How to start a connected consumer device company in 2017

When it comes to consumer IoT startups, I’m tired of talking to entrepreneurs who build an expensive connected product but don’t think about how they are going to sustain the business. Or who don’t think about connectivity beyond just offering a stream of new data. That’s why I was excited to speak with Russell Ure, who is starting his second consumer-focused connected device startup, Klashwerks.

Klashwerks is building an add-on device for cars, called Raven, that sits on the dashboard and monitors basic vehicular functions while also adding additional sensors like a camera and decibel meters. Before Klashwerks, Ure created Piper, a home security device that sold to iControl in 2014.

Ure says that this time around he was more skeptical of crowdfunding his device because it seems most consumers have become disenchanted with the process. Instead, he funded Klashwerks in part with his own money. However, he is still banking on pre-orders to help understand the market demand for the device.

Like Piper, which combined a connected camera, several sensors, a siren and a Z-Wave hub into one compact device, the Raven product is a twist on the traditional car monitoring device. Piper’s array of sensors helped consumers connect with their home, even without video, which made it a compelling option for renters and those who didn’t want to outfit all of their doors and windows with pricey hardware.

Raven uses the on-board diagnostics information to get speed and other data from the vehicle. It also offers a camera that shows the road and sensors turn the Raven into a security system for the vehicle while it’s parked. These extra features are an example of how Ure is trying to take connectivity and sensors to re-imagine traditional products like an on-board diagnostics device and car alarm. He’s looking to connectivity like Apple looked at the smartphone. It’s not just a phone or a computer. It’s also a camera, a calculator and more. I wish more connected device startups thought this way.

This time around Ure’s also adding a subscription fee to the business model, in part because he’s thinking about longevity and the cost of processing the video that comes in from the connected camera that’s on the Raven. He also has to pay for the cost of adding a cellular radio to the Raven, because Wi-Fi won’t cut it for a connected car device. The plans should start around $5 a month for the low-end option and rise from there.

The cellular radio offers another worthwhile lesson from this product. Ure’s adding cellular connectivity now as the mobile operators are finally coming to their senses and getting creative with the plans they offer startups and others who are innovating with connected devices. Earlier costs could be prohibitive, even if you found an operator willing to work with you.

In general, the lessons Ure has learned in producing two connected products for the consumer herald the growing maturity of the market. It’s no longer enough to crowdfund something or to toss a product out on the market without considering a business model. And when it comes to the product itself, it’s time to think deeper about how to tie sensors and connectivity together into something the consumer is excited about buying.