From last week’s coffee conversation, one of the important questions I was asked was what devices and sensors to build to enter the IoT market?
My response was while there are a lot of startups and existing players that are building IoT devices or sensors that aggregate data are not going to have the fundamental value to connect ecosystems, but will exist as peripheral appliance OEMs. These players are subject to the laws of commoditization at the speed of digital.
Then who is and which players in the ecosystem are disrupting the game in town?
There are the industrial OEMs and the startups working to commoditize sensor platforms for wearable healthcare to industrial automation.
- GE CEO Jeff Immelt’s Analytics Lessons Learned (starbridgepartners.com)
OEMs such as Automobiles, Agriculture, Aerospace & Defense, Healthcare, Supplychain & Logistics, Manufacturing, FMCG, industrial Automation, et al who will either continue to lead or be disrupted by startups with crowdsourcing marketplace business models. The reason being the traditional CAPEX is rapidly shifting to OPEX across industries and this is the disruptive opportunity.
Those companies creating “peripherals” such as wearables and other allied IoT technologies will have to work on a platform marketplace play, else will not create sustainable business models.
- Best 20 Internet of Things Devices (techpp.com)
- Apple’s hidden threat to Fitbit, Jawbone UP, and Nike Fuel (venturebeat.com)
- Could Quantified Self-Devices Lead To Internet of Things BYOD? (blogs.sap.com)
This is a very exciting era of change with multiple industries being impacted from global events and digitization disrupting business as usual. This coupling makes is a real window and a big one for entrepreneurs, risk capital investors and ecosystems to get together and they are around disrupting businesses and industries.
I wrote a quick summary from my coffee conversation last weekend around crowdsourcing business models and what the value was.
WHY WARREN BUFFET AND THE WORLD’S SMARTEST INVESTORS INVEST IN CROWDSOURCING BUSINESS MODELS?
Just to recollect.
What is the crowdsource business model? Any market where demand-supply is fragmented and centralization is not possible due to inherent infinite costs of factors of time, distance, population, etc. then crowdsourcing creates the economies of scale and scope, via an intermediation marketplace model.
So let’s take a look at these opportunities. Agriculture, Healthcare, FMCG at home, Retail, Security, Defense, etc are all ripe for disruption. The economics of social, location, time, value are all fragmented and this is where crowdsourcing marketplaces as intermediaries with aggregated economies of scale and scope with APIs for the ecosystem to leverage are the competitive advantage and disruption.
Let’s look at one example.
Aggregate smallholder and larger farmers into a Crowdsourced Marketplace. Crowdsource whatever is fragmented via mobile, sensors and platforms.
1. Farmer social network
2. Within a 1 mile radius, data, land, weather data, soil, irrigation, etc.
3. Cropcycle lifecycle data – Crop type, planting cycle, fertilizer and pest management, etc.
4. Cropcycle management & monitoring – Package of Practices
With sensors embedded into soils, on tractors, mobile, fixed and mobile that are connecting, the farmer social network, land, agro-climatic data and the cropcycle management in real-time, online and off-line. Aggregate this data into Analytics from algorithms that create an aggregated marketplace that connects fertilizer companies, insurance providers, and buyers upstream to processors midstream to commodity, wholesale and retailers downstream, which result in;
1. Upstream (Farmers, Agri OEMs and Finance valuechains) – Aggregation creates economies of scale drive Insights from Analytics
i. Reducing costs of inputs, fertilizer, crop inputs, fertilizer, expertise, and supplychain
ii. Increase in Productivity, Yield & Predictability
iii. Decreasing costs of Risks
iv. Bringing the best agri expertise as services & monitoring in real-time
v. Creating the next cycle with lower Carbon, water and energy footprint
2. Midstream (Processors) – Aggregation creates economies of scale & scope drive Insights from Analytics
i. Reducing costs acquisition and processing
ii. Increase in Productivity & Predictability
iii. Decreasing costs of Risks
3. Downstream (Value-add derivatives, Finance valuechains, Wholesalers and Retailers) – Aggregation creates economies of scale & Scope drive Insights from Analytics
i. Lower costs acquisition and distribution for Wholesalers & Retailers
ii. Increase in Predictability
iii. Decreasing costs of Risks and costs to Consumer
Another example of how retailers BAM as well as online are working to solve the the challenge of insights form analytics to accelerate CCC, Stock Turns and GMROI.
Thus Internet of Things commoditizing data collation lined to algorithms that create analytics that provide insights to the stakeholder in real-time or online or off-line or all, linked to marketplace business models are the real IP and competitive advantage. It is clear that the commoditization of technology will not be the competitive advantage, but the ability to connect demand and supply in context.
The ability of commoditizing OSINT/MASINT/GEOINT/SIGINT/HUMINT into insights via marketplace economics from discovery to commerce is where the value is.
What are you disrupting, starting up or investing in as a CXO, investor or entrepreneur? Or is your company getting disrupted?
BY THE TIME YOU READ THIS ARTICLE YOUR COMPANY MAY NOT EXIST!
- Why Warren Buffet and the world’s smartest investors invest in Crowdsourcing Business Models? (gerardjrego.com)
- Analytics 101 – Summary of slides (gerardjrego.com)
- Killer App! Fragmented markets, crowdsourcing business models and Mobility (gerardjrego.com)
- Mass Personalization – What to invest in or startup? (gerardjrego.com)
- Insight from Analytics – A “hyperlocal social commerce marketplace”? Live business plan! (gerardjrego.com)