It’s an exciting time to launch an IoT startup. With the rapid advancements in technology, it seems that future is bright for this relatively new industry. However, because IoT is still in its infancy, there are still plenty of unforeseen challenges that early-stage IoT entrepreneurs face on the road to success.
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Luckily, Maxime Schacht of Sigfox has outlined some of the mistakes that IoT founders can avoid when launching their companies in this syndicated blog post.
The post, “Top 5 common mistakes made by B2B IoT solution providers,” originally appeared at Sigfox, and has been republished below (with minor changes) with permission.
We see some IoT startups being more successful than others. Here are 5 things to avoid when building your solution:
1. Not being able to determine and explain the solution’s business value
If a prospect customer understands quickly and easily that he will save money and/or generate new revenues thanks to an IoT solution, then his decision is a no brainer! The reality is far from that today. Most enterprise IoT companies are not capable of quantifying the value created for their target customers. Benoit De Longeaux, Business Manager at the Sigfox IoT Agency says:
Solution providers should set their price based on the value created and not on the production cost.
The business value should be superior to the total cost of ownership which, they often forget, includes also the complexity of installation, the cost of integration and even the time they have to spend for the customer on-boarding.
2. Not having a convincing customer story
My strong belief is that a solution provider should always sell itself and struggle before outsourcing to channel partners. Even if your expertise is in the architecture and industrialization of the solution, you should secure your first clients, at a discounted price or not, in order to raise the brand awareness and create a nice story to tell future customers.
Once a solution provider can communicate on its first customers cases, it is possible to outsource, partly or fully, the sales to channel partners for a rapid and global expansion.
3. Overspecifying the device
Some solution providers tend to create broad “swiss-knife” solutions. Laurent Soubielle, Technical leader at the IoT Agency, says:
The lack of focus and relevance for a specific type of customers will make it hard to be price competitive in the long-term against niche players that are vertical or use-case specific.
The first step of a solution provider should always be to meet its ideal customer before going too far in the product design process. Spending time with a target customer will help to define precisely what he needs: no more, no less. Once the business is sustainable and there will be an opportunity to make small changes to address other sectors and applications. Finally, if you are not well performing on the core features of the product (embedded AI, antenna design…), the additional ones won’t matter. So, spend time on what is critical.
4. Not anticipating technology & environment challenges in the product specifications
Try to imagine the customer journey, how the product will be used. Will the user experience be equally good in every environment it will face? In the Enterprise IoT sector, for instance, we see lots of players with Tracking solutions but only very few having it right and Sensolus is one of them.
Sensolus has anticipated that there can be a lack of coverage (black spots, countries not yet covered). And therefore the solution has a patented mechanism to resend lost messages. Sensolus has also worked around the data limitation of Sigfox (140 messages per day) and sends only temperature alerts when necessary while storing the rest of the data locally. The logistics manager will then be capable to retrieve this information later, via short range connectivity.
5. Underestimating the power of Design
Lots of Enterprise IoT companies have a heavy focus on price and completely ignore the design of their device. But they tend to forget that in the end, the purchasing decision is made by humans. And humans are emotional. Casper Harlev, CEO of Sensohive, confirms that time and money invested in the design of the device has played a significant role in its success.
Even if the device is used to measure the temperature in a truck, the customer will go for the best-looking device, assuming the pricing is somewhat close to its competition.
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