Connected Home Startup Celebrates Google’s Nest Buy

One smart-home startup CEO says the news this week of Google’s $3.2 billion acquisition of Nest is good news for everyone.

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Ambient Devices CEO Pritesh Gandhi says it’s pretty clear that connected devices are the future. The company has been making smart home products since 2001, and Gandhi says its latest product, the Energy Joule, is saving homeowners up to 25% on energy bills thanks to its simple design. The device glows green when energy demand is low, and red when demand causes peak pricing to kick in.

“The [acquisition] is fantastic news for the entire industry. It puts a spotlight on the fact that homeowners are now finally prepared to be able to accept devices like ours and the Nest device to allow them to make decisions and be better engaged with their consumption,” says Gandhi.

The Power of ‘Polite’ Technology

Gandhi launched the Boston-based Ambient Devices out of MIT’s Media Lab, where he and a team were working on so-called “calm computing.”

“[Our] vision was trying to take information off of computer screens and present it onto everyday objects,” says Gandhi.

Rather than having to actively search for information that could be found on websites or databases, the idea is to have basic information transmitted wirelessly to a home device. The device then glows, using LED lights, to indicate whether something is good or bad.

Gandhi says Ambient products present information in a “polite” fashion that enhances at-home living. The first device was used to depict stock market movement: It glowed green when the market was up and red when it was down.

“It’s really trying to distill information and give you that binary – is it good or is it bad? ... without interrupting your everyday tasks,” says Gandhi.

Turning an Eye to Energy

While Ambient Devices’ products can be used to present real-time news of almost any kind, from the markets to sports, the company began to turn its attention to the energy sector around 2006.

“We saw more and more energy companies start to use our device. A great example was Baltimore Gas and Electric: Back in 2008-2010, we used our Orb (an early version of the Joule) for residential applications in 1,200 customers’ homes in the greater Baltimore area. We saw in that particular example, homes reduced consumption by 25%,” says Gandhi.

Encouraged by the results, in 2011 Gandhi and his team began to develop the Joule. The screen shows energy cost per kilowatt hour, overall consumption—and what it means for a customer’s bill. Today, Ambient Devices’ products are in more than 1.5 million homes across the U.S., thanks to partnerships with utility providers that give their customers the Orb or the Joule – at no cost to the consumer -- to help manage peak demand.

“We feel we’ve just scratched the surface of the energy industry,” says Gandhi.

Running a Lean Company

Compared with other connected home startups, Gandhi is running a rather lean operation, having raised just one institutional round of funding for $4.5 million over the course of the company’s 13-year history. (By comparison, Nest had raised a reported $230 million in funding.)

While Gandhi wouldn’t share whether or not Ambient Devices is profitable, he says the company is “healthy.”

“We run a very lean company. We’re proud of the fact that we are able to get the most out of our team and our products based on the value they provide,” says Gandhi.

He says they are not currently looking to raise more money – but he is eyeing international expansion.

“The idea of demand response is much more prevalent in markets like Europe and Australia,” says Gandhi.

“We’re just now getting some attention, and there’s a massive amount of potential for us in the marketplace,” he says.