HomeTech.fm - Episode 250 - Martin Plaehn of Control4

Episode Date: March 22, 2019

On this very special 250th episode of HomeTech: We are joined by Control4’s CEO, Martin Plaehn. As the CEO of one of the largest companies in the professional channel and the only “pure play” publicly traded smart home company, Martin brings a very unique perspective to the show. We discuss Martin’s take on the evolving smart home landscape, Control4’s recent hiring of Charlie Kindel and acquisition of NEEO, the company’s ongoing expansion into new markets and categories, their steadfast commitment to the professional channel, and more. You don’t want to miss this one! That, plus the latest home tech headlines including: SnapAV acquires northeast distributor, MRI. LG partners with JoshAI. IKEA delays shipment of their new smart blinds. Apple’s long-awaited streaming service is almost upon us. And more…

The Home Tech Podcast is supported by you. To find out more, go to hometech.fm support. This is the Home Tech Podcast for Friday, March 22nd from Denver, Colorado. I'm Jason Griffin. And from Sarasota, Florida, I'm Seth Johnson. Jason, welcome back. Thank you. Thank you. And thanks to Cody for jumping in last week. Definitely appreciate that. Cody, he's a great guy. I can count on him in a pinch. Yeah, yeah, absolutely. As in the same day when I think I'm like, oh, yeah, there's a show tonight,

and Jason's in Boston. Boston. Yeah, I had a nice trip out there. It's always good. As listeners probably know, that's where the One Vision headquarters is. And so I periodically go out there and get to spend some time with the team. So I really enjoyed that. And again, thank you, Cody, for jumping in. But I am happy to be back for our 250th episode. So this is kind of a landmark, our Sestercentennial episode, as Google would have us put it. And we've got a great guest on

this show. We have Martin Pleen from the CEO of Control4 lined up. So definitely stay tuned for that. Control4 has been a really, really busy company lately. And so we're going to chat with Martin about all of the things that they've been up to here over the last year or so, and there's been no shortage of activity for them. So definitely look forward to sharing that conversation with our listeners. Yep. And speaking of doing things, Jason, I've been busy. I've been on an acquisition spree of my own. I mean, Control 4 is buying up everybody left and right, so look what I've got here. Not to be outdone. Not to be outdine. What is this?

This is a shiny new... It's an antique. Lowe's Iris hub. Yeah, Generation 1 hub. So, not the second, but the first one. I had to get the first one. Okay. I've got one more thing. I've got one more. This is our little... We've got an unboxing on this week's episode.

Yeah, here's our yaibo, hebo, jiibo? Jiibo. Jiibo. This is my little jiibo. Greg in the chat room says, no one can see what you're doing. Yeah, no, no, it's a radio show. I'm showing Jason.

He can see. We got it. They sent me, since the shirt wasn't going to fit me, that they sent me. I got a USB thing that I'm not plugging into a computer because I'm too paranoid to plug me that they sent me. I got a USB thing that I'm not plugging into a computer because I'm too paranoid to plug USB things into my computer. So what you're telling me is you've started

your IoT museum collection. You are now officially a curator of IoT relics. Yep. Yep, yep, yep. Now, I've got one surprise for you. You've seen those two. I've got one surprise for you. You've seen those two.

I've got one surprise for you. Jason, look at this. Oh, you didn't. Oh, it's a Revolve hub. That is a good one. Hard to find. Harder to find than I thought they would be. So, yeah, I've got to think I'm going to put some shelves up and put these up on the wall or something.

But, yeah, got the IoT Museum starting up here. I've got a Revolve, a Yaibo or Jibo. I guess it's Jibo because it's not Spanish. And an Iris. And my Nero remote. My Nero remote will be going up there shortly. So I've got four things. Starting the collection.

Yeah, yeah. And I'm limiting it to things that are, like, that we started the show. I'm not going back. You know that you and I could go back and find things. I'm not doing that. I'm going to limit it to, you know, what started with the show and kind of things that we've covered. And, like, you know, of course, we've definitely covered Revolve. We've covered these other things.

And I'm limiting it to the time frame that the show's been on because all right there's definitely more out there that's died and i'm not i'm not getting every light bulb every smart light bulb that existed out there for a flash in a pan i'm not i'm not yeah yeah just stupid yeah well that that could be quite the collection yep greg is asking about wink that's enough that's one you may have to uh i'm not sure what's going on with wink it's been done more than once but but I mean, what's his name over there with the black-eyed peas? Must be doing really well with it. Yeah, that's right. I forgot about that.

Yeah, I think his company bought it. Oh, man. You never know what's going to happen. You never know what's going to happen. All right. Well, I want to see pictures. Pictures or it didn't happen. Yeah, right.

That's it. What do you say we jump into some home tech headlines? All right. Let's do it. Snap AV snapped up MRI distribution in the company's third distributor purchase in the past year. MRI was a member of the Powerhouse Alliance and has three branches located all in the Northeast. In a memo to dealers, MRI said it will have SnapAV products available at its branch locations and online in the coming weeks. And for now, your shopping routine will remain unchanged. Well, SnapAV definitely staying

aggressive on this path. That's Volutone out in California and Allnet in the Midwest, and now rounding it out with MRI in the Northeast. So it looks like the Southeast is going to be next, Seth. That's your neck of the woods. So we'll have to see who they've got their eyes on down there. But they are definitely making some big moves. Well, they're already in the southeast. I mean, they're out of Charlotte, North Carolina, I want to say. That's true. So they've already got HQ there.

And I think they had something in the northwest. They had a warehouse out west somewhere, so they may be covered as far as having their product available to dealers. I think one of the biggest things they're going to be able to do with this is if you need a SnapAV mount or a SnapAV product, you can almost get it within a day or two worth of shipping from any of these locations at a very low price, or you can just walk in and of these locations, right? Right. At a very low price.

Or you can just walk in and pick it up at a branch location. So they're going to have a reach that I don't think any other distributor, maybe outside Amazon has in the States here. Right, right. And they definitely are like the Amazon of this little channel of ours. So very interesting. All right, well, moving on here, IKEA is delaying the release of its smart blinds until later in 2019. While it works on improved firmware, the furniture company confirmed to the verge. The smart blinds were originally supposed

to be released last month in Europe and hit US stores April 1. But IKEA is delaying the launch, because it wanted to ship the product with Alexa, Siri, and Google Assistant integrations built in rather than delaying them for a firmware release later this year. Smart move. Yeah. You know, ship something that's sort of fully baked. It sounds like probably the core functionality was there, but they wanted to, well, I guess I say that and I'll back up a bit. We've talked on the show a lot about these sort of integrations with things like Siri and Google Assistant kind of being table stakes now. Right. So it kind of does make sense that if those things pick up a smart blind that you couldn't control. That isn't smart. Yeah, it isn't smart.

Exactly. So, yeah. Glad to see they did that. Speaking of IKEA, you've seen the prototypes, but now IKEA has set the date to show off its first Sonos-powered Symfonisk speakers. Thanks for that one, Jason. I'm tongue-tied. Yep, I put these in a strategic order tonight. Sally sells...

She sells, yeah. Sally sells, she sell, yeah. Sally sells Sonos some funneks. The products, plural, and there's more than one, will be revealed on April 9th in Milan before they're expected to go on sale in August. IKEA and Sonos have showed off a prototype to the world, reads the IKEA press release,

a bookshelf speaker that will give customers a great connected speaker that enables multi-functional usage in the home at an affordable price the speakers are expected to start at 120 and late breaking news here just like a couple minutes ago on twitter dave zatz ran across the uh the fcc labels uh which the link that i had isn't working anymore so you must have pulled them down but uh we'll go ahead and dig and find those things i we were we were kind of laughing at them because the the input on the on the thing was one one amp so i mean it's don't expect these speakers to like compete with a sonos anything yeah you know, sound-wise. But I think having like an IKEA, affordable IKEA package,

good-looking speaker, plus the Sonos brains is really a compelling product. Yeah, yeah, IKEA's doing a lot. So blinds, speaker now, some smart lighting. Yeah, it's very sort of unexpected entrant, right, that we've seen continue to develop here over the last year or so. So we'll continue to keep an eye on that.

LG today announced a collaboration with the Denver-based home automation company, Josh AI, that will enable owners of multiple LG TVs to control those displays using voice commands as they walk from room to room. With Josh AI smart home integration, LG's 2018 and 2019 OLED, Super UHD, and UHD televisions can be controlled using simple and natural language commands such as raise the volume and switch inputs to Roku, or more complicated multi-part directives like watch Stranger Things Season 2 Episode 3 three turn up the volume on the tv draw the shades to 40 and dim the lights a little the system will support voice control for any device in the room uh the room the user is in lg said it is committed to developing features that make its tvs easier to integrate with smart home control systems this is great i mean a good good

for josh i mean this, this is a good, this press release came from LG, or I think it was a press release that came from LG. It's not like LG doesn't have these APIs out there that exist that, you know, you can't do this with anything, but it sounds to me like this is like a little bit more formal operation with Josh

to bring voice control into the LG ecosystem. Yeah. Um, so I'll be curious to see what this looks like completely in practice, but I mean, it, it sounds like a great, a great integration all around, like just straight to the TV, tell it what to do. And I think it's, it's great too. When you see these larger companies like LG and Sony comes to mind, I know Sony has done quite a bit in, in past years to make their, uh, AV receivers come to mind as an example of, you know, making them sort of integrator friendly and having like remote monitoring built right in and things of that nature.

So, you know, I always love when I see these bigger companies kind of thinking about the more fully integrated home and the channel that many of us and our listeners operate in. So yeah, good news all the way around. Speaking of big companies, Apple, March 25th event, right around the corner. So this will come out on the 22nd, and three more days later, everybody will know by the time we record next week what exactly Apple TV projects are. Yep.

The Apple March 25th event sports the tagline, It's Showtime, and the gathering, it's rumored to be the official unveiling of the company's slate of television and movie programming. A recent unconfirmed report suggests that at least five projects have been completed filming, with a long list of additional TV shows and feature-length movies in various stages of development or production. What isn't known, however, is when and where audiences will be able to see these projects. The answer to that question will likely be a big part of the event on Monday. So yeah, that'll be fun to watch, I'm sure. Yeah. It's going to be like the end of an era, Seth,

because we can no longer speculate about Apple's TV offering. Oh, it's Apple. We'll be able to speculate on something else they come up with. Yeah, that's true. We still have our WWDC bets on HomeKit every year. That's right. The HomeKit over under. Right. Yeah, this will be good though. I'm excited to see what they're doing. And we've read all the stories and we've talked about numerous ones of them on the air. And it sounds like they're trying to do something different and unique. I know it's been sort of a long and drawn out thing for them. And you've heard all the stories about battles and negotiations with the content providers and things of that nature. So it'd be good to see what they're finally able to, uh, you know, lift the curtain on and, and,

uh, yeah, we're not, we're not far away. So it's exciting. All right. Well, that does it for our headlines. All of the links and that does it for our headlines. All of the links and topics that we've discussed here in our show can be found on our show notes at hometech.fm slash 250. While you're there, don't forget to sign up for our weekly newsletter where we will send you weekly show reminders, as well as other occasional updates about all of the great things going on in the world of home tech. Once again, that link is hometech.fm slash 250. And don't forget you can join us live each Wednesday starting sometime between 7 and 7.30 p.m. Eastern. A little bit late last week, a little bit early this week.

We do our best. To find out more, go to hometech.fm slash live and follow us on Twitter at Home Tech Podcast where we usually put out the announcements. We do that there and in the hub. So if you want to know when we're recording, that's when. Just follow us on Twitter. It's a labor of love, right, Seth?

Yep. Yeah, exactly. All right. Well, without further ado, let's go ahead and jump into our interview. Once again, very, very excited to have Martin Plein, the CEO of Control4, join us to talk about all of the great things that they've been up to here over the last year or so. So we hope you enjoy. Hey, Martin, welcome to the show. How are you? I'm doing great. Thank you very much for having me.

Yeah, no, we're excited to have you. I know it's been a really busy time for Control4. We've definitely been talking about you a lot on the show and watching what's been going on. And really excited to have you on to catch our listeners up on all of that. But before we do, I think the vast majority of our audience is certainly familiar with you, at least by name, but would love if you could take a couple of minutes just to give a personal introduction and maybe talk about some of the relevant points of your background that have brought you to where you are today as the CEO of Control4? Well, Control4, our purpose and mission is to improve consumers' lives in their homes

through connected technology and solutions. We're 100% focused on delivering that in the realm of connected entertainment, connected and intelligent lighting, safety and security, peace of mind. And we do that through hardware and software solutions and a broad, broad platform of interoperability and interactive functionality that we enable other people to plug into. And I think that that opportunity is huge. It continues to expand. The world's not going to be less connected tomorrow than it is today. And a big portion of that connectedness is going to be within homes and houses. And that opportunity was presented to me eight and a half years ago by the founders of Control4. And through a confluence of experience and connections, my path with Control4 and its investors and its founders created an opportunity and a discussion.

And in August or September 2011, I jumped in with both feet and brought my software experience, my international business experience, platform, ecosystem, multi-sided business models to Control4. And we have a fantastic team and had a beautiful opportunity that was expanding. And we've been going after it. And today, we're probably three times what we were seven years ago. You know, top line, certainly far more profitable, continuing to grow, more employees, more countries, larger dealer network. But our fundamental strategy and our fundamental focus hasn't changed. Yeah, we're definitely going to jump in and talk about that

because I've had the opportunity to get to know you and have several conversations with you about that. And I think you have a really great perspective and a really valuable one when it comes to the professional channel and the value of that channel, especially in today's sort of dynamic marketplace where you're hearing more and more about these other entrants and what's going on and how is that going to affect the channel. So definitely look forward to that. But yeah, so you've taken control for through the IPO, which I think was back in 2013. And I know the company's seen some tremendous growth since then. What are sort of the snapshot today, dealer count, number of countries operating in, things of that nature? We just finished 2018 and we reported in early February. We have approximately 5,800 direct certified dealers that have a relationship directly with Control4. We manage our channel directly in large geographic regions like the United States, Canada, the United Kingdom,

Germany, Australia, New Zealand, China, and probably another 25 countries. And then we have about 60 countries that we use two-tier distribution, or distributor partners, that are really a control for proxy that represent us from the sales, marketing, training, tech support, inventory, and fulfillment. So that's that. We finished 2018 with roughly $272 million in revenue, had a good year of profitability,

good bank account, no debt. And in early 2019, we announced that we had acquired the company of NEO and hired its technical and business team to join our adventure to deliver more products to Connect at Home. Great. And we're going to talk about that probably a little bit more, time permitting, to join our adventure to deliver more products to connect at home. Great. Well, yeah, and we're going to talk about that probably a little bit more, time permitting, but definitely want to zoom back to the comment I made just a second ago and sort of start our conversation jumping in to the here and now with Control 4 and talk about your take

on the effects of the increasing DIY and consumer direct options. You know, Seth and I started doing this podcast about five years ago, right around the time Nest got acquired by Google and, you know, everybody and their, you know, and their mom was coming out with a home automation hub. And it was, it was a crazy time. And we've continued to see a lot of, of development and companies come and go during that time. So, you know, share your take overall on the evolution of the DIY and consumer direct market and, you know, specifically with an eye towards how it's affecting the professional channel and your outlook on sort of the medium and long-term prospects for the quote-unquote traditional, you know, professional channel? So I look at it from the outside in.

And the world is a very big place. And if we think about all the products and all the systems and all the dwellings in which we operate, live, learn, play, teach, pray, all of that stuff is getting connected. It is not going to be less connected tomorrow or a year from now or five years than it is today. And every product that consumes electric power, battery, alternating current, direct current, solar current, air current, are going to be on networks for various reasons. Everybody is going to play in this connected product space. Some of those products are going to be directly purchasable by consumers and directly attachable to their home network. As each product company and each solution provider learns how to augment unconnected

products with the benefits of connectedness and computing in the cloud and interactivity and interoperability, the consumer world, the demand side, is going to become more and more aware of the art of the examples of things to do and probably a good number of things not to replicate. And if we look at the professional sector, I think all of that is good for us. and companies are going to have to choose or teams are going to have to choose do they want to build a product and bring it directly to consumers for them to buy and connect to their their networks or do you want to provide solutions that are much more integrated with other fabric of the way people live and the way dwellings are built. And for our company, we believe that homes and houses are going to get more and more connected, and connectedness is going to be more and more part of the infrastructure of houses and homes.

And we felt that we had a good shot at being a leader in that space. And it's a very large market. And we could afford the R&D with products geared through that. And we could afford to build a channel that delivered much higher customer satisfaction or durable customer satisfaction. And so our company has focused on that. And we certainly learn from examples of very compelling products that are use case specific and highly insightful on customer functionality and ease of use and ease of installation. But yet, to date, there aren't a lot of examples of long-term, durable, self-sufficient providers of products with a do-it-yourself profile.

And you have to ask yourself, well, why is that? And that's not to say they're bad and they're not going to go away. But our company, Control4, we've chosen not to follow that path. We're going to keep focused on building connected products and system platform capability to be installed in newly constructed houses, newly constructed custom homes, and to be injected and retrofitted into existing homes and dwellings. And we believe we can build a powerful business and deliver sustained value through our channel partners, through our dealers and service providers and installers to end customers. And that's our choice.

And we interoperate with 13,000 third-party products. If you can talk to it, it plugs into Control 4. So we look at the connected products phenomena that is buy it on the web or buy it in a big box store. Those are accessories to the connected infrastructure of a home. And what we provide is the fabric and the connected permanence in a home. Right. The kind of the glue that binds everything together and makes everything work together is where Control 4 is really good at sitting and being. Not to say that you don't have your own products that exist in these.

You know, you have your own lighting products when, you know, there there are a number of third-party lighting products out in the market. But guess what? You also integrate with most of those too. multi-room audio, multi-room video, family room entertainment, automation, comfort and convenience, access control, and communications. And 30% of our business is in our platform products. That's networking and automation. Interesting. So, you know, those are published facts, and we believe that a combination of very competent and competitive and functional and beautiful solutions coupled with a democratizing, open, interoperable platform is a very, very powerful long-term strategy. We get to harness everyone else's R&D by letting them plug into our platform.

And we get to focus on our R&D on certain disciplines that we want to go deep in. And that's lighting, multi-room audio, multi-room video, family room, entertainment, automation, and comfort and convenience. And in certain categories, we don't try to compete with a solution, but we interoperate. We don't build door locks, but we work with alloperate. We don't build door locks, but we work with all of them. We don't build security panels, but we work with all of them. Yeah, absolutely. To shift the conversation just slightly to what was a very big story,

and I think definitely related, is the recent hiring of Charlie Kendall. The reason why I say specifically that's sort of related is, you know, Charlie, I've read his blog posts and had the opportunity to get to know him a little bit too. And I think a really interesting story from the professional's vantage point, because for those of you who may not be familiar, you know, Charlie was really the head of Smart Home. He was the architect of Smart Home at Alexa and is now, of course, over at Control 4. And you can talk a little bit about what he'll be doing there. But I think his perspective as somebody who was really such a key player in the development of what a lot of people

think of as a true DIY mainstay in the connected home, yet Charlie has been very public and blogged about his personal home and how the level of complexity that still exists around the connected home is not for the faint of heart. And so to see him come over to Control 4, I thought was a really, really... Congrats on that hire. I thought it was a great hire for you guys, and I'm excited to see what comes of that. But talk a little bit about bringing Charlie Kendall on board and sort of what you think that means for the company moving forward. Well, we're certainly very excited to have Charlie on board. He's been with us

approaching nine months now and certainly making a difference via, you know, his leadership and mastery of the subject matter and his sort of natural way of being data and information driven and team oriented. You know, we had an opportunity where our prior leader was going to retire, and I had to go look for a candidate that understood the connected home and was passionate about it and believed in focusing on the infrastructure of the connected home. And through conversations, Charlie and I saw a lot in common about the opportunity and the challenges and how to navigate those. And the opportunity was timely for him and his position on why and how he stated that for himself, so I don't need to repeat that. But we're thrilled. And we've got a very large software and hardware product development and engineering team. Charlie's leading all of that and coordinating activities of two large teams in Europe, a team here in Salt Lake, in California.

And we're thrilled. We have a lot to do. It's a lot of things in the air, but it's a target- things in the air. But it's a target rich environment to innovate and, and improve. Yeah, absolutely. You mentioned teams over in, in Europe. And that brings me back to something you mentioned a few minutes ago is the, the recent acquisition of, of NIO. And I think if I understand correctly, you obviously correct me if I'm wrong, is Charlie will be, will be leading that team. And NIO will be becoming part of the team.

Talk a little bit about the NIO acquisition and the reasons behind it, and again, what you're excited about. What does that mean for Control 4 moving forward? Well, we're excited about having the team from NEO. They're based in Bern, Switzerland, and they're focused on interaction devices, not just handheld remotes, but focused on those physical products with which customers directly interact, that they're visible. A lot of our products are hidden in racks and are sort of hidden infrastructure. And then several of them are very visible and are iconic to the consumer experience. And when we met Rafael and his team, we found a really insightful and already cohesive team that understood the connected home and the needs of the consumer.

They understood industrial design, mechanical design, design for manufacturing, electrical design. They understood embedded firmware and how to write compelling software that was very efficient from a computation and electric power consumption because of battery. And when we looked at how long it would take to really build a scalable team around that, we felt that the NEO team had demonstrated that they had a unique perspective and had already formed a cohesive team on that, which would take us a better part of a year or two to find and form that kind of team. And we found that the Neo remote itself was a powerful physical world example of what

that team could produce. And we said, let's make that the basis of a portion of our handheld remote strategy, which we had already underway. And the Neo team became an accelerant of that. And now they're working on it. fully focused on bringing a new set of products into the Control4 world to be sold through our channel in all the regions where we support our dealers. We're not going to sell that product directly to consumers. We've already discontinued the Neo Kickstarter-like business. That's been shut down. And pretty soon we'll start testing what these guys have integrated.

And once it goes through a pretty rigorous set of internal tests and field tests. We'll make announcements on what that product is and how it's priced and what it's good for. Oh, interesting. Very good. Well, as a Neo remote owner and as a Control 4 systems owner and programmer, developer, I can't wait to see that.

Because, I mean i don't get me wrong i i love the the 250s and 260s that i have laying around i think those are those are great remotes uh and i i think they have been for a long time um but you know there's there's a certain i don't know for the lack of better term sex appeal that the neo has uh over yeah and i and Yeah, and I think that one thing that Control4 is on a journey to continue to become a better and better provider of solutions and platforms. you know, in 2000, started shipping product in 2008, you know, the iPhone wasn't even ubiquitous and Wi-Fi wasn't even ubiquitous. I mean, and today the world is very different. And so when we started, our first set of challenges was to introduce really compelling

and novel automation capability and and we did that and very quickly we realized that capability and functionality that's cool isn't enough it has to be durable solid extensible. And so the next chapter after delivering cool stuff was make it infrastructure. And so we continued on that journey. And if you followed Control4 from 2010, 2011 through 2017 and 18, you saw dramatic changes in how we built software, how we built hardware, how we tested and released it, how our failure rates have come way down, how our ability to manage homes remotely and update them has dramatically changed. We released OS 2.10.6 four weeks ago.

We have almost 30,000 homes running software that we've released less than four weeks ago. I mean, think about that. Five years ago, 10 years ago, that would have taken forever and it would have taken truckloads. Absolutely. I started with a Control uh, I started my,

I started with a control four dealer and the one, two, five error. So we were, we were ground level and, uh, But the next layer that's on top of, you know, first you come up with cool functionality, then you got to make it durable and expansible and industrial strength. And then for us, the next chapter is really upping the game with regard to industrial design and aesthetic.

And that, we've provided a few deposits with our new tabletop touchscreen and its industrial design, our in-wall touchscreens. We're making progress now. We've made a visible commitment on the handheld remote, and I think you'll see stuff in the lighting category and other interaction devices where we're going to up our game on the industrial design side as well as keeping the advance on functionality

and durability and extensibility. Interesting. I can't wait to see what you guys come up with. I want to pivot a little bit as we're kind of running, slowly running short on our time, but privacy is kind of a big thing these days, or it's getting to be more of a big thing these days. It's certainly, certainly on the, the periphery here in the States and over in Europe and the EMEA markets, it's probably a little bit more prevalent for you, uh, as you work, you know, internationally. What, um, there's an interesting Bloomberg, Bloomberg story,

uh, that we'll put in our show notes that, that things that Amazon and Google are doing in regards to letting developers interact with their systems and how they want those developers to kind of report on that information, I guess, back to Amazon or Google. I'm wondering what Control 4's stance is on privacy and what your thoughts are on kind of this era that we've moved into with having data coming out of the home and going up into the cloud. Well, again, this is one where I would say let's start on the outside and work in. We are big proponents of overt consumer privacy. What happens in a customer's home with regard to the interaction of their connected devices orchestrated by Control 4 stays within the scope of their home unless they overtly and consciously approve its flow otherwise. We have adopted GDPR, the European standard for information privacy, for our company worldwide.

That's what we do. That's our standard. And it's simple for our employees. It's a complex topic, but we don't do things differently because California lets you do different things than what you can do in Germany or in China or in Australia. We say GDPR is the standard for us. And if there's a place in the world that has a higher standard than that, we're going to aim towards being as privacy respectful for the consumer as possible. And since we orchestrate so many devices within the home from all sorts of different vendors, not only our own, we have a special responsibility and a special entrustment from our end customers, our homeowners and families. The average control for home orchestrates 43 connected devices.

The top 10% of our connected homes, in those top 10%, the average is 180. If you go to the top 100 installations, you're talking about homes with over 1,200 connected devices. So our responsibility of how we orchestrate what happens, what triggers an action, whether that's an overt consumer action or whether that's state-driven by temperature or a motion sensor or time of day or somebody driving into the driveway. That information has to stay within the purview of the homeowner and within our trust sphere.

And we're very, very deliberate about that. And when we interact with other services, like voice services, we've designed those interfaces so that a consumer can empower their home via voice commands for a large number of those 43 or 180 devices in their home. So there is a namespace for interaction across the entire home. And we think that if a homeowner says, voice service, let's watch CNN, we'll do that. And we would assume that the voice service knows that CNN was triggered. But if the homeowner uses his handheld remote or his iPhone or Android app to change the channel to Fox News, that information stays within the home. And I don't see any reason why the voice service should be told that the TV is now on Fox News. Agreed.

And likewise, if every light is addressable by name within a control system and thus addressable through voice, if the consumer says, the homeowner says, turn on the bathroom light, you assume the voice service knows that the bathroom light, you assume the voice service knows that the bathroom light is on. But if the consumer turns the bathroom light on at 2 a.m. via a physical switch or a motion sensor, why should the voice service be told that? Right, right. I agree. I And so we believe in that kind of construct. We think that a consumer at some time, as the world becomes more connected, there may be reasons in the future that a consumer says, you know, I don't mind if the voice service knows what's going on with my lights. I don't mind if the voice service knows what's going on with my lights. I don't mind if the voice service knows what's going on on my TV. But I'm sure it's not going to tell them about my door locks and my security system. We have to come up with mechanisms by which consumers can knowingly, consciously, and in a knowledgeable way, grant permissions for certain kinds of data flow.

Because if we do that wrong, we will have broken the trust that we've already established over 15 years and 400,000 customers. And we're not going to do that. Yeah. And I think, you know, Will, we had this link up in our show notes a couple of weeks ago. This may sound familiar to some of our listeners, but Will included again, it was a piece in Bloomberg that I know you were quoted in amongst other manufacturers. And I thought it was a really interesting perspective and something that, by and large, I think flies under most people's radar, but that distinction between voice servers having access

to data where they're being called upon to do things versus just wanting this constant sort of stream of information about the home and a really interesting distinction. And I think you make some great points on there. And certainly from my humble perspective, it sounds like you guys are thinking about that in all the right ways. So definitely appreciate you sharing your perspectives on that. We are, as Seth alluded to, running up against our time a little bit, but before we wrap up, I did want to get your take on just kind of the macro market trends and things that are going on out there. You know, as CEO of a public company, you're obviously paying very close attention to these things. And from my side of the coin,

I, you know, working at One Vision, I'm talking to integrators all the time, every day, and certainly these sort of potential headwinds in housing trends and geopolitical concerns and volatility in the stock market are all very, very real concerns when it comes to operating in the professional home technology space. So what are you seeing to the extent that, you know, that obviously you can share what you guys are sort of thinking about when it comes to this topic at Control4. I'd love if you could share that with our audience. Well, for us, and on our early February earnings conference call, I shared remarks that I can reiterate here today, we do see a combination of geopolitical uncertainty in several large areas of planet Earth. One big one is in the UK and Brexit and its radiant impact across the EU. Another area is the trade war, trade dispute between the US and China and the introduction of escalating tariffs and how that impacts many, many businesses. And then you have stock market volatility that has an impact on, I would say, upper middle class or the higher income producers and higher investment portions of the economy that cause them to take pause. And I think all those layers

can cause decision makers to slow down or be more reserved with regard to capital purchases. Should we do that remodel? Yes or no? Do we have to do it now, or should we wait six months? I think the tariff situation has impacted lots and lots of business owners and senior managers in their own companies who probably didn't get a 2018 bonus because their business was impacted by 10% or 15% tariffs and the threat of 25% tariffs. Those people hold back on decisions. If they had planned to go buy their spouse a new BMW, they're probably going to say, let's it's continuing in Q1, probably will go into Q2. It's still a healthy economy, but if you measure it relative to the backdrop of the first half of 2018 and all of 2017, it is different. And as a manager and a leader of a company with 750 employees and an ecosystem of 50,000 employee partners of our dealers, we have to be prudent and somewhat transparent and transmitting of what we see.

How do we help our channel, our customers, and our employees navigate that choppiness? I think the Control4 team is doing a good job at that. And, you know, it may end up being a little bit more choppy than we expect. But, you know, we're conscious about it. Right. There's a lot going on right now. I don't think, I mean, I know that Control 4 is not the only one that are looking down the road going, it looks like we may be a little cooler on what we're expecting to come in the door. And, yeah, it's prudence, and it's a good thing to have these days. On that note, can you tell us what is exciting Control 4 these days?

What are you excited for that you guys maybe, I know you can't talk about what you're working on right now, but maybe what you're looking at down the road that, that is exciting. Um, you know, say the economy is, is great and everything. What, what's, what's exciting, uh, for control for, uh, down the road from now? Um, well, you know, again, I, I think the connected home and connected consumers and connected improved living is just a big opportunity that isn't going to go away. And we are, in a step-by-step fashion, continuing to invest and put pieces in place to deliver better and better on that promise. In the last year, we've rolled out our certified showroom program so that consumers can have a predictable place to get a very compelling,

very competent overview of the art of the possible of a control fork connected home. You know, we have 207 certified showrooms and another 100-plus applications. So that's working really well. Our business to date has been focused on homes, where the homeowner is known. 50% is custom homes, new construction, and 50% custom retrofit. And we've been focused on production builders to augment our homes business where production builders build houses to sell them to become homes. And we see that houses are going to be built smart, if not smart ready. And we want to be a leading provider of the connected infrastructure and solutions for those production houses that get built smart and then sold to become homes.

And they're already a smart home. And so that's exciting. What we're doing to up our game on industrial design of our products is exciting. I mentioned that we have a fairly large engineering and product development organization. 2018 was a modest year for product releases for us because we have an exciting pipeline of products coming. And so that's pretty thrilling. We just went direct in New Zealand. That used to be under the purview of a distributor. We bought that business from the distributor, and now we're direct in New Zealand. We'll see rapid expansion there.

We went direct in Switzerland because we now have a team in Bern. There's no reason to have a direct presence for engineering and an indirect presence for sales. So now we have that. And likewise in Ireland. So it's step by step. When you know the opportunity is real and durable, how you put the pieces together in a methodical way really matters. And I think we've demonstrated that over the past seven years and our opportunity is not exhausted and we're going to keep doing it. All right. Very good. Well, Martin, we definitely appreciate you taking some time to come on the show

and share all of these updates about Control 4. I know I've really enjoyed it and I am quite sure that our listeners will as well. Speaking of our listeners, if they wanted to learn more, we've got a mix here of a lot of professionals listening to the show, but we've also got some end users and enthusiasts.

So maybe if you're a dealer interested in learning more about how to become an integrator, I should say, wanting to know more about how to become a Control 4 dealer, how do you go and learn more? And then conversely, if you're a consumer or end user, what would be the best way to go about doing that? Well, I think that the starting place is at www.control4.com. There's a lot of information there about our product line. There's a lot of information there about how to, if you're an existing customer, how to get some help from one of our dealers or from our customer advocacy group. If you're an integrator or an IT professional and you're interested in learning more about how to get into the smart home industry, there's pages of information there on how to get started and who to contact and what forms to fill out. We manage our channel directly. We have, you know, over 100 people in our sales organization. So we can be pretty attentive to inbound inquiries that start out on our website. All right. Well, thanks again, Martin. We really do appreciate it. And definitely,

you know, we'll look forward to checking back in with you, you know, in the future here to see how things are panning out. But thank you so much again for taking the time to come on and share these updates with us. Yeah, thanks for having me. Appreciate it. Thank him again for coming on the show. We really do appreciate his time. And, man, Jason, very, very interesting to talk to the CEO of arguably, I don't know, I would argue with most people these days because that's what I like to do. You're good at it. Arguably one of the premier and leading vendors of home automation control product in the industry. I think when you think of the CDM market, it's hard not to think like Control 4 anymore, right? Back when you and I started, Control 4 was not a brand that many people were very loyal to, but now it seems that the tide has turned and very interesting to have

him on the show. Yeah, yeah, absolutely. And, you know, we talked about SnapAV earlier in the episode and certainly SnapAV and Control4, arguably, you know, I don't know the numbers, but probably the two biggest companies in the residential, you know, custom install side of the smart home. And so, yeah, really great. Definitely, like you said, appreciated Martin taking the time to join us and really enjoyed the conversation hope our listeners did as well so what do you say seth we uh you want to jump into the mailbag i think we got a good one this week yeah we uh we do we got a an interesting letter uh based on our conversation uh about tv security um from from listener scott r and uh he wrote in uh after hearing your bit about regarding TV, TV's ads and privacy violations,

I wanted to pass along what I do. You mentioned the possibility of doing ad blocking at the router level. This is in fact what I do. I use the free router software PFSense. And he says, admittedly, this is very geared towards advanced user is not for the timid.

And I will agree with that. PFSense, I've had my kind of like eye on that for a while. PFSense is like just a very geeky, completely complete setup. Like if you were doing security in your business, that's probably the router you'd want to have. If not, you know, maybe a more commercial version of it. But I've heard great things about that. He goes on to write, I have PF since blocking not just ads, but numerous known malicious IPs and domains.

And sometimes he's very surprised about how effective it is. He says, I'll watch videos through Roku apps and there'll be blank pauses where it tries and fails to play an ad before the video then continues. Sometimes it's a little too aggressive. The Amazon shopping app on Android is very unhappy with it, and I've not dived in to determine what I might need to get in there and whitelist off for that to work. So he's just passing along that he uses. There's a couple of different ways of setting this up, this PFSense. There's one little small, I want to say $130 box that you can get that makes it super easy.

And it's not like you're at a command line typing stuff in, Jason. It actually does have a GUI where you can go and configure things like a router. But it has a ton of features on PFSense. And I've heard good things about it, and I just haven't had a chance to dive into it as Scott has. But it sounds like I might want to in the future here. Yeah, it's definitely an interesting offering. I think it is, like you said, not for the faint of heart and probably something that I will therefore skip. Not necessarily because I don't think I could figure it out. I just can't

be bothered. I think I'd rather just have some ads. The ad blocking stuff isn't all that compelling to me. I'm not that bothered by it. But if it could help with privacy and the growing concerns around that, then I think these sort of solutions are certainly appealing to me. And I think that's where you get into the more broad appeal. But yeah, ad blocking, I get it. Nothing against it, obviously, but the ads don't tend to bother me so much. And so if it's a weekend of sort of wrangling this thing into position. Uh, I'll just stick with the ads for now. Well, yeah, I, I, I think that's what you'll probably be. Uh, like most people will do that, right? Right. Not everybody is going to go out and, uh, and set something up like, like this up.

I don't know. I think in the future it might be, uh, something that's built into more routers. Like it seems like the, this privacy thing has some legs to it, right? Oh, yeah. Yeah, definitely. More so than I thought there would be two years ago. I think we started talking about security and IoT stuff maybe two or three years ago, and it's just kind of been a slow burn up into the point where we've had some very interesting things, both political and not political,

that have come from privacy concerns, right? In ads that people are getting creeped out by. They think their Amazon Echo is listening to them 24-7 because they know what they want to buy. And it turns out, no, the ads are just that good. The algorithms are just that good. They don't even need to listen to you. They just know.

I think people are getting creeped out by that. And, you know, hopefully it seems like, at least here in the U.S., it seems like there's political wind that's starting to kind of line up and get behind both. Like we have two different diametrically opposed houses of, what do they call it, parties here. Yeah, you can say that again. It seems like there might be some wind behind both of them at this point.

Most Americans, if you ask them about this, they would probably say, yeah, you know, I kind of find that creepy and I don't want that to happen. And I think that Congress and those in power are probably, if they're smart, they'll go ahead and figure out how to make this happen and get it done right. We may end up with something like GDPR here in the States, which would be nice. Yeah. I think there's got to be a middle ground, right? And I agree. I think we've gone a little bit too far to one end of the pendulum swing, and it is due to swing back and hopefully not go too far back in the other direction, as can sometimes happen with these sort of political and social types of concerns. novel approaches to privacy and, I guess, ad blocking maybe, but, you know, other things like just privacy and security and seeing over the next maybe two to five years, like, what companies are able to do in that space. It'll be really interesting. I think there's definitely some

opportunities in the market for companies to, you know, to come out and fix a real problem. So it'd be interesting. Would be nice. We've got a real gem of a pick of the week this week, Seth, and want to give a big thank you to, uh, Robert from the hub. We, we definitely appreciate this one. I got to get, got a good laugh out of it, out of it. So I'll do my, do my best to walk, walk through this one. So you've got a, you've got a clearly a husband and wife couple, and the wife is standing with a very sort of... Terse.

Terse, or, you know, a kind of angry look on her face with her arms crossed. She's leaning against the door. You've got the husband standing over the bed, sort of looking kind of over his shoulder and folding laundry, uh, on the bed. And the caption says, okay, last night you washed dishes today. You're folding laundry. You bought more speakers. Didn't you? It's a good one. Oh man. It's a good one. That feeling, that feeling. Yeah. Yeah. Hats off to the guy. He's doing his best. Yeah. Well, and you know, it's, it Yeah, well, and our spouses always know, right? They've figured this out by now.

Oh, indeed. They already know. The spouse acceptance factor is very real. I might not apply to this one, but more, I don't know, AirPods or computer parts or something. Right. Doesn't necessarily have to be speakers. Yeah, no. For me, it's like usually fly fishing stuff.

But it's all the same. It's the same reaction. Yep, yep. Absolutely. Absolutely. If you have any feedback, questions, comments, picks of the week, or great ideas for the show, give us a shout. Our email address is feedback at hometech.fm or visit us at hometech.fm slash feedback and fill out the online form. As we always do, we want to give a big, big thank you to everyone who supports the show, but especially to those of you who are able to financially contribute to our efforts here at H Tech through our Patreon page. If you are not familiar with Patreon, head on over to hometech.fm slash support, where you can learn how to support our

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And if you want to help out but can't support the show financially, we'd appreciate a five-star review on iTunes or a positive rating in the podcast app of your choice. You know, we're aiming for that five stars, Jason. This is a five-star show. We want to keep it that way. I have no idea what our rating is right now,

but it helps other people find the show, and that's what counts. It's right, yeah. No, it's still up there. I think we got a couple, like four, maybe one three, that the guy was not happy that we were talking about pro stuff. And I was like, oh, we're pros. Well, you just got to keep listening. That's all.

I mean, we go in and out. I mean mean it just depends on who's going out of business in the diy market exactly oh geez yeah um so anyways you know you can't please everyone right no no can't all right cool well uh that will do it for our show this week had a lot of fun hope everyone enjoyed and seth will definitely look forward to reconnecting with you again next week. Sounds good, Jason. Have a great weekend.

All right. You too. Take care.