In this Q&A, Notion CEO Brett Jurgens explains the company’s view of the consumer IoT market, emphasizing that while the tech community perceives it as crowded, the mass market remains largely unaware of IoT devices. Notion aims to be an affordable, non‑intimidating entry point that can be installed in five minutes and controlled via a phone, positioning itself as a potential platform that integrates with other smart‑home products. Jurgens discusses the cautious approach to retail expansion, using Lowe’s as a test case and highlighting the financial risks of large‑scale inventory commitments. He stresses the importance of in‑store education and brand recognition before scaling. On hardware development, he shares practical prototyping advice: leverage low‑cost 3D printing, prioritize functional demonstration over aesthetics, and expect longer timelines and higher costs than anticipated. The team at the time consisted of four core members (co‑founders, head of hardware, head of software), and they raised roughly $200‑300K, entering Techstars with a third‑generation prototype. The discussion also touches on the future role of brick‑and‑mortar retail in a predominantly online world.
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Our product was differentiated enough, and we had done enough work with consumers, and we had built enough that they kind of believed in the fact that our— that one thing that has played in our favor— people say this market is crowded, it's busy, there's a lot of competition, right? I would ask, why do only 13% of people in the US know about Internet of Things devices if it's that crowded and that busy? Because they don't know about it. It's crowded and busy in San Francisco. It's crowded and busy in the tech early adopter Kickstarter Indiegogo community. It's not. It's a wide open, no one knows what's going on field when you really look at the mass market for these products. So that was part of our story is look, we need to find. We need products that are less expensive and are not intimidating and are not just for early adopters and are not super heavy techy products. In order to get to that place, in order to get to a place where anyone in the country can buy Notion, install it in 5 minutes, and use it on their phone without really having to think about it, that was more of our pitch in saying, look at— if you look at the competition, it's mostly single-use devices. And people are trying to connect everything together. But people in general don't have a whole bunch of things. trying to get their feet wet with something. They're trying to get into a smart home, a connected home. That's really where Notion is so strong here at the beginning. We will come out with other hardware and software products, but our product is that easy to use that we don't— we almost think we almost like accidentally will become a platform because we'll be the first thing somebody buys. You can get smart lights, but that's all they do. You can get a smart door lock, but that's all they do. Notion does all these other things and integrates with those 2 products. So are we going to start to see people buying Notion and adding on a smart door lock and adding on lights and adding on a thermostat? Possibly. And I say by accident because that wasn't really our intent to be a platform. But I think we might start to be, be that for a lot of people that we are one of the first things that they look to buy because it does solve really critical points. I mean, the 2 biggest things are peace of mind and saving money. And then there's kind of this layer of the cool factor, which I would say we probably don't have quite as much of the cool factor. But we're up in the realm of the really critical pain points that people are going to start to buy these products for. So— Definitely not going to reduce our focus on internet marketing. Definitely not expanding aggressively into retail anytime soon. Lowe's for us is a fantastic test. It's a great place for people to go see, touch, feel our product. And it's a great way to get in front of people that we may not be able to get in front of quite as well online. Too much retail too soon? Too much retail too soon for us could absolutely kill our company. It could blow up our company. So I don't know if anybody here has much retail experience, but when we sell product to Lowe's, they can return it and we have to buy it back. There's another concept called pay on scan, which luckily we don't have to do. That's kind of phasing its way out. But that's a situation where we wouldn't even get money from Lowe's until they sell a product. Now we're not doing that, to be clear. We are basically in a position where it's a guaranteed sale. Where Lowe's can say, well, we told you you were gonna be on the shelf for however long, a year. But we changed our mind. And we don't know really how to sell this product. Or it's not selling well. Whatever it is. For whatever reason. And they can ship it all back. And we have to pay for shipping too. That's just what retail— that's just the nature of retail. So if we went into 10,000 locations and spent millions of dollars on inventory in a way without really knowing we could sell through that inventory, we would be taking that much risk. We'd be taking millions of dollars in risk that we'd have to buy it all back and then store it somewhere and hopefully be able to sell it somewhere else after the news came out that Lowe's just dropped our product because we couldn't sell it. So we've got to be careful with retail. I do think it's a good opportunity longer term. And you see companies like Target and Sears coming out with these really focused singular location kind of innovation centers where they're showcasing a lot of these products. They're trying to figure out how to sell these products right now too. They're trying to figure out the best way to educate customers right now. I can see a scenario in Lowe's where you walk down the aisle and they, you know, you ask somebody, hey, what is this product? And they say, oh, it's some new sensor thing. It's like, oh man, a new sensor thing? I can't have somebody say that because you'll never buy a new sensor thing. So how do we kind of get to that next level where in-store we can educate people either through materials and/or the staff that really is comfortable with these products? That's a big part of what's needed for retail to be successful before we have a recognizable brand. People will go buy Nest in a store. Nobody knows what Notion is quite yet. 10 minutes. Yep. Was it just you and your co-founder? There were 4 of us at that point. So my co-founder and I both put in a decent chunk of money ourselves. And then it was the 2 of us, a head of hardware, and a head of software. Yeah. How many hardware companies are here? Is that one comp— like 2 or 3 in total? Or are all of you separate? Separate. Separate. OK. OK. How far along are you guys? First prototype? Thinking about a prototype? Thinking about a prototype? OK. So I guess a couple things I would say on that front. Everything's going to take longer than you think and cost more, which that's maybe something that all of you probably understand. There's a lot of really good prototyping, small-run prototyping firms, and even 3D printing. And I know some of you are probably familiar with it. We own a 3D printer. We got a Formlabs 3D printer. that was like $1,500, and it prints really, really high-fidelity stuff. Stuff that if you sand it down just slightly and spray paint it, it looks as good as what we're actually going to manufacture. So some of the things that we did early on were— we actually didn't have really nice-looking stuff early on, and we actually were advised not to, which is maybe a little counterintuitive. Early-stage hardware investors really like to see boards and wires and batteries and flashing lights and like— that you're doing cool stuff. And I know that sounds a little funny, but like when I pulled out this big brick of our first product, people were like, oh man, like yeah, these guys are awesome. Like they're doing this. It wasn't this pretty finished product. I think a lot of them would have said, well, why are you making it pretty right now? So I'm not necessarily saying make your stuff look terrible. But I wouldn't worry too much about the aesthetic of it. I would worry that if you can actually show somebody it works and it does what you say it does, that's Way more important than the actual aesthetic. So yeah. Where do I see retail in 15 years? So one of the interesting things, and I don't remember the exact stat, but in the mid to high '90s, retail still drives that many sales. Retail is still a massive business. Brick-and-mortar retail. I think me and— this generation, we see it all going online. And we think every retail business is going to die. I think there's struggles around retail. I still think it's an opportunity for people to go look and see and test out products. So I think that brick-and-mortar retailers are going to have much more of an online push and online presence. I don't think they're necessarily going to get rid of their locations. you still have such an experience in a store, or the opportunity for an experience. Target's concept of this new kind of connected home-focused store that's in downtown San Francisco is interesting. Because I would almost— I would wonder— I don't know this for sure, but I would wonder from Target's viewpoint, are they actually hoping to sell a lot of products out of that store? I would think that they're hoping for people to try a lot of products in that store. And that that would translate potentially into online purchases. But their issue obviously is now they have to compete with Amazon. Now they have to compete with other online folks. So where is it going to go? I'm not sure. But I do think there's a long-term place for it just because I think there's that experience aspect. Yes, we have time for one more question. Yeah. So when we applied for Techstars, we had, I would say, a 3rd version prototype. But it was still pretty early. We had a device that was about this big. You could put it on a door, and you could open it, and we could show that you had a text message on your phone. We were 4 people. We'd raised $200,000 or $300,000 or so. But most of the companies had not raised money coming into Techstars. They— every company did have a team. There was not 1 or 2 people on a team. There were no single-person teams. Techstars is very focused on the team. We had a 4-person team, so not a big team. I don't mean the number of people, but we had really critical folks that were really good at what they were doing. doing on our team. So that's, that's a big focus for them. So—
