One of the most memorable presentations delivered at RFID Journal LIVE! occurred in 2005. We had invited renowned futurist Paul Saffo to discuss RFID adoption. He showed a slide explaining the technology hype cycle, noting that most technologies far exceed the hype upon finally taking off. The number of PC, Internet and cell-phone users, he said, far exceeded the most outrageous hype. Then, he delivered the line that has stuck with me ever since: “For you vendors in the audience, you will be exiting the RFID market just as it is about to take off.”
I bring this up because radio frequency identification is reaching an inflection point. We are near—perhaps very near—the time at which RFID will begin to be adopted more rapidly. I realize there have been other times that we thought this to be the case, but this time is different. The evidence is clear that there are more large-scale deployments and more examples of companies achieving real value, and there are clear signs that the technology is now mature enough to be deployed by large numbers of businesses across many different applications.
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Some technology companies walked away from RFID a long time ago. After a modest initial investment, they folded up their RFID groups when the dramatic growth that everyone envisioned failed to materialize. They could (if they possess impeccable timing) jump back into the market now, but most CEOs are not focused on RFID—and they won’t be until the growth rates become dramatic. When that occurs, they will have to invest heavily to get back into the market, or overpay to acquire a firm already in place. Timing is everything.
Some companies that have stayed the course over the past few years are now considering reducing their marketing and/or research and development budgets. (I don’t know of any RFID companies that are thinking about walking away at this point.) CEOs at these firms are, not surprisingly, frustrated that their investment is not yet paying off. Sales have been up and down over the past few years, with some big orders here and there, but not enough to keep sales rising steadily. Patience is wearing thin in the C-suite, which is understandable, but now is the time to double-down. Timing is everything.
Many venture capitalists invested a lot of money early on, when they thought that mandates would drive RFID adoption. That didn’t happen, however, and a lot of money was lost as a result. Now, the technology is gaining real momentum, but many VCs will miss out on the opportunity, because they are afraid of getting burned twice. There are a lot of solutions providers with good products, and there is much money to be made if VCs fund these companies to keep them alive. Instead of trying to time the market—jumping in when things heat up, getting out when they cool down and then trying to get back in when they heat up again—VCs should bet on a technology they believe in, and stay the course. Timing is everything.
Investing in new technologies is a challenging game. But now is the time to ask yourself this: Do you want to be standing on the sidelines or exiting the RFID market just as it is about to take off?
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark’s opinions, visit the RFID Journal Blog, the Editor’s Note archive or RFID Connect.