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In 2013, during episode nine in the fifth season of entrepreneurial reality TV series Shark Tank (a show like Dragon’s Den for our UK readers), James Siminoff pitched his smart doorbell invention ‘DoorBot’ to the show’s panel of experienced investors.
During the pitch, Siminoff sought a $700,000 investment for a 10% stake in DoorBot, valuing the company at $7 million. The idea was wholly rejected and Siminoff left empty handed to pursue his ambitions alone. Five years on and Siminoff’s firm, now called Ring, was acquired by Amazon this week for an estimated $1 billion or more.
“Instead of being worth $7 million, this company could be worth $80-90 million, but i just don’t see that progression,” said “shark” Mark Cuban, owner of the National Basketball Association’s Dallas Mavericks, co-owner of 2929 Entertainment and chairman of AXS TV, as he declined the investment.
This is not an article about how badly the Sharks assessed this opportunity, instead it underlines the dynamic rapidly evolving nature of the Internet of Things space. Even Robert Herjavec, CEO of global IT security firm Herjavec Group, another investor on the show, declined Siminoff by saying, “it is not an internet play, it’s a consumer device,” as if from a time when the two were separate in the smart home.
The DoorBot was a video enabled device, mounted on or around a home’s front door instead of a doorbell. It allowed users to see and speak to visitors through a smartphone or tablet from anywhere with WiFi access. It meant users could vet visitors before revealing if they were home, “like caller ID for your front door,” said Siminoff. Equally you could see and speak to someone at your door while at work or on holiday.
A month after appearing on the show, the firm raised $1 million through a seen round. Series A over 2014-15 brought in $10.5 million and Series B added $28 million by August 2015. In 2016 and 2017, series C and D funding rounds raised $61.2 million and $109 million respectively – taking total funding to $209.2 million. The firm even made an acquisition of its own, a startup named Mr. Beams that makes WiFi-enabled LED lighting with motion-sensing capabilities.
Today, under the name Ring, the firm has developed and moved on from the DoorBot. It markets four versions of its Video Doorbell – 1, 2, Pro, and Elite – offering a range of features and designs. They also sell a range of security cameras and accessories such as solar panels to power remote cameras. No wonder “the world’s most popular video doorbell,” caught the attention of the world’s biggest companies.
The final details of this week’s acquisition have not yet been announced but Reuters report the deal to be worth “more than $1 billion.”
Ring already works with Alexa through Amazon’s Echo line of smart speakers, and it should fit seamlessly into Amazon’s range of smart home devices connected through a central hub. It puts Amazon in prime position to dominate the smart doorbell market. After their acquisition of low-cost security camera maker Blink in December 2017 and its own creation Cloud Cam, the Ring acquisition also give Amazon wide range of cameras to fill out their surveillance offering.
Amazon is well on its way to creating its own line of smart products to dominate the smart home, each working through its Alexa powered home hub: Echo. We probably shouldn’t expect the firm to stop third party integration, especially for the high-end smart home devices on the market. However, we also shouldn’t be surprised when the easy and affordable way for people to create a functioning smart home is entirely through Amazon products.
Each successful smart home device that aligns with Echo will serve to strengthen the product’s popularity in the household. That, in turn, will support sales of other Echo aligned products. This cycle feeds into Amazon’s true business model, creating a one-stop-shopping-portal that makes purchasing anything and everything, easier and more automatic, than ever before or anywhere else.