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CE Pro: iRule and On Controls: One Company, Two Home Automation Brands

Two years after iRule launched a software-based, cloud-enabled home automation system for do-it-yourselfers in 2011, the Detroit-based company acquired On Controls, an iRule reseller for the custom channel. On Controls would become the basis for iRule’s professional integration offering. Here, CE Pro visits with iRule founder Itai Ben-Gal about the two businesses.

Tell us about the genesis of iRule.
iRule began doing business in 2011 after approximately two years of R&D. The concept was born from the founders’ passion for home theater and media room applications, and we went to market initially as a cloud-based DIY solution for tech-savvy consumers passionate about music and movies who wanted control but couldn’t afford the more costly solutions available at that time.

Where did On Controls come from, and why incorporate it into the company?
iRule began attracting dealers almost immediately due to the convenience and efficiency associated with a cloud-based solution, which enabled them to “work smarter not harder” by reducing programming time, truck-rolls for upgrades and basic service issues.

We had a white-label customer at that time called On Controls that was using our product to address the CEDIA channel, and realized there was an opportunity to better serve our growing integrator community by making an acquisition.

With On Controls, we have been able to create an infrastructure to properly deliver a profitable model to custom integrators both in the residential and commercial market segments, along with unique marketing to support the On Controls initiative.

What do integrators get with On Controls that DIYs don’t get with iRule?
Professional integrators were looking for non-published pricing of hardware and software, which wasn’t achievable with iRule. On Controls offers this missing piece.

The On Controls project management tool can be repurposed for job after job—reducing installation time and increasing profitability on future jobs.

- Itai Ben-Gal

Additionally, On Controls dealers have access to exclusive hardware not available to iRule users, such as the On Controls Connect, which simplifies network configuration and remote access. Additional hardware devices are slated for release later this year, offering an opportunity for integrators to elevate their business and stand out from their competition.

Professional integrators are also provided with a comprehensive cloud-based project management tool to allow teams to collaborate on projects for scale. This is a big differentiator between the two as it allows a professional to leverage his or her skillsets and creativity in an efficient manner, which in turn allows for the development of new business models and increase sales.

The On Controls brand also delivers a partners program that generates device-specific drivers for a broad range of compatibility with third-party devices such as Sonos, Lutron, Onkyo/Integra, Nest, Denon/Marantz and many more.

UI graphic templates also are exclusively released to professionals, such as our Se7en theme (shown above), slated for our 4.2 release this July.

In addition we pride ourselves in offering professionals best-in-class service and support to our integrators in the field.

What do dealers get on the service and support side?
On Controls offers tremendous support to the CEDIA channel including dedicated training, our Online University, reduced costs for showroom systems and our Concierge Service, delivering support to integrators as they are onsite in a customer’s home. On Controls takes tremendous pride in delivering best-in-class phone/online support manned by real world integration specialists who have spent time in the field and understand the myriad of challenges faced in the field.

For dealers that are successful with your product, where does the profit come from if the software costs so little?
Much like the IT industry model that used to rely on hardware sales (computers) but now leverages specialized skills to deliver services and added value to their clients, On Controls integrators have an opportunity to establish long-lasting relationships with clients and leverage their expertise to sell services on a recurring basis.

Integrators do generate revenues from selling hardware and software with the On Controls platform; however, the long-term profitability comes from an opportunity to distinguish themselves as superior service providers—force the customer to ask, “What else do you offer?” and “What else can this company do for me?”

Value-add specialty services enable integrators to differentiate themselves from competitors in a way that no hardware component can do.

Additionally, integrators can create templates within the On Controls project management tool that can be repurposed for job after job—reducing installation time and increasing profitability on future jobs.

Since an On Controls solution is affordable, integrators to increase their overall volume of business—meeting new clients with an opportunity to bring products and services to each of them.

With the On Controls platform being so scalable and with a universe of new IoT devices coming to market at a ferocious pace, profit opportunities only begin with the initial sale. Increased overall volume and new customer relationships are the key to long term profitability for integrators using the On Controls platform.

What’s on the horizon for On Controls?
On Controls Connect is in Beta now and will be released to integrators shortly. A new and exciting UI template is also nearly ready for release. Adding new partners to our compatibility and programming initiatives is ongoing.

As iRule had been pulled into the CEDIA channel and spawned the emergence of On Controls, there will be a dedicated solution for commercial markets featuring specialized functionality and new hardware.

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Crain’s Detroit – iRule to reveal $2.5M in VC, electronics investor, key

Detroit-based iRule LLC, which has developed smartphone apps to network and run high-end home and corporate entertainment systems, is expected to announce Monday that it has closed on a venture capital funding round of $2.5 million.

The significance of the round is far greater than the money involved, said Itai Ben-Gal, iRule’s CEO and co-founder.

Of prime importance was that one of the investors is an overseas electronics manufacturer and retailer with worldwide sales and distribution offices, which will help expand iRule’s reach and revenue.

Also of significance was that the way the round was structured allowed IncWell LLC, the Birmingham-based VC firm founded by former Chrysler Group LLC CEO Tom LaSorda, to make a profitable exit from a previous investment in the company.

Important, too, was that the round was joined by AOL founder Steve Case as a result of iRule’s winning a Google Inc. Demo Day event in Detroit in February. That honor allowed the company to showcase its business plan along with nine other companies at the national Google Demo Day in Silicon Valley in April.

The name of the electronics retailer as well as an announcement about a new iRule product will be disclosed at a trade show in February, Ben-Gal said.

Ben-Gal said he and Detroit Venture Partners, the lead investor in a funding round of $1 million in 2013, wanted to limit the size of this round of funding, raising what was needed to spur the next round of growth without diluting equity needlessly.

“We had a lot of demand and were able to be quite choosy,” Ben-Gal said. “Taking on this strategic partner was important because they have a huge dealer base and worldwide offices.”

Ben-Gal said the electronics retailer wanted to invest more than what was available to it out of the $2.5 million and offered to buy stock in the company from previous angel investors and IncWell.

IRule, founded in 2009, also got a seed round of funding of $500,000 in 2011 that was led by Compuware Ventures LLC, a VC unit of the computer services company that was later shut down by CEO Bob Paul.

Tom LaSorda
“We had a small investment in iRule, a little over $100,000,” LaSorda said. “For us to make a good return in just 15 months is great. Usually you expect it to take three to five years to have an exit.”

This is the first exit for IncWell, which was founded in 2013.

“We’ve already sent checks out to the investors in our first fund,” LaSorda said.

“It was funny. We got some calls saying, ‘What is this for?’ I said, ‘Hey, under the terms of your subscription agreement, we had to write you a check.’

“This is a strategic partner that will be important for iRule. Itai is such an energetic guy, just what you’re looking for as an investor.”

IRule, based in the Madison Building in downtown Detroit, has 22 employees. Ben-Gal said some of the funding will be used to hire eight to 10 employees over the next year, including beefing up the sales and marketing team and adding engineers for product development.

Ben-Gal said he projects revenue to go from almost $2 million in 2014 to more than $3 million this year. He said commercial clients include CNN headquarters in New York City, all the Best Buy stores in the U.S. and Walt Disney Pictures’ LucasFilm division.

In 2012, Ben-Gal was named to Crain’s 2012 class of 40 under 40.

At the huge Consumer Electronics Association show in Nevada in 2013, iRule won the award for best control product of the year.

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Tom Henderson
Crain’s Detroit

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CE Pro: Best Buy Picks iRule Home Automation for Controlling Magnolia Showrooms

Affordable, software-based, cloud-enabled iRule beats out better-known home automation brands to run the demos in some 470 Magnolia stores.

CE Pro
Julie Jacobson
May 28, 2014

Click to View Article on CE Pro

Magnolia, the custom installation arm of Best Buy (NYSE: BBY) , needed a home automation system to help customers and salespeople operate audio demos in the listening rooms of roughly 470 Magnolia stores. They picked iRule.
iRule might seem like an unusual choice, given that the software starts at only $100 and the hardware at $100 as well, and given that it isn’t one of the biggest names in home automation. But the Detroit-based company beat out many of the better-known brands in the smart home business.

“There wasn’t anyone else that was multi-platform, flexible enough and affordable,” says Brent Newman, senior manager, Technology Design for Best Buy, in an interview with CE Pro. “We wanted something flexible, modular, something we could easily change out and that wasn’t hardware-driven.”

iRule uses iOS and Android devices as interfaces, a combination of local and cloud-based services for control, and flexible adapters or dongles (about $100 each) to operate devices via IR, IP, RS-232 or relay communications.

In the Magnolia implementation of iRule, the user has a smart tablet that replicates visually the display in the store, which consists of multiple speakers and components (take the tour here).

To select a speaker and/or source, the user simply touches the image(s) on the smart tablet.

LEDs in the showroom light up to show the products selected – a feature also enabled by iRule.

Newman says that Magnolia itself – not iRule – built the interface in about three weeks, with iRule doing only “a couple of custom things to it.”

That Magnolia themselves could program the system was an important consideration for selecting iRule, since products in the showroom can be rearranged or swapped out at any time.

Compared to the last demo system Magnolia was using, “we reduced the change-out time by 90 percent,” says Newman.

Although customers themselves can operate the demo system, it is primarily meant for employees. From the same interface they use for demos, they can easily pull up more details on any given product.

“If you can’t get the employee experience down, you can’t get the customer experience,” says Newman.

So is Magnolia offering iRule through its stores? No, at least not yet. Currently the company sells AMX, Control4, Pro Control, Savant and URC for home control.

iRule founder and CEO Itai Ben-Gal tells us that Best Buy is working on a different implementation for its core stores that lets customers try out the products with their own selections of music and video.

iRule Pro, the professional installed version of iRule, was named Control Product of the Year at the 2014 CEA Mark of Excellence Awards.

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CE Pro: iRule is Only CE Company Invited to Google Demo Day

Home automation software company iRule wins Detroit, invited to pitch with nine other companies at Google for Entrepreneurs Demo Day in Silicon Valley.

iRule, an up-and-coming maker of DIY and professionally installed home automation systems, has been invited to pitch at Google for Entrepreneurs Demo Days in Silicon Valley.
The company, which recently snagged the Control Product of the Year award from the Consumer Electronics Association, beat out more than 100 applicants for the Detroit qualifier. Twenty-one companies were selected to demo to a panel of judges there, and seven made it to the final stage, presenting to a panel of Michigan investors.

iRule prevailed and will battle nine other winning startups throughout the U.S. at Google headquarters in Silicon Valley, April 1-2.

iRule CFO Joseph Ben-Gal tells CE Pro the company is the only consumer-electronics firm invited to the event.

The home automation firm is not exactly a startup. Founded in 2009, iRule claims to have sold “tens of thousands of licenses” in more than 55 countries. The software, which works with IP-enabling hardware from Global Cache, starts at $100 for the DIY model.

Considering the millions of licenses iRule hopes to sell, however, the company is still just a baby, hoping to gain the visibility that will catapult it into the Nest leagues.

“When Google selects 10 companies from around the country and pays for them to come and meet for two days, it’s amazing visibility and recognition,” says founder and CEO Itai Ben-Gal. “We are excited to meet other interesting start-ups from different sectors and continue to build our name beyond the CE community.”

RELATED: $100 iRule Could be Next Big Thing in Cloud-Based Home Automation

And if some funding happens his way from the Google pitch, that would be nice, too. AOL founder Steve Case and other prominent technology leaders will be evaluating the pitches.

Meanwhile, iRule will be evaluating Google technology over two days of meetings and learning sessions to determine “ways we can better use our mutual platforms,” says Itai Ben Gal.

iRule is a cloud-based software solution originally designed to control virtually any type of A/V gear, enabling users to chuck their handheld remotes in favor of a richer platform.

The software has grown to support any number of smart home subsystems including thermostats, motorized shades, lighting controls, security, surveillance, multiroom audio, streaming services and more.

With third-party hardware starting at less than $100, iRule can communicate via IR, RS-232, relay and IP-based commands.

Recently, the DIY-centric company acquired On Controls, an OEM customer, to better serve the custom installation channel with richer features and pro-worthy support.

——

By Julie Jacobson, March 17, 2014
Click to View Article

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iRule wins opportunity to pitch its plan to Google

Detroit-based iRule LLC will have the opportunity to pitch its business plan toGoogle Inc. executives after winning Detroit’s Google Demo Day competition Wednesday night.

The startup, which created an app that allows consumers to use smartphones and tablets to control devices such as lights and TVs, will join the other winners of Google Demo Day events in April in Silicon Valley, Calif. Demo Days, held in seven cities across the country, is part of the tech company’s Google for Entrepreneurs Program.

IRule was chosen over six other finalists in the Detroit competition, organized by Grand Circus Detroit. Finalists made a five-minute pitch and underwent a three-minute question-and-answer session from a panel of four Southeast Michigan investors in front of an audience of 150.

“It’s incredible; I’m truly humbled by the opportunity to represent Detroit and the Detroit area,” said Itai Ben-Gal, iRule co-founder and CEO, who was a Crain’s 40 under 40 in 2012.

Besides pitching his startup, Ben-Gal will be able to interact with Google’s product experts, tour the Google campus, network with other entrepreneurs and receive Google swag.

“I’m looking forward to making great connections so we can continue to grow our business and take it to the next level,” he said.

IRule generated revenue of $1.1 million last year and expects that to increase to $3 million this year, Ben-Gal said.

The runner-up in the competition was Detroit-based Are You A Human — creator of PlayThru, a program that replaces online ads and security filters such as distorted text with games. The startup could earn one of three wild-card slots that Google will select from among the second-place finishers.

The wild cards will be announced next week, said Grand Circus CEO Damien Rocchi.

The other finalists in the Detroit competition were Detroit-based Backstitch Inc., Ann Arbor-based MyFab5 LLC, Detroit-basedFoodjunky LLC, Detroit-based GreenLancer Energy Inc. and Ann Arbor-based Wisely Inc.

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