The IoT checklist: 14 reasons why you might not be ready to work on a ‘Smart’ version of your product
This mad rush to connect anything and everything to a mobile app is primarily driven by grossly inflated numbers and speculation. This rush could potentially take your company into unknown terrain, with no assurance of a profitable or safe return. While there are customers for IoT connectivity, the number of customers who derive real value from this technology has been much lower than industry projections lead us to believe.
Most companies struggle to find use cases beyond proof-of-concept. But with the significant interest in automated comfort and in our excitement, we overlook the percentage of consumers who truly find our application appealing, with or without smart connectivity. Below are a few points to keep in mind before plunging into IoT tech.
- Is your connected device solving a real problem? As of 2017, only 26 percent of households own smart home devices. Now off this number, how many do you venture, truly use those “solutions”? Just because you can introduce IoT technology into a couple of devices doesn’t mean people will want it or have a need for it. We’re all convinced that people don’t know what they want until you show it to them and a little too smitten with our own technology on top of that. A ceiling fan, even if it can turn on and off according to a schedule, will still rotate with the same speed. Its efficiency remains the same. But a single remote that works for every application in your home; there’s still more value in that.
- How many of my customers genuinely want this? Put a number on that. Merely because it’s all over the papers doesn't mean everyone is clamoring for connectivity. Talk to your users, and listen to the subtext. Poll your customers at least twice before committing. Aesthetics and quality still might make more of a difference than smart features.
- Have you embraced a modular approach? Or you might find yourself having to manufacture two products. One equipped with the connected capability feature and one without. Unless you’ve run the numbers and you’re certain there are enough consumers who would pay the increased rate for the connected, in which case you can discontinue the other line.
- Is your product worth the effort? Pay attention to the amount of work your users from across demographics will have to put in to get comfortable with your product. And while you’re at it, consider how many times you’ve put off software updates on your system. Sometimes a product just doesn’t offer enough reasons and incentives to learn its features.
- Are you more inclined towards building in-house or outsourcing? In making the build-versus-buy choices, we suggest you identify the technology layers that offer the most significant opportunities for future innovation, competitive advantage, and product insight, and outsource the ones that will advance too fast or be commoditized. These choices will evolve over time. Outsourcing will work with the right partner. With the wrong one, you might find yourself being charged to dot every ‘i’ and cross every ‘t.’ And doing it in-house is a huge commitment. As with the previous two IT waves, the skills, time, difficulty and cost involved in building the entire technology stack for connected, smart products is formidable and leads to specialization at each layer. Carefully weigh the ramifications of both options.
- To collect data, you need sensors that will add cost to the product, as does securing, storing, transmitting and analyzing the data. Can you meet this cost or will you compromise? Product data is essential in gaining a competitive edge and to create value in smart, connected products. You might also need to obtain rights to the data, adding cost and complexity. To determine which types of data provides sufficient value relative to cost, you’ll have to consider how each type of data can lead to tangible value for functionality? Will the data help your company understand and improve how the broader product system is performing over time? To optimize its usefulness, how often does the data need to be collected and how long should it be retained? Make sure you have all the answers before you dive in.
- What kind of business model can capture the greatest value from the sale of your connected product? Traditionally, manufacturers captured value by producing a physical good and transferring its ownership to the customer through a sales transaction. The customer then has to bear the cost of its upkeep and other costs of use, while carrying the risks of downtime and other product failures not covered by warranties. Smart, connected products are altering this long-standing business model. The manufacturer now can affect product performance and optimize service through access to product data and the ability to repair, anticipate and reduce failures. This has opened up a spectrum of new business models for capturing value, from the product-as-a-service model in which the manufacturer takes full responsibility for the costs of product operation and service in return for an ongoing charge and retains ownership, to a version of the traditional ownership model where the consumer benefits from the new service efficiencies.
- There's a difference between consumers warming up to individual devices like a smart washing machine and consumers adopting a connected life. The present ecosystems of smart devices are short-term solutions. The future will demand a cohesive whole that is an integration of disparate devices. Companies, on the other hand, are working furiously on building their own ‘walled enclosure’ home solutions while users are only coming to welcome smart home devices into their homes. Consumers are only just beginning to comprehend the ramifications and the advantages of a connected network of smart devices. For now, you’ll have to decide between hunting for ways to interest consumers in buying into more expensive and larger whole home solutions or re-positioning your product to deliver greater value in an ocean of standalone smart products.
- Work towards interoperability. Every device in our lives has begun to talk and listen. Be it nosy Google, the know-it-all Siri or the-eager-to-assist Alexa. It can feel like we’ve invited noisy guests into our lives. We’re surrounded by objects that are platforms for providers to grab our behavioral data and lock us into their “ecosystems.” Unlike with digital media, or mobile phones, the notion that you can lock a home into a single ecosystem is a pipe dream. While it’s easy to see an Apple-user loving the convenience of a one-stop world where music, video, photos and the like all interoperate cleanly, it’s tough to see an entire home IoT system being governed by one platform technology. The market offers far too much choice for any consumer to care enough about committing to any one platform. The net result will likely be that part of a home will speak Alexa, a part will speak Siri, and part will speak Google. Users will want their home devices to work the same way without having to commit to any one ecosystem. To compete, rather than working with 'got you' tactics aimed at locking consumers into your world, fall back on tried and tested, old-fashioned, consumer electronics marketing techniques.
- Work towards designing IoT products that are functional and mute, rather than trying to breathe life into inert objects. There are far too many over-designed devices masquerading as futuristic creations in the market today, being used as they were in 1967. The initial phase of market development is often self-organizing, characterized by consumer confusion and the deployment of absurd features. With IoT, unfamiliarity could breed contempt. The best bet in today’s clutter is embracing minimalism. But by all means, keep your devices beautiful, but also recognize that making a thermostat learn as much as a search engine is impressive but still pointless.
- To reach the finish line when you’re trying to make the marriage of hardware and software work takes incredible patience and cooperation. Traditional manufacturing is extremely rewarding even though it takes a crazy amount of time and money to develop new products. Without sacrificing quality, it’s not possible to speed up the process. In contrast, software is incredibly fast. Efficiently combining the breakneck speed of software development with the slow-moving timetable of hardware manufacturing is like tying the hare and the tortoise together in a race.
- Flexibility options like a payment plan can help ease in consumers, as will the eventual drop in price that comes with greater market presence and increased consumer familiarity. Money’s influence on the smart home market is a puzzle of sorts. On the one hand, the price is the number one purchase inhibitor among some. While the prospect of saving money represents the number one purchase motivator for others.
- Security offers consumers reasons to adopt and reasons to shy away from the connected home technology. The safety and privacy of personal data is an important concern among consumers. The younger consumers seem more concerned about companies or the government tracking their behavior, while the older ones worry they’ll become victims of cyber-crime. However, security concerns among all ages will diminish if a smart home device provides a service of high enough value. Furthermore, the prospect of a more secure home and personal security is a strong inducement for purchase.
- The finish line keeps on moving. Mainstream adoption of connected devices is still a couple of years in the future. Furthermore, mainstream adoption may take a very different form from the one you envision, when it finally happens. The traditional business model is based on defining a problem and solving it or identifying a need and meeting it. So far, most connected products have been solutions in search of problems. Developing connected products is a significant commitment. Walk into it, armed with data and a deep understanding and a clear picture of how it will affect both your manufacturing process and your business model.
A single smart device by itself isn’t actually that smart. It’s when that device speaks to other devices to make data-driven decisions that we meet the promise of IoT.
So what will it take to create connected environments that graduate from individual smart devices to seamless smart living? The short answer is time. Till then, there are ways to rationalize all of this and create a win-win for all . It starts with making IoT devices do just what they need to, breaking down a cross-platform way to make things work across silos smoothly and for all this minimal functionality to just work. If you’re looking for the long answer, feel free to knock on our door.