If this year’s Consumer Electronics Show taught us one thing, it’s that every consumer electronics company is trying to “appify” its hardware in order to become an internet of things company. But the key word here is “trying.” Many of the ideas we saw weren’t, shall we say, fully baked; and as a result they fell flat.
It’s easy to fall into the “app trap” and connect a product for the sake of saying you’re mobile-friendly. But not everyone wants vibrating clothing that helps direct you to your destination via your smartphone’s Bluetooth — that’s a real thing by the way.
Never heard of it? Spinali Design shorts connect to their wearer’s smartphone and helps direct the wearer through urban environments by buzzing when she needs to turn right or left. While the shorts are an interesting application for what technology can do, their contribution is not necessarily something a consumer needs tech to do.
That’s not to say there is no value in having a connected product, but it’s critical to evaluate the “why,” the “how” and everything in between before you fall down a costly rabbit hole.
If you find yourself at a crossroads as to whether or not to connect your product or service, make sure you ask yourself the following seven questions:
1. Why am I even doing this?
For many companies, the motivation to create a connected product comes from an executive initiative to be “tech-forward,” rather than from a clear customer or business need.
Also, if you’re a hardware startup, you may be motivated by investor demands: Those people are looking for recurring revenue and SaaS, not hardware, widgets. But if you’re building an IoT product and don’t know why, you’re doing it wrong. It’s imperative that you know what your business goal is in delivering this connection. Have you surveyed customers? Is there a white space in your market that’s untapped?
Take a look at Nest, for example. At a time when IBM’s Watson was defeating Jeopardy’s champions, the founders of the startup Nest Labs decided they wanted to make an equally thrilling, super sexy . . . thermostat. Why rethink a device in homes that most people ignore? Because there was a huge opportunity to help homeowners reduce their energy bills. And helping people save money will always help you generate money.
Before you app, however, be prepared to answer the “why” question — whether you’re a startup looking to take a risk, or a veteran organization trying to evolve.
2. How will I create value through data?
Many companies building a connected product realize that the data collected from those products can be extremely valuable. But too often they don’t go through the effort of understanding where that value comes from or how they will utilize it.
3. Am I going to use customer-usage data to generate customer insights to make my next product better?
Are you going to look for issues and errors so you can provide service and support proactively? Do you have specific burning questions about your customers that data can help you answer? Do you have a retention problem with current customers and want to know how data can help improve those numbers?
Having data doesn’t create value on its own — you have to do something with it.
4. My product: Necessity or novelty?
Often, the “next big thing” has a much shorter shelf life than anticipated. Take smartwatches, for example. The wearable industry is set to take off — and the smartwatch was the first of these products to test the waters. What’s more, expectations for the market were initially high; but, contrary to forecasts, IDC reported late last year that shipments were down 51.6 percent year-over-year for the third quarter of 2016, and even tech giant Apple saw shipments drop 71.6 percent.
So, why is the smartwatch industry floundering? Because these items don’t solve any burning problems, so the market doesn’t extend far beyond early adopters.
5. What’s my product’s staying power?
Pay attention to your product’s staying power. It may be overused and talked about ad nauseum, but it may not stick around.
A great example of a device with staying power? Alexa. Why? It capitalizes on consumer demand and provides next-generation convenience to its users by acting as a virtual assistant.
Other big name companies are picking up on Alexa’s longevity. Starbucks, for example, announced this year that it’s “taking the next step toward evolving the digital customer experience by launching voice-ordering capabilities within the Starbucks mobile iOS app and the popular Amazon Alexa platform.”
This latest move will let consumers order their favorite coffee on demand without having to lift a finger. Starbucks essentially simplified an already relatively easy task — ordering through your phone. But now, thanks to Alexa’s voice messaging capabilities, Starbucks has brought the barista to you by connecting its mobile app to your in-home personal assistant.
The moral of the story is that assessing the practical application of your product will help determine the difference between fad and forever.
6. Am I a copycat?
While staying competitive with other vendors is crucial for the life of a company, creating a copycat product when the competition is the current authority on that niche isn’t going to garner the desired results. If anything, you’ll just look like you’re playing catch-up — and that’s the last thing you need when coming out of the gates with a connected product.
LG rolled out its Smart InstaView refrigerator at this year’s show but industry talking heads said it was virtually the same as Samsung’s Family Hub refrigerator. Both appliances offer a large touch screen that allows consumers to track their groceries and expiration dates. Both offer — believe it or not — a full Alexa integration, meaning that those consumers can use voice commands to build grocery lists and order more groceries.
The only real difference right now is that the Samsung product was revealed almost a full year earlier. Of course, time will tell how well it tests in the market. But, for LG, coming on to the scene under a veil of skepticism and observers’ mentality that “This has already been done” isn’t an ideal way to launch.
That’s why before you launch, you should ask yourself what other improvements or offerings you can offer that show you’re one step ahead, instead of two steps behind the competition.
7. Am I pricing myself out?
Finally, there’s price. The average hairbrush costs around $10, and most people today brushing their hair don’t need any kind of direction. However, if you want stats on the health of your hair and advice on how to best brush, L’Oreal has created the Hair Coach — an “under $200” product. Will it fly? Who knows?
With any kind of change in a company — be it new leadership or a shift in your business model — there’s going to be an element of risk to any new product. But before you take the plunge into connected products specifically, assess the true value you’ll provide the customer and whether or not you need to put time and energy into something that could be either brilliant, or simply “excess tech.”
Source: Entrepreneur
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