|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
RFID Startups Hold Promise
The next generation of RFID startups will come to market with solutions to many of the problems early adopters are wrestling with today.
May 10, 2004—Over the past month, I’ve worked with General Catalyst to review more than two dozen young businesses that are looking to provide technology solutions that leverage the unique capabilities of RFID. While General Catalyst has seen its fair share of opportunistic companies betting heavily on firms racing to comply with Wal-Mart’s mandate, we’ve purposefully cast a wide net to see as much as we can in this space and avoid focusing too narrowly on startups offering supply chain solutions. Here’s what we’re finding.
The market is still very young. A large number of first generation startups, such as Alien Technology, Matrics, ThingMagic, OATSystems and ConnecTerra, are working on delivering finished labels, agile readers and intelligent middleware.
What the majority of Gen 2 software startups still lack is technology that's focused on solving business problems. We saw the same thing in the early days of the commerce software market, where early versions of products required marketing people to learn HTML instead of providing them with language and tools they understood. Right now, we’re at a similar crossroads with RFID. Most new businesses lack a combination of industry and technology expertise. It’s like a group of search experts trying to launch a new travel site without understanding the politics of how global distribution systems, airlines, and hotels compete for revenue; the site would never take off. Only industry insiders will have the credibility to convince peers to swallow the costs for promised ROI.
But we have good reason to believe generation two will lead to a very promising group of generation three startups. And these companies will emerge in the next six to twelve months. Why so fast? First of all, and most importantly, we are beginning to see tenured executives from companies, such as International Paper, Markem and Intermec, get the entrepreneurial bug. Over the past 20 years, these folks have wrestled with mass serialization issues in industries like retail, consumer goods and health care. Their focus will accelerate a much- needed fusion of business and technology and introduce RFID companies with greater business alignment. Some early results of this new energy can be seen in spin-offs such as Flint Ink’s Precisia and Trenstar’s Agility Healthcare Solutions. Also, third generation startups will benefit from stronger management teams. For instance, Larry Kellam, the former director of business-to-business supply chain innovation at Procter & Gamble, recently joined the board of advisors of GenuOne, a Boston software firm that specializes in systems designed to thwart product counterfeiting and diversion.
Third generation startups will also benefit from a more experienced supporting cast. General Catalyst has spent time visiting and speaking with university faculty and graduate students at institutions such as Georgia Tech, Michigan, MIT and Harvard. Many first-year MBAs are heading off this summer to work on RFID projects at companies such as Target, Woolworths and Gillette. These pilot projects are much more extensive than the field trial run out of the Auto-ID Center a couple of years ago. When these business minds return to school in the fall and team up with their technology-focused classmates and professors, they will help to identify and resolve the problems in first-generation software and hardware products. As they emerge from academia, their industry connections to help startups accelerate sales cycles.
Also adding to the RFID talent pool will be the young consultants working at firms such as Deloitte and Accenture. After two or three years of living in Residence Inns and building pilots, these brains will want off the bench and become very important additions to business development teams or product development.
This market is evolving quickly—albeit not as quickly as many would hope. Deployments are forcing rapid improvements to first generation products and rapid education. Our research shows business people, not just technologists, are beginning to understand how RFID infrastructure can solve business problems. End users can looking forward to the rapid evolution and strengthening of generation two startups and a new generation that is able to address real-world business issues.
Josh Walker focuses on creating and identifying new investment opportunities for General Catalyst Partners in RFID and related markets. He joined General Catalyst from Forrester Research, where he launched Forrester’s extended RFID working group and published several strategy reports on the RFID market. To comment on this article, click on the link below or send e-mail to firstname.lastname@example.org.
Login and post your comment!
Not a member?
Signup for an account now to access all of the features of RFIDJournal.com!
SEND IT YOUR WAY
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
|RFID Journal LIVE!||RFID in Health Care||LIVE! LatAm||LIVE! Brasil||LIVE! Europe||RFID Connect||Virtual Events||RFID Journal Awards||Webinars||Presentations|