When I started contemplating Internet of Things and the right approach to gain widespread adoption,…
When I started contemplating Internet of Things and the right approach to gain widespread adoption, it was 2014 and Smart Home products were being touted as the entry or gateway drug into Internet of Things (IoT). Brick and mortars such as Home Depot, Lowe’s and Best Buy were piling Smart Home products on their shelves, capitalizing on the hype.
Large companies were gobbling up smaller start-ups for obscene amounts of money, most notably Nest was acquired by Google in Jan 2014 for $3.2B and then Google acquired Dropcam for $550M in June 2014. Other major corporations were desperate to develop an IoT strategy as well; Qualcomm bought CSR for $2.5B and Samsung bought SmartThings for $200M.
Things were getting insane, but what didn’t make sense to me was the notion that one connected device somehow made a ‘smart home.’ Nor did the target market, single-family homeowners, make sense. The demographic profile of people who shop at Home Depot and Lowe’s are not typically thought of as early adopters. It seemed highly unlikely that they would enter into these brick and mortars thinking, “I really need a new smart home solution.”
Where are the early adopters? Not the uber-geeks and DIY tinkerers, but the ones who would use, provide feedback on, and refine this technology for the mass majority? The typical age group for early adopters is 18-35, which fits the Millennial demographic. With this group, home ownership was only at 35%, since most of them were renting. They also live in the ‘Subscription Economy,’ where access to value is more important to them than ownership – E.G. the death of CDs and DVDs and rise of Netflix and Spotify. So what would be the perfect product for these Millenial early adopters?
I believed that the perfect product for early adopters would not cost them thousands of dollars, and should not be DIY, requiring them to set it up, and then force them to uninstall it, pack it, move it, reinstall it, and set-it-up again when they moved next. What a pain. I could see why the early adopters would never buy into ‘Smart Home,’ they just don’t want to spend the time or money to do this. A true Smart Home would also be a complete home. Rather than just one thermostat, a couple of lights, random devices, or outlets, a smart home would be 100% of lights, 100% of outlets and thermostats, with sensors throughout. IOTAS also wouldn’t be just Home Automation but a ‘Digitized Physical Interface’ – more on that in future posts.
Luckily for me, at the same time that this was going through my head, Capstone Partners, an innovative Real Estate Developer in the Pacific Northwest, reached out to me to ask about a technology differentiation that they could market to their residents in an upcoming building.
They made me realize that the Multi-Family-Home (MFH) industry is ready for a radical tech overhaul. In fact, that the real estate industry would go through a similar transition to the telecommunication industry when phones went from being dumb to smart. After the iPhone hit the market, the mobile industry realized that it wasn’t about selling the hardware / phone anymore but about selling apps and services, and driving revenue through digital products.
I identified that the real Smart Home users are in rentals, what would not work for them, and I identified the actual customers within the correct industry. The next step was evaluating the MFH market size and understanding trends in the market. Based on my research, there is a trend towards Urbanization, where cities are the next big deal because resources are limited, and it’s more effective to share resources in cities versus a spread-out inefficient infrastructure like suburbs. This urbanization is a global trend and that means that Multi-Family-Homes will be growing in volume.
Now you know that IOTAS was created very intentionally, after careful analysis. The rest is history.