How to create a successful IoT business model – insights from early innovators

In short

Thousands of smart connected IoT products were introduced to the market in the last 6 years 
IoT Analytics published a comprehensive 189-page report  studying the success factors of early IoT business model innovators such as iRobot, thyssenkrupp Elevators, and Caterpillar 
An overwhelming 61% of study participants claim a competitive advantage thanks to the IoT solution. This article highlights 6 insights from the report. 

Why it matters

Smart Connected IoT products are disrupting the dynamics of entire industries 
The study provides quantitative data to support OEMs and their technology vendors in decision-making on IoT business models and commercialization 

Less than 6 years ago, in November 2014, Michael Porter (one of the world’s most influential management thinkers and professor at Harvard Business School) and Jim Heppelman (CEO at PTC) published a widely recognized  article  in Harvard Business Review titled: “How Smart, Connected Products Are Transforming Competition”. In it, they argued that IoT connected products would alter traditional industry structures, business models, and the nature of competition in many industries.  

Indeed, the  world has seen a number of disruptive IoT business model innovations  since the article was published. Examples include: 

irobot , which, with its autonomous IoT connected vacuum robots, has gone from zero to 9 million IoT connected devices  sold , thereby changing the dynamics of the entire vacuum cleaner industry. 

Thyssenkrupp elevators , which has gone from zero to 130,000 IoT connected  elevators . All 3 major competitors (Otis, Schindler, and Kone) have introduced a similar IoT-based business model. 
The entire  shared scooter industry , which has gone from zero to 39 million  trips  in the US, and was essentially created through the advent of IoT technology. 

There are  thousands  of  o ther  examples  of new smart product / IoT business models and many more which are still in the making that we will hear of in the coming months and years. 

Those who are currently bringing (or are planning to bring) smart connected products to market should ask themselves: What can we learn from these early innovators in order to create a truly successful IoT business model? 

Components of a successful IoT implementation 

IoT Analytics’ 189-page report, titled “ IoT Commercialization & Business Model Adoption 2020 ” provides an in-depth look at how some of the leading equipment and product manufacturers (OEMs) around the world have successfully introduced smart connected IoT products in the last 5 years and which learnings they had on the way.  

There are  many tradeoffs  when bringing a smart connected product to market, for example:

Do I approach existing customers first or target new ones? 
Do I monetize...