Welcome to the Vardis' new startup

Nov 22, 2004 Arik and Oded Vardi, along with father Yossi, have been busy building a new start-up under a cloak of secrecy in the last two years. The family of high-tech entrepreneurs hopes that Superna Systems will bring about a revolution as great as their previous breakthrough - ICQ instant messaging.

There has been much speculation over the Vardis next invention as the family worked in complete secrecy, did not raise any venture capital, and even kept its name quiet with the exception of a few insiders.

But after two years, the founders have unveiled their new technology and vision to the public. Superna's product is a controller for the "smart home" of the future that manages all household electrical appliances, including DVDs, televisions, lighting, computers, stereos and alarm systems, and eventually even washing machines and refrigerators. The controller, which connects to the appliances either with or without wires, basically runs the house automatically.

With an investment of $3.5 million, including $3 million from private investors close to the family and another half a million dollars out of their own pocket, the Vardis are attempting to break into one of the toughest markets - home electronics. They will try to present a complete and relatively cheap solution in a market where giants such as Philips, Sony, Samsung and Intel have yet to offer a similar product.

Arik Vardi, 34, started the firm out of his personal needs. Two years ago, Vardi, one of the founders of Mirabilis, which invented ICQ, moved to a new house, and he wanted his home to reflect his lifestyle. He decided to plan a "smart home" - a house where the electric shutters, lighting, DVD, stereo and air conditioning would work from a single control system and would continuously operate based on his needs and wishes, whenever he wanted.

But even Arik Vardi, who thought that such systems, always appearing in the headlines over the last few years, were simple and straightforward, quickly discovered that the price of a basic system for the living room was $5,000. This may not have been a lot of money for one of Israel's richest young high-tech millionaires, but it is a steep price for most people. In addition, he discovered that despite his programming experience, these systems were not so easy to operate. After buying a system and programming it, he realized that this was a good business opportunity.

He then brought in his 32-year-old brother, Oded, to join him. Oded previously had founded Rusure, a company that compared prices on the Internet and competed with Shopping.com.

The new system is expected to cost between $1,200 and $10,000 for basic installation, while competitor systems cost between $30,000 and $500,000.

"The problem with these systems, such as those manufactured by Crestron of the U.S., is they are quite expensive and appropriate only for the upper part of the top thousandth of the population," Oded Vardi explained. " These systems sometimes require rebuilding and rewiring the entire house, or renovating it in order to provide the required network for connecting all the parts. Also, these systems are difficult to operate since they require programming," he added.

Superna's product, a "control box," is a box that controls and bridges all household equipment. All of the equipment can be connected either by wires or via the WiFi wireless protocol. The box can be controled either by a special monitor or via the television, and can be managed by a single remote control unit. For $1,200, the system covers only the living room, while for $10,000, one gets a system for the entire house.

Manufactured by Flextronics, the system includes a microprocessor, memory and advanced graphics card along with sound, and runs on the Linux operating system. The box also will interface with nearly all infra-red remote control systems.

The firm currently employs 20 workers, and its R&D center is in Israel with headquarters to be established in the U.S.