May 24, 2013 · 3 minutes

You might have heard of Ninja Blocks. The Sydney-based startup first came to the world’s attention last year with one of the most successful pre-Pebble hardware campaigns on Kickstarter. The Ninja Block, a small device with built-in sensors that allowed users to link the Internet to actions in the physical world, raised more than $100,000 in pledges and shipped out to customers only a couple of months after deadline – almost unheard-of in the world of hardware projects on Kickstarter.

The device was nifty, enabling a kind “If this then that” for stuff. Want to get an SMS when the washing machine is done? No problem. Need to know when the cat has jumped on the kitchen table? The Ninja Block can send you a Tweet to let you know.

But Pete Moore saw a bigger opportunity. Moore, who had sold his previous software company to Aussie giant Atlassian, had been introduced to the company as a potential investor and was considering coming on board as an advisor. But he noticed that it wasn’t taking advantage of the cloud. With the original co-founders stepping aside, Moore ultimately took over the reigns and re-focused the company on building a platform that he hopes will help standardize how the “Internet of things” – or, in less jargonistic terms, the world of connected devices – ultimately operates.

Essentially, Moore wants Ninja Blocks to do for connected devices what Twilio has done for telephony. Twilio is a cloud-based platform that takes the fuss out of telephony and lets developers interact with its API so they can easily build voice and SMS communication into their products. It also operates on a software as a service (SaaS) model, so there are no contracts and you only pay for what you use.

To get a sense of how that would work in the connected devices world, consider the humble toilet paper roll. If you had a sensor on your toilet roll that activated whenever the paper ran out, you could set up a system that allowed a message to be sent to Amazon in order to deliver a fresh roll to your door by the next day (although hopefully you have a few back-ups in the meantime). But by being able to tap into a platform’s API, then you no longer have to build that sensor – for example, the original Ninja Block – yourself. That means the toilet-roll-refresher system could become a software-based business in its own right. You could start to sell products as services. 

Moore reckons that the idea of “home automation” is less compelling than enabling the component parts of home automation that could have a wider application, or could be built upon by developers. For instance, he’s interested in enabling the ability to turn devices on and off by measuring energy use, temperature, or touch as interesting. So rather than being the company that might build the next Nest, or Philips Hue, or LifeX, it is attempting to position itself as the mediator that allows smart devices and the sensors to talk to each other in a meaningful way. 

For now, Ninja Blocks is selling connectivity as a service, and has cut some deals with manufacturers to build its tech into their products. It also charges for raw API use. Through those means, it is currently doing about $100,000 a month in revenue, Moore says. But the plan is to move to a model in which it charges developers for access to the services it enables. Moore says the company is very focused on building up a developer community, and that it measures its success in part by how popular its forums are. It has about 2,000 developers signed up to the forums, about 500 of which are active users. In total, it has sold about 3,500 developer kits. 

Ninja Blocks’ biggest challenge – aside from operating in Australia, a remote corner of the planet – is that is competing in a fragmented marketplace into which a number of big players, including Cisco, are stepping. Other startups in the space include Xively, ioBridge, and Wovyn. 

Ninja Blocks last year raised $1 million in seed funding, with participation from Australian fund Blackbird, Atlassian founders Mike Cannon-Brookes and Scott Farquhar, and 500 Startups, among others.

[Picture by Justin Clayden, Ninja Blocks]