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Keeping Up with the Jetsons

Chairman Bill Gates has his robo-home. Control4 sells home automation systems for the rest of us.

Company: Control4

HQ: Salt Lake City, UT

Founded: 2003

Management: Will West is president and CEO. Previously, he co-founded STSN (now iBAHN), a developer of broadband services for business travelers. Before that, he was president, CEO, and co-founder of PHAST, a manufacturer of high-end home automation equipment. Chief technology officer Eric Smith co-founded both STSN and PHAST with West, and vice president of marketing Mark Morgan was also an STSN co-founder.

Investors: In July, the company raised $15 million in a round led by Foundation Capital, with participation from existing investors Frazier Technology Ventures, Thomas Weisel Venture Partners, and vSpring Capital.

Business Model: Control4 manufactures wired and wireless automation products that allow homeowners to control lighting, audio, video, climate, and security systems. The company’s products include audio components to beam music throughout a house, media storage devices, and wirelessly controlled dimmers and thermostats. Control4 has also developed software that controls all these devices, which can be accessed through a wireless touch screen device – sort of a remote control operating all the wireless products. And it’s linked together using the new wireless networking standard Zigbee (see ”Home Smart Home” in the August 2005 issue of Technology Review). The company claims that most of its products can be installed easily and without the need for remodeling or special maneuvering, at an average cost of around $600.

Competitors: X10, HAI

Dirt: We’ve been hearing fanciful tales about the wireless home ever since Bill Gates built his mansion with picture frames that feature rotating digital images of his favorite works of art. But apart from the occasional home Wi-Fi connection and the ‘Clapper’ (which is not exactly wireless), we haven’t witnessed the broad adoption of wireless technologies in the home yet. To help bring the networked home to the average buyer, Control4 has a very attractive philosophy: keep price points low and make implementation easy.

In the past, the lack of compatibility among devices from multiple vendors hampered the networked home concept, as did the costs associated with building proprietary networks. Today, industry players targeting the digital home market are rallying around a more collaborative approach. For instance, Control4 has joined the ZigBee Alliance, an industry group featuring technology heavies such as Samsung, Motorola, and Philips, that’s promoting an open standard for “cost-effective, low-power, wirelessly networked monitoring and control products.” This sounds like a promising start. But even the installation of a basic home Wi-Fi connection can be cause for some hair-pulling. So Control4 will have to spend much of its time – and money – educating consumers and proving that its products are as easy to use as it claims.


‘Celebrity’ VCs
Secretary Powell becomes Partner Powell – and other alarm:clock news from the land of private venture funding

One of the most highly covered business news stories recently was Colin Powell’s career move into venture capitalism. The former head of the U.S. Joint Chiefs of Staff and Secretary of State is a perennial name on the list of potential U.S. presidential candidates. Now, though, he’s with Kleiner, Perkins, Caufield and Byers, perhaps the most prestigious venture capital firm, and an investor in Netscape,, and Google.

In fact, Powell (should we say “Secretary Powell” or “General Powell”?) is not a General Partner – rather he’s a “Strategic Limited Partner.” That means he gets to invest in the fund. As Kleiner Perkins’ partner John Doerr has stated in news reports, Powell also will be a mentor. Powell will not sit in meetings where VCs determine which companies to add to their portfolio, but rather he will add further prestige to Kleiner Perkins, so it can extract better investments terms and promote portfolio companies.

With all of his options, why would Powell commit to weekly communications with a relatively small investment firm – when he could certainly have joined Goldman Sachs or the Carlyle Group? In fact, Powell is not quite a newcomer to technology: he was on the board of AOL. His latest affiliation with Kleiner Perkins will firm up his reputation as a leader in cutting-edge businesses. In addition to information and biotechnology investments, Kleiner Perkins is investing in fields such as alternative energy and nanotechnology. So Powell will likely not only make a great return on his investment in Kleiner Perkins, but also win points for having spent time in the trenches with those who are building America’s cleanest and smartest assets.

For Kleiner Perkins, the Powell connection is a tremendous public relations coup of course. John Doerr may be well known at the right clubs in Palo Alto and New York, but he’s no Colin Powell. What’s more, having Powell in your corner opens every door in Washington D.C. Kleiner Perkins emphasizes that Colin Powell is a “global leader” – and venture-backed companies are increasingly going global. Certainly, any tech company that has an emissary who can make a call to a political leader in, say, China or India will gain a huge advantage over its rivals.

But Colin Powell is not the only global superstar to be recruited by a VC firm. Last year, Elevation Partners announced that Bono, the front man for the band U2, was becoming a limited partner. Elevation plans to invest in media and entertainment projects. As with Kleiner Perkins, the firm is led by a team renowned in Silicon Valley, including technology investor Roger McNamee and John Riccitiello, the former president of videogame maker Electronic Arts. Again, the addition of Bono makes Elevation Partners a big deal. A third VC firm with a celebrity partner is Insight Venture Partners, with ex-Treasury Secretary Robert Rubin as a Special Limited Partner.

Easily the most successful investment firm at adding celebrity partners, though, is the elusive D.C.-based Carlyle Group. For starters, its chairman is ex-IBM CEO Louis Gerstner, its European chairman is former UK Prime Minister John Major, and George Bush Sr. is a Special Advisor.

Andrew Madden is a freelance writer in New York City.

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