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Retrospective
From Starting to Scaling: The Early Days of SmartThings

A Retrospective on Start-up Culture

Hiromi Matsumoto

Partner, Mass Productive

Originally published: November 11, 2024

In 2012, I was Creative Director at Refactr, a small consulting firm in Minneapolis that helped entrepreneurs turn their ideas into functioning businesses. It was an exciting time in tech—everyone was staking their claim in the app store, and we were building everything from “Facebook for therapists” to “Pinterest for men.” But after years of working on derivative concepts, I started feeling impatient. I longed to work on something with real vision—something innovative.

At that same time, smart devices were popping up everywhere, but the technical complexity made them impractical for most consumers. That’s when Alex Hawkinson, soon-to-be CEO of SmartThings, approached us with an idea to bridge the gap in the emerging Internet of Things (IoT) space. His vision was to create a central hub that connected all these disparate gadgets, making them truly “smart.” It was clear the idea had potential and for the first time, I felt like we were working on a startup that could go somewhere. But to sell this unfamiliar concept, we had to sell a future that didn’t exist yet—a fully connected world of “smart” things.

Selling a Future That Didn’t Exist

The project started with some humble soldering irons and Arduino components in a small corner of our office, but it quickly grew, taking over more and more space. SmartThings felt different—this wasn’t just another startup. It had the potential to be big. So we all wore a lot of hats. I wasn’t just working on design and user experience; I was helping shape the marketing strategy, build a community, and, most importantly, tell a compelling story.

We had to move fast. Investors were intrigued but cautious, and consumers didn’t yet realize the potential of a connected home. It felt like we were on the edge of something huge. So we set out to sell the story before the product fully existed, knowing we needed to build momentum quickly.

Building Momentum: The Kickstarter Campaign

To validate our concept and build a foundation, we launched a Kickstarter campaign with a modest goal of $250,000. It seemed like a large sum, but we hoped to prove there was a market for consumer ready connected devices. What we didn’t anticipate was how quickly things would take off.

We put the campaign together with limited resources. I shot the pitch video on my personal Canon T2i DSLR, and in the absence of proper equipment, I taped Apple headphones to Alex’s shirt as a makeshift mic. To save on licensing fees, I used a track my band had recorded. One memorable shot had Alex lying behind his niece’s bed, manually pulling the blinds to simulate “smart” blinds sensing her waking up. It wasn’t polished, but it worked.

Our goal was to engage early adopters—people who loved to tinker and saw the potential of connected devices. We kept the content playful, with 30-second teaser videos asking, “Wouldn’t it be smart if…?” and inviting people to imagine how SmartThings could transform their homes.

We knew we were onto something when we hit $100,000 on the first day. By the end of the campaign, we had raised $1.2 million—almost five times our goal. We were thrilled, but in hindsight, we hadn’t fully grasped the risks of moving so fast.

Wouldn't it be smart if... your sprinker knew if rain was coming and turned off automatically?

Trying to Keep Up

With the momentum from Kickstarter, things accelerated fast—too fast. We had to scale quickly to meet the promises we made to our backers and investors. In a matter of months, we grew from a small team of 10 engineers to over 80, expanding into multiple high-end office spaces. It felt like the dream was finally happening.

But behind the scenes, things were spinning out of control. Product development was delayed, and logistics were becoming increasingly complicated. The costs of injection molding and manufacturing were far higher than we anticipated, and the burn rate was outpacing our investment. We were spending money we didn’t yet have on scaling the team and expanding office spaces, all before bringing a product to market.

The Fallout: A Hard Lesson in Timing

As financial pressure mounted, leadership faced tough decisions. Rapid expansion had driven up expenses, and with the product still not ready for market, funding began to run dry. In response, teams were merged to cut costs, and layoffs became unavoidable. A few months later, Samsung stepped in with a $200 million acquisition, providing the capital the company needed—but not in time to save the jobs or unvested shares of those who had already been let go.

Destination in Mind, But Eyes on the Road

Reflecting on my time with SmartThings, I learned some important lessons. It’s critical to have a vision for the future—without it, a project can drift from priority to priority without real focus. But that vision needs to be tempered with realistic goals. Moving fast can be exciting, but without careful planning, you can burn through resources long before you cross the finish line.

Since then, I’ve seen many startups aim for the moon, only to miss their first step. I often think back to something Marc Barros, a seasoned entrepreneur, once told me: “Under-promise and over-deliver.” It’s a principle I try to live by now. You need to have the destination in mind, but you can’t forget to keep your eyes on the road right in front of you—and occasionally, glance in the mirror at the things you’ve left behind.