An IoT startup is a technically-lead small business that typically has yet to define its business model. Startups usually try several different routes to market prior to settling on an approach that has a good market fit.
A key early goal for IoT startups is to identify the problem that is being solved by the use of IoT technology. The problem also has to be big enough for organisations to justify investing in a solution.
Once a problem has been identified, the startup describes their hypothesis and identifies assumptions and risks. The next phase is to plan and test, building something simple to test the assumptions. Results are analysed and the hypothesis re-evaluated, and so on in a spiral fashion until a final business model is proven.
The above process can be an emotional roller coaster, with many peaks and troughs. Peaks can be associated with initial excitement around an idea, seeing prototypes working, interest from a potential customer, obtaining funding etc. Troughs are associated with the realisation that its not as easy as first thought, mistakes, lost customer opportunities, cashflow crunches, realisation of a lack of skills, etc. Other challenges include decisions around quitting a day job etc.
Individuals who launch or lead the establishment of new businesses are often described as entrepreneurs. Entrepreneurs need to have a certain amount of resilience to cope with the above challenges. They also need a lot of energy and self-motivation.
There is a huge amount of literature around innovation generally and the Lean Startup methodology has found favour in recent times. This includes concepts such as minimum viable product to test ideas before committing further.
A whole industry has grown up around support for technology led start ups. This include business accelerators/incubators and a range of investment companies ranging from seed/early stage angel groups, equity crowdfunding and late stage venture capital. These organisations often host several startups that share technical and business system resources.
IoT specific challenges
Startups in the IoT space is more challenging that other fields because it requires a combination of hardware, software and business models. Technical challenges that need to be addressed during business planning include consideration of the full range of technologies and practices outlined in this wiki. In addition, there are a number of national inhibitors/enablers of the entire IoT industry in Australia which really need to be addressed in order to foster more IoT Startups, illustrated below:
Source: A report commissioned by the Communications Alliance Australia on Enabling the Internet of Things for Australia
For example, it is currently difficult to deliver IoT led innovation in the healthcare sector due to the very high number of regulatory barriers that must be cleared. Similarly, the smart city concept is difficult to address due to the highly fragmented nature of efforts around this area.
The following organisations are encouraging IoT Startups in Australia:
- The IoT Alliance Australia has a workstream on Startups and Innovation.
- The Australian government supports the IoT Ecosystem, e.g. Thinxtra obtained funding to roll out its Sigfox LPWAN network
Sources: The information on this page was primarily sourced from the following:
- A webinar titled Your brilliant idea! Technology start-ups dissected by Stuart Waite, CEO, Timpani
Edited by Tim Kannegieter