I recently had the pleasure of attending Mobile Monday, the San Francisco edition of a global institution dedicated to sharing and discussing trends in mobile connectivity. This event centered around the “Connected Home,” but touched on trends across other ”mega-markets” in mobile (which the host identified) as automotive, appliances, and wearables. The highlight of the night was a panel, moderated by Mark Hung of Gartner, along with colorful spectrum of talented perspectives:
- Sy Choudhury – Sr. Director, Product Management, Qualcomm
- Jason Johnson - CEO, August Smart Lock
- Tim Enwall – Head of the Company, Revolv
- Francesca Romano – CEO, Atooma
- Santiago Merea – CEO Chef Sleeve
- Rob Coneybeer – Managing Directing Shasta Ventures
What struck me was that this event– being focused on the singular domain of the ‘connected home’– left me with four findings that apply to the entire ‘connected’ or M2M market as a whole, independent of industry. They are:
1. Vertical Solutions and Standards will Not Support a Complex Ecosystem
Bad news: Fragmentation in IoT is going to exist for a while. By fragmentation, I mean disparate or overlapping solutions that can’t “talk” (connect) to each other. This can be a matter of the type of connector or connectivity framework needed to interact, standards in protocol, or the programmability needed to connect in the first place. Devices that are not made by the same manufacturer, devices that do not run on the same operating systems, or even those that weren’t made or purchased at the same time all add to the complexity. Inherently, vertical solutions cannot not support a complex (read: multi-domain) ecosystem, creating an imperative to standardize: to create horizontal platforms that are communicable, operable, and programmable across devices, regardless of make, model, manufacturer, or industry. Today standardization doesn’t really exist in the M2M market, but is an important evolutionary element of the industry to simplify set up and operations. From AV equipment to cars to refrigerators, to enable the “seamless” programmability of these devices is to enable the full potential of a connected life.
The good news is these types of companies or products are beginning to emerge. Technology vendor, Axeda, for example, is dedicated to a “device agnostic” infrastructure, in which they build their product to connect and comply with as many different device standards as possible. As one panelist explains the need: “we want to make device connectivity what today is equivalent to having your own URL;” it works no matter what screen type, browser, hardware. It’s a standard. Qualcomm’s “AllJoyn” shares this mission defining itself as an open source project that provides a universal software framework and set of system services that enable interoperability among connected products and software applications across manufacturers in order to create dynamic proximal networks. I expect we’ll see more of these companies emerge, more likely than not from the industry giants (the Googles, Microsofts, IBMs of the world).
One of the biggest challenges to mass consumerization of the Internet of Things is that, particularly from a B2C standpoint, it aims to replace products or processes that aren’t broken yet. What this means is that the emergence of friction spells immediate death for the device. Take the lock on your door: it’s probably not broken since you rely on it to keep unwanted visitors out of your properties. If it were broken, you would call a locksmith and replace it. Now enter August Smart Lock, a company responsible for the smart lock and access system that allows you to send a virtual key to anyone you choose to have access to your home. Because there is nothing wrong with your current locking system, August Smart Locks must create a product and experience that improves the status quo; any of the following crushes its chances of adoption:
- It has to work. Consistently, intuitively, seamlessly, quickly, and independent of the cloud.
- It cannot provide any extraneous steps that take more time or are confusing to explain to family members
- It must provide back-up. Smartphone dead? Power goes out? Grandma only has a tablet?
- It must have clear, compliant security measures (Security isn’t one size fits all; different domains whether driven by consumers, manufacturer, regulatory, etc. will have different measures and regulations)
I have in no way exhausted this list, but the point is that any one of these (and other) points of friction can frustrate users to the point of discard– and fast. Customer experience with non-essential hardware has never been more important to adoption. People have a peace-of-mind issue that can only be assuaged by proving value and trust.
Mass adoption won’t happen overnight. Robert Coneybeer, Early Mobile Investor in IoT-related companies at Shasta Ventures, says this happens around Maslow’s Hierarchy of Needs. In other words, we look for value first at the most basic level of shelter, water, heat, light, etc., then and only then will we invest higher up the hierarchy in things like entertainment, recreation, building self-awareness.
Overcoming the ‘It’s not broken but we want to fix it anyway’ challenge is also where context awareness becomes critical. By context awareness, I refer to the cross-domain connectivity I referenced earlier. For instance, the smartlock’s ability to interconnect with the home lighting system, or with the homeowner’s smartphones, or with a biometric tracking platform… the list goes on.
Like we have seen in the smartphone market, once things can connect with each other, they add value and context to each other in totally unprecedented ways through a groundswell of applications, this will take off. I’m using the word application in both senses here: one, as a technological product or platform (“an app”); and two, [deriving value from] a new (applied) use of the original function of the device. Harking back to the challenge of friction, we want these products and processes to be context aware, to blend into the background of our contextual experience. When novelty partners with (not replaces) utility, we’ll see a ramp towards mass investment and consumption.
3. The Older the Device, the Better
Two things to note here: One is this increases the value and potential return on investment. Return being defined largely as experientially and informationally (intellectually), and less so monetarily (although I shouldn’t rule that out). Two is that this places immense pressure on the viability and stability of the hardware.
4. The Fundamental Difference (and Incongruence) of the Hardware Mentality vs. Software MentalityOne of the biggest insights I drew from this event emerged from a hearty discussion around the profound difference in the hardware developers’ mentality vs. the software developers’ mentality. Disclosure, I would in no way pretend to be a developer, but I will try to outline this disparity as clearly as possible:
Whether in the home or not, a world of standardization and seamless connectivity across devices has infinite potential. As with any technology, it is the visionary vendors, investors, brands, and prosumers who will drive the market forward. What sets M2M apart as a market is the near-reverse adoption in M2M than in other technology markets. That is, instead of consumers driving business adoption, as we’ve seen with social media for instance, some of the most complex, coordinated, and disruptive uses of cross-domain connectivity are coming from brands and manufacturers. As a result, some of the smartest minds in tech are not only dabbling in the Internet of Things, they’re living it and analyzing trends, pains, and opportunities related to it. Thank you to Mobile Monday for sharing some of these with us.