Why The Smart Home Failed. And How We Can Reinvent It For The Future

(Notes from a recent speech to a large tech firm in Silicon Valley)

Experts agree that the initial era of IoT has come to an end. Despite a lot of hard work, the vision of a connected and conscious residence was never realized. This future was hampered by interoperability issues and a level of service sophistication that didn’t match the hype. We have an opportunity to use more powerful AI to glue together the best parts of the the initial Internet of Things era to deliver a more proactive, intuitive smart home. 

I was recently asked to share PSFK’s point of view on the future of the home with executives at a technology company in Silicon Valley.

The following notes are part of a preperation Q&A with myself that reveals research and analysis found in PSFK reports like Home Debrief, Designing The Connected Home, Integrating Chat And Voice Along The Purchase Path, and In-Home Retail Debrief.

Why have consumers been slow to adopt the ‘smart home’?

There are a number of drivers in play here, with four of the key issues that dampened the growth of the smart home being...

1. Teens and young adults are the core early adopters of IoT tech. The issue is that they don’t own the home, and they probably don’t pay the cable bill. If they live with their parents, they’re still showing their seniors how to operate the remote control but, we believe, they’re not convincing them to make house-wide tech recommendations.

2. IoT is ending up in drawers in the same way phones were pre-iPhone. Consumers have become wary about waste in terms of money spent and hardware garbaged.

3. It’s pretty well documented that people want experiences over stuff but outside of telling their home 'you can turn on the lights' most technology companies are still only focused on selling around devices and not moments. 

4. PSFK believes that a next-gen AI is needed to fill in the pieces and make all of this mess intuitive.

To explain this, let me present a personal story: my 10-year-old son was showing his grandmother how to use the Google Home device in her house outside Philadelphia last weekend. As part of this, he says “Hey Google, turn on the lights,” but the smart speaker can’t because granny has no connected lights. What does Google Home do? It tells my son to go to the app and change the settings. Why is Google Home pushing my son to the phone?

Surely, Google can make out that there is no purchase history of smart lights, and Google definitely knows exactly which house my son was in, and can probably pull up blueprints and guesstimate the number of light bulbs inside and outside of the house. So, instead of sending a confused grandmother and her grandson to a screen to check settings, a more sophisticated AI would respond to the request to turn on the lights by saying, “Hey, I was wondering… do you have the right light bulbs? For a home in your neighborhood, you’d need 10 inside and 10 outside. I can go ahead and order that for you. It looks like Cy will be at school the day the shipment will arrive, so we could send someone to set the whole thing up for you? How’s 10am next Tuesday?”

So what is the role of technology in the home?

PSFK’s research shows three key markets are:

1. Home Automation
2. Home Entertainment
3. Shopping

IoT makers are too fixated with the kitchen and living room, though. Tech firms largely ignore the two places people probably spend the most time in: the home office and in the bathroom. Come on, how much time do people spend on the phone while seated on the iron throne, for instance?

The beauty industry is showing us how we could apply this here with ideas like make-up tutorials and smart mirrors.

How do you shift or change behavior from old technology to new technology? 

I think there are human needs that will remain constant. Some of these are bottom of the Maslow chart and some of these are at the top. I need to feed my kids, I need to remove clutter to get stuff done, I need to show off.

How people go about fulfilling their needs changes. I think we spend too much time thinking about tech first, and needs second.

How is technology ‘supposed’ to behave in the home?

At PSFK, we talk about four major pillars to designing the at-home experience:

1. A Simplified Interaction: helping people stay focused on the important things in life
2. A Unified Connection: providing a single interface for operating everything
3. Enabled Living: proactively managing the mundane aspects of people's lives
4. Trusted Touchpoints: offering a sense of control over one's data and interaction, as the default setting

How do we interact with technology in the home?

Obviously we have a raft of device types that belong to the IoT/smart home category, but there are only a few types are that are selling well: the smart TV and the smart speaker.

Because of the sheer sales volume, we probably need to seriously consider the TV as the center of the smart home experience. We’re talking to the Comcast remote to watch the game, or the Apple TV remote to find the show for free. Realizing this could provide brands who make TVs, phones and other hardware a real opportunity to corner the smart home 2.0 market.

In terms of how we will interact, I think we also need to look at behavior in Asia. People there generally have less concern about privacy and security, and they are more willing to explore.  Asian consumers have also been pioneers in tech and human behavior that we couldn’t quite get our heads around: can you remember how we thought it was weird they bought stuff in chat? Now it’s the next big thing in retail everywhere. 

And let’s remember that the complexity of the Asian character sets led to a new and faster form of communication: the emoji. What else will they drive? Right now people in Asia are super excited about the virtual assistant and smart speaker—let’s watch for new (and extreme) use cases.

Does the Home of the Future look like the Jetsons? 

I’m writing this from the brownstone I rent in Brooklyn with all original moldings, original hardwood floor and that crooked staircase, you know the one. If they returned today, the original, Victorian-era owners would not be shocked to find what it looks like or what it contains.

The Home of the Future is not full of high-tech gadgets because the hardware doesn’t matter as much as the services that run through them.

I don’t need more speakers and my son definitely doesn’t need more screens; we just need everything to do more and do so intuitively. We need this stuff to run across hardware manufacturers, and it needs to be futureproof so we don’t need to change the hardware very often. And we need these systems to flow into other personal spaces like the car, or the yard. 

Also... I don’t need my fridge to show what’s in it and order more. Maybe it should spend more time talking to my AC to work out how to save energy while I’m out. 

Can technology feel like a friend or family member? 

When I try to think about different tech to which we really apfply human traits, I keep coming back to the car. Do you know how many Folks give their auto a name—there seems to be more sites helping you to name your car than your human baby. We also pat her or him, and we don’t want to talk bad about the car while in it or when we are thinking about selling it!

I can’t think of another piece of tech that we anthropomorphize like this as if it were a pet. Some researchers suggest that the ability to personalize technology reduces our ability to have an emotional connection with gadgets. That might be one of the biggest issues with the smart-home tech: our inability to connect on an emotional level.

With a car, you personalize it by making the choice of brand, color, shape. After that, you’re stuck with the clunker and all you can do to personalize is wind the window down or change the radio station. 

While our PSFK researchers does believe tech should provide proactive and personalized support, maybe shoppers need to buy the gender or personality settings that suit them at the time of purchase, and then they’re stuck with it. I can see that encouraging a ‘we’re in it together’ relationship, which is more human.

Come on... you can’t change a pet from a dog to a cat so why do we get all these options in our gadgets, when the makers still strive for some deeper human connection?

So what is the role of our phones in the Home of the Future?

Hopefully it’s not to adjust the settings! Here are three areas:

1. Computer Vision: your speaker hears, your sensors smell, your phone sees
2. Password Padlock: a family member identifier
3. Dumb Receiver: of multimedia swipes from AI-curated content services

There seem to have been a lot missteps around the smart home. When it comes to human behavior and technology, how do we know we’re on the brink of change? 

This is an age-old question: how do you spot the future? From a practical point of view, you or your team need to set up active listening of weak signals (rather than loud opinions). You need to have the time and recognition process to see patterns, and then understand them through internal and external expert conversation.

The biggest challenge for an organization that I’ve learned in the past 15 years is the ability to believe and react. Airbnb’s land grab was not some sort of surprise. From conversations I’ve had at the HQs in Virginia, I know the hotel business saw Airbnb coming but they had an unwillingness to believe and therefore no will to react. 

So.... to be clear: what an organization probably needs is someone presenting the ideas and trends emerging week in, week out, and other people willing to invest the time to listen and respond. 

Oh, and that organization needs to be supported by access to all the PSFK reports, newsletters, events and analysis through a PSFK Membership, of course. :)