How the Internet of Things will evolve business models.

At a recent Hardwired NYC meet-up, Tim Chang a partner at Silicon Valley venture capital firm Mayfield, shared where he sees opportunity in the emerging tech company sector: The Device-as-Service business model.

Tim observed “Assume everything in your life will become cloud connected, the nest-tification of things in your life, like night lights and thermostats.” He continued “There will be beautiful, smarter versions of existing devices that will be connected to the cloud, with services so compelling people will be willing to subscribe just to access them, on devices that might even be given away in some cases."

There is a logical link here in what Tim was saying to The Internet of Things (IoT) and his idea seems compelling, if not more than a little out there. It warranted further investigation.

For many years the traditional manufacturing-driven business model reigned supreme. Service after a sale was viewed as an afterthought, of secondary importance for most businesses from a strategic and revenue generation standpoint. 

28 billions reasons to make money.

This conventional view is being upended by the the rapid growth of IoT. For example Goldman Sachs is estimating that over 28 billion "things"  may be connected to the Internet by 2020, ranging from wearable bracelets to cars and even your dog. That number will be more than triple the projected global population in 15 years. 

In “IOT: Making sense of the next mega-trend” Goldman does a great job of giving dimension to the IOT sector. From the early IOT success stories like fitness trackers and thermostats, to the five early verticals of adoption, and IOT building blocks including “enablers” (Wi-Fi sensors) “platforms” (software apps for managing communications between devices, middle-ware, storage and data analytics) to “industrials” (B2C: home automation. B2B: factory floor optimization). 

Tim Chang of Mayfield.

Chang went on to observe that moving forward there could be products so dependent on a service layer that they’d be useless without it. People will be willing to pay for the service, more so than the hardware. He posed: “Is there an emotional connection made through the service layer?” and “Can it be made to be part of the work flow of the user’s life?”

One of Mayfield's portfolio companies is OUYA - a micro-console gaming manufacturer that runs on its own version of the Android OS. OUYA targets people who love to play and make games.  

"The offering is useless without the community,

game store and marketplace" according to Chang. Each OUYA console empowers the user to also be a developer. The revenue tail comes in the form of users purchasing game credits. 

The overall ability to couple products with a wide variety of after market services is emerging as a requirement to stay ahead in business, as well as a fertile ground for innovation. 

Consider AT&T’s “Connected Car” Service. It uses the Audiovox car connection device for $100 that plugs into most cars made after 1996 and sends real time wireless updates to smart phones, tablets and PCs. Then there are the added monthly subscription fees of $10 month for mobile share, and another $10 month for data. 

The "connected car" allows the owner to track the car location, and get walking to directions to where it is parked. It also automatically sends notices for maintenance issues and safety alerts for excessive speeding, and towed or stolen vehicles. It can produce “driver scores” for feedback on driving habits that could be improved. An additional smart phone app is available to discourage or block use of a mobile phone while the vehicle is being driven. Both are suitable for parents who want to remotely manage teen drivers. It can even be used to start the car remotely, just like in a James Bond movie. 

M2M (machine-to-machine) applications are mostly growing in the B2B context, such as equipment manufacturers developing remote services and support tied closely to their equipment and service contracts. Customer support and automation are the key benefits.

Making the dip-stick obsolete.

 ATEK Access Technologies, uses IoT generated data for the oil and gas industry to create a profit-generating service.The technology company uses the IoT to “service-ize” their business in a move that has differentiated them from the entire industry. 

From her office in Eden Prairie, Minnesota, Sherri McDaniel, President of ATEK, can see all of the company’s tank monitoring 
devices with a cloud interface.  

“Look, here are eight devices at
 one site in Nebraska,” she said. 
Sherri pointed to a icon on the screen that represented all the 
locations on a Tank Scan® monitor.

Sherri McDaniel of ATEK

Tank Scan® eliminates
the need for physical inspection of tanks holding liquids in terms of measuring fluid levels. The device in the tank measures fill 
levels from a sensor and sends the data to a gateway, which 
aggregates data from up to 20 tanks, and transmits that 
information to the cloud. 

As Goldman Sachs observed, “The Internet of Things will create new winners and leave in its wake a host of losers based on companies’ abilities to adapt to a world where things are connected.” 

The end benefits of all these connected IoT devices will:

· Help make lives easier (think: turn on the heat before you get home)

· Improve efficiency (think: turn on the washing machine when electricity usage and prices drop in the middle of the night)

· Anticipate the need for services (think full-body health monitors or car care diagnostics) 

At the end of his talk Tim Chang pondered the possibility of an IOT toilet. I did a little research, and in fact it is already in the works. 

This might give a whole new meaning to using “data exhaust” …to feed the “Potty Logger” spread sheet.

At least it might make the "toilet experience" smoother, for people who have the time to worry about such things. All kidding aside, the smart business bet is on the future of IoT.

Match-Click: A revolutionary approach to online recruitment advertising.

A typical online job listing:
About as interesting as watching paint dry.

Seems that the HR profession may be firmly stuck in 1990, at least from a recruiting standpoint. Online job listings rely on key word searches, long and boring job descriptions, use of cheesy jargon and bullet pointed candidate background requirements. There is a glaring lack of relevant dynamic content or streamed videos for today’s tech savvy job seekers.

No wonder that response / click-through rates to text only help wanted posts on job boards hover at 5%. A study from The Ladders showed that the average job seeker spends about one minute mulling over an online job posting. That translates to consuming about 250 words of content. All this spells poor engagement between hiring companies and potential candidates. 

Compare to this user engagement at Tinder  – the match making smart phone app that connects with the user’s Facebook profile to provide pictures and ages for other users to view. Users are presented with dating profile after profile, and they swipe left if they're not interested and right if they are. If both parties are interested, they can connect on Tinder’s chat function.

The average Tinder user spends an astonishing 77 minutes a day on the app, a spokesperson for the company recently told The Huffington Post. That's a lot of time, especially considering the app moves fast. That’s the power of engaging content.

For a more engaging approach to online recruiting enter Match-Click, the result of Maury Hanigan's frustration with staid and boring online job boards and corporate recruitment sites.

Maury has a 20-year history of working as a consultant to Fortune 500 firms on HR strategies, along with being tech savvy from her Duke computer science education. She saw the opportunity to use technology to deliver useful, relevant and highly engaging job information to candidates in a new smartphone app.

A blinding glimpse of the obvious for Maury was that people don’t go to work for a company per se -- they go to work for and with other people, within a defined corporate culture. Text-based job descriptions offer absolutely no clue for candidates to that side of the job under consideration.

Candidate’s prospective manager & co-workers and Top 3 reasons to apply are front-and-center.

Match-Click uses 20 second blocks of streamed content to introduce job seekers to their prospective hiring manager and co-workers. The job listing page also offers “Top 3 Reasons to Apply” and a one-click “apply now” navigational button.

Maury says this approach delivers a staggering 40% response rate, with user curiosity driving this higher engagement number. All it takes is about a minute of time from the prospective candidate to get great insights about a listed job.

Match-Click discourages the use of defined scripts. "Canned conversation lacks authenticity and therefore is much less engaging" says Maury. "The Match-Click service offers real people talking about real jobs in a credible way. It leverages a company or an employer's most compelling asset - it's people." That's what is missing from the traditional text-only job listing.

But it is Match-Click's simple presentation of the job online that is the big draw – allowing prospective candidates to begin to answer the big question fast: “Is this the right job for me?”

Conventional HR wisdom asks: Is the candidate willing and able to do the job with a high degree of excellence? Most candidates ask themselves: “Will I fit in?” and “What will the people be like that I would be working with?” Match Click offers specific context for them to judge the opportunity. It hooks prospects with the specifics of the job that makes sense for them.

Maury says the "secret sauce" for Match-Click is that it's scalable for larger enterprises, those hiring upwards of 5,000+ people each year. This comes in the form of a simple and highly effective back-end CMS / Content Management System.

Match-Click CMS dashboard for Employers.

Match-Click's current clients include a broad range of business sectors from Ernst & Young to Citrix and L'Oreal Paris to Cisco and these actual job listings are the best way to see this business model in action. 

Match-Click is currently in the process of seeking $ 2.0 million in seed funding. As one NYC based venture capital executive recently observed: “There is too much venture money chasing too few good ideas.” Who wants to see another 20 something with a smart phone app lacking a MVP?" (minimum viable product)

Match-Click is one of those really good business ideas that will leverage mobile technology to help redefine a multi-billion dollar industry, with more engaged and satisfied users on both sides of the transaction.