Over the years, IoT has made its way into the complex consumer markets and made millions of lives easier and smarter. Without a doubt, the industry holds enormous potential for upcoming entrepreneurs to introduce innovative solutions. In fact, the number of IoT start-ups has grown by 27% from 2019 till mid-2020.
While many of these IoT projects have made the cut, others are struggling to realize the intended RoI. Although tempting it is still a highly challenging space to be in and create sustainable companies.
While a new organization is a collaborative effort of many people, it is the leaders who hold the vision strong and spearhead the transformation. For those setting on their journeys of tech start-ups, here’s what you can learn from the best.
Targeting the right KPIs
The rule to achieve your KPIs is simple – never ignore them. Start-ups who planned around the KPIs were able to meet them quickly and seamlessly. Starting from product ideation to distributing the budgets across marketing, development, and acquiring customers and retaining them, the complete lifecycle should be evaluated periodically through metrics such as Customer Acquisition Cost (CAC), Customer Retention Rate (CRR), and the Life-Time Value (LTV).
Customer Retention Rate (CRR) is the total number of customers a business is able to retain over a given period of time. High retention rates are a clear hint of a successful product and a fully satisfied customer while high attrition rates mean the opposite. Life Time Value (LTV) is the net value of a customer to the business. When these metrics are evaluated in relation to each other such as the LTV/CAC ratio, the total capital efficiency of a company can be predicted.
IoT enables you to take a step further in tracking KPIs:
- Track end usage using IoT and deduce usage analytics.
- Take user feedback at the point of usage using IoT and deduce user experience in real-time.
- Use remote device management to monitor the health of your IoT solution and run diagnostics to find and fix issues. This will help in keeping MTTr rate (Mean Time to Repair) as controlled as possible.
These advanced indicators can directly help you in reducing expenses and increase revenues by improving customer experience.
Why are these important? Entrepreneurs who stayed intact to meet these KPIs have seen a 10x increase in business efficiency. This is an important takeaway for budding entrepreneurs who have to justify their investments periodically. Since CAC has increased by 50% over the past few years, not ignoring performance KPIs is the foremost lesson for every new leader.
Rapid adoption to change
IoT is not the same as it was 5 years ago. In fact, it may not be a ‘new technology on the block’ anymore. It is continuously evolving and start-ups have no choice but to keep experimenting with newer builds and processes. For example, embracing new technologies such as Edge computing or bringing anonymity to the data transfers, IoT products must upgrade. Likewise, project owners can improvise their development process by officially collaborating with other companies. It is a mesh and more hands will help to simplify. So be it outsourcing the resourcing requirements to a partner or outsourcing end-to-end product development, start-ups must weigh their choices and utilize the available expertise optimally.
Few entrepreneurs have been able to resolve this complexity by trekking the midline. They sensed that the risk of not embracing change is greater than the risk of failing. Therefore, budding entrepreneurs must understand that experimentation doesn’t have to replace your existing processes. It can be an additional vertical which is committed to embracing contemporary product offerings or technologies.
Despite the world being restricted indoors due to Covid, the following tech entrepreneurs have brilliantly led their workforce and achieved impressive results.
CEO Armis Security
Armis Security ventured, attempted, and mastered a market that most companies are scared of trying – IoT cybersecurity. Led by the hugely ambitious Yevgeny Dibrov, Amris is a security platform that discovers devices across the network, analyses their behaviors, and identifies risks. For an industry plagued with cybersecurity threats, Amris is a huge reassurance. The company has a line-up of customers across sectors such as healthcare, automobile, finance, and manufacturing.
While the start-up completes 5 years shortly, CEO Yevgeny quotes – “ “As companies accelerate their digital transformation initiatives, securely enable employees to work from home long-term, and adopt 5G, we are seeing an explosion of connected devices. At the same time, this uptick has increased the risk profile for businesses, especially around ransomware attacks, which is driving even more demand for our industry-leading agentless device security platform”.
CEO – Ioterra Inc.
When most start-ups were swaying in the hype of IoT, Ioterra foresaw the complications and immediately plunged at the opportunity to resolve a huge gap in the IoT ecosystem – the challenge of quickly sourcing reliable IoT service partners and other resources needed for a successful IoT initiative. Unlike other technology markets, IoT is a rare space that involves sourcing complications regarding IoT services as well as solutions from all walks of technology – hardware, software, and wireless communications. Besides delaying projects, sourcing difficulties lead to cost overheads. As an IoT consultant himself, Daniel along with his team created a digital marketplace that enables project owners to seek sourcing assistance based on their business model, type, and sector.
Daniel says, “Startups are advised to ensure a minimum of 12-18 months of runway. The most important reasoning behind this thinking is that you would invariably pivot 2-3 times before you get it right and you need to survive until then. Unless you watch the KPIs regularly and quickly pivot adapting to what you see on the ground, you cannot build a growing startup”.
CEO – Helium
Technologies from all sectors and markets have started to embrace Web 3.0 and Helium is IoT’s big bet. It is a platform that empowers businesses to develop connectivity for devices and sensors over a peer-to-peer wireless network. CEO Amir Haleem who was always ambitious about wireless coverage for low-power IoT devices aims at bringing more projects on the stage.
He quotes – We’ve worked hard to bring native geo-location to everything that connects to the network. This opens up all sorts of interesting use cases that haven’t been seen yet, which have otherwise been impossible to build.
What’s common in all of them?- The Ethos to grow
Ultimately, no start-up can grow without the mindset to win. Although most tech leaders ensure a learning culture within the organization, motivation is mostly missing at the employee level. This largely happens when leaders don’t communicate their vision to the workforce and keep them restricted to the task assignments. The ethos to grow has to reflect at the individual level and that’s the hack to organizational success that many don’t get right.
Moreover, the missing KPIs and not retrospecting upon those failures along with your teams is a big flaw. In a startup environment wherein the team structure is mostly lean, the entrepreneurs must share quarterly progress with everyone. Besides keeping everyone in unison about the expected outcomes, such sessions float innovative ideas to achieve the results more efficiently. Therefore, upcoming entrepreneurs should ensure a work culture that acknowledges creative inputs.
Motivated employees with a growth mindset, diligent tracking of KPIs, and quick adaptability to change lay a solid foundation for success.