IoT: Just because you can doesn't mean you should

February 21, 2017

The Internet of Things (IoT) presents an amazing opportunity to make many things better. With over 50 billion devices expected to be connected by 2020, some experts say IoT is bigger than the internet itself! 

With all the buzz, it can be difficult for a company to resist the desire to connect any and every product to the internet. But does everything need to be smart?

When does being connected add value?

When trying to assess the value of connecting a product, I fall back on Design Concepts’ desirability, viability and feasibility model. Most devices CAN be connected to the internet and made “smart” so the feasibility question is not the critical one.

Viability is tricky when you are dealing with an emerging idea. Are connected devices a fad (like adding .com to the end of a business name) or a market disruptor (online commerce)? A fad can make a company money — in the short term. It is acceptable for a company to consciously decide to ride a wave (think Crocs or Himalayan salt lamps). But viability is about a company creating value over time. So how does a company distinguish an emerging trend from a passing fad?

You should look at the third pillar — desirability.

Desirability over time creates value

Desirability is the trickiest of the three to get right. People are mostly optimists and will say that a connected device will improve their lives in some way. Most people can rationally assess that a connected device could make a task faster, easier or more consistent. What people are poor at is assessing whether a smart device will actually change their behavior over time. 

Here are three questions a company should answer about their customers and their product before pursuing “smart”:

1. Will this product completely and permanently change the way someone does something? 

Essentially, this is revising the value proposition of your existing product or writing a compelling one for a new product. When a company I know considered launching a connected yoga mat, their assumption was that people who are practicing yoga would rely on the map to capture the information their body was already telling them (i.e.; my hands are aligned, my weight is balanced, I am doing a down dog). The new value prop was that people could forget about experiencing their bodies during their practice and this would permanently change the exercise for the better. Anyone who practices yoga will tell you the information may be interesting, but a smart mat is not going to overhaul value proposition of yoga itself — which is to notice, adjust and enjoy the poses as they are done.

People are poor at assessing whether a smart device will actually change their behavior over time.

2. Does this product offer a measurable improvement over the existing product?

When considering the benefits of a connected device, people will often respond, “Oh, that’s cool.” Cool isn’t enough of a reason to make a product “smart.” Take the example of Milwaukee Tool, which offers a digital platform for tools and equipment called One-Key. It allows tool users to connect their wireless-enabled tools (drills, for example) to the Cloud and use a free app to customize tool settings, manage inventory and track the performance of their equipment. 

All of that sounds neat. In my opinion, there isn’t a compelling story to be made for how customization or performance tracking will measurably save a user time or money. It may be slightly more convenient to save personalized settings, but drills don’t have many adjustable features to begin with. And unlike a piece of factory machinery or a car, optimizing the performance of a drill isn’t a necessity. One-Key appears to be typical of many devices that are connected just because they can, not because they offer true value.

In contrast, how did we ever live without the Ring doorbell?  This Wi-Fi enabled gadget replaces a conventional doorbell and syncs with an app on a smartphone. When someone rings your doorbell, a notification appears on the phone’s screen. From there you can view –and interact—with the visitor. You can give the cleaning lady access code to your house, tell the delivery man where to put your package or even convince a would-be robber that you are home when you aren’t. This doorbell offers way more than letting you know that someone is on your front porch – it offers peace of mind.

3. Is the world is going to operate this way whether we like it or not?

This is essentially looking at market forces that may push a company into responding to a disruption. For example, insurance companies use age, income, grade-point average and other demographics to predict the probability of risky driving. There may be a day when insurance companies will not insure a driver unless he or she has irrefutable data that proves safe driving habits. The implications of this are that drivers will need cars that can capture information on driving speed, sudden braking, tailgating, etc. This is an example of how automakers may need to look beyond what seems like a consumer fad and address the potential for disruption to their market. If the only way someone can get auto insurance is to drive a connected car, that world is about to be turned on its head.

If a company can answer something other than “no” (i.e., yes, a qualified yes, maybe, etc.) to these three questions, then the idea of making a “smart” device has passed the sniff test. The company can circle back to the questions of feasibility (can we build it?) and viability (can we make money doing it?), the two areas that are infinitely easier to address once the true value of being connected is confirmed.