There is a ton of talk in the hardware world these days about creating a minimum viable product (MVP) that you can show to customers or investors before investing big money — and time — into a final device. The idea is that you’ll learn a lot through the creation process and even more from how customers interact with the device, learnings that might influence its final design.
However, I recently had a conversation with Pilgrim Beart, who brought the concept of a minimum viable ecosystem to my attention. Beart is CEO of Device Pilot, a company that provides business intelligence from various different devices in one place. With the internet of things, companies are no longer trying to create a product to offer value, but rather establish relationships between companies and individuals to create value. But to understand how those relationships should develop means that product designers need to think about not just a device but how to establish relationships between entities that will work with a device.
For example, in the consumer space, Peloton makes a connected bike that links customers to cycling classes offered around the world. Peloton argues that it is a media company, not a device company. But what it really does is wrap a web of relationships with fitness professionals and studios into a service tied to connected bikes.
Ecosystems can be even more complex in the enterprise space. For example, an automaker might have connected manufacturing equipment that can assess the production time of a car based on data gleaned from similar machines in other automakers’ plants. That data is more valuable in aggregate than it is when it’s just from that one automaker or one plant. So figuring out how to build an ecosystem where data sharing can take place without disclosing trade secrets should become a priority.
It will also influence how you charge for a product and the way that product is physically architected. Beart himself interviewed Gaye Soykök, head of emerging technologies at Legal & General, an asset management company in the UK, in order to better understand the concept and relate it to the internet of things. Here is one excerpt from their conversation:
Soykök: Minimum Viable is application when we’re trying to do something new. There’s indeed a close analogy with MVP: we don’t just create products anymore — a website, an app. Maybe it’s my luck, but almost always these days it’s more complicated than only a product and it takes several different players to deliver and create value. “Viable” means that it’s enough to test an idea. And if the concept works not just technically but for adoption, then it’s viable enough, so it takes off and grows by itself. It’s an organic metaphor.Beart: Yes, that “taking off” is what many IoT use cases need right now. Often, the first application has to pay the costs, e.g. smart streetlights in a city have to pay for the network, but then subsequent applications in the same ecosystem can ride on the back of that investment and quickly get returns — so the ecosystem as a whole starts to take off. So, smart cities may need to some things to sponsor that first application in order to reap the ecosystem benefits more quickly.
This framework is an excellent way for us to start thinking about IoT. Yes, we have to get the hardware, the back-end cloud architecture, and more, right, but we also have to figure out what it’s going to take to get real value out of any IoT investment. That means bringing in partners early and sharing ideas with them.
One way to start this process is by mapping out which competencies, data, and services your operations can bring to the table. Then figure out the type of need your organization can fulfill. What tools does your organization have to meet that need? What is missing? Can you find a partner that has that piece of the puzzle? Can you find some way to co-market a product that solves that need and can become part of an ecosystem of services?
You also have figure out how to get people or companies involved in your ecosystem. It may be as simple as offering a share of the revenue generated or as complex as building out a network of participants by incentivizing them with credits or points. The article mentions Nodle, for example, which is building a Low-Power Wide-Area network using individual Bluetooth connections by providing cryptocurrency to users who share their connections.
The whole article is jam-packed with nature analogies as well as some other case studies, and I would recommend it to anyone trying to think through an IoT product. If you’re looking to expand your view beyond a piece of hardware to encompass a real service, its insights are invaluable. Indeed, tomorrow’s big companies are being formed today, and those that view their products within an ecosystem will likely fare far better than those that limit themselves to a single device.
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