Horizontal IoT Challenges, and the Connected Product Conundrum

The customer-acquisition challenge in horizontal IoT

For horizonal IoT vendors, the re-occurring challenge is customer acquisition.  Finding enough “top of funnel” prospects to both overcome churn and feed company growth.  Very few have their arms around this.  There are complicating factors. First, “IoT” isn’t a market (even if you put an “A” in front of it). Yes, we had a decade of IoT trade shows, but those were filled with sellers, not buyers. Second, a key IoT segment is OEMs and Service providers moving into Connected Products/Connected Services. Those are difficult to target because their profiles vary so greatly. They’re difficult to land because their own success depends on navigating a complex business model change.

It takes some very diligent and strategic segmentation work to build a sales/marketing operation to continuously feed that funnel.

The Connected Product Conundrum

For Connected Product companies, many are now well into their first or second generation of Connected Products or Services. But they’re struggling.  Many are still discovering the operational requirements of sustaining an IoT solution; maintaining firmware, responding to security vulnerabilities, never-ending mobile app revisions, and ongoing discussions of data governance and privacy.  Even more taxing for those companies’ leaders (and their poor Product Managers) is adapting their company culture as they must take on some traits and practices of technology companies that are very different than their legacy business. 

Traditional companies getting into “Connected Products and Services” are, wisely, using a lot of outside help in the development of the technical solution. One recent report estimates that figure at 60% of large enterprises. That solves one end of the challenge, but the cultural shift required can’t be easily outsourced.