Susan Paley, who helped turn the Beats by Dr. Dre headphones into a wildly successful personal fashion statement, knows a trend when she spots one. As Beats Electronics’ first employee and CEO, she played a major role in redefining headphones as a status symbol—one for which people were willing to pay $300 or more—by incorporating superior audio in a striking package, and placing the product over the ears (or simply around the necks) of celebrities like LeBron James, Eminem, and Lady Gaga. Since then, she has advised startups as well as established companies like General Motors, for which she has served a consultant on its connected-car concept.
We sat down with Paley at the International CES expo in Las Vegas—on the floor at the Sands Expo (sensible seating can be hard to find at the world’s largest trade show)—to discuss the connected home, 3D printing, and other trends that were the talk of CES, which ends on January 9, 2015.
What stood out to you about this year's CES?
The quality of a lot that was being presented was fantastic. It's amazing, this is really the do-it-yourself generation. Think about 3D printers. You can print your own circuitboards, so to rapidly prototype products now, it's accessible; you don't have to go to China, you can do it in your garage. I was talking to a guy and he said it's almost like when you would go to Radio Shack to buy transistors, but it's like that on sterioids because so many more people are doing it. So you've merged do-it-yourself wth craft and tech. It's incredible.
A lot of the buzz here has been about the connected home—the so-called “Internet of things.”
The whole show is the Internet of things. And it’s the Internet of things for the value chain; it’s the end device, the enabling software, the cloud-based services. Back in the early days, it was all about “walled gardens,” or closed ecosystems. This year, the nice thing that I’ve seen is that most of the home-automation companies—Lutron, for example—have their devices playing on multiple software platforms. You see a much more inclusive ecosystem so you don’t have to make a choice between this or this. So you see all these devices that are playing with each other, because no one can develop everything for the home, and until everything shakes out, everyone’s kind of hedging their bets. And that’s great for the consumer because they’re not forced into an ecosystem. They get to see how it’s all going to play out, and they’re not going to have the same obsolescence.
Is that what we’re seeing with Apple’s HomeKit—hubs that can control smart-home gadgets developed by multiple companies?
Yes, and there’s Wink, too. This is an area where Apple doesn’t have a clear dominance. You’ve got all these players—GE is involved with Wink—who have been established in the home, because the connected home really starts with safety, security, and utility-type situations, like doorbells, lights, and garage-door openers. So that’s not Apple’s coveted, beautiful art objects. It feels almost weirdly democratic, which is nice.
Does any company stand out as a particularly savvy operator in this realm?
Nest really set the standard because they came up with an object with a beautiful interface that you can show off to your friends. The interfaces are so much better and so much more sophisticated than they used to be, and the apps are so much better and so much cleaner. It’s funny, because I think the idea for home automation is to have things disappear. Everything works. From a design standpoint, to me, it should be minimalist; you don’t notice it and it delivers all of that function.
Security seems to be a big driver in home connectivity this year.
It really is, and it’s remote security, for when people are away. It’s monitoring. The difference between last year and this year is incredible. Last year, everyone was talking about home automation, but what does that really mean? This year, we’re seeing that safety and security are the first emerging areas in which people are trying to put a consumer value proposition on why this should matter to people.
And it’s not just about someone breaking into your house. It’s peace-of-mind stuff, too.
Right. You have a cat. You’re away for three days and your air-conditioner breaks. You can monitor if there’s excessive heat in your house, or if there’s a gas leak.
Where are we in the evolution of these concepts?
I think it’s going to take a couple of years because it’s really about starting with the home first, where people are making long-term purchasing decisions. It’s wiring the whole network. I’ve done a lot of work with the automotive companies, so they all want to get to the point where you drive into your driveway, or you drive out, and you want to be able to access all that information on your dashboard. “OK, I’m home. I want the lights on, I want the heat at this temperature, I want the door open.” And we’re getting there. Car companies have four-year design cycles or three-year design cycles, but those are being broken now. They’re much faster. So with Google and Apple getting into the car much quicker than anyone expected with Android Auto and CarPlay, I think in two years you’re going to see exponential leaps. The car, which has really been the last bastion in terms of being its own private universe, is going to get connected in a much more meaningful way.