The Internet of Things (IoT) involves connecting sensors and devices to the Internet so that the data they generate can be aggregated and analyzed. This effort can inform how businesses run their operations, optimize their product lifecycles, and improve their equipment maintenance and repair schedules. Because IoT technology can be applied to any device or sensor that can connect to a Wi-Fi, Bluetooth, or cellular network, this has yielded unprecedented insights for everything from fitness tracking to smart homes to autonomous driving.
If your company needs IoT but your executives still aren’t on board, this post is for you. We’ll go over why IoT is necessary, the challenges that come with it, how to identify opportunities within your business, and how to create a polished IoT business model with lasting value that can get everyone excited for IoT implementation.
The Good and Bad of IoT
IoT technology can be applied to many aspects of a business: customer support, sales, user experience, revenue projections, and product quality name only a few examples. These facets can all be improved, and many of them can even be automated through IoT implementation. Ideally, the goal for an IoT application is to hit the mark on all of these details, but sometimes it can be a struggle for companies to accomplish this.
Problems that can arise early in the project include a lengthy projected timeline, not enough process improvement, trouble scaling the application, or an excessive budget. Worst of all, what if the company’s product doesn’t improve for customers?
Instead of worrying about the technical and logistical challenges, business executives should turn their attention to how the IoT system will make money and how to find a product-market fit. Creating a functional and future-proof value proposition and business model can set your company up for centuries of success.
Define Your Value Proposition and Business Model
Value propositions demonstrate the benefits your customers can expect to receive from the IoT implementation, while the business model outlines how to bring that value proposition to market. A successful IoT system combines both of these aspects with strong forethought and planning. Your company’s product must be improved through the IoT system, giving customers something that fulfills their needs and addresses their pains.
To accomplish this, go through the three phases of fit with representatives from multiple departments in your company. The first phase, the problem-solution fit, focuses on validating your ideas with your customers. Instead of assuming what their pains and gains might be, ask them directly. It could uncover something employees never thought of, and the more customers that mention a specific problem, the more value you’ll see in solving it.
The second phase of fit, product to market, stretches for the longest length of time. It involves bringing your product to customers who will respond most enthusiastically to it. But this phase has a lot of ups and downs as you refine and optimize every detail. Innovation in this phase may cut into margins, but the end goal is to pivot, scale, and make a profit.
The last phase, finessing and fine-tuning, involves doing just that to your business model.
Uncover IoT Value
Instead of thinking about applying IoT to your product, think about how it can be applied to your customers’ needs and pains. If you haven’t pinpointed your customers’ pains and gains, there are two ways to help you understand your customers better.
The first way helps you identify how you can enhance your product for your customers. With your IoT system, you won’t be going from 0 to 100; your product will be improved in small increments. Map out what these small increments entail, with an end goal for your product.
This roadmap serves as your IoT system’s evolution canvas, prompting you to take action based on outcomes of previous product improvements. It’s imperative to use customer feedback to re-prioritize and add more improvements to your roadmap. Eventually, this may involve fully or partially automating your IoT system.
The second method allows you to create depth and refine opportunities into a plan. It involves describing a specific IoT value proposition in greater detail by reviewing data collection, analysis, subsequent decision-making, actions of the humans and machines involved, and the outcome for the customer’s benefit.
After the plan is refined and fleshed out, go back and make sure the outcome is right for the customer. If the customer won’t care about it, if you’re not looking to solve the bigger problems, or if you believe the plan won’t be attainable, your stakeholders and customers will lose confidence in your company, its IoT plan, and product.
IoT Revenue Models
There are three ways to generate revenue streams from your IoT system. The first is the fixed, one-time transaction. If you buy a microwave or oven, you’re going to pay a fixed price only one time to receive the product.
The second revenue model involves a one-time or ongoing service fee. For example, San Fransisco-headquartered Netflix charges its customers a fixed amount every month for access to its content library. It doesn’t matter if you didn’t watch anything during the entire month: your bill reflects a fixed fee.
In contrast, the third revenue model bases price on consumption. This model, called outcome, entails a variable revenue amount depending on how much you have or how little you used a product. For example, a financial planner may know how to invest your money for maximum return, but they’ll take a percent of your yield. The smaller your return, the smaller their fee.
The nature of these three revenue models is such that they can be mixed and matched to create the framework that works best for your IoT implementation.
Confidently Presenting Your IoT Plan
You’ve worked hard on an IoT value proposition and business model. Using the above advice, flesh out whatever aspects you can before presenting your plan to your company’s stakeholders. It should show executives the value of IoT using models, customer research, and previous feedback.
With this roadmap, you can improve your product for your customers’ benefit and gains while addressing their needs and pains. Additionally, your plan includes a way to maximize your initial investment in an IoT implementation.
Did we leave anything out? If you’ve got anything to add, don’t hesitate to let us know in the comments below!Tags: app developers san francisco, internet of things, internet of things app, internet of things app developer, internet of things app developers, internet of things app development, internet of things developer, iot app development, IoT app development San Francisco, IoT business model, IoT value proposition, mobile app developers San Francisco, profitable IoT systems, San Francisco app development, San Francisco IoT app development, San Francisco mobile app developer, San Francisco tech