Q&A with Kleiner Perkin’s new Industrial IoT entrepreneur

It feels like the industrial IoT has been waiting to happen for a while. There are dozens of startups all trying to tackle part of this problem. Why is this taking so long to emerge? Progress, unfortunately, never happens linearly so I think we sometimes underindex the positives and overindex the problems. Take the energy industry for example. Although the distributed grid and smart metering opportunity took time, the industry now has a baseline to do follow-on activities with analytics, autonomy, and security. And IoT Security is something that you’ve covered really extensively on the podcast. Probably the 2nd question a potential customer asks in Industrial IoT after “does it work” is “is it secure”? So instead of sputtering in the market, there may be a few breakthrough companies and technologies that can finally uncork the demand. I’m on the hunt for those companies and those approaches.

There are dozens of huge companies from GE and IBM to SAP and Salesforce all touting their industrial IoT capabilities. Where are the opportunities for startups?

In the early days of software and computing, everything felt very vertically specific, and was later rolled up into giants like SAP and Oracle. Do you think we’ll see that same highly vertical development happen in Industrial IoT?

Great questions Stacey. First, I think that the marketing for IIoT has been effective from the standpoint of creating pools of demand. Unfortunately there have also been cases where those products don’t fit the requirements of the potential customer or are just too cost prohibitive to be localized. I believe the opportunity is in “Verticalized IoT” where very focused startups attack the larger platforms by focusing on a discrete market/offering. I call these startups “seam startups” because they can attack a discrete segment and then grow through adjacencies. If we use SaaS as exemplar, there are large public companies like Veeva Systems and Guidewire that were formed to take advantage of a vertical opportunity (in their case healthcare and insurance respectively).

What are some startups that you are excited about that you have worked with or invested in during the last few years?

Lots of exciting startups attacking big problems but three where I’m involved that are very relevant are Cirrent, Matterport, and Roost. Cirrent is solving a major issue for connected devices; out of box experience in a simple and compelling way. For any Wi-Fi device to be successful it needs to get and stay connected and Cirrent has created a software-only network-as-a-service that can do that.

We’ve spoken about Roost in the home telematics space and I’m really excited for Roel and his team. They just announced a $10M Series B round and are partnering with many leading insurance companies. And Matterport is showcasing how disruptive computer vision can be when applied to commerce. They have a 3D Camera to scan 4K virtual tours of real estate, hotels, retail etc. and using that technology it can be applied to a variety of activities. We recently sold our home with a Matterport tour that allowed buyers to view it in 360 from across the country.