People Don’t Buy IoT, They Buy a Solution to a Problem

Everywhere we turn there seems to be a new “connected this” or “smart that”. Many applications are novel, but not very useful.

Illustration by Igor Kozak

Too many product teams and entrepreneurs think, “If I connect it, they will come.” The problem is that people don’t buy IoT, they buy a solution to a problem. In this post, I talk about an excellent example of IoT solving a customer problem, and share tips for evaluating if IoT is right for your product.

The Internet of Things (IoT) continues to be one of the biggest buzzwords around. You hear about it everywhere: from industry publications, tech publications, blogs, and even in the news. Every article I read usually starts by stating that by 2020 (or some year in the near future), we’ll have billions of connected devices.

And it’s true that more and more IoT products are being launched every day. But unfortunately, most of the products that make the news are not giving IoT a good reputation.

In fact, IoT has gained the stigma of being “The Internet of Useless Things”.

Everywhere we turn there seems to be a new “connected this” or “smart that”. Many applications are novel, but not very useful. I can think of many silly examples, and I’m sure you can too.

So here’s my point: The fact that we can connect any device to the Internet doesn’t mean we should. And if we’re not careful, we can fall into the trap of having technology looking for a problem, instead of starting with a problem and looking for the best way to solve it. This is Product Management 101.

It’s a shame the useless products get most of the airtime, because there are many applications today that are solving important problems — in healthcare, manufacturing, transportation, energy, and more.

So this is a call to action for all you IoT Product Managers: Leverage IoT only if it provides more value to your customer or your company.

IoT is a Tool, not a Product

During the 2016 Mind the Product Conference in San Francisco, Des Traynor, Co-Founder of Intercom, made the point that Product Managers should keep an eye on technology trends, but only adopt them if they enable you to provide a better/cheaper/faster solution for your customer.

It’s important for Product Leaders to realize IoT is not a silver bullet, or a way to make easy money by jumping on the latest trend. IoT should be considered another tool in our toolbox that helps us provide more value to our customers.

People don’t buy IoT, they buy a solution to a problem.

In my Product Management for IoT course at Stanford Continuing Studies, the students go through my IoT Decision Framework to analyze the viability of their proposed solution.

On several occasions, students actually discovered that IoT was not the best solution, and their customer’s needs were better solved by other types of innovation, such as service or supply chain innovation.

Imagine how much value this analysis adds in the real world, enabling a Product team to pivot before wasting time and money on a solution that won’t provide additional value.

Focus on Solving Customer Problems

Now let’s take a look at an opposite example. The Brita Infinity Water Pitcher is a great example of a product team using IoT as a tool to solve customers’ needs.

During the 2016 IoT World Conference, I had the opportunity to hear the Brita PM explain the evolution of this product.

Brita knew that the main barrier to using their filtered water pitchers is running out of filters. To solve this problem, Brita went through several product iterations to alert customers that they would need to buy a new filter soon.

First, they added stickers to reminder customer what month they would need to change the filter, but that didn’t work.

Then they added a chip that measures the amount of water you pour and blinks when it’s time to order new filters. But that didn’t work either.

Brita then realized the problem was not reminding customers to buy filters. The problem was that people had to go out of their way to actually buy the filters. It was not convenient, or it was often forgotten on shopping trips, and therefore it never got done.

So they decided to create a pitcher that connects to Amazon and automatically orders filters when needed. The filters arrive just in time to the customer’s house, with no effort by the customer, solving the problem once and for all.

You see, Brita never set out to become an IoT company. They didn’t sit in their lab with IoT components trying to figure out what to build. Instead, they realized that IoT was a good tool to solve their user’s problem. Remember, people don’t buy IoT, they buy a solution to a problem.

The Bottom Line

What does this mean for us Product Leaders? Ultimately, our role as Product Leaders (IoT or not) is to deliver value to our customers and our companies. Our goal is to create products that solve a pain big enough that people are willing to pay for it.

So start by understanding your customer’s needs and then choose the best tool for the job. It might be IoT and it might not. And figuring that out early on will save you a lot of time and money.

I invite you to use my IoT Decision Framework to evaluate if IoT makes the most sense for your product!

(This article was originally published on my blog

Daniel Elizalde
Daniel Elizalde is the founder of TechProductManagement, where he trains Product Managers around the world to become highly successful at managing IoT products. He is the author of the leading blog on IoT Product Management, and the creator of the IoT Decision Framework. Daniel teaches this framework through his online course: The IoT Product Manager and also teaches the popular course "Product Management for the Internet of Things" at Stanford Continuing Studies.