Oh, what a tangled web of wires we weave
Nampa start-up's device a boon to home networks
Idaho Statesman
6/7/2003
Imagine walking into your home theater and popping in a DVD. Automatically, the lights dim and the shades electronically slide shut, creating the perfect movie environment.
Or how about this one? Your framed flat-panel plasma screen can be a beautiful picture most days, but on occasion can act as a window into a faraway relative's house.
A new Nampa firm is moving the technology toward those future possibilities and has attracted $500,000 in funding from area investors for its launch.
Dedicated Devices Inc., founded by local entrepreneurs displaced by the Micron Electronics break-up two years ago, is the first start-up to receive venture funding from Highway 12 Ventures' new seed capital fund. Highway 12 joined three other investment groups in a joint deal to assist DDI.
"We're already talking to other investors and expect to have another round of funding of a couple million later this year," said Mark Solon, Highway 12's managing partner.
Along with Highway 12, other current investors are: Area real estate developers Stewart, Laney, Oaas Mountain West Investment, a group of Boise-based investors and Idaho Falls-based Ball Ventures.
DDI has created a design for a device that will network all electronic and wireless components in a home, from a personal computer or laptop to a DVD player to a cell phone. While the technology might be reminiscent of the much ballyhooed Smart Home concept -- an idea for complete home automation launched in the '80s that never caught on -- partners of the Nampa business say today's advanced technology has morphed that idea into something called the "intelligent home network."
"Look at all the data sources in a home," said DDI partner Jeffrey Moeser, pointing out that nearly half the homes built today are equipped with the cabling infrastructure to create this network. "All the devices have disparate sources. We're going to be that product that links them together."
The market for networked homes is on the rise, according to The Yankee Group, a Boston research firm. That firm projects the number of networked homes will rise from a $6.7 million market in 2002 to a $32.3 million market by 2007.
"There's no reason, as long as they execute well, that this can't be a $100 million company in five years," said Phil Reed, who heads up Highway 12's seed capital initiative. "There's a great upside here. A lot of stuff's got to happen, but all the ingredients are there."
The main ingredient, say investors, is the management team that launched the new business. Led by Moeser, former Micron Electronics chief technical officer and senior vice president of product development, the team also consists of Jonathan Weech, former director of retail product development at Micron Electronics, and Amber Jacobs-Bedegi, former director of product development, also at Micron Electronics.
The group previously launched a design firm called Design-Genetix but closed it to focus on this venture.
The new business -- so new that its office space is still a bare concrete floor and walls without sheet rock -- for its first two months this year operated out of Highway 12's boardroom to save money.
The company has hired two employees and is recruiting nationwide for people with high-level computer architecture skills.
"This could be a world-class company, not just the best of Boise," said Highway 12's Solon.
Allen Ball, principal for Ball Ventures, said that while his Idaho Falls firm is better known for its traditional real estate investments, DDI's possibilities captured his imagination.
"I just put in a home theater and have had lots of problems," he said. "This device will make it easy to have sound systems and new technology coming into new homes."
The key to success will not be engaging the consumer but rather the installer, said Kurt Scherf, vice president of research for Dallas-based research firm Parks Associates.
"The amount of programming skill and time it takes to get all these devices working in concert with each other is huge," said Scherf.
He added that various companies are coming out with similar types of home control systems, which will open the door for mass retailers such as Best Buy and Ultimate Electronics to capture installation from independent dealers, he said.
"The industry is becoming more complicated and the installing dealer community is looking for ways to reduce their costs," he said. "These new devices have to be cost competitive and allow them to install more products in a home."
DDI has addressed the ease-of-use and the cost issues, said Moeser. While high-end systems can cost upwards of $100,000, DDI plans to make its device in the $3,000 to $10,000 range, and one that requires minimal installer time and skill.
In addition, he said DDI would target the new home construction market.
"This will bring a new level of use to the home," he said.
ABOUT DDI
Company: Dedicated Devices Inc.
Located: 5680 E. Franklin Road, Suite 120, Nampa
What they do: Design and manufacture devices that link all electronic and wireless components of a home.
Employees: Five, and hiring.
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