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Are Smart Homes Worth the Investment?

https://www.howtogeek.com/446854/yes-smarthomes-are-worth-the-investment/

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Exterior of a two-story blue and white house at dusk with the interior lights on.
Breadmaker/ShutterStock

Converting to a smart home might seem expensive and complicated at first, but do the benefits outweigh the cost and hassle? Let’s check out why setting up a smart home is a good investment of your time and money.

Convenience for (Nearly) Everyone

An Echo Spot, Google Home, Smart bulb and smart plug on a wooden surface.
Josh Hendrickson

When you install smart lights, plugs, thermostats, and more, you add a great deal of convenience to your home. It isn’t that you’re incapable of getting off the couch and flipping a light switch, it’s that you’ve given yourself the option of not heading to the light switch.

We all accept a certain level of convenience in our lives. People generally don’t need electricity and light switches. Yet, you don’t often hear the argument that electrical lighting is the product of laziness, and people should use candles instead. Smart lights and other smart gadgets are just a natural extension of that progress.

When you start watching a movie, only to realize you’d prefer the lights to be dimmed or turned off, you’ll appreciate the convenience of making that happen without having to interrupt the film. Likewise, the first time you answer the doorbell from your office, or even when you’re away from home, you’ll appreciate the convenience of video doorbells.

If you’ve ever tried to teach a family member how to operate your complicated entertainment system, you’ll see the relief in their eyes when you can tell them, “Just say, ‘Alexa, turn on the TV.’” That’s so much easier than, “Hit power on this remote, then that remote, and then this remote,” or handing them a universal remote with dozens of buttons.

Convenience might not be a necessity, but that doesn’t make it a bad thing. Smart homes provide creature comforts you might not otherwise have, and, thanks to routines, they even offer peace of mind because you don’t have to worry if you remembered to turn off the lights in the living room.

Smart Homes Solve Problems

A young child in a wheel chair doing crafts with her mom at a table with an Amazon Echo nearby.
Amazon

Smart home technology can help you overcome some daily challenges. Take the classic example of asking a child to deliver a message, only to watch them shout it from two feet in front of you.

With voice assistants, you can communicate with everyone in the home, no matter where they are, via the intercom features. Google Home’s version of this is Broadcast, and it’s brilliant. While the initial message goes through every speaker in the home, Google Assistant sends the response to the originating speaker. Sure, you can buy intercoms, but they often cost at least as much as an Echo Dot. Besides, voice assistants offer you more functionality.

As a bonus, when you set up voice assistant speakers in several rooms as intercoms, you also get whole-home music.

Having voice control over your lights and plugs solves some problems, too. For example, young children are capable of saying, “Alexa, turn on the lights,” before they can reach a light switch. People with disabilities will also appreciate it. If you add smart sensors to the mix, you can even program lights and plugs to turn on and off when you enter or leave a room. With just a few devices, your smart home can go beyond solving problems—it can provide independence.

Smart plugs can have secondary benefits, too. Rebooting your router is still the best starting point to troubleshoot your internet. But routers are often tucked away in inconvenient places.

You can buy smarter routers, like Mesh kits, which feature apps that reboot the device. However, those are expensive (Google’s new Nest Wi-Fi starts at $170). Alternatively, if your current router works fine, you can connect it to a Z-Wave plug and reboot the router from anywhere in the home.

Save Money

A Wyze smart plug in an outlet with a device plugged into it.
Josh Hendrickson

If you wake up only to see that every light in the house was left burning all night (again), then you’ve discovered the easiest problem a smart home can solve.

The more people you have in your home, the harder it can be to train all of them to do sensible things, like turning off the TV or lights when they leave a room. If you have children, that challenge often only grows.

It would be best if everyone learned about and remembered the importance of energy conservation, but we’re only human and prone to forgetfulness. So, any extra bit of help to overcome that absentmindedness is most welcome! With basic routines, you can program smart lights and plugs to turn off overnight, or even during the day when everyone is at work or school—which saves you money on your electric bill.

Even if you always remember to turn off the lights and electronics, smart plugs can still cut back your energy usage. Even when they’re turned off, many devices still draw power. For example, modern game consoles use more power than other devices when turned off because they still update in the background.

Vampire energy isn’t always worth tackling, but you can use an electricity usage monitor to find out. It’s best to check either devices that frequently turn on (like dehumidifiers) or areas in which you have multiple electronics plugged into one power strip (like your entertainment center).

You might be surprised how much you can save when you prevent those devices from drawing power. Especially when you consider the eight hours you spend asleep, and the six to eight hours you spend at school or work.

Smart home technology isn’t always easy to set up, and more work needs to be done to bring it into the mainstream. Still, if you go into it with the understanding that you’ll occasionally have to troubleshoot problems, the benefits do outweigh any downsides you might encounter.

What Are the Downsides?

When it comes to smart homes, instability is definitely a problem. For example, your smart home might stop working, and there’s not much you can do about it.

We once praised Wink Smart Hubs for all they were capable of, but we can’t recommend that anyone buy Wink’s hardware anymore. This can happen with any smart device.

Even if a company is successful, many smart home products are challenging to install. You might find yourself troubleshooting the worst aspects of owning a smart home.

Still, despite all the downsides, smart homes can provide convenience, solve problems you regularly encounter, and even save you money. If that sounds good to you, it’s worth the investment.

RELATED: The Worst Things About Owning a Smarthome

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These ten enterprise M&A deals totaled over $40B in 2019

It would be hard to top the 2018 enterprise M&A total of a whopping $87 billion, and predictably this year didn’t come close. In fact, the top 10 enterprise M&A deals in 2019 were less than half last year’s, totaling $40.6 billion. This year’s biggest purchase was Salesforce buying Tableau for $15.7 billion, which would…

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These ten enterprise M&A deals totaled over $40B in 2019

It would be hard to top the 2018 enterprise M&A total of a whopping $87 billion, and predictably this year didn’t come close. In fact, the top 10 enterprise M&A deals in 2019 were less than half last year’s, totaling $40.6 billion.

This year’s biggest purchase was Salesforce buying Tableau for $15.7 billion, which would have been good for third place last year behind IBM’s mega deal plucking Red Hat for $34 billion and Broadcom grabbing CA Technologies for $18.8 billion.

Contributing to this year’s quieter activity was the fact that several typically acquisitive companies — Adobe, Oracle and IBM — stayed mostly on the sidelines after big investments last year. It’s not unusual for companies to take a go-slow approach after a big expenditure year. Adobe and Oracle bought just two companies each with neither revealing the prices. IBM didn’t buy any.

Microsoft didn’t show up on this year’s list either, but still managed to pick up eight new companies. It was just that none was large enough to make the list (or even for them to publicly reveal the prices). When a publicly traded company doesn’t reveal the price, it usually means that it didn’t reach the threshold of being material to the company’s results.

As always, just because you buy it doesn’t mean it’s always going to integrate smoothly or well, and we won’t know about the success or failure of these transactions for some years to come. For now, we can only look at the deals themselves.

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Jumia, DHL, and Alibaba will face off in African ecommerce 2.0

The business of selling consumer goods and services online is a relatively young endeavor across Africa, but ecommerce is set to boom. Over the last eight years, the sector has seen its first phase of big VC fundings, startup duels and attrition. To date, scaling e-commerce in Africa has straddled the line of challenge and…

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Jumia, DHL, and Alibaba will face off in African ecommerce 2.0

The business of selling consumer goods and services online is a relatively young endeavor across Africa, but ecommerce is set to boom.

Over the last eight years, the sector has seen its first phase of big VC fundings, startup duels and attrition.

To date, scaling e-commerce in Africa has straddled the line of challenge and opportunity, perhaps more than any other market in the world. Across major African economies, many of the requisites for online retail — internet access, digital payment adoption, and 3PL delivery options — have been severely lacking.

Still, startups jumped into this market for the chance to digitize a share of Africa’s fast growing consumer spending, expected to top $2 billion by 2025.

African e-commerce 2.0 will include some old and new players, play out across more countries, place more priority on internet services, and see the entry of China.

But before highlighting several things to look out for in the future of digital-retail on the continent, a look back is beneficial.

Jumia vs. Konga

The early years for development of African online shopping largely played out in Nigeria (and to some extent South Africa). Anyone who visited Nigeria from 2012 to 2016 likely saw evidence of one of the continent’s early e-commerce showdowns. Nigeria had its own Coke vs. Pepsi-like duel — a race between ventures Konga and Jumia to out-advertise and out-discount each other in a quest to scale online shopping in Africa’s largest economy and most populous nation.

Traveling in Lagos traffic, large billboards for each startup faced off across the skyline, as their delivery motorcycles buzzed between stopped cars.

Covering each company early on, it appeared a battle of VC attrition. The challenge: who could continue to raise enough capital to absorb the losses of simultaneously capturing and creating an e-commerce market in notoriously difficult conditions.

In addition to the aforementioned challenges, Nigeria also had (and continues to have) shoddy electricity.

Both Konga — founded by Nigerian Sim Shagaya — and Jumia — originally founded by two Nigerians and two Frenchman — were forced to burn capital building fulfillment operations most e-commerce startups source to third parties.

That included their own delivery and payment services (KongaPay and JumiaPay). In addition to sales of goods from mobile-phones to diapers, both startups also began experimenting with verticals for internet based services, such as food-delivery and classifieds.

While Jumia and Konga were competing in Nigeria, there was another VC driven race for e-commerce playing out in South Africa — the continent’s second largest and most advanced economy.

E-tailers Takealot and Kalahari had been jockeying for market share since 2011 after raising capital in the hundreds of millions of dollars from investors Naspers and U.S. fund Tiger Global Management.

So how did things turn out in West and Southern Africa? In 2014, the lead investor of a flailing Kalahari — Naspers — facilitated a merger with Takealot (that was more of an acquisition). They nixed the Kalahari brand in 2016 and bought out Takelot’s largest investor, Tiger Global, in 2018. Takealot is now South Africa’s leading e-commerce site by market share, but only operates in one country.

In Nigeria, by 2016 Jumia had outpaced its rival Konga in Alexa ratings (6 vs 14), while out-raising Konga (with backing of Goldman Sachs) to become Africa’s first VC backed, startup unicorn. By early 2018, Konga was purchased in a distressed acquisition and faded away as a competitor to Jumia.

Jumia went on to expand online goods and services verticals into 14 Africa countries (though it recently exited a few) and in April 2019 raised over $200 million in an NYSE IPO — the first on a major exchange for a VC-backed startup operating in Africa.

Jumia’s had bumpy road since going public — losing significant share-value after a short-sell attack earlier in 2019 — but the continent’s leading e-commerce company still has heap of capital and generates $100 million in revenues (even with losses).

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Airbnb’s New Year’s Eve guest volume shows its falling growth rate

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between. It’s finally 2020, the year that should bring us a direct listing from home-sharing giant Airbnb, a technology company valued at tens of billions of dollars. The company’s flotation will be a key event in…

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Airbnb’s New Year’s Eve guest volume shows its falling growth rate

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

It’s finally 2020, the year that should bring us a direct listing from home-sharing giant Airbnb, a technology company valued at tens of billions of dollars. The company’s flotation will be a key event in this coming year’s technology exit market. Expect the NYSE and Nasdaq to compete for the listing, bankers to queue to take part, and endless media coverage.

Given that that’s ahead, we’re going to take periodic looks at Airbnb as we tick closer to its eventual public market debut. And that means that this morning we’re looking back through time to see how fast the company has grown by using a quirky data point.

Airbnb releases a regular tally of its expected “guest stays” for New Year’s Eve each year, including 2019. We can therefore look back in time, tracking how quickly (or not) Airbnb’s New Year Eve guest tally has risen. This exercise will provide a loose, but fun proxy for the company’s growth as a whole.

The numbers

Before we look into the figures themselves, keep in mind that we are looking at a guest figure which is at best a proxy for revenue. We don’t know the revenue mix of the guest stays, for example, meaning that Airbnb could have seen a 10% drop in per-guest revenue this New Year’s Eve — even with more guest stays — and we’d have no idea.

So, the cliche about grains of salt and taking, please.

But as more guests tends to mean more rentals which points towards more revenue, the New Year’s Eve figures are useful as we work to understand how quickly Airbnb is growing now compared to how fast it grew in the past. The faster the company is expanding today, the more it’s worth. And given recent news that the company has ditched profitability in favor of boosting its sales and marketing spend (leading to sharp, regular deficits in its quarterly results), how fast Airbnb can grow through higher spend is a key question for the highly-backed, San Francisco-based private company.

Here’s the tally of guest stays in Airbnb’s during New Years Eve (data via CNBC, Jon Erlichman, Airbnb), and their resulting year-over-year growth rates:

  • 2009: 1,400
  • 2010: 6,000 (+329%)
  • 2011: 3,1000 (+417%)
  • 2012: 108,000 (248%)
  • 2013: 250,000 (+131%)
  • 2014: 540,000 (+116%)
  • 2015: 1,100,000 (+104%)
  • 2016: 2,000,000 (+82%)
  • 2017: 3,000,000 (+50%)
  • 2018: 3,700,000 (+23%)
  • 2019: 4,500,000 (+22%)

In chart form, that looks like this:

Let’s talk about a few things that stand out. First is that the company’s growth rate managed to stay over 100% for as long as it did. In case you’re a SaaS fan, what Airbnb pulled off in its early years (again, using this fun proxy for revenue growth) was far better than a triple-triple-double-double-double.

Next, the company’s growth rate in percentage terms has slowed dramatically, including in 2019. At the same time the firm managed to re-accelerate its gross guest growth in 2019. In numerical terms, Airbnb added 1,000,000 New Year’s Eve guest stays in 2017, 700,000 in 2018, and 800,000 in 2019. So 2019’s gross adds was not a record, but it was a better result than its year-ago tally.

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