by David Rolfe
The ‘Internet of Things’ (IoT) has matured to the point where it’s no longer a geeky conversation topic and most people have a reasonable idea of what it is. This shift in general awareness has resulted in a gold rush to create ‘IoT’ products. However it’s not enough to simply add “IoT” to the product name or feature set — a significant increase in value is required to drive consumers to use connected products in place of a perfectly functioning, non-connected product. To have a successful consumer IoT idea, you either need to develop something brand new or present a substantial improvement to an existing product.
Creating something original can be a huge challenge. Not only does it need to be new, it also must present a strong financial upside for the developer and tremendous benefits for the user to justify the investment. Adding another layer of complexity to the equation is the inherent need for physical assets to integrate with any new technology. Inventing new devices is a very different business than creating pure software solutions. Hardware, and especially price sensitive hardware, is almost impossible to patch once deployed, and even firmware changes can be deeply problematic. Outside the video game industry, how many large software applications do you know of that have never been patched?
From an investment perspective, venture capitalists use the ’10X’ rule to see if an idea is worth funding, meaning the product needs to be 10x better than what it is replacing. The improvement when you go from VHS to DVDs is a good example of this. Because we’re dealing with physical devices, product life cycles start to become important. In some cases such as refrigerators, the life cycle can last up to 20 years, and the product can be expensive to replace. From a consumer perspective, an IoT fridge must offer a significant upgrade relative to a “normal” fridge for consumers to be convinced to throw away the existing, working appliance. And perceived value isn’t all that’s needed: IoT technologies must carry a ‘cool’ factor to draw serious attention from consumers.
How do you know if you have the next big thing in consumer IoT? Here is a checklist for assessing the viability of an IoT project in today’s competitive marketplace.
Is the business model clear?
Does everyone involved in the project benefit in some way? By ‘benefit’ we almost always mean monetary benefits – will this project make money? Whatever the objectives may be for your project, it’s important that all relevant stakeholders are clear on what those objectives are so that all can agree on what success – or failure – looks like.
Is the idea good enough to displace alternatives?
This goes back to the refrigerator example mentioned previously. If you make an IoT fridge, it needs to offer a significant upgrade to entice consumers to invest in a new appliance. Often consumer devices are built to last, so be sure the IoT version is worth the investment in the long term.
Is the idea legal and socially acceptable?
Consumers’ attitudes toward new technology can be unpredictable, particularly when it comes to the cloud and personal data. Consider whether your idea could provoke backlash from concerned citizens or interest groups who may not benefit from your success.
Do you have a clear plan for supporting your hardware for at least seven years?
Consumers have an expectation that devices are built to last, particularly if they are investing in an expensive new technology or device. If your project is not sustainable or requires expensive or frequent maintenance, the product will not be worth the investment in the eye of the consumer.
What is your approach to security?
Security is a big topic of concern when it comes to consumer IoT technology. Many innovators view device security as not their responsibility, but if an IoT device is hacked or data is stolen, the blame will reside with the provider. There must be a clear and thorough plan for implementing and updating security features. For instance, understand why hackers would be motivated to hack your system, and consider the implications of a successful breach. Ask and understand how to update security on your products without bricking them.
How do you integrate into the IoT ecosystem?
Just as a network port on a computer is useless without a network to connect it to, the ultimate utility of your IoT device will be limited by its ability to interact with other devices.
How will you manage Fast Data?
With every IoT application, there will inevitably be some form of remote processing, and most applications will require rapid responses. IoT devices almost never turn off, so you need a method for storing, managing and responding to data in the moment it matters.
The IoT is more than just software. IoT systems need to cope with the eccentricity and oddness of a real world that designers can anticipate but not control, as opposed to the absolute and god-like authority a video game designer has over their product. Before going too far down the path of planning and developing your IoT device, be sure to walk through this checklist to ensure you have a viable idea that will appeal to consumers and offer a value-add opportunity.
David Rolfe is the director of solutions engineering, EMEA, at VoltDB.