Insteon, SmartLabs Acquired; New CEO Wants to Make Powerline Great Again for Home Automation

Richmond Capital acquires SmartLabs, owner of Insteon mesh-networking home-automation technology, and Smarthome, leading home-technology retailer; plans serious investment in IoT hardware and software.


The private investment firm Richmond Capital Partners has acquired SmartLabs, the parent company of home-technology distributor Smarthome and its product-development arm Insteon, an exceptional but rather marginalized IoT and home-automation technology.

“This is a blockbuster of an opportunity,” says new CEO Rob Lilleness in an interview with CE Pro. Previously he was CEO of Medio Systems and COO of Universal Electronics Inc.

While we as an industry tend to forget Insteon these days, it’s actually a pretty great protocol that was developed in 2004 by Joe Dada and his team at SmartHome, a leading home-technology distributor.

As we wrote back then:

Insteon (pronounced “instee-on”) combines the convenience of RF with the efficiency of powerline-carrier (PLC) communications to create what appears to be the first hybrid wireless/powerline technology for control applications.

Smarthome envisions a world in which wireless security sensors and PLC-enabled light switches communicate with each other over a single network, through a single protocol, with a unified programming interface. …

Both PLC and RF have their own advantages when it comes to in-home communications, whether for high-speed networking, or small-bit control applications. PLC is generally less expensive, while RF is more convenient. Either media might enable faster or more reliable communications, depending on the installation. Thus, a hybrid approach presents the best of both worlds.

Certainly, a hybrid environment could be created by bridging two existing protocols—say X10 for powerline and Zensys for RF. In fact, this is being done, but the approach is less than optimal. The translation from one protocol to another takes time, and there’s no way for X10 devices and Zensys devices to “feed” off of each other since they occupy two different networks.

On the other hand, hybrid Insteon products can simultaneously signal both powerline and RF devices. Whichever signal happens to work best for any particular device—that’s the one that automatically “wins.” Furthermore, Insteon employs a mesh networking architecture (as does Zensys for RF) in which all nodes are transceivers and repeaters. Thus, any powerline or RF device added to the network enhances the entire network.

It was the first, and still the only, worthwhile protocol to bridge two transports: RF wireless and powerline carrier (PLC, the home’s existing AC wiring). In the Insteon ecosystem, products like sensors that should be powered by battery would communicate over RF, while anything plugged into an outlet would take advantage of the usually-more-reliable PLC.

Lilleness says SmartLabs has some 30 patents around “dual-mesh” technology. The powerline component, he adds, is becoming increasingly important as wireless signals bombard the home.

“Our implementations are in the thousands of nodes in certain cases, with no degradation of service.”

— New SmartLabs CEO
Rob Lilleness on Insteon robustness

If, as he cites, we’ll have an average of 300 smart nodes in the home by 2020, “you’d need a lot of improvement to wireless protocols to handle that.”

Insteon’s PLC technology, on the other hand, has the “ability to scale,” according to the CEO. “Our implementations are in the thousands of nodes in certain cases, with no degradation of service.”

Pros will tell you that Insteon is a reliable and robust protocol, but it never quite made it as a “standard.”  First Alert announced it would use the technology in a line of smoke detectors back in the day, and the protocol had a few other high-profile takers, but the products didn’t materialize and ultimately SmartLabs really was the only one to make Insteon products.

The effort might have been harmed by Insteon’s association with X10 – at the time a longstanding home-automation protocol that worked over the home’s existing powerlines. While X10 was the only thing going for a time, the technology was often derided as slow and unreliable, especially as Z-Wave wireless mesh-networking technology (then “Zensys”) began to overtake it.

Thereafter, all powerline carrier technologies including Insteon and Universal Powerline Bus (UPB) became suspect, despite their major improvements over X10.

Investments to Make Insteon Open, Ubiquitous

Perhaps we’ll see a renewed interest in powerline communications, now that RF is out of control, what with interference from microwave ovens, mirrors, HVAC ducting, brick fireplaces, as well as wireless activity in your homes, in your neighbors’ homes, in your cars and on your person.

With wireless, a “network inherently gets stressed as new devices utilize the bandwidth,” Lilleness says.

Lilleness and team plan to reinvigorate Insteon with a “significant investment” into the company, starting with a $7.3 million infusion.

RELATEDInsteon Bows First Hybrid RF/PLC Technology (2004)

The opportunity is vast, even if we just consider the powerline.

U.S. housing starts are now at about 1.2 million units per year. With an average of 70 electrical nodes (electrical outlets, switches, lights), the opportunity would be about 84 million nodes, according to Lilleness.

“Today, 99 percent of those nodes are dumb,” he says. “My belief is that in five to seven years, the vast majority will be smart.”

For the incredulous set, he reminds us that we scoffed at Bill Gates when he said there would be a PC on every desk.

“It’s the same thing with IoT,” Lilleness suggests.

The first order of business for SmartLabs will be to invest in software. SmartLabs has decent home-automation software, but the new leadership will invest more heavily to create not only a smart-home system that is affordable and easy to use, but also an ecosystem that is easy to join.

SmartLabs will “build out our APIs so anyone can utilize Insteon,” Lilleness says. “We have to ensure compatibility.”

So far in the modern era, Insteon has been largely ignored by makers of home automation hubs, including DIY and pro. The short-lived Revolv hub had it, and the Staples Connect Hub was supposed to have it, but apparently never got it.

Even so, SmartLabs itself has built out a nice ecosystem of home-automation hardware and software, (including cloud-based services) compatible with Amazon Alexa, Apple HomeKit, Nest and most of the other popular offerings today.

Lilleness feels confident the company can deliver world-class hardware and software around Insteon, but at the end of the day what matters most is that Insteon simply works.

“The customer expectation is when you flip a switch … it turns on,” he says, channeling Thomas Edison.

Future of Smarthome

Insteon was a product of Smarthome, founded in 1992 as a supplier of home-automation devices, and today a leading online retailer in the category. Lilleness says Smarthome will continue to run “distinctly” from Insteon, while recognizing synergies with the technology group.


Richmond Capital Partners Acquires Smartlabs and Fortifies Company with $7.3 Million in Funding to Accelerate the Company’s Push in the IoT Industry

Technology Industry Veteran Rob Lilleness to Lead the Company


Richmond Capital Partners, a private investment firm based in Seattle, today announced the acquisition of Smartlabs Inc., parent company of Insteon®, an Internet of Things (IoT) technology company, and Smarthome®, an eCommerce superstore for home automation. As part of the acquisition, Rob Lilleness will assume the role of chairman and CEO.

Lilleness has built multiple successful high-tech businesses in digital media, mobile, software and consumer products. Most recently he served as president and Chief Executive Officer for Medio Systems, an ACCEL-backed company, which was acquired by HERE Technologies (a company currently owned by BMW, Daimler, Audi, Intel, and Tencent). Prior to Medio, Lilleness was president and chief operational officer of Universal Electronics. During his tenure at Universal, earnings more than tripled and the market capitalization grew from approximately $100 million to $500 million.

“I’ve been following Smartlabs almost from when they started. Their Insteon line remains arguably the strongest in the IoT space for controlling and communicating with electrical components in one’s home—whether via Amazon Alexa, smartphones, pads, or traditional wall plates and remotes,” said Rob Enderle, principal analyst, Enderle Group. “Additionally, Rob Lilleness, with his background helping to build Microsoft’s networking business, is one of the few people that has both the resources and experience to take Smartlabs where I’ve always believed they could go.”

One of the Largest Opportunities in IoT 
According to a report published by Business Intelligence, by 2020 the U.S. residential market will have 193 million devices in connected homes with almost 50 percent of those devices in SmartLabs’ core electrical, lighting and sensor market. The global smart electrical control market is expected to grow to $10.8 billion over the next five years.

“There are two incredibly interesting IoT spaces in technology today—the car and the home,” said Lilleness. “Over the next five to 10 years, it is inevitable that a large portion of electrical nodes in the home will be ‘smart’ and addressable via the internet. With Insteon’s patented dual-mesh technology that communicates both wirelessly and via the home’s own electrical wiring, SmartLabs has the most reliable and scalable technology for electrical control and communication, which is critical to meet consumers’ expectations.”

Smartlabs headquarters will remain in Irvine, Calif., and the company plans to open a software development office in Seattle.

About Insteon 
Insteon creates the world’s leading technology for electrical, lighting, and sensor communication and control. Its patented dual mesh technology delivers unmatched reliability that is used in more than 200 Insteon-powered products and enables consumers to control their homes from virtually any device or interface.

About Smarthome 
Smarthome is one of the world’s largest home automation retailers and an easy-to-use source for thousands of affordable lighting, security, and home entertainment products that the average “do-it-yourselfer” can safely install. Its team of product specialists strives to deliver the newest cutting-edge products at the best possible prices. Smarthome distributes products with award-winning INSTEON technology.

About Smartlabs 
Founded in 1992, Smartlabs, Inc., the parent company of Insteon and Smarthome, is the world's leading authority on electronic home improvement and automation.

About the Author

Julie Jacobson
Julie Jacobson:

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson