So you want to start an Internet of Things (IoT) business? No wonder. The power and potential of connected devices, smart homes, driverless cars and so on have been hitting headlines in multiple sectors. Meanwhile, transactions like Google’s $3.2 billion acquisition of the connected homes business Nest Labs show just how much money and expectation is attached to the burgeoning IoT ecosystem.
Today, then, we’re launching a series of blogs examining the different stages involved in setting up a brand new IoT business, from financing your business, to marketing and selling your idea, to enhancing the user experience. This, the first blog in the series, goes even further back. How can you hit on a business-worthy IoT idea? And what are the design skills, applications and equipment you will need to turn that idea into a product?
What do customers need?
Any start-up begins by defining a gap in the market that it seeks to fill. One of the many exciting aspects of the IoT era is that those gaps have never been considered before. No one knew they needed a smart thermostat until suddenly it was a possibility. Cars, central heating and fridges have been three of the most common IoT areas to hit the headlines, but there will be countless others that haven’t yet been considered.
But wherever you’re anchoring your IoT vision, you need to return to that basic point of what problem am I trying to solve? What do my potential customers need? From there, it’s a case of working out how internet connectivity and digital communications can help deliver to that need, by integrating a physical product with a software platform.
The digital and the physical
The next thing to understand is that the IoT is all about connecting the digital and the physical. It’s about taking devices or hardware that were previously standalone, and connecting them to others by virtue of communications technology. So far, so simple.
It’s important to understand, however, that this means two very different design processes need to be combined in one when developing an IoT product. On the one hand, you have a physical design and manufacture process – these are typically linear and often very lengthy. On the other hand, you have a digital development process – these are typically far more ‘looping’ in structure, with developers specialising in a range of different areas each feeding in for short periods, and the application going through dozens of different iterations as it is designed.
Since you won’t personally have the skills and expertise to complete every aspect of the design and manufacture, what you instead need to be able to offer are tight project management skills, along with an understanding of these different work processes and timescales. You need to recognise the importance of drawing on the design and project management skills you don’t have from elsewhere.
A new business model?
Finally, it’s important to understand that this convergence of hardware and software forces many IoT organisations to embrace new business models that they might not previously have considered, especially if they’re evolving out of an old hardware business. Since so much diverse expertise is required to build a successful IoT product, it might, for example, make more sense for you to build a strategic partnership than attempt to do everything in-house.