Large corporations have brands to grow and protect, marketing and distribution systems that need product, and the ability to invest in new product. The challenge for a well-established brand is to find the balance between staying fresh and relevant, while avoiding jumping on trends. And it’s hard to find a bigger trend these days than the Internet of Things.
But what is the potential impact of the IoT on brands? And what impact could embracing the IoT have on a brand? To answer those questions, we need to understand what the Internet of Things is really all about. To me, it comes down to the convergence of three trends:
• Cheap, low-power microprocessors and radios
• Ubiquitous networks and access points
• Low-cost rapid prototyping tools
The early hype has been all about small companies and entrepreneurs coming up with new gadget ideas by adding a microprocessor, a radio, and a battery to a “thing” and voilà—an article appears on some website about a new IoT gadget. Add crowdfunding to the mix, and it has never been easier to get a new product from idea to first sale. However, anyone who has created a significant product or brand will know that it is not this easy.
Major brands have the ability to invest in new feature development, and they have the marketing and distribution systems to get IoT features into the hands of business and consumers. This is what will put the IoT into our everyday lives.
Brands are tricky. If they don’t grow, they shrivel—but they need to be protected because they rely on a stable perception by their audience. This requires balance and consideration before new features or trends are baked into products related to a brand. Jumping on a technology trend too early often results in compatibility issues and angry customers. Failing to understand how a technology will add real value has resulted in some pretty idiotic products—only the user benefitting from the technology can create value.
Worse, it can make the company look stupid. Embarrassing security failures with early so-called smart appliances were appallingly predictable. The combination of a major brand and a security or design failure is news, and we have entire communities dedicated to discovering and publicizing these weaknesses.
This means that large corporations are being careful about adopting the IoT. It needs to add value to the user and create a better experience. It also has to preserve or increase market share and/or margins.
There is an inherent conflict between building on a brand legacy and riding the wave of a new concept. Large corporations can be forgiven for treading carefully. With the IoT, the advantage of doing something first can’t come at the cost of doing something foolish.
The riskiest part of adding IoT capabilities to existing product lines is the impact it can have on the software and user experience, not on the hardware. The hardware side is relatively simple. The problem most manufacturers face is that they don’t understand large-scale system design or user experience. Companies that should know better—Samsung, for example—have had major issues with this.
The worst is yet to come. Badly designed software that clutters our devices and adds noise to our lives will have the effect of distracting us and distancing us from our real environments. This will be the short-term reality of the IoT. Brand consideration means that companies need to think about how the addition of a radio and a microprocessor to a product enhances the user experience. We have a lot of history to show they shouldn’t rush in just because it is trendy.
A bad product launch can show that a company is out of touch with its own brand, its customers, and technology. I am a huge fan of what the Internet of Things represents in terms of applied technology, and am convinced that it will be the addition of IoT features to existing products that will ultimately deliver on the early hype. I am also convinced that, as we have seen before, the reality will eventually be pervasive and subtle—we won’t remember what all the hype was about, but it will be all around us.
Paul Hanson, CEO and co-founder of bbotx, a startup in the Internet of Things space, has extensive experience in software product development and business development for global businesses. He has led successful startups, including BIDS Trading, a New York-based technology-based financial market. BIDS was sold to a consortium of global banks in 2006, a highly successful exit.