Scariest part of IoT? The struggle to monetize IoT services.
As a child of the ‘80s, Halloween often transports me back to a time when Wes Craven’s Freddy Krueger owned my nightmares. While rewatching the movie recently, it occurred to me that anyone involved in the business side of IoT faces similar fears of something unknown lurking in the shadows: there is a problem to be solved, but there’s no clear solution.
We all know there is a potentially huge upside of IoT. Organizations can now offer services and solutions to their customers that were simply not possible before. Connected ecosystems and data offer interesting areas for growth; however, the CFO’s office is typically standing between you and your budget to launch an IoT project. We’ve all heard scary stories about people who pitched IoT projects without including monetization models. Apparently Freddy Krueger’s got nothing on some CFOs. To help you avoid this same fate, let’s look at your next IoT project with Halloween in mind.
Get the party started: IoT ecosystems
Halloween parties aren’t much fun without happy, engaged guests. In the same way, you need partners to make your IoT business model successful. If your Halloween party or IoT marketplace is small and lacking enticing offerings, you may lose guests to the other party down the street, where the food music and crowd are better. Keep your “guests” engaged with plenty of options in your ecosystem.
Land a sweet deal: Settlement engines
In many ways, it’s the settlement engine that allows for the creativity in your business relationships. However, many commercial teams I speak to offer just three compensation models for their partners – that would be like suggesting the only Halloween costumes available are the witch, cowboy and ghost.
Limited compensation models reduce your success in capturing new partners and your profitability by forcing you to negotiate at the account level as opposed to the services level. Think of it this way: instead of only being able to trade 10 percent of your Halloween candy with your friend at the end of the night, you could actually trade any combination of candy. If you’re a sugar fanatic like me, you could even negotiate four Snickers for three packs of Skittles – there are no limits.
Adapt your trick-or-treat strategy: Flexible business models
To ensure a successful night of trick-or-treating, you need to be creative and move fast. You may want to try different routes, switch costumes throughout the night or invite more people to the party. In much the same way, increased creativity in business models will improve your success rate so the next meeting with your Freddy Krueger-like CFO won’t be quite as scary.
Prepare for the unknown: IoT services of today and tomorrow
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