Two Biggest Challenges IoT Founders Must Face
Endeavoring to start a company is extremely challenging regardless of what kind of company it is. However different industries present their own unique challenges. Software, hardware, and service companies must all take very different approaches to carving out a profitable share of the market. For IoT (Internet of Things) companies, I’ve observed two large challenges.
Founders need an extremely diverse skill-set
First, would be start-ups in the IoT space must be proficient in all of the three aforementioned domains – software, hardware, service – and more, within their founder talent pool. Before they are “connected,” IoT devices are sensors wrapped in hardware, so founders must be competent in both hardware and electronics design to get a prototype off the ground. As mentioned, the devices need to be networked to effectively communicate with each other and/or the cloud presenting the need for knowledge in connected devices. Finally the networked devices need to be backed by a user friendly software interface that distills the data generated by the sensor infrastructure. Once the device is built, hardware maintenance and data management is a prime candidate for technology service models that rely on recurring revenue on a per unit or per person basis.
With all of these layers, IoT start-ups have challenges quickly ramping up as the founder(s) may have expertise in one or two of these domains, but is blocked by her lack of expertise in the another. What is distinctly lacking in the model presented so far is the business development, marketing, and sales skills needed to effectively launch a start-up. This is in addition to the diverse technology skill-set that is required, thus increasing the challenge of having sufficient talent in the company founders to not just have a product idea or create a prototype, but also quickly ramp up to production and effectively sell a product.
Staying focused on added customer value
The second challenge is not unique to IoT companies, but is important to them because of how feature laden IoT devices can be. IoT companies must thoroughly understand the metrics their customers use to measure success. IoT devices can do two things really well: make the customer’s life easier or more enjoyable, and provide valuable data to the customer. Thus the IoT start-up’s sales team (aka founders) need to fully understand how their customers measure added value to their companies or lives. This could be anything from financial savings due to early detection of problems, to individuals wanting more control over when they heat their homes. In any situation, only the most valuable data and features should be provided. This is crucial for a start-up that is constantly battling the slippery slope of feature creep, especially when IoT devices can be easily modified to “do everything”.
About the Author
Crystal Harvey is the Reno Innevation Center Assistant Director, and InNEVator Program Manager. The University of Nevada, Reno Innevation Center – Powered by Switch acts as the University’s avenue for supporting funded growth companies in the region. The InNEVator is a fully-funded 8-week bootcamp for start-ups in the field of IoT. Crystal’s expertise is in communicating both technology and business needs and has a background in project management, operations, mechanical engineering, and business development.