Why The Consumer IoT Is Stalling

By Mike Farley
Chief Executive Officer and Co-Founder 
Tile






Builders of the Internet of Things (IoT) have long promised consumers a more convenient future: We will all live in “smart homes” where surveillance cameras, thermostats and garage door openers will turn on and off automatically, our groceries will order and deliver themselves into our refrigerators, and our speakers will know our taste in music. In our “smart cities,” always-on surveillance systems will crack down on crime and sensor-driven roadways will put an end to traffic.

Yet this hyper-efficient, IoT-fueled future is years away and plenty of pundits and investors are talking about consumer IoT as a too-hyped trend that’s failing to take off. According to a   recent survey, consumer demand for smartphones and IoT devices is stalling. So why aren’t consumers snapping up the new technology?

Industry insiders say the barrier is a lack of standards: connected devices can’t talk to each other, and each device comes with its own app, rather than being managed from a single point of control. Others think jargon-y marketing is to blame: Consumers still scratch their heads when they hear “Internet of Things.”

I think the problem runs deeper than standards or labels. People don’t think IoT will make a real difference in their lives.

Yes, interoperability and ease of use are essential goals that will unleash the long-term potential of the technology. Yet, I believe it’s more realistic and effective to grow the consumer IoT now by starting simply. Instead of convincing consumers that they need complex systems to serve needs they don’t know they have, we should fix real problems people struggle with every day. It might be less sexy than showing off the latest whiz-bang tech but it sure would help more people—and therefore sell a lot more.

Case in point: Uber has been growing exponentially not because people felt it was their natural-born right to have cars on-demand, but because everyone can relate to the red-hot fury of standing outside waiting for a taxi that never comes. The dramatic disruption of the taxi industry proves people are willing to pay for peace of mind.

So how can we start by addressing real pain points – and providing peace of mind – with IoT? Solve simple problems that strike an emotional nerve, like the following:

1. Safety for Seniors. Product developers and innovators have a tremendous opportunity to use the IoT to help older Americans live safely at home, and even save lives. An AARP survey found that 87 percent of people over 65 want to remain at home or in their community. Those of us with aging parents know the tension between supporting your mother or father’s choice to live at home and fearing a possible fall, slip or medical incident that could change everything in an instant. I was inspired by a recent application from Temboo that showed how a microphone, a motion sensor, a paging service and streaming data can work together to establish a baseline for independent seniors’ activity at home and then alert adult children or caretakers if something has gone wrong. With the older population expected to double by 2060, this is a perfect example of how the IoT can be deployed to solve problems that matter.
2. Security. If your home has ever been burglarized, you know that feeling of violation is something you would do almost anything to prevent. Home security products like Ring, DropCam, SimpliSafe and Canary can do just that. Those companies aren’t using IoT for the sake of engineering bragging rights; they take advantage of the Internet because it makes it easier to keep tabs on your house from your smartphone. Keeping families and homes safe isn’t a futurist convenience – it’s a priority that strikes an emotional nerve, right now.
3. Loss. Location tracking connects any individually “dumb” object to the IoT so it can be easily located, integrating location-aware sensors, mapping software, Bluetooth wireless, GPS, smartphone apps and network effects to give people the ability to always know where their belongings are. But, more importantly, it solves a problem we can all relate to: the sinking feeling in your stomach when you realize you’ve lost your wallet or bike. As manufacturers begin to integrate location-aware capabilities into their products as a way to deliver added value and peace of mind, the technology will drive significant growth in the number of objects that become part of the consumer Internet of Things. Ensuring people can find their stuff and lowering anxiety may seem like relatively small problems compared to running cities more efficiently, but they’re universal issues.

WiFi reliability is a fundamental threat to consumer IoT growth. At home, I’m the IT guy. When Netflix  is rudely interrupted by buffering, I do what everyone else does: I get up, mutter under my breath and restart the router. As the number of connected devices in a home grows, so too does competition for valuable WiFi. That’s why new cloud-based, mesh networking WiFi products like Eero have a role to play in fueling the consumer IoT. Seamless interoperability is the long game, but reliable WiFi and consistent performance of networked devices is what consumers demand now.

The potential power of IoT is truly awe-inspiring, but in order to boost sales and drive demand beyond the early adopter set, we need to stop making toys no one cares about and instead work on building simple solutions to real, everyday problems for real people.

Michael Farley is a pioneer of the Location of Things and Co-founder and CEO of Tile, a technology company in Silicon Valley that is giving everything the power of smart location. Farley started Tile to help his wife find the many things she lost. Tile’s first product is a small square that fits on your keychain, in your purse or on almost anything else, and uses Bluetooth technology to help you locate the things that matter to you most. The company launched with a crowdfunding campaign and has gone on to sell millions of Tiles online and in retail stores such as Apple, Best Buy and Target. The Tile community helps people find items around the world and locates more than half a million items every day. 

Prior to starting Tile, Mike spent eight years at Green Hills Software developing real-time operating systems for products such as flight control systems and networking hardware and was recently awarded EY Entrepreneur of The Year award.

Growth, Innovation and Leadership: Silicon Valley

THINK TANK 1
Monetizing the IoT: How Organizations are Making or Saving Monet with IoT 

MODERATOR
Dilip Sarangan, Industry Principal, Internet of Things (IoT) Frost & Sullivan

PANELISTS 
Sukamal Banerjee, Executive Vice President and Head of IoT, HCL Technologies
Jesse DeMesa, Venture Partner, Momenta Partners
Christoph Inauen, Vice President, IoT, GTM, SAP
Makarand Joshi, Director, Product Management, IoT Platform, Schneider Electric
Abhi Rele, Director, IoT Product Marketing, Samsung
Faraz Shafiq, Associate Managing Director, Global IoT Practice, Verizon Enterprise Solutions
Pavan Singh, Vice President & Business Head, IoT Security, Covata

SESSION ABSTRACT
IoT transcends industries and vertical markets with solutions that range from automotive to healthcare to energy. This panel discussion featured industry leaders discussing how they work with organizations from the planning stages to deployment and post-deployment with the goal of helping them save money and monetize their investments in IoT.

KEY TAKE-AWAYS

• Proven ways that IoT could help your organization save money
• Use cases illustrating how organizations have maximized their potential with IoT
• An assessment of the relevance and importance of IoT
• Key areas where IoT could help your organization save money
• Use cases illustrating how organizations have maximized their potential with IoT

OVERVIEW
The purpose of the discussion was to help the audience gain a deeper understanding of monetizing on IoT deployments. Most of the panel believed that the easiest current opportunities present themselves in the cost reduction cases. Revenue generation will be the next step. As illustrated in the chart below, a recent Frost & Sullivan global survey of 1,980 IT decision makers across verticals revealed that 34% of companies have already invested in IoT solutions, and 39% plan to invest over the next 2 years. Over one third of the respondents are providing small trials and proof of concept; live services with customers, distributions, and suppliers; and deploying next-generation solutions.

  
Some industries are further along the IoT curve than others, but almost all are on the path.

BEST PRACTICE 
Each of the panelists shared case studies to provide success stories around IoT to the audience. Below, please find highlights:

Christoph Inauen, Vice President, IoT, GTM, SAP:

Customer cases are categorized into 3 areas:

1)  Save money – Port of Hamburg

• Problem: The increased capacity of the port created huge problems with traffic flow due to the additional number of shipments and vehicles.
• Solution: They deployed sensors along the port and in parking lot areas that needed to be managed. The also installed dashboard units in the trucks to notify them of accidents in real time and then give them instructions on where to park or where to go to avoid congestion.
• Results: In the one year they have been up and running, they have improved conditions and enhanced capacity.

2)  Create revenue streams – Trenitalia (The primary rail transport company in 
     Italy)

• Problem – They needed to increase efficiency - every car that had battery issues had to be taken out of commission.
• Solution – Sensors can now share the status the battery, allowing trains to stay in the system much more of the time.
• Results - Trenitalia saves 7% of maintenance costs. 

3)  Change business model – Under Armour was discussed as an example of a   company that had reinvented itself. Its vision is connected life. They are embedding sensors into shirts and shoes to monitor health and give each consumer tailored recommendations on their body. Specific diet plans can be provided to each individual based on their personal data and goals. This gives the company new revenue streams.

Faraz Shafiq, Associate Managing Director, Global IoT Practice, Verizon Enterprise Solutions:

 “We, as in Verizon, can’t just focus on cellular; with IoT we have to be network agnostic.” The platform can take care of IoT needs for cellular as well as fixed lines with connectivity and security. A key question is “what do you do with the data?” 

Shafiq gave an example of a situation where there were hundreds of containers on a ship and fourteen people to monitor the containers. With a small form factor sensor attached to the container, they no longer need monitors on board, but only the mechanics to fix any problems when they are alerted. The devices also provide preventive information so problems can be fixed before they become huge ones. Another benefit of this solution is that any data can be sent to customers on their mobile phones. Customers can always check in on their shipments. This reduced operating expenses  and capital expenditures.

Makarand Joshi, Director, Product Management, IoT Platform, Schneider Electric:

Schneider makes Uninterruptable Power Supply (UPS) products for data centers. Often these were returned to Best Buy because buyers failed to read the manual. Now, buyers have the capability to register their UPS purchase on theirs smart phones and Schneider can monitor their usage. This way, Schneider can tell the customer when the battery runs out and it needs to be changed. This prevents buyers from simply throwing the UPS’ out. Also valuable is that when there are a lot of UPS’ low on battery, the utilities can be informed.

Sukamal Banerjee, Executive Vice President and Head of IoT, HCL Technologies:

A medical devices company wanted to track and trace inventory and equipment needs for surgical cases. The ability to manage inventory and ensure all the equipment needed for the surgery, and for potential emergencies, is in the surgery room, is critical to maintain costs, and save lives. Previously, a lot of time was lost, when the right tools were not in the operating room when needed. 

TAKE-AWAY 
The barriers to deploying IoT include security risks, cost of integration, managing data protection and privacy requirements, cost of connectivity and the time it takes to develop the solutions.

This should not deter companies in any industry from taking action today to capture the opportunities that lie ahead with the integration of IoT.  Start with implementing solutions utilizing IoT to reduce costs. At the same time, start planning for how to create new revenue streams, or how to change a business model.

The key drivers for investment include the ability to boost customer service and marketing programs, automate manual processes, collect customer usage data, and optimize field or on-site operations. 

Ecosystems are going to be critical for IoT to really take off. Below are some key quotes from the panelists:

 “If you can connect the ecosystems and work together, it can really make IoT implementations successful.” -- Jesse DeMesa 

“What’s different about Samsung’s IoT solution is its end-to-end solution, which includes hardware modules, IoT, cloud, and partner ecosystem. It is integrated (saves 9 to 24 months), interoperable (you don’t have to “do the plumbing”), and easy (everything is API driven).” -- Abhi Rele

“Someone who understands the whole ecosystem is important for the solution.” Verizon has implemented a new strategy where the professional services group, rather than the sales team, is the front door to discussing opportunities that IoT can create. These are multi-year engagements, so creating the right relationships is very important to the success of this solution. -- Faraz Shafiq

ACTION ITEM 

1. Use the case studies you heard about as a starting point. Consider how these case studies can be applied to our organization.
2. Discuss IoT implementation costs with your executives – especially the ones that are no-brainers.
3. Plan for ways to utilize IoT to create new revenue streams or new business models.
4. Understand that every industry is already looking at IoT opportunities – now is the time to get started on your roadmap.
5. Talk to Frost & Sullivan if you have any questions – we can support you in a number of ways throughout your planning, implementation, and monitoring process.

FINAL THOUGHTS FROM THE PANELISTS  
“IoT is not something you can buy. You buy solutions such as sensors that alert you when there is a problem or you add predictive features that warn before things happen.” --Christoph Inauen

“The common denominator is information; value of information depreciates with time. Aparking spot won’t wait for you for a half hour. [The] right application and analytics in real time is critical.” -- Faraz Shafiq

“Once you implement IoT, it’s critical to recognize that it has to be run in a very different way than you run IT because it has to be a much smaller percent of the cost for each transaction.” -- Sukamel Banerjee

“Why now? [More] connectivity available, [the] cost of sensors down, cost reduction needs, [and] we can process a lot more data effectively. [We] need to position IoT based on industry trends. Data exchange is a big part that IoT will drive towards when the connectivity issues become resolved.” -- Pavan Singh

How IoT Data Can Improve New Product Development

Co-authored by
Susan Harman
Product Line Director
ShareFile SMB  
Citrix

Eugene Yamnitsky
Director, Product Management
ShareFile
Citrix 






There’s a lot of buzz, hype and confusion regarding IoT.  What is it?   How will it impact you? What is the value that it could provide to business – for new product development, for customer acquisition and retention, and for ROI?  We’re going to define what it is, discuss the importance to product development, highlight some challenges we see on the horizon, and lastly, present our point of view. 

What is IoT?

The internet of things (IoT) is the network of physical devices, vehicles, buildings and other items—embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data.More simply defined, it’s the ability of virtually any smart electronic device with WiFi/Bluetooth/NFC (mobile phones, washing machines, refrigerators, cars, wearable devices, etc.) to communicate with other such devices, and connect to the internet, where the usage data is collected and exchanged without human intervention. Virtually every device we touch or are in proximity of will be IoT enabled in a not so distant future. Some research firms estimate that by 2020 there will be over 26 billion connected devices…

What does this have to do with product innovation/development and customer value?

There is tremendous value in leveraging IoT to collect meaningful, contextual data that can help organizations solve a myriad of business problems, contribute to better decisions for new product development, and craft innovative and disruptive new product offerings that solve important customer problems in new and exciting ways.

Imagine a hospital where a patient is moving from room to room receiving treatments over a course of days, interacting directly or indirectly with devices from various manufacturers. The experience may vary from patient to patient, while none of the vendors is in the room to observe and identify ways to improve the care or identify new problems to be solved. Now imagine that all the devices, rooms, and even doctors and nurses with wearables, are connected in a way that enables the vendor to collect product usage data in the context in which the product is being used. Not only will the individual vendors gain insight into the stand-alone product usage, but now they will be equipped with the contextual data for interaction with other devices and humans (patients, doctors and nurses). 

And there are several examples of companies doing just this today. One recent example is Coca-Cola vending machines, which track the user’s interaction with the machine and use the collected interaction data to come up with new flavors. Other examples include mobile application functionality changing based on the phone location with respect to various sensors, smart meetings that start when participants enter the room, and smart irrigation systems interacting with soil quality sensors to determine the right quantity of water to be dispensed.

Key challenges exist

IoT is not without challenges. A big challenge that exists in many organizations today is that many times product and marketing people don’t have access to even the most basic data. Take SaaS applications.  They can be instrumented to measure usage (Google Analytics, Pendo, MixPanel, etc.) so product teams have access to rich data on how an application is really being used. Strangely, though, many product development teams still don’t use this information (let alone instrument their applications). Why?  Existing products might not have been architected to support measurement, or limited resources are working on more exciting new features, as well as a multitude of other reasons. 

Another challenge is a lack of uniform standards when it comes to data exchanged by devices from various vendors. There are several startups that have recognized this problem and turned it into opportunity to develop vertical digital platforms; one notable example is Durham, N.C. based Validic.

Conclusion

IoT is here to stay. It will help us solve many complex problems. It may or may not be chasm crossing. Regardless, we believe that IoT brings tremendous value to new product development by enabling context-aware applications and devices which can provide meaningful product use data to vendors, and enable these vendors to innovate based on data which they couldn’t collect before.

Susan Harman has an extensive career as a leader in innovation, product management, product marketing, voice of the customer, identification of new markets and launch of H3 offerings in a broad range of business and consumer products and services. She is also an experienced intrapreneur and entrepreneur.

She joined Citrix six months ago as the Business Leader and Product Line Director for the ShareFile SMB, and an innovation mentor.  For three years prior to joining Citrix, Susan was a Vice President at LexisNexis, responsible for innovation and the development of a global cloud offering. Susan is author of Digital Handshake, Finding Revenue in New Relationships, published by the ASAE in 2002. 

Eugene Yamnitsky is an innovation catalyst & product development leader with sixteen  years of experience getting things done in conditions of uncertainty and fast paced change. He has a proven track record of success in early and late stage startups and large companies and has built high performance Agile teams delivering Cloud/SaaS Enterprise and SMB apps to millions of users. Eugene has consistently hired top talent and leveraged that talent for innovation. 

He is currently Director, Product Management – ShareFile at Citrix. Previously, he was Senior Manager, Product Management & Innovation at Citrix, where he led the ShareFile Product Management team responsible for mobile, desktop and web applications, as well as the key infrastructure components and the developer program. He also leads the Innovation Center of Excellence and acts as a catalyst for innovation, prepping teams for the Startup Accelerator.

IoT 2.0: Predictive Computing

An Interview with
Dilip Sarangan
Principal Analyst for the Internet of Things
Frost & Sullivan






In this excerpt from a recent interview, Dilip Sarangan introduces Frost & Sullivan’s IoT 2.0: Predictive Computing Practice, discusses what people may not know about Frost & Sullivan’s IoT coverage, highlights some key industry trends, and identifies a variety of growth opportunities.

“The Internet of Things is not new at Frost & Sullivan. We track the applications for IoT in a variety of vertical markets, and have done so for decades, helping clients identify viable growth opportunities.” – Dilip Sarangan, Principal Analyst, IoT, Frost & Sullivan

What is your role at Frost & Sullivan?
My role within Frost & Sullivan is to coordinate the research and consulting services for our unified Internet of Things program. In its 50+ years in the business, Frost & Sullivan has covered most of the applications that now roll up into IoT. This is outlined in the image below.

How do you distinguish between Machine-to-Machine (M2M) and Internet of things (IoT)?
M2M is about connectivity and connecting devices to the network. IoT is basically M2M 2.0—it is about creating the ecosystem to provide security, storage, the cloud, and data analytics to transform the data collected by devices into actionable intelligence. The graphic below shows a representation of how we define and differentiate M2M and IoT.

Our vertical coverage includes data from various segments: automotive, industrial automation and process control, security and surveillance, connected consumer services, energy and environment, building technologies, healthcare, defense, and smart cities.

Our horizontal coverage provides a detailed analysis of IoT ecosystems, partners, platforms, connectivity, cloud, Big Data analytics, and so on. We also use Frost & Sullivan’s Mega Trends to provide relevance to why some of theseIoT technologies have the growth trajectory they do by incorporating macro-level economic and social trends that have an impact on enterprise and residential customers.

What does the everyday person need to understand about the IoT?
While everyone thinks of IoT as connected devices, that is not always the case. With these devices being connected, enterprises must understand that people and processes are a vital part of what must be connected to really provide value and help achieve the typical goals or reducing operating costs, generating revenues, or improving organizational efficiencies.

From a consumer standpoint, they must really understand the difference between connecting devices to the Internet and the need to connect devices to the Internet. Not all devices need to be connected. There are significant privacy and security concerns with IoT today and consumers must really analyze the impact of putting private information online and tread that fine balance between convenience and security.

What are the biggest challenges that you are seeing in the IoT/M2M space?
Based on our research, there are some areas that are particularly troubling:

• Security and Privacy: Security is the biggest concern for all IoT applications. One of the factors that must be considered is the difference between security and convenience. IoT solutions (this is especially true for consumers) provide a large degree of convenience. However, at some point, security must be compromised to achieve convenience. What every manager or user must evaluate even before undertaking an IoT project is where is that line in the sand for me? At what point will enterprises and consumers give up convenience for better security? Until that question is answered, IoT will continue to suffer from being overly hyped.
• Cost: For enterprises, bringing all these disparate devices, processes, and people together to be managed with a central system that provides a 360 degree view of an organization, will not be cheap. In a lot of cases, it might require a complete overhaul of existing systems and retraining users on new systems. The costs can be to the tune of millions of dollars. This large upfront investment is hard for any organization to swallow. In addition, technology is evolving so rapidly now that a system that might work best today may be obsolete in a couple of years. Organizations must strategize on future needs and build the solution that will serve them best for the long term.

What are the biggest successes you have seen in the IoT /M2M market to date?
IoT applications that have been around for a long time have been the most successful till date. In my opinion, fleet management and asset tracking and monitoring are applications that have helped enterprises save money and increase efficiency. In addition, the industrial segment provides the most opportunity for IoT in the short term. This includes factory automation but also other industrial-type solutions such as oil and gas pipeline monitoring, tracking and monitoring at ports, agriculture, and so on.

From a consumer standpoint, the alarm monitoring industry has seen great success over the past 15 years. New market entrants aid in increased competition that will stimulate innovation and possibly make the vision for smart homes a reality in the next few years.

I think that the technology is now available to make the vision of IoT a reality. However, we are caught in the cycle of the “chicken or the egg”. We need the scale to reduce device costs but the cost is too high to increase the demand. At this point, it might be wiser for system integrators and service providers to take a hit on hardware costs to put the solution in that will help with long-term growth.

What are the biggest growth opportunities?
Within IoT, there are opportunities at every level of the ecosystem and within many vertical markets. For instance, in connected home, the real opportunity is not in connecting elements or hardware, but in the value-added monitoring capabilities and integration of the home with the vehicle. Just as with that example, IoT is really blurring the lines between vertical markets.

Take Oil and Gas (O&G) as an example. In the past, O&G vendors were interested in opportunities in upstream, downstream, and midstream. Now, integrated O&G vendors own gas stations and need to collect data from gas pumps, retail systems such as Point-of-sale (PoS) systems, digital signage, and so on. In addition, oil companies must understand the data collected by utilities about their residential and commercial customers, their energy usage, uptimes, downtimes, and so on.

Connecting billions of devices and sensors generates a large amount of data. Analyzing and creating intelligence from this data (and learning from it) will create growth opportunities for IoT service providers and their ecosystem partners.

IoT is an evolving market, with new entrants in the ecosystem every day. To survive and thrive in this industry, companies must focus on enhancing their core areas of expertise and forging partnerships in areas where better solutions exist. Without a thriving ecosystem and constant evolution, companies will be finding things difficult over the next few years.

Since 2006, Dilip Sarangan has held positions of ascending significance at Frost & Sullivan, including Research Analyst, Industry Analyst/ Lead Consultant and Research Team Leader for the security industry. He also forecasts disruptive technologies. In his current role as Industry Principal, IoT & Digital Transformation, he covers the horizontal IoT ecosystem and marries that with vertical market and application expertise. 

Deliver Real IoT Business Value by Answering Five Key Questions

By April Bertram
Business Development Director
GOJO Industries






The new world of data is vastly different from anything we have known and will continue to evolve at a record pace. The Internet of Things (IoT) has a promising future and will play a significant role in this evolution. While having access to all of this data is exciting, there are a number of complexities that come with new technology. To develop value-driven IoT solutions, you must think differently about how you bring products to market. Asking these five key questions will be crucial to successful and profitable engagement in the world of IoT: 

1. What is the problem you are trying to solve? When developing an IoT solution or any product for that matter, you need to start at the same place and understand what problem you are trying to solve. Once you have a hypothesis of the problem and have validated you are solving the right problem, then you can begin to develop and refine a solution. Market intimacy will be necessary to achieve problem-solution fit. The value proposition canvas is a great tool to help facilitate this process.
2. What data do you need to deliver to solve the problem and how can you present the data in a meaningful way? Many solutions in the market today are standalone solutions requiring customers to manage multiple apps and data sources to solve a broader problem. When developing an IoT solution, you should be thinking more broadly about how your interface might integrate into an existing platform or how you might develop a platform for others to use as an integration point. The goal with these new streams of data is to help simplify, not create additional complexities. Always test and iterate concepts with your customers before doing any significant development. 
3. What needs to be coupled with the delivery of data to ensure behavior change to solve the problem at hand? Data by itself can create more complexity, unless you also design a solution that helps customers apply the data to solve the problem. All too often, products are launched with this claim of solving a problem. Yet, they end up creating complexity by adding more steps in a process or more time to analyze the data. They don’t effectively solve the customer’s problem, but exasperate it. Consider advanced analytics to help visualize data or services to help your customers understand how to modify behaviors and processes with the data.
4. Have you built enough security measures into your IoT solution and are you ready to partner with your customers to ensure the right security plans are in place? Security is becoming a larger concern. We have already seen several examples of corporate systems being compromised from weaknesses in smart building control systems. Up until now, many IT departments have been concerned with the security of moving to the cloud and now have to think about the perimeter. This creates a different kind of risk that needs to be managed. As a developer, security prompts need to be designed into multiple layers of the IoT solution.

It is also important to ensure that your customers are asking the right questions when installing and integrating multiple control systems. The world is moving to IoT environments and your customers need to be comfortable with this evolution, no matter how risky it seems. Devices that offer data will be everywhere. In order to ensure market growth and penetration, your role will be not only to sell the IoT solution, but to help users understand how to deploy multiple connected devices and provide security with broader distributed access. 

1. What role will you play in an IoT ecosystem? Are you an orchestrator of an ecosystem or do you simply act as a participant and contributor of value in the ecosystem? Start by mapping the ecosystem as it exists today and understand the key players and their roles. Decide what role your company and solution will play. You may determine that the ecosystem requires collaboration with others in and outside the industry…and even competitors. In fact, in this new frontier, you may be the first to develop an ecosystem in your given industry. Know that this will take time, but if done right, could deliver the most value for your customer. Collaboration will be a critical capability in determining success.

Connecting people with their physical and digital environments will be a requirement in the future. Most importantly, development of IoT solutions must solve a problem and help individuals and businesses change behaviors to solve the problem – or no value will be delivered. Partner with your customers and other key players in the ecosystem to help ensure faster market adoption and quicker return on investment. 

April Bertram is the Business Development Director of SmartLink Solutions at GOJO Industries. April joined GOJO in 2002 to lead healthcare product development efforts. Since then, she has reinvented the GOJO innovation process, from the front end of innovation, to market and product development, and strategic portfolio management. Most recently, April was tasked with creating new IoT business models in healthcare and other core vertical GOJO markets.

Prior to her role at GOJO Industries, April was a small business owner and served in Product and Market Development for market leading brands, Hygenic Corporation (TherabandTM and Biofreeze®), GE Lighting and CompuServe Network Services/UUNet. 

Artificial Intelligence as a Catalyst for Innovation

Modar (JR) Alaoui
Founder and Chief Executive Officer
Eyeris






By now, it is widely understood that Artificial Intelligence is a main catalyst for innovation and organizational growth. In fact, AI has been part of our imaginations and simmering in research labs since a handful of computer scientists rallied around the term at the Dartmouth Conferences in 1956 and birthed the field of AI. 

However, it wasn’t until recently that AI has started delivering on its long awaited promise, thanks in large part to the recent advancements in machine learning, and more particularly deep learning.

The combination of the recent advancements in microprocessors, coupled with the commoditization of GPU-based super computers along with today’s massive amounts of datasets available for algorithm – supervised and unsupervised – training has clearly enabled the (r)evolution of Deep Learning.

As is the case for most emerging technologies, those who leverage the afore-mentioned enabling items ride the early waves of deep learning.  Not only do they get to discover early challenges, but also disrupt greatly by solving them to benefit their respective technologies, whether in speech, text or image recognition, 

We, in the image analysis area come at it from personal experiences, which allow us to use deep learning as a medium to continuously push the boundaries of facial expression recognition.

Popular deep learning architectures such as Convolutional Neural Networks address image and speech recognition applications. CNNs deem to be easier to train than other regular, deep, feed-forward neural networks since they can be trained with standard backpropagation. They have many fewer parameters to estimate, making them a highly attractive architecture to use for image analysis, especially in our case of emotion tracking through facial micro-expression recognition.

While there are a number of applications that can benefit from emotion recognition today, we have purposely chosen our industry verticals to solve harder problems by leveraging unique technology differentiators, including the integration of Deep Learning architectures into our expression recognition algorithms for continuous and improved learning in relatively short timeframes.

Our mission towards advancing Ambient Intelligence (AmI) allows us to enable a new era of Human Machine Interaction (HMI) where embedded systems, including everyday devices and machines, can understand and predict users emotions and respond accordingly in time-critical situations to enhance user experiences. Predictability and improved accuracy through rapid adaptation are key areas that affect user and environment personalization and delivery.

While there are a large number of different variants of deep architectures, most of them remain branches of some original parent architectures. Since not all of these architectures are implemented on the same datasets, it is not always possible today to compare their performance all together. 

Deep learning, however, is a fast-growing field so new architectures, variants and algorithms are expected to branch out more and more, and each will target many or a specific problem in its respective area. Industries like Healthcare for drug discovery and toxicology or Automotive for scene recognition and camera view interpretation are all ripe for more developments with Deep Learning architectures in the coming years.

Deep learning is a tool that allows algorithm training through one of its infrastructures using either supervised labeled data, unsupervised labeled data or through reinforced learning. In either case, data here, both in quality and quality, represents the “raw material” that, via the deep learning “tool”, permits for algorithm training and is a lot of time, a crucial indicator to accuracy.

Both the large numbers of available datasets today and the ones being implicitly amassed by companies of all sizes, startups and large corporations, are what is shaping the future of deep learning. Being part of and contributing to this future with our own proprietary datasets and Artificially Intelligent algorithms, is certainly exciting. 

This raw material data, together with the deep learning tool are enabling the “fruit” of advanced decision-making algorithms, some of which include our technology, outweigh human logic, speed and overall performance. And this is what excites us the most.

Modar is a tech entrepreneur and technologist with a special interest in Embedded Vision for user facial behavioral measurement. He is a frequent speaker on Artificial Intelligence (AI), Deep Learning (DL), Face Analytics & Emotion Recognition through facial micro-expressions, Human Machine Interaction (HMI), Robotics Vision and the keyword for next decade: Ambient Intelligence (AmI).

He is the Founder and CEO of Eyeris, the world's leading Deep Learning-based Artificially Intelligent emotion recognition and face analytics technology. Eyeris' flagship product, EmoVu, is a hardware-agnostic Computer Vision software that reads people's facial micro-expressions in real-time, as part of the most comprehensive suite of face analytics.

Innovation and Leadership

Michael Flynn
Vice President, Innovation & Strategy
Bank of the West




What is more impactful? Innovation or leadership? The theme for this e-Bulletin presents a quandary for me. Innovation can definitely serve as a catalyst for leadership and growth, but what motivates innovation to begin with? It’s easy to get caught up in a discussion of great “swing for the fences” technology efforts that led to the first successful moon shot, decoding of the human genome, first self-driving cars, and so on. What is often missed is an examination of what spurred or allowed those and lesser innovations to happen in the first place.

Invention creates possibilities. More often than not, leadership provides the fuel and direction that enable the successful commercialization of invention (i.e., innovation). Neither invention nor leadership by themselves can drive engines of innovation that create and sustain business growth. In successful businesses that experience consistent and sustainable growth, innovation and leadership are intertwined and reinforce each other to ultimately create a culture that thrives on challenges and delivers valuable products and services to its customers.

The most innovative companies foster cultures where leadership and innovation are so intertwined as to be inseparable. From the microcosm of small teams to the macrocosm of entire organizations, these successful innovators understand this self-reinforcing concept. One cannot be sustained without the other. Smart leadership understands that consistent innovation doesn’t normally result from big-bang experiments occurring in isolated “clean rooms” walled-off from the rest of the business. If anything, these leaders understand that sustained innovation is difficult, stressful, and even messy at times. Things break and emotions come into play. However, it is steadfastness in the face of this volatility that separates the greatest innovators and their higher growth companies from the pack of innovation tinkerers; the latter are not willing to put forward the effort and resources required to build and sustain cultures that embrace tolerance of risk and doing things differently. A long history of abandoned innovation initiatives speaks to many businesses’ inability to remain focused and consistent, if not patient, in their desire to realize near-term benefit from innovation-related investments. Irrespective of product or service focus, many organizations cast off innovation efforts when business climates toughen. This speaks directly to the role of leadership, or lack thereof.

There are variants of models and best practices for innovation. Ruling out unproven ones lacking in qualitative and quantitative corroborative data, there is a reason for this. That reason is the richness and diversity of company cultures. These differences reflect any number of characteristics from scale, to core competencies, to adaptability, to identity, and more. Successful organizations understand their inherent culture knowing that their respective innovation and growth trajectory will most likely resemble the zigzag path of a sailboat tacking in the wind rather than the smooth curve of a rocket. They will navigate a path that enables transformation over time while reaping benefits from innovation practices that produce near-term and mid-term successes, even if more incremental than market disruptive.

Absolutely, innovation can serve as a catalyst. It is certainly doing so in my industry. Traditional financial institutions are responding to pressure from emerging fintechs and peers, whether employing alternative credit models in marketplace lending, robo-advisors in wealth management, or machine learning in fraud detection. These are external motivators. They are effective but only to a point. The true measure of success in leveraging innovation for growth is in the application of leadership to help imbue the organization’s DNA with self-motivated innovation, creating a self-sustaining engine of growth. 

Michael leads teams and organizations in defining and creating the future. By leveraging both internal and external creativity, resources and assets, his teams champion and drive the crafting and integration of solution strategies, culture, and best practices to deliver innovative solutions with tangible impact and sustainable value. As Vice President, Innovation and Strategy at Bank of the West, Mike helps to discover and monitor emerging innovative business models and related technology and service trends.

As a Strategy Consulting Principal at HP, and Director of Ecosystem, Co-Innovation Lab, and Products & Innovation at SAP Mike was instrumental in transforming software design and development methods for innovation and new product development, guiding co-development of an industry-disrupting business model  and forging strategic partnerships to realize 100% growth in an innovation lab’s portfolio while securing multi-$M investments. 

Building an Entrepreneurial Culture to Spark Leadership and Growth

Jeremiah Gardner
Principal
Moves the Needle







It’s been said before but still rings true – the world is rapidly changing. It’s not only that technology has advanced, but with that advancement is a wave of digital disruption, rising customer expectations, and non-traditional challengers. These changes present both new challenges to face and new opportunities for growth.

Enterprises around the world are asking themselves, “How do we meet the challenges presented in this shifting landscape?” “How can we continue to create change and explore new opportunities?” “How do we use innovation as a catalyst for transformation?”

Increasingly, the ability for an enterprise to practice innovation (not just talk about it) is critical to meeting the challenges of today. 

What is “Innovation?”

The answer to these challenges seems to be captured in an increasingly-popular buzzword, “innovation.” It’s ever-present in the values of almost every enterprise across the world, gets mentioned in countless keynote addresses, and is sure to get a chip placed in any conference attendee’s game of “Business Buzzword Bingo.” 

But there is a difference between “innovation theater” and innovation as a competitive advantage. 

Innovation means creating new value. It’s not just new products, or new technologies, or new breakthroughs; but creating new value throughout the entire organization. 

This means focusing innovation efforts in HR, marketing, internal process reinvention, management, sales, procurement, and yes, even legal, are critical to an organization’s ability to remain competitive and evolve.

In our work with some of the leading organizations in the world we’ve found the foundation to establishing innovation as a practice – not just a buzzword – is fostering an environment for “Entrepreneurial Spirit.”

How Do You Awaken an Entrepreneurial Spirit?

Entrepreneurial Spirit is what empowers small, focused groups of intrapreneurs to make drastic impact by discovering new value, flipping existing markets, or even disrupting entrenched industries. 

Entrepreneurial Spirit drives these intrapreneurs to do so with only a fraction of the resources large enterprises have at their disposal (versus wasting months and millions on a new initiative only to see it flop).

The lack of Entrepreneurial Spirit allows organizations to become complacent and miss the boat entirely on the new demands and expectations of their customers. 

How do you recognize Entrepreneurial Spirit when you see it? It shows up in the behaviors of people who:

• Prioritize learning over execution
• Seek to understand the needs of a market deeply, not superficially
• Assume they’re wrong and experiment at small scale prior to scaling
• Follow the evidence, not the roadmap

Fostering the Conditions for Entrepreneurial Spirit To Thrive

The truth is, leaders and managers can’t mandate Entrepreneurial Spirit, they can only create the conditions in which it is likely to ferment, thrive, and grow. If the environment is shaped successfully, this way of working can spread throughout an organization causing ripples and waves of cultural transformation.

How do large organizations with established customer bases, thousands of employees, stockholders, and millions of dollars on the table empower innovation? 

The conditions for entrepreneurial spirit to thrive in the enterprise involve both a mindset and a skillset. 

Mindset

The mindset for innovation is straightforward: balance execution and learning. Most enterprise organizations already know how to execute well. After all, it’s how they got big in the first place. But often enterprises fail when they apply their execution mindset on the learning side of the equation.

Instead, leaders must balance resource allocation and focus in both the known (execution) and the unknown (learning). This means aligning KPI’s, reward incentives, supporting functions, and organizational structures to empower intrapreneurs to activate their entrepreneurial spirit. At Moves the Needle, we like to break it down into education, enable, and empower.

Skillset

An innovation mindset is critical but not enough. Without the requisite skillset, entrepreneurial spirit can easily slide back into becoming a buzzword. To practice innovation, intrapreneurs need three critical skills we’ve come to call the “3 E’s”: empathy, experimentation and evidence-based decision making.

Empathy means the ability to develop deep understanding for your customers, the problems they face, and the aspirations they hold. The farther you are away from the customer in your daily work, the farther you are away from practicing innovation. 

Enabling your employees to have direct, authentic interactions with real customers is job one in fostering the conditions for innovation to thrive. Every Lean Innovation Bootcamp we conduct intentionally starts with practicing customer empathy through interviewing real customers. This is the foundation for new ideas. Truth be told –  there is no more powerful tool in your innovation toolbox than a cup of coffee with a customer.

Experimentation means the ability to identify critical assumptions lying beneath the surface of your ideas and generate evidence to validate or invalidate your current path. Experiments are designed to rapidly find out whether the underpinning assumptions about an idea are valid or not, before investing in expensive development. 

Time and time again we see teams run experiments and produce evidence that guides their work. In the end, they’re better able to allocate resources and mitigate the risk of sinking time, energy, and money into a venture that isn’t worth pursuing. 

Evidence-based Decision Making means the ability to not only generate evidence, but to follow what the evidence is saying. The biggest competitive advantage of any organization is their ability to learn, and rapidly turn insight into action.

The goal is to build a case over time using multiple rounds of empathy and continuous rapid experiments to provide the evidence you need to prove the venture creates new value, and a return.

Three Questions

Coupling the mindset of balancing the known versus the unknown with the skillset of empathy, experimentation, and evidence-based decision making are the foundation to awakening an entrepreneurial spirit and building a successful enterprise innovation practice.

If you’re serious about going beyond the buzz, here are three questions to help you evaluate and accelerate your innovation practice: 

1. How are you empowering your organization to practice innovation, not just talk about it?
2. How are you fostering an environment for “Entrepreneurial Spirit” to grow and thrive?
3. What obstacles are standing in your way to put innovation into practice and spark new leadership and growth?

Jeremiah Gardner helps organizations create new value. He is the author of the bestselling book, The Lean Brand and Principal at Moves The Needle where he empowers companies like GE, Sprint, eBay, Intuit, and Cisco practice Lean Innovation. He has been featured in several media outlets including Forbes, Entrepreneur Magazine, Lifehacker, and The Guardian. Jeremiah reads a lot of Mark Twain, is an avid Lakers fan, and a self-professed amateur home chef. 

Jeremiah tweets @JeremiahGardner and blogs at http://jeremiahgardner.com.

Your Corporation is Killing Innovation without Knowing It

By Brian Moelich
Customer and Idea Implementation Lead
Cisco






Before innovation even starts, corporate alarms are ringing and walls are raised.

In the post-recession economy, markets are changing faster than the mighty corporations of old can keep up with. To combat the epidemic of nimble startups, corporations are advocating fresh thinking such as prototyping, failing fast and quick iterations based on customer feedback.

But few if any corporations have been able to point to any concrete successes, no matter the size. Why is that?

Large organizations are always going to be risk averse

A publicly traded corporation must not only appease shareholders but also Wall Street analysts and the corporation’s executives who hold the purse strings are rated predominantly on financial performance.

New ideas within corporations don’t always achieve short-term profitability, and thus it is difficult to convince decision-makers to reallocate capital from an existing cash cow to an “ugly duckling” innovation project. Corporate resources will inevitably go towards incremental established brand innovations and not disruptive new market innovations, which are inherently risky.

Remember that it was Kodak who invented the first digital camera, and chose to continue investing in film R&D over a risky new venture. Everyone knows how that story ended.

Play into the risk-averse nature of large corporations

For a corporate innovation project to succeed, it is necessary to recognize that the executive investing in the innovation project has corporate strategic goals to uphold.

The key for the innovation project’s success then becomes to fit into the corporation’s strategic goals. The following are some key factors to encourage this outcome:

1. Find out what keeps executives up at night – There are two approaches that corporations have found successful 1) use executive problems for innovation challenges and   2) tie the innovation project to or search out projects that match an executive challenge.

EMC and Deloitte have been very successful at taking executive challenges and posing them to the corporation as an innovation challenge, which employees can submit ideas for. Success is derived from the fact that executive buy-in is built in from the onset, because the ideas are directly tied to the executive’s imperatives.

The Citrix Startup Accelerator’s Innovator’s Program and recent Citrix hackathons have engaged with executive sponsors prior to kickoff and used their input on challenges as selection criteria. Much like the first approach, executive buy-in is assured as teams enter the program with ideas that match executive needs.

2. Develop a monetization roadmap – Innovation projects attain a quick death due to a rapid demand for monetization. In some instances, this is possible, but for most, a user base needs to be established before the market is willing to pay.

Ash Maurya is beginning to popularize a framework that calls attention on attaining users prior to revenue.

This model is helpful because it addresses the challenge of organizations understanding the needs of startup marketing versus established brand marketing. Additionally, the framework helps innovation project teams outline what their plans are to eventually reach revenue.

The push to monetization can also be prevented by demonstrating how the innovation project brings other forms of value to the corporation. For example, accessing a new user base to cross-sell existing brands.

3. Gauge executive buy-in throughout the process – Using executive buy-in as a gate to pivot, persevere or kill is critical, because without buy-in, the project is already dead on arrival.

The corporate innovation process should have gates where certain criteria should be met before moving on. At each of these gates, executive input must be acquired and should be used as a determining factor as to whether the gate is achieved.

It is also helpful to prime executives with what the criteria and stages of the innovation process are, so that they are aware of how to judge and assess the innovation project. Otherwise, the executive might have a higher expectation based on traditional corporate outcomes than what could reasonably be expected of an innovation project.

4. Speak the language of the executive – Not only do innovators need to have vision, they need to be able to explain it in the C-suite’s language.

Entrepreneurs are quick to state that startups are liberating versus a stifling corporate culture, but the reality is that even entrepreneurs are beholden to others. Entrepreneurs are bound to their investors, while corporate innovators are indebted to their executives. Both need to translate their vision into a language that their stakeholder understands.

That language is one based on quantitative factors. For investors, the considerations are traction, growth and revenue. For executives, the elements are cost, payback period and top line revenue growth.

5. Get Line Function Buy-In – It isn’t only the C-suite that needs to be convinced but the “doers” as well.

As much as the C-suite needs to be bought into the conversation, the other critical component is the “doers:” mid-level management. Without convincing the “doers” of the project’s necessity, these managers will continue to throw up barriers that will eventually kill innovation within the corporation.

6. Be Selective. Take Baby Steps –  Dreaming the world is great, but taking actionable baby steps is better.

Corporate innovators are great at envisioning future states, but often fail to concretely translate their vision into beneficial steps. In other words, corporate innovators tend to be perceived as dreamers, rather than doers, which relegates their concepts to the bottom of the corporate priority list.

Overcome this perception by ensuring that the initial ask is not only actionable, but also achievable in the short term. Present small projects in the language of the C-suite and deliver on them to build the groundwork for the grander vision.

Corporate innovation requires an understanding of the organization’s needs

Innovation within a corporation requires a recognition that the corporation is inherently risk averse and the only way to push innovation through is to accept this and appease it. Every move and decision a successful corporate innovator makes is based on directly reducing this risk or taking steps to bypass risk by addressing corporate challenges head-on.

This article was co-authored with Eric Quon-Lee and originally published in Huffington Post

With more than six years of experience solving ambiguous problems across multiple top tier technology companies, Brian Moelich has a proven track record for identifying and exploring untapped opportunities for new growth and managing the execution of those ideas. His passion is taking nascent ideas from concept to launch and building desirable, feasible and viable businesses.

Currently, Brian is the Customer and Idea Implementation Lead for the Cisco Hyperinnovation Living Lab or CHILL for short. CHILL drives disruptive innovation through the collaboration and co-creation of Fortune 500 companies and startups. Brian was previously a Business Designer at Citrix, where he designed facilitated and ran the internal innovation incubator program and advised teams post-program on how to navigate corporate hurdles, de-risk the technology and business, develop and test prototypes, go-to-market and grow once in market. He is also a mentor for the Citrix Startup Accelerator and the French Tech Hub.