There has been a lot of talk in the venture capital industry about automating the home and leveraging Internet-enabled devices for various functions. The first wave of this was the use of the smartphone as a remote control to manage, for instance, a thermostat. The thermostat then begins to recognize user habits and adapt to them, helping consumers save money. A lot of people took notice of this first-generation automation capability when Google bought Nest for a whopping $3.2 billion. But this purchase was never about Nest; rather, it was Google’s foray into the next phase of the Internet of Things. The ability to control the temperature using Nest or to open your garage door using your smartphone falls under first-order IoT applications. The next phase will be two-fold. It will be about connecting Internet-enabled devices in the home, as well as leveraging data to improve people’s lives and the efficiency of their businesses.