Opportunities in the Ice Age of IoT

Heli­um ain’t the only LoRaWAN net­work out there, and it’s cer­tain­ly not the one that’s been around longest. Thomas over at Tingkart recent­ly sent me this excel­lent video from the The Things Net­work YT chan­nel called “The Sil­ver Bul­let to IoT Success”. 

Spoil­er alert: The “Sil­ver Bul­let” involves hard work. 

If you don’t have 20 min­utes to spare, here’s the short write-up. If any­one from the TTN YouTube chan­nel sees this, you’re wel­come to copy/paste any of this into your description.

The great news is that oth­er very sharp minds have been learn­ing about and try­ing to solve the IoT busi­ness prob­lem. They share the dis­til­la­tion of a few decardes years work and pro­l­ly many mil­lions of dol­lars in con­sult­ing fees in a lit­tle less than 20 minutes. 

In the video below you’ll see Fer­ry Gri­jpink (I’d pro­nounce his last name cHi-pink” using the Ger­man “ch as in Bach” and be pret­ty close) from con­sult­ing behe­moth McK­in­sey walk through the state of the (non-cryp­to) IoT space right now. I’m impressed by Fer­ry, this is a sharp cat!

NOTES
We are in an Ice age of IoT, and win­ter is com­ing for the glob­al economy.

[Nik’s notes: This Ice Age thing is prob­a­bly the dom­i­nant nar­ra­tive, but it does­n’t mean it’s true. The idea that “win­ter is com­ing” is super sexy from a FUD per­spec­tive, but I’d bal­ance that per­spec­tive with the oppo­site end: Daniel is coming. 

Daniel Andrade at Hotspot­ty (along with Max Goossens and the rest of the team) are show­ing us how fast a new IoT-based busi­ness can grow using the rock­et-fuel incen­tives of cryp­to. Daniel and Max aren’t the only ones build­ing in the space; you’ve got BGFNeil with Track­pac, Paul at disk91, the Myceli­um crew, the Hexa­gon Wire­less crush­ers, and a host of less well known but equal­ly com­pe­tent oper­a­tors out there build­ing the next economy.

If we want to real­ly stretch the Ice Age anal­o­gy, I’d put it this way: Sure, the ice age is com­ing, but web3 is also com­ing, and web3 burns with the white-hot inten­si­ty of a thou­sand suns, melt­ing the ice and caus­ing tsunamis of change to race around the globe. 

I’ll keep my notes in ital­ics from here on out.]

Back to the notes from Fer­ry’s talk, which is excellent:

Investors don’t believe in IoT any­more, but bot­tom up efforts (like Hotspot­ty, Track­pac, and oth­er lean and fast web3 based com­pa­nies) are work­ing well and can be profitable.

This sounds like sup­port­ing evi­dence for my “Ice Age meets white-hot web3” hypoth­e­sis. Small & lean com­pa­nies are build­ing fast while the big mon­ey backs off. That’s what oppor­tu­ni­ty smells, looks, sounds, and feels like. Ever seen a duck? You’re look­ing at one right now. Don’t wait for the Ency­clo­pe­dia Bri­tan­ni­ca to con­firm it, MOVE!

The first impor­tant key to an IoT busi­ness is: Mak­ing it easy. 

As the joke goes, “The e in IoT is for easy”. If you’re in a posi­tion to make the busi­ness use case of IoT easy, you’re sit­ting on a gold­en egg machine. Many peo­ple are not sit­ting on that machine. Psst: You’ll have to build it.

The fol­low on and equal­ly impor­tant aspect is: Change man­age­ment is key.

Both fas­ci­nat­ing and pre­dictable (McK­in­sey is a con­sul­tan­cy help­ing large busi­ness­es go through a change man­age­ment pro­ces­sion), this idea is not to be over­looked. We, the new play­ers in IoT, would be wise to learn from some of the biggest and bright­est in the indus­try, and Mr. Gri­jpink is cer­tain­ly among that crowd. Do not for even a fem­tosec­ond think that your path to install some rad IoT solu­tion at a busi­ness will be easy. Peo­ple are resis­tant to change. If you want to be suc­cess­ful, make sure some part of your busi­ness address­es this change management.

The two commandments of IoT Businesses:

• Thy devices shalt work straight out of the box.
• Thou shalt ROI quickly.

Fer­ry did­n’t actu­al­ly ref­er­ence “two com­mand­ments”, but I thought it was use­ful as a framework.

What Fer­ry DID say was, “If you need a deep inte­gra­tion in the SAP, if you need a lot of of insti­tu­tion­al change man­age­ment, the next 12–18 months are going to be real­ly tough for you.” Read: Big busi­ness­es that can’t move fast are about to freeze & shatter. 

So, what can you do?

1 — Watch for the envi­ron­ment to change.  Or change the envi­ron­ment. That is far hard­er to do, but at a local lev­el is achiev­able. For exam­ple, if you get just a few local busi­ness­es to start using your IoT or 5G solu­tions and it gives them an edge, you can bet you’ll have many more cus­tomers (and com­pe­ti­tion) quick­ly following. 

What did he mean by “Watch for the envi­ron­ment to change?” Fer­ry gave the exam­ple of UK doc­tors chang­ing en masse in response to an envi­ron­men­tal change.  Pre-pan­dem­ic none of them want­ed to do online con­sults; they thought it was sil­ly, a waste of time, not real “doc­tor­ing”. With­in 6 weeks of the pan­dem­ic hit­ting and lock­down, UK docs were com­plain­ing that no online con­sul­ta­tion was avail­able and that “the sys­tem” was fail­ing them.

2 — Sil­ver bul­let: Make it real­ly simple.

Fer­ry gave the exam­ple of the out­puts from all your efforts should be as sim­ple as:
Red, green, or dou­ble green.

How can you make it incred­i­bly stu­pid sim­ple?  If you’re an engi­neer and think it’s simple…make it 10x sim­pler.  As inter­view­er and The Things Indus­tries CEO Wienke Gieze­mann says in the video, “We [engi­neers & devel­op­ers] are addict­ed to hard prob­lems.”   That’s great if you’re an engi­neer.  That’s ter­ri­ble if you’re build­ing for nor­mal peo­ple, who by and large are addict­ed to social media.

Anoth­er great Fer­ry quote: “Peo­ple don’t want to use tech­nol­o­gy, they just want to do their job.” Again, keep it super sim­ple. Use IoT solu­tions to make it eas­i­er for some­one to do their job and you’ll make the “change man­age­ment” prob­lem much eas­i­er to solve.

Want to build a suc­cess­ful IoT busi­ness?  Solve: How can you take a prob­lem away?

Be as com­plex in the back­end as you like, but the front-end should be Sam­sara sim­ple: Dri­ve slow­er, dri­ve faster, or keep this speed. 

When McK­in­sey looked at IoT busi­ness­es cas­es from a finan­cial per­spec­tive, 95% of busi­ness cas­es worked out.  There are not tech­nol­o­gy hur­dles when it comes to IoT. There are “change” and “ease of use” hurdles. 

A 95% suc­cess rate is obvi­ous­ly good news, but in stark con­trast to the asser­tion that investors have lost con­fi­dence in IoT.  Why isn’t IoT see­ing high­er adop­tion?  McK­in­sey thinks it’s because of a change man­age­ment prob­lem in the institution.

A “you win / I lose” busi­ness case isn’t sus­tain­able.  For exam­ple, if you’re buy­ing mate­ri­als and IoT makes your buy less mate­ri­als due to effi­cien­cy gains, that’s great for you but not for the mate­r­i­al pro­duc­er.  A case that allows you to use more mate­ri­als to build a bet­ter prod­uct is one direc­tion you might con­sid­er, as an alternative.

Find a busi­ness cas­es that work through­out the val­ue chain, and make sure every­body wins.

Thanks again to Thomas at Tingkart for send­ing that video my way and to the good peo­ple at TTN who put that on. If you want to keep up to date on the lat­est I’m active on Twit­ter & Dis­cord. If you want a week­ly update for indus­try insid­ers, check out the GKIIN. Rock on! ~Nik