Internet of Things (IoT) is one of the key technologies in the Fourth Industrial Revolution which promises to transform and disrupt our current business. It’s like a “do or die” thing. Even though Kevin Ashton have coined the term “IoT” in 1999, it’s only four to 5 years ago that we see a sudden increase of renewed interest in IoT due to multiple factors such as the price of hardware becoming cheaper, communications becoming more pervasive, software development becoming more easier, Moore’s Law doubling the computing power and the impact of Metcalf’s network effects.
We are also seeing a transformation in the business model. Initially, it’s all about technology-based, product-based or service-based business model. However, with IoT, we can offer a new business model based on outcome. For example, I will pay your solution if it can guarantee to reduce my electricity bill by 30% or pay me this amount if I can guarantee you that your healthcare costs reduce by 50% this year.
The new business posed great challenge since it requires enough data or information to make a particular decision. These data can come from various sources including the sensor data. Building an IoT solution requires many parties to be involve since every part of the IoT value-chain requires specialization such as chipsets, devices, connectivity, middleware, applications, data analytics and system integration.
Below are the main key factors how Startup can capitalize on IoT’s new co-economy:
- Leverage their agility – Startup work faster than many bigger companies. They are more innovative and have faster decision process. Successful Startup will be normally acquired by bigger companies to be part of their whole ecosystem.
- Specialist in their own areas – Startup is excellent in one or two things. They have the knowledge depth in specific area. They can be a very good partner and to fill the gap required by a bigger project.
- Capturing the immature market – IoT is still at an infancy stage but have great potential. With the use of cloud, IoT services can be reach worldwide. A smart building or smart parking solution can have their IoT middleware resides across the world.
- Think big but start small – IoT have four maturity phases. In many IoT implementation journey, we can start with as simple as monitoring and later towards control. As we include more sensors and actuators, we can reach the phase of optimise and finally the ultimate phase of making the solution autonomous.
- IoT DNA – Startup should capitalize the journey of an individual organization’s digital transformation journey from the beginning. Understanding their pain points and providing the IoT solution is similar to a doctor prescribing medicines for their patient until they recover from their illness. Only the regular or the “house” doctor know the patient well enough – thus, be their IoT DNA.
IoT has taken a long journey and now it has become an integral part of Fourth Industrial Revolution and beyond. It will be very pervasive and will change the landscape of current business whether you like it or not. It is no longer a monopoly economy due to multiple technologies and specific talents required. Startups have to take quickly leverage and capitalize the opportunity now.
Dr. Mazlan Abbas is the CEO and Co-founder of FAVORIOT, a Malaysian IoT Start-up that focuses on providing a peace of mind solution called RAQIB for the pilgrims and their family members during performing their Hajj. Favoriot also offers RAQIB to monitor the elderly’s health, safety, and location. Both solutions above comprised of Smart Wearables connected to FAVORIOT IoT middleware. The middleware is now being used by more than 20 organizations to build their own IoT solutions.