An Interview With Control4 CEO Martin Plaehn: "The Connected Home is Happening"
At the recent HTSA Fall Conference in Chicago, we had the opportunity to sit down with Martin Plaehn, the chief executive officer of Control4. We discussed the company's plans for this year and next, its recent acquisition of Extra Vegetables and life as a public company. This is a transcript; some sections have been edited for the purpose of clarity.
Technology Integrator: I just wanted to ask a bit about what Control4 has going on this year, this fall and this year, and what your goals are for what you have going on.
Martin Plaehn: Well, that's a pretty broad question. Our aim is to be the best in the industry at delivering solutions for the automated home. We really focus on the family, not just the tech geek or the technical sponsor of the purchase. We [want to] make entertainment systems really accessible to the entire family. And their guest- even their mother-in-law and the babysitter. And make lighting systems really smart, and energy-efficient, and have them work with the blinds and the window treatments and the heating systems. This year has been all about software, for us- getting our software and user experiences and personalization interaction really fluid, getting out architecture underneath- since we operate with lots and lots of different devices- getting that more modern.
When we started the company, a TV was a TV and a receiver was a receiver. Today, a TV is a TV and a video streaming media player, and a receiver is a receiver plus a video switch plus an audio and sometimes a video streaming service. So that abstraction models within our software have to change. Because what used to be three devices are now one, or what didn't exist now exists within one device. We are expanding our business, we have spent a lot of time opening offices in places like China. We have training center there, we decided to go single-tier- we used to be two-tier distribution in China and we did the same thing in India. A few years ago we did the same thing in the U.K., where we linearized it, and the U.K. now is our fastest-growing region, with growth probably well over 50 percent year over year, staggering. Lighting is a big deal for us, we put a lot of energy into panelized lighting solutions, and intelligent lighting is catching.
And next year, it's like rince, repeat. We're in a very big space, the connected home is happening, no one argues anyone about "is it gonna happen?" Our job is to move from one in a thousand homes, to first get to five in a thousand homes- let's go from .1 percent penetrated to half a percent penetrated.
TI: So, Extra Vegetables [the acquisition, announced in September]- what are you hoping to accomplish with that?
MP: About 18 months ago, we embraced a strategy that said 'you know, if you look across the spectrum of devices- domains in the automated home, whether it's multi-room audio, multi-room video, home theater, lighting, comfort, shades, there's tons of manufacturers in that space.' And what we said is for the top one, two and three, in the major categories that we care about, we need to own and control the IP of the interaction software. And when we made that decision, we had been partnering with Extra Vegetables for many years, they're really good friends of the company, they've served a very great purpose.
We went to them and communicated that this is our strategy. We've got 150 people in our engineering department, 400 people in the company, and we are going to go across this spectrum. And device #1, #2, and #3, we're either going to write, procure or contract and that means, businesses like yours are going to have to be comfortable with doing #3, #4, #5, and obviously #1 is way more interesting than #5, so that's going to impact your business over time. And we don't want to hurt you, so how would you like to just join us and help us implement this strategy. And they thought about it for about a week, and we came to an agreement, and we did it.
We're not going to charge for those drivers, because that would be viewed as, in my view, if we're one company, as too opportunistic or [extortionist]… so drivers are included.
TI: So you've been a public company for how long now?
MP: Oh… five quarters.
TI: So, what has changed being a public company?
MP: You know, not much. We have reporting overhead, and transparency, and responsibilities to communicate with the public market in a structured way, and that takes effort and discipline. I spend 40 percent of my time making sure the products are right. I spent 40 percent of my time making sure our sales channel and support systems are right. And I spent about 20 percent on governance, investor stuff, board stuff and recruiting. And so, if you focus on the customer and you're in a big market, stay that way. And if you get to go public? Fantastic.
TI: So, let's talk about the Internet of Things. Being in the business that you're in, what do you think about that?
MP: I think it's great.
TI: Do you think it's here yet?
MP: It'll be growing for generations to come. I think everything with a battery or power chord will be network-aware. Which network is unclear, but there will be many. The network for parking meters will be very different from the network in a hotel. But it's clear that there's a lot of benefit, when devices can be connected together, and our job within the home is to deliver solutions that come from us and augment them with the orchestration of devices that come from others. And the more there are, the larger the orchestra is. And it's our job to connect them and convey that connection and context onto families. And when they want to wake up home, the "I'm home" button, or the home senses that they're home because they have the near-field identifier in their pocket, the right things happen, and that could cross 25 vendors.
TI: So you think that's good for you guys?
MP: It's totally good for us. And just because a radio is in a product, doesn't automatically make it downloadable into your house. My garage door opener now comes with Wi-Fi radio- it is not easier to install.
TI: In your meetings with dealers and integrators here, what's been the topic, what have they been asking you, and what do they want from you?
MP: I haven't had a lot of meetings here, but I do think the atmosphere here is very bullish. I haven't talked to anybody yet who's really in the doldrums. Many of them are very busy in dealing with the stress of "how do I keep up, I hate turning away business," and many of the people I've talked to here and in other forums, they like what they see from us. They like the direction, we're only focused on one thing, 100 percent of our business goes through the professional channel, and we're just getting better and better at it. On the product side, and on the tools from dealers, the support network and our business policies, all of that are just getting sharper and sharper. And I think that the company who really figures it out is gonna really win. This opportunity is only going to get bigger- and it's going to be locally solved, locally installed, locally supported and locally maintained, there's no question in my mind, it's gonna happen. It's gonna be just like plumbing.
Related story: D&M's Caudill Joins Control4 Board