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Start-Ups

What is the Internet of Things

By Garrett Spence   |    March 13, 2017   |    1:34 PM

 

What is the Internet of Things and how can it create new industry and transform existing markets.

Information technology is radically revolutionizing products and businesses. Previously machines were composed of disparate, unrelated mechanical as well as electrical bits and pieces. Today our machines have become intelligent, complex systems that can join together and combine their hardware, sensors, data and a whole plethora of other tools, to form a connected network that ensures optimal customer experience and maximum productivity. As a startup or small business, taking advantage of smart, connected products can give you the edge on the competition.

Smarter products are more attuned with customers

A vital part of the Internet of Things is related to sensors. These tiny tools can be used and attached to anything from a yoga mat to a yogurt pot to allow businesses to produce better products that are more suited to customer requirements. The sensors then record the data and send it back to the cloud.  This means that businesses can collect and compare feedback on how services and products are used, allowing them to perfect them. This data allows firms to record problems but also foresee what consumers might need in the future.

Knowing your niche market

The Internet of Things not only means that you can make smarter, better products more aligned with customer's desires and needs, but it also means you can market better to your clients. Ever had an advertisement appear on Youtube that was trying to sell a product to you that you had absolutely no interest in? What a waste for the company paying for that advertisement! The Internet of Things can eradicate such situations.  Smart devices are able to track user behaviour. For example, a fitness tracker like FitBit accumulates data about fitness habits and health stats which they then share with strategic partners.  That sort of data is invaluable for marketing purposes. Knowing your customers habits and behaviour means you can better market products to them, especially online.

New business models

The Internet of Things means that businesses will soon be operating with entirely novel business models and that they will have to keep in mind big data and myriad other concepts associated with the Internet of Things as they plan their strategy. Business models have always revolved around creating added value for customers, but previously, sources of information were limited. With the Internet of Things, data on customers is unlimited, you can gauge exactly how customers view their experiences and what they value. This means that startups that want to flourish must optimize customer experiences by using Internet of Things. Value capture will no longer be about charging the right price to ensure profits from individual product sales.

Recurring revenue

The Internet of Things will make generating other revenue streams much easier.  After the initial product sale, startups will easily be able to predict how to keep making money by offering value-added services that could easily exceed the initial purchase price. Especially if you own a tech business, it will be increasingly easy to 'lock' customers into your products and services by offering Internet of Things personalization and aggregation, meaning customers will be using your platform for multiple services, making it hard for them to switch.