This paper describes experiences obtained conducting the "Embedded Systems Design" course at Tallinn University of Technology. After introductory lab tutorials, a complex Smart House project has been provided to the students. The students had to complete the project in a Start-up Company style environment, which demands planning, good teamwork, solid theoretical background, down to the ability to handle soldering tools. Special emphasis was given to low-power design techniques. Besides continuous supervision, the students' progress was carefully monitored, feedback collected and analyzed. Despite partial success on solving the problem as a whole, the commitment and cooperation yielded an acceptable integrated solution. The most valuable outcomes of the project work from students point of view were confidence and experience obtained from tackling development challenges of a heterogeneous and widely interconnected contemporary embedded systems.