A year ago I wrote the post How do you see the M2M Glass ? . I had stopped working in Microsoft and I felt optimistic again to create a company related to the Internet of Things (IoT) and M2M-based Analytics, both of them megatrends that could make my idea will succeed, yes or yes.
During this year I have seen the glass half full and half empty more than a dozen times, possibly on the one hand due to my passion for this work and on the other side due to mood after several disappointments. It’s been a tough year in which I have devoted much time to learn, to meet new companies, to share experiences with other colleagues, to evangelize with customers and partners but in which I have failed to create the company I wanted.
Although not all IoT companies have gone badly during last year. Remembet PTC Acquires Leading Internet of Things Platform Provider ThingWorx for approximately $112 million, plus a possible earn-out of up to $18 million or Google Buy Nest Labs for $3.2 Billion.
Not all is my fault. As Francesco Radicati, a Senior Analyst with Informa Telecoms & Media, wrote in this post, The Internet of Things World event, held in California from June 16th to 18th, gave a glimpse of the problem. As one speaker noted, there are 275 different definitions for IoT – perhaps an exaggeration, but as another speaker pointed out the following day, the Internet of Things is much more fragmented than the actual Internet
Nevertheless, I am not concerned anymore about how we define IoT, what will be the number of connected devices in 2020 either 50 or 80 billion, nor in the analysis conducted by Cisco on the $14.4 trillion potential economic impact of the Internet of Everything for global private-sector businesses over the next decade. I am concerned now more than ever about how can I make money of it.
I want to share three of the main lessons learned in this first year as entrepreneur and businessman with the readers of my blog that makes me see the glass of IoT half empty.
Lesson 1: Avoid your customers abuse of my Freemiun Business Model
Despite my reputation in the industry, my knowledge and experience, when you’re not in Microsoft, Oracle or SAP, customers tend to abuse of your weakness. My need to monetize quickly, to get my own references was exploited by many of my potential customers. When they smell that you’re desperate, they believe that you are going to accept free consulting services to certain that once they try and remain satisfied, they will be willing to accept paying for your next services. Then, they abuse of the free services duration and they delay signature of a payment contract.
Mistake: Provide too much information for free in first meetings by assuming people will be as honest as me.
Advice: Unfortunately, the majority of customers react to offers and discounts but a few one especially appreciate the quality of your services. You must search for these ones. Redefine as many times as needed your portfolio of services to make sure are valuable for your target customers from day one. Do not accept to work for free. Be smartest as them.
A Wish: We can change the rules, but we need all to be in the same boat. It´s easier said than done.
Lesson 2: You must be your main and best client
I aspired to “make OIES Consulting one of the world’s leading independent consulting companies, delivering top class M2M/Big Data services supporting innovations that improve the way people works and lives”. We still aspire to be a “trusted advisor” for our clients, but maybe not as independent as we wanted to be. The strategy is based in three pillars that matter most:
- Revenue Diversification & Business Longevity
- Decision-Maker Ready Deliverables
- Cultivate strong networks of exceptional solution providers.
Mistake: Do not execute the strategy that I recommend to my customers in my own company.
Advice: You have to apply in your own company the trusted advice that you offer to others. You need to think more in finance terms and less technical to get business longevity. To hold principles of independence top level consulting you must find a market able to pay for it, but if you do not find it you should not swim against the tide. Thus, make sure you have different sources of revenue and for instance in spite you hate “body shopping services” like me, you have to swallow toads and do it for your business. Do not worry to lose independence if you decide to bet for become a partner of a company that can bring you more business.To be Independent is not always the best option.
If you need not feel guilty for betraying your principles, do not forget that probably you are also helping your employees and networks.
A Wish: That exceptions does not become a general rule.
Lesson 3: The sum of startups do not make a large multinational enterprise.
Because my company does not have the financial or human resources like multinationals in which I worked, and I wanted to keep working on large or innovative projects, I decided to sign alliances with a number of local and global startups with the idea of being the glue that will join all for reaching customers with a unique and compelling proposal.
In parallel, I was searching for other Co-Founders or be part of another entrepreneurial team that share similar business idea and vision, in order to growth faster.
Mistake: Spend too much time to convince other startup´s team to build something bigger. They are startups not intrapreneurs working on multinationals.
Advice: Review your business plan immediately. Select a short number of key strategic partners and define with them customer oriented solutions and services.
A Wish: Find investors that help me to find and attract talent to run a great business.
Summary:“The Internet of The Things is here to stay and will impact in our jobs and our lives”.
The balance of the first year needs to be realistic. I do not want to call myself pessimist because I saw last year my glass half empty. I want to think I am optimist because I am ready to fill the other half.
Note: This post is also published in Linkedin.
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