The Difference in IoT: corporations vs. start-ups?
Hello. My name is Michael.
I am an independent brand and marketing strategy advisor.
I help my clients
Innovate and develop new products
Engage with customers more effectively in a digital world
Attract talent and motivate the organisation
And to set an agenda, that reaches beyond the narrow business goals to become more relevant in today’s society.
All based on a common platform, which defines the strategic direction and the relationship with stakeholders.
AND last but not least, with that compass, I help my clients to an effective implementation across the business.
My company, purpose@heart, is founded 1,5 years ago on the ambition to
Do things for a reason
Try to make a difference and
And I am trying to live up to this every day.
Before I started my own company I was the CMO for the VELUX Group for 17 years and today I am mainly going to talk about a product development project, which at the time, was the first IoT project within VELUX.
As you may know, the VELUX Group produces roof windows and skylights for better living environments with daylight and fresh air. Making windows for the roof, remote control was an identified need from very early on. Manual to begin with, but the first electrical version was launched in the 70’s - this one from 1980.
In 2000 the next generation, VELUX Integra, was launched, offering a new technology, io home control, which was, and still is, a unique security set-up, vital for controlling the building envelope against unauthorized access.
In fact, io was offered to a number of players in the building industry at the time, in an early attempt to create a smart home standard. However, this initiative never really took off in a big way.
In 2010 the next generation was launched.
But in the meantime the smart phone came along, which
a) may be recognized in the inspiration for the design of the VELUX remote and
b) more importantly, completely changed the game.
It raised a no. of questions for the VELUX development team as the 2010 remote couldn’t connect to the IoT environment, however, it contained the sum of 30 years worth of development and insights.
The final result was a completely different product: VELUX Active, a sensor based automation of the window integrated into your smart phone.
It is different from the past in a number of ways, but rather than talking you through features and benefits, I will show a small film about VELUX Active.
VELUX Active ended up as a cross-over app solution.
On the one hand, it retained the unique security features of io home control to protect your home, and on the other hand, it became part of the open Smart Home environment, with Apple HomeKit as the leading integration.
This also eloquently highlights the dual nature of the development process, which followed, because we managed to make a development team consisting of a strong heritage and product competences from VELUX Development, combined with a new approach in a partnership with the French IoT company Netatmo, in the end leading to the full product name, VELUX Active with Netatmo.
It also brought in a new era of interaction into the VELUX programme.
If you look at development in a very long perspective, VELUX started out with a range of mechanical building components, which could open and close manually.
In the 70’s it moved on to the world of Electrics, adding remote control to the programme as a feature on the main product. In fact, it was supplied as component inside the window box.
In a business model, which was a box business. Standard products, stocked at dealers and sold via installers to unidentified end-users.
And it gave you the possibility to control and program your window remotely within your home.
The IoT age brought a completely new set up of opportunities.
First of all connectivity and integration with other smart home products.
Secondly, the automation - you can operate your product, but you don’t have to. The sensors will take care of the indoor climate.
It also meant a completely new business model.
VELUX Active is sold separately as a consumer product, for both old and new windows.
And it is a service business. Not a box business.
Suddenly, you can communicate beyond your home and with other products.
VELUX will know where the products are installed, which is important intelligence for future campaigns.
You can talk to the customers and give them more value, than the immediate product.
And possibly up sell new products or services.
All of which is new. And it will probably take a while, to get full benefit from this.
Because this journey doesn’t happen, without solving a number of dilemmas on the way.
Firstly. When you have more than 30 years of succesful experience, the next development is likely to become an extension of your current path. It means, that you may miss out on new opportunities and fundamentally different mindsets. In the Active project we solved that, with a diversified development team, with relevant product experience on one side, and relevant IoT experience on the other + a fair amount of curiosity about the window business from our partner.
We managed to suspend the usual stage-gate model for development and apply a more agile, iterative model. It may sound easy - I can tell you, it is NOT, in an industrially minded production company with more than 75 years of success behind them. However, the result was a development process of 18 months (rather than 3x or maybe 4x the time for development in a serial process.
The iterative approach also meant, that we had all stakeholders around the table from the start and accepting, that the first iterations wouldn’t even deliver a viable solution - only progress. And for a brand like VELUX the thought of launching an MVP is almost unthinkable. They go for perfect. Every time.
It may sound like a small thing to shift from a transactional mindset to relationships, but it is maybe the hardest part of all, because it means changing the organisational mindset, and I am sure, VELUX is still struggling to make this transformation. At least, almost two years in, I still haven’t received any other info, than when my ‘Active windows open and close for ventilation. This is an opportunity lost.
It is an opportunity to change your relationship from transactions: buying a product, or making a service call, and into a flow, where the fundamental delivery is not the product, but what the product does for me - every day.
And of course there are dilemmas around the balance between risk and speed.
VELUX s one of the strongest, if not the strongest brand globally in the building material category, and the fear of making fatal mistake to damage this position, slows down things. Of course.
But some speed must be maintained, because in a digital world the life span of unique propositions is becoming shorter and shorter. And eventually you risk disruption from your competitors - or from somewhere else, if you don’t marry the balance between risk and speed.
And VELUX is a good example of all of these challenges - like most other established corporations going digital.
To look at the other side of the coin, I would like to introduce a small start-up, in which I have invested with purpose@heart. Climaid.
Climaid will process data from your indoor climate and turn them into health, well-being and good economy.
They sit with an intelligent algorithm between a host of different sensors and user inputs about the indoor climate on the input side, and user feedback, either as good advice for a better indoor climate or commands for an actuator: light, windows, ventilation, thermostats on the other side.
On the balance, Climaid delivers a subjectively optimized indoor climate for the specific users of the room or building they are in.
And for them it is the other way round.
They have curiosity, design-thinking, MVP, relation and flow mindset, and they have speed. But then they have limited financial strength (and yes as it happens we are looking for new investors).
In fact as a start up, you sometimes feel like The Little Match Girl by H. C. Andersen, looking through the window at the feast, and sometimes David will succeed in concurring Goliath.
It is a matter of perspective, which situation you prefer. It makes a lot of difference, whether you are a corporation or a start-up!
So, what are my two cents out of this?
First of all, there isn’t one simple solution for all. The solution lies in the right mix at the specific point in time.
Find the Right Partners
Getting the right partners. For instance the relationship between VELUX and Netatmo. Or for a start-up it may be the right investor, or the right commercial competences to scale a good idea.
Work in Sprints
Don’t look too far into the future, but work in sprints and try to measure the progress from each cycle.
Engage your users along the way. Don’t assume, that you have all the answers, just because you know your product best.
Challenge your Beliefs
Challenge your beliefs. Whether you are a corporation or a start-up, you probably need to learn along the way.
Stay Focused on your Dream
And last but not least, stick to your dream!
It’s a little like cooking.
It makes a lot of difference whether you are simply aiming to sustain in order to survive until tomorrow, or if you aim to create a Michelin experience?
Either way, in a business context you need a good recipe to drive the right products, customer engagement, organisational development and a strong public appearance.
A recipe, which clearly describes, what you do for your customers; describes the relationship with your customers: your culture - how you see yourselves, and the perception, or how you want to be seen by your customers; and the strategic direction is equally important: the raison d’etre- why you are here - and where you want to go: the future vision.
With a strong recipe, or compass, to steer you forward, you are better equipped to enter unknown territory, which is or will be a condition for both corporations and start-ups to succeed in the digital world.