideas that I find exciting, and that I would really like to see happen. By pitching in $20, it is a way to show the people with enough money to make it really happen that it is something that I would like to see happen. That is your role as a Kickstarter patron. You are cheering for your team. Anything else you get out of it (like a product delivered only a few months late) is entertainment.

You want to be a VC? Do it the old fasioned way. Launch a successful startup, then take a few million of your own dollars and several million more dollars from some insurance companies, and use the expertise and contacts that you aquired doing your own start-up and help other people do the same thing. Oh... you haven't done a successful start up of your own yet? Luckily, you can still *drive* on Sand Hill Road, even if no one will give you an office there.

Actually, every VC I have ever met (and I've met a lot) has been very friendly, listens very well, and is extremely engaged in learning. But... they don't waste any time on the clueless. The best way to get a VC's interest and hold it is to teach them something they didn't know before. You need to learn the realities of the VC business before you start thinking you are ready to participate.

Re:$200MM

[Intrepid imaginaut]

My balls it is. The only place I've ever seen it as such is on slashdot, and here twice.