Product Market Opportunity → Part III, When To Launch An IoT Smart Home Product
A bit of context beforehand.
I started this series from a discussion around few beers with a fellow product friend…
Is there any true market potential for consumer IoT devices today? → Would we invest time and money in a smart lock product today? → Which are the adoption barriers? → Is there any chance for the small players? → How the disruption looks? → Which is the real benefit for the user?
I took all the questions and the debate as a homework.
First step, I had to build the toolbox. Which I did, here in Part I and here in Part II.
TL;TR from the first two parts:
- Market adoption — it measures the utilitarian value of the product. Or the adoption. Or the market value. It’s described by Rogers-Moore Technology Adoption Lifecycle model
- Social perception — is only about perception, it describes the emotional value. How people perceive a certain technology or product. It’s described by Gartner’s Hype Cycle.
- Correlation — there is a correlation between the two models and values (utilitarian and emotional). A unified model can be defined (described here in Part II)
Let’s set the scene before dive in. Firstly, the author’s cognitive bias:
- I do believe technology (as a concept) is being commoditised
- I do believe technology is moving fast from the why a product is built to how a product is built
This is the consequence of technology’s success and penetration. The inherent meaning of technology is now about the real value it brings in people’s life, rather than the wow factor of a, let’s say, smart lock.
Back to the point: evaluating the market potential
So, the question is which is the market potential for smart looks?
Three steps, easy:
- Step 1, research & industry understanding
- Step 2, mapping social perception
- Step 3, interpret results using the unified model
- Research & market understanding
According to Gartner, in 2018 Connected/Smart Home has started to slide down from the top Peak of Inflated Expectations (its position in 2017).
Gartner’s Hype Cycle is a great tool for understanding how people are perceiving different product and technologies within a space. It maps the emotional value, not the market adoption. I covered the subject extensively in the Part I, here.
To understand the hype and the social perception over a topic, a starting point can be following the appropriate hashtags on LinkedIn, Medium, Refind, Reddit, Quora… Or ask a friend :)
Step 2, social perception
In the image above, the Connected / Smart Home category is mapped by Gartner among its peers within Emerging Technologies space. But to understand on a more granular level different products inside of the Connected Home space, we need a different diagram — depicting the space and map out the different SmrtHome products & technologies are perceived by the public.
The most mature product category inside of SmartHome space is formed around lighting, followed by security, home automation (heating, anomalies detection, gardening), etc. The most inflated expectations are seen in energy smart metering and energy disaggregation.
Step 3, using the unified model
Coming back to the model described in the Part II
Let’s remember:
⭐ Golden Gate → growth starts, hype is decreasing. This is the gate to the Holy Grail, the mass market, Early and Late Majority. It’s seen very often at the end of the steep slope that is climbing down from the Peak of Inflated Expectations.
So, the first signs of a relevant market traction are seen when the public perception is still low, and decreasing. At this point most of the startups are still inside of Dead Valley but some of them are starting to get some good investment deals.
So, is it now a good moment for smart locks?
First, the observation: the public perception about smart locks is decreasing fast. The hype is not anymore at its hights. But the segment is nearby the Golden Gate, few steps away to Early Majority.
The response is, well, it depends. Depends on who’s asking.
For a startup it could be a bit late. If they don’t present a radical new technology or address a killer use-case, launching a product into this category could require significant resources just to penetrate and compete against the other small players.
For an established (but innovative) company, it is the right moment. People are aware about the benefits, such as, the technology itself works, and that the only blockers are related to some perceptions about privacy. As an example, Amazon just acquired Ring in 2018 and is preparing to integrate it in their Amazon Key service.
For a big corporation leading an established space, it could be a bit too early to pivot, and too late to develop. But it is a good time to acquire a startup, as it isn’t yet a unicorn, but just a dingo starving somewhere in the Death Valley. Assa Abloy, the world leader in door locking and access systems did, acquiring August Home, a smart lock startup.
Conclusions
For sure, there is not an exhaustive way to judge and give a verdict. There are many other aspects that should be considered, like adoption velocity, how fast a technology is traveling through normalised phases, who else is investing, how many and how big are the adoption barriers (privacy, security threats, how old and established is the behaviour which is going to be disrupted), among many others.
However, using the proposed unified model and the three phases described above, we can at least get a feeling about the future, and have a strong argument in a board meeting, or well, a beer chat.
The beauty of this framework is that it’s practically possible to map any kind of innovation regardless if is about emerging technologies, veganism, social trends or political movements.
Because yes,
Innovation is not only about technology. Innovation is about us, humans.
Questions for future investigation:
- Launch when expectation are high. Or launch when the disillusionment is low?
- When the commoditised products/companies are more likely to be disrupted?
- Is it possible to find a dependency between Desirability, Feasibility and Viability? → v = f(d,f)
