Device manufacturers wanting market share of the booming Internet of Things (IoT) world have massive uphill challenges in designing, developing and deploying their IoT applications, all while trying to source, integrate, and manage the infrastructure needed behind the scenes to make the applications work.
Before taking on the IoT challenge to launch a connected product or service, it is critical that businesses have a thorough understanding of what key components must be incorporated, how these components interact with each other, and how common integration pitfalls can be avoided. Specifically:
Start with the IoT value definition
Remember, you are looking to bring to market a solution for a known problem. You need to calculate the value equation of the solution launch. Typically it consists of time to market, investment costs and less quantifiable components such as quality and customer experience. Once you get to a point where you know your solution costs you one Dollar and the customer is willing to pay you three, things begin to look good.
Every company planning an IoT device rollout should also evaluate how much time and costs can be saved by partnering with known specialists and assess the value of avoiding the risks of devices and products failing at customers’ hands after being delivered all over the world.
OEMs do not make new products based on a seemingly cool idea. Innovators need to turn to IoT devices specialists to gain IoT results faster and more efficiently and in best case take the benefits from existing hardware and platform enablers. This can save OEM’s several hundreds of thousands of dollars on prototyping and pilots by using a device developed by device design and maker partners.
Service and business design
How to apply uncovered value is step two. Use creative methods to design your business outside in. Think of your customer and try to build your offering around its needs. Define the customer needs and pain points in minute detail and see how your new offering could solve the problem.
On business design, build a picture on how your customer firstly hears from you and also how the solution is delivered to the end customer. Other points to consider include billing, where you make your margins and/or cost savings are made and how the business scales.
IoT solution evaluation: Proof of Concept
If possible, build and sell the first solution using readily available devices for a quick proof of concept. By doing so, you will learn a lot about your future IoT business, how pricing works and how customers are reacting to your solution to the problem. This eventually allows you to quantify value.
One good tool for new business evaluation is the “fake it until you make it” process. This means you test the product pricing and value proposition with existing IoT prototyping hardware. It really doesn´t matter how much off-the-shelf devices cost if your sole purpose is to validate your business model with paying customers.
If your sourcing project and discussions with potential suppliers have shown that your new device could hit a price point of say $20, you could use that for the value evaluation phase. In the beginning, the sole purpose is to find out if your solution works in the eye of the customer. Spending a few thousand dollars on first batch of devices is a really well justified investment if it makes sure your product is desired by customers.
Having something ready really helps to discuss the customer value. Then you can go back and see if the business model is working if you optimize everything. Shaving off costs with a custom made device can still cost you tens of thousands so it is good to have a very accurate picture of the market prior to making the investment. Most likely everyone will say “what a cool idea” but paying customers are the ones that make your business.
Use rapid prototyping techniques
Having a device or a service to show always brings the discussion deeper towards customer expectations. Prototypes help when collecting feedback from customers, partners and other people and enable you to optimize the offering. You can use anything from demo applications to using 3D printed mockups to showcase your product to your first potential customers.
One good tip for making the first sell is to use a functional prototype. Build an IoT device using readily available developer boards to complete the functionality and package everything in a cool 3D printed exterior. At a meeting with customers, you get to play with the actual use case with real implemented tech which can help your customer to orientate towards your solution. However, beware of demo effects! The most typical place where a rapid prototype fails is at a funding or customer meeting.
Hardware is hard
It takes time to build even the most simple sensor device and most companies do not have the required competencies and platforms in-house for making commercial grade hardware devices. In this case the smartest strategy is to purchase readily available hardware or hire a design house which has done it all before and knows the drill. Look for a partner that is interested in your solution and don’t make your own hardware if you can source elsewhere.
Sourcing hardware, however, can be a daunting task. Typically it is very difficult to find a solution that fits your problem perfectly. A line on specification does not mean a great customer experience, it always comes to firstly what has been integrated and secondly how it has been integrated. Look for partners that offer customization. A well executed small customization is cost effective and can save you a lot of money when your service or solution takes off.
Remember to start early with your hardware purchasing process. It typically takes between four to eight months to create a new simple custom sensor device to commercial grade with needed type approvals, sensors and the like.
Choose your IoT platform wisely
The world is full of platforms so make sure the pricing, business model and the functional capabilities of a platform works for your benefit. Think about the whole IoT architecture, and establish what work amounts are needed for getting the service up and running. You need to consider how to integrate devices, backend solutions and analytics.
Make sure that the chosen platform and connectivity technologies provide the required bandwidths, mobility and roaming capabilities at a reasonable cost. So, choose the right partners for backend and data services, IoT technologies and system integration.
Leading platforms enable your application almost out-of-box so time and money saved on integration can take your first sales and marketing initiatives a long way.
Make the leap and enjoy the value
IoT is an amazing opportunity with blue oceans waiting to be discovered. There are plenty of markets that are currently untapped and value can be found in the strangest of places like valpas.io, which, of all problems in the world, decided to apply IoT to remove the bed bug problem from hotels globally. Its solution includes a connected retrofitted bed-leg containing technology to attract, captivate and eliminate bed bugs. Once the bug container detects an unwated visitor, it automatically signals the hotel administration.
Valpas, although a simple idea, is built using complex and compact technology, yet it saves hotels vast amounts of money through better visitor experiences, avoids complaints and makes significant savings in costs associated with bed-bug invasion.
If a small enterprise such as Valpas can make the leap and fix the global bed-bug problem, anyone can. It is just a question of speaking to the right experts right from the beginning of an IoT project!