When companies approach IoT products, too often, they dive directly into product development without taking the necessary steps to ensure success. They usually start by focusing on technology instead of understanding their customers’ needs.
This technology-first approach is a mistake and leads to building products nobody wants.
Through my years of experience and after talking to thousands of Product Leaders, I’ve compiled a list of 12 steps to help you avoid pitfalls and put you on the path to profitability. (Notice how technology is important, but those considerations happen much later in the process!)
Step 1: Select a specific market, industry, and vertical (instead of casting a wide net).
Step 2: Identify a strong customer pain in that vertical that your IoT solution solves.
Step 3: Get support from your Executive team to work towards an early prototype that solves the customer pain identified in Step 2. Convey how this will impact the company’s bottom line and ask for their support for at least one year.
Step 4: Identify all users (internal and external) across your product’s customer lifecycle, including installation, provisioning, operations, maintenance, and decommissioning.
Step 5: Define personas and “jobs to be done” for all users identified in Step 4. Prioritize them based on those who have the biggest pain and willingness to pay.
Step 6: Create a data strategy. Focus on the data your IoT product needs to collect and how to create value for your customers and company based on that data.
Step 7: Define, test, and iterate various IoT business models until you find the one that works best. (Don’t stop at the first one that comes to mind!)
Step 8: Work with your teams to create a plan for deploying and operating your IoT product as a pilot—in the early stages and at scale.
Step 9: Perform a build vs. buy analysis with your Engineering team. Agree on the components of the IoT Technology Stack you will develop in-house and the ones you’ll buy off the shelf.
Step 10: Develop a robust ecosystem of partners across the IoT Technology Stack. Make sure you select partners relevant to your industry vertical and those that cover technology, services, and market channels.
Step 11: Complete a security threat analysis across the IoT Technology Stack for your product. Develop mitigation plans including how to test for vulnerabilities and how to react if your system is hacked.
Step 12: Develop a clear understanding of the regulations that impact your product across the IoT Technology Stack and across geographies. Integrate the impacts of these regulations into your roadmap.
In these steps, you might recognize some best practices for any digital product. That’s true! IoT is more complicated because it has five components on the technology stack (as opposed to just one or two for a software-only solution).