A group of customers bought Insteon, a bankrupt smart home company

Following yesterday’s report that smart home company Insteon’s servers had mysteriously turned on overnight, there’s good news: Insteon is back, and it’s been resurrected by its customers. This post appeared on Insteon’s blog today, posted by the company’s new CEO, Ken Fairbanks:

We are a small group of passionate Insteon users who have successfully acquired Insteon. Like many of you, our homes are powered by Insteon’s incredible dual-mesh technology and highly configurable products.

Insteon’s servers were taken offline last April when SmartLabs, the company that owns the smart lighting system, ran into “financial difficulties”. A financial services company had been commissioned to sell its assets, but this “passionate user group” stepped in and took over.

The group says it plans to “responsibly rebuild Insteon’s business.” It’s unclear exactly what this means, and it’s unclear whether subscription fees will be required to keep the servers running. That’s what happened when smart home platform Wink ran into financial trouble a few years ago and started charging for services that were previously free.

Insteon’s hubs are now back online, but the app is still missing from app stores.
Image: Insteon

Fairbanks goes on to explain that getting hubs back online was the first priority in order to stem the loss of customers. They were able to reactivate the service before they had access to the site or the means of communicating with users, hence the slightly disturbing stealth movement. “Every day more and more customers were losing hope, so it was essential to restore that as soon as possible,” Fairbanks wrote. “We realize that not all features are back online, but we are actively working on it. We hope you understand this urgency and appreciate your patience.

Interestingly, Fairbanks worked for SmartLabs between 2004 and 2007 and, according to his LinkedIn profile, helped develop Insteon’s home control networking technology and products.

This is great news for owners of Insteon devices, which include smart switches, outlets, and other lighting products. The devices hadn’t stopped working locally but had lost their connection to the cloud via the hub, which meant there was no way to program them using the app or control them remotely .

But that’s not a good sign for the smart home in general. No one who buys a smart light switch wants to worry about whether they’ll have to buy the company one day just to keep the lights on.

Smart home makers need to develop products and services with longevity in mind and have an action plan for what happens if they have to turn off the lights. Failure to integrate these two strategies into a business plan for smart devices should be a major red flag for customers and investors.

Update, June 10, 10:35 a.m.: Added details of Keith Fairbanks’ prior involvement with SmartLabs.

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