What’s going to happen with IFTTT?

In the wake of Google saying last week that it would kill its Works with Nest program (a decision that has now been somewhat mitigated), I checked in with IFTTT, a company that suddenly seemed like its days were numbered.

I spoke with Linden Tibbets, IFTTT co-founder and chief design officer, about the company’s future, his recent decision to step down as CEO, and an unfortunate comment made by an executive at Google when it was announcing the end of its Works with Nest program. The core takeaway from our talk was that IFTTT is changing its strategy, and we should expect to learn more about that change by the end of the summer.

IFTTT (which is short for “If this then that”) has been around since 2010; it was formed as a way to give flexibility to the digital objects and services we use on a daily basis. In one of my first conversations with Tibbets, he pointed to a mug on his desk and noted how in the physical world we could use that mug to hold a beverage, we could also use it as a paperweight. However, the virtual world is different.

In the virtual world, software can only be used for whatever purpose its user has built it to perform. There’s no easy way to take a piece of software and repurpose it the way one might repurpose a mug to become a paperweight. But that’s what IFTTT does. IFTTT takes the APIs associated with web-based services and lets those act as a trigger to make something else happen.

For example, in your email program the arrival of an email might trigger a notification. However, if you hook up that email program to IFTTT, the code that triggers a notification could be repurposed to also turn on a light.

In its early days, IFTTT tried to take some of the information encoded in popular digital services and turn those into triggers that could result in some type of action. So IFTTT could turn your phone’s location to trigger a text message, or it might use the posting of tweet to copy the sent tweet and automatically send it to Facebook. It did this by connecting to an API provided by companies such as Dropbox, Google, Honeywell, etc., and building connecting code to make the action happen on a different service using the other company’s APIs. Both digital and physical events could trigger an action.

While IFTTT was initially confusing for the mainstream, its ideas quickly attracted the attention of tech-savvy folks who saw a way to build shortcuts to make their lives a bit easier. And more and more users have followed.

Among those who were adopting the smart home technology that started appearing in 2012 and 2013, IFTTT’s service became a simple way to create automations. Examples include turning a Hue light bulb blue when the weather dropped below freezing or turning off the lights when someone left their house with their phone.

Today, IFTTT has roughly 700 services on the platform; some 300 or so are related to the smart home. But only about 7 million of its 17 million users connect a smart home device to the platform, which means that most of the IFTTT’s end users and the companies whose services they use aren’t doing anything related to the smart home. Tibbets wouldn’t offer specific numbers around device-to-device connections or smart home usage, but I know that I have a dozen or so functioning IFTTT applets and two-thirds of them relate to my smart home devices.

I rely on IFTTT to connect devices that otherwise don’t have integrations or to do something a manufacturer might not otherwise support in its app. I’m not alone, which is why when Google said it would kill its Works with Nest program, preventing Nest devices from talking directly to other services and forcing them to instead go through Google Home hubs, I worried about IFTTT.

I read the announcement to mean that applets associated with my Nest doorbell and thermostat would break. And I wasn’t the only one. In a news report right after Google announced the original deprecation of Works with Nest, Google executive Rishi Chandra said, “It will break IFTTT.” But Google on Thursday of this week said it won’t actually shut off individual Nest devices’ API access (see the news section below for more detail), which means there won’t actually be a loss of functionality.

When I spoke with Tibbets, he expressed confusion over Chandra’s quote, saying that IFTTT and Google had been working together for the prior two months to build new integrations for the new way Nest devices would work. He also said that Google’s decision to deprecate the Works with Nest program helps explain why many companies choose to use IFTTT in the first place. “I think a lot of these decisions are about control over the unbounded liability that API platforms can sometimes represent,” he said.

Google said it needed to reign in the number of devices and skills that could talk to Nest devices to ensure users’ privacy was respected and that third parties weren’t pulling data and using it for questionable purposes. But Tibbets said that many of IFTTT’s customers — which range from smart home companies such as Honeywell to web services such as Dropbox — pay IFTTT to make sure that their outward-facing APIs stay up to date as well as to track which services are using them. The platform also lets the owners of IFTTT channels set limits on what types of triggers users can set and how often they can pull from them.

As to digital assistants, Tibbets says IFTTT is still working with Google and will have integrations through Google Home in the coming months. He thinks IFTTT still represents a valuable service for Google because it lets IFTTT manage platform integrations while Google works on core features, such as natural language processing, local control, and reducing latency.

But no ecosystem will have every element a consumer wants, especially for long-tail use cases. And Tibbets is banking IFTTT’s future on turning the exchange of digital information into a big business. He foresees a day when consumers can link up their home water heater data to a third party such as an insurance company to reduce their premiums.

Tibbets says that IFTTT can offer users control over how their data is being used, and even help them reap the benefit of that data for themselves. But because the infrastructure for sharing data isn’t there yet, and the business models are still evolving, consumers don’t really know what to ask for.

IFTTT has built the technical infrastructure needed for sharing data and will soon build the business infrastructure. The API layer is built, but now it’s time to figure out the business rules. Take the insurance example above: Should the company making the connected water heater, which will alert the homeowner if it leaks, get paid for reducing the likelihood of a catastrophic leak? How might that work?

These are the questions IFTTT plans to help answer over the next few months. “So many people think of [IFTTT] from a consumer point of view,” Tibbets says. But the business side is where IFTTT generates a lot of value and where later this year we’ll see more services evolve that cater to businesses.

It was this shift that led to Tibbets stepping down as CEO earlier this year and bringing in Chris Kibarian, a self-described turnaround expert, to take on the role. When it comes to APIs enabling new services and new monetization schemes, IFTTT was a first mover. It started off by making clear why such links might be valuable to users. It then began charging a fee to companies that wanted to let someone else handle the technical demands of these API-based services. It now plans to provide the tools needed to track and monetize those exchanges of data.

In many ways, Google’s announcement is part of a larger shift in the overall smart home environment, as companies try to lock down their platforms to control who has access to data and entice users to stay in their ecosystems. IFTTT is trying to stay relevant amid the lockdown by making sure it can offer value beyond integrations. If it can provide the tools and trust to build an economy based on data exchange, it might very well succeed.