The Internet of Things, the Internet of Everything, the Industrial Internet — whatever you call it, connected devices are a fantastic gift to any business that wants to get closer to their customers. The pattern captures people’s imaginations and many of the predictions feel like magic, but IoT solutions are hard to get right. If you’re trying to decide on your first project, you probably have a lot of questions. Here are six critical things to keep in mind as you move forward.

#1 Pick a Great Use Case

There are a lot of fun IoT use cases around the Internet. Many of them don’t matter. In the interest of keeping good relations with the rest of the world, I’m going to call out something I did as a fantastic example of a trivial exercise: the Coffee Copter, detailed in the video below. As you pour a cup of coffee, a quadcopter takes off. As you empty the cup, the quadcopter lands.

Now, as fun as that was, it was an execise in can you do something, and these days can is the wrong question. You need to be asking yourself should questions. Should I connect a coffee urn and a quadcopter? No.

But there are lot of areas where the answer is yes.

Should you make healthcare equipment more reliable? Should you make it easier to monitor radiation in a nuclear accident zone? Should you help people save money on energy by helping them monitor and manage their use?

The answer to all of these is a clear yes.

One of my favorite examples in this department is New England BioLabs. NEB sells supplies to medical researchers. As part of their sales process, they stock these supplies in a freezer at their customer’s location. Now, it used to be that they had a hard time knowing the right supplies to stock, validating that supplies were kept at the right temperature, and tracking the researchers that used a specific item. NEB solved this by transforming their freezers into connected devices and now they know the researchers, they know the supplies and they know the temperature history for each item.

I’m sure we can all agree that medical research is a worthy cause. But not everyone is a healthcare researcher, so you have to find a similar problem in your business. You need to start by identifying the target outcomes your customers are looking for, and then come up with ways to help them achieve those outcomes more reliably. When you do this, you deliver additional value and build better relationships.

These outcome oriented use cases are what matter, and you should start with them.

#2 Create a Great User Experience

Once you decide on the right use case, you have to create a user experience that delights your customers.

(source & thanks @RossBelmont).

User experience, UX, determines how people engage with your solution, and there’s no one UX for every product. Your UX goal should be two fold. First, if possible, your new solution should fit into what customers already know how to do. Second, it should reduce the friction of what they have to do to realize the value it delivers. Great UX not only disappears into the environment, it makes the environment better.

The current generation of fitness wearables is interesting example of good UX. Fitbit, for example, has no buttons. All you have to do is put it on and the technology does everything else in the background. Now, on the down side, the user also has to tap the device from time to time. It’s easy to get the hang of, but I wouldn’t call it natural, and it still requires a local gateway rather than being able to magically talk directly to the cloud. There’s no great way around that right now, it’s a constraint that the technology hasn’t eliminated yet. But the first wearable that includes some sort of background connectivity will have a tremendous advantage.

#3 Community & Collaboration

I’m not talking about the network of connected toasters or refrigerators complaining to each other about being out of milk. I’m talking about actual people. People value interacting with other people in context of things they care about. In fact, they value it so much, if you don’t create a destination for the community that pops up around your product, your customers will probably create one on their own.

There are three main types of communities to be thinking about.

The first is a data-centric community. Runkeeper has created an excellent example of a data-centric community. Data-centric communities take the output of the device and interact around it. In Runkeeper’s case, this is a leader board comparing the number of activities between you and your friends (yes, that’s me at the bottom). Most fitness wearables have data-centric communities as a core part of the product.

The second type of community is product-centric. Product-centric communities are more about how to use things, news from the company, tips and tricks, etc. PrintrBot has an excellent product-centric community. Interestingly, it’s not operated by the company itself. Customers created their own informal community. Today the company has an official one as well, but the original continues to thrive.

The third type is transaction-centric. Say you manufacture MRI machines, and you connect those MRI machines to an enterprise backend like salesforce.com. When the MRI machines have actionable data, that data gets posted to Chatter, and all of the people who have a legitimate interest in it can collaborate around that particular post. MRI techs, doctors, hospital staff, biomed technicians, and external contractors can create a short lived, ad hoc community around that transaction.  (The screenshot above is from this video, a couple of minutes in.)

#4 Developer Experience

Open Source has shown time and again that remix is often more valuable than the original. And although I won’t presume to say you should open source your core IP behind whatever connected solution you land on, I think its critical you have an easy to understand, well documented and powerful API that developers can harness.

A great example of a good out of the box Developer Experience (DX) is Automatic, the car tracking company. With Automatic, you pair an OBD-II device with your phone and track driving patterns. Automatic launched with an API out of the box, and they exposed their API using a number of standards. For example, it has a REST API and handles authentication via OAuth2. This definitely sets them up for developer success, and people are doing great things.  (Note that Automatic’s API is still in beta.  That’s fine.)

Like the community, the funny thing is that if you don’t deliver an API out of the box, chances are good someone else will attempt to. Take the example of Kickstarter success LiFX. It took a year for them create and ship bulbs to their backers, and they did so without an official API. However, an unofficial API showed up on Github in days. Now the challenge here is that an unofficial one is OK, but people don’t have a lot of confidence in it. Meanwhile the Philips Hue, their competitor, has had a reasonably good API for quite a while.

This all begs the question of Nest.  Nest doesn’t have a public API yet which probably makes you wonder if you really need one.  My opinion is that most of the time yes you will need one.  Nest has proven to be a successful exception.  There may be more exceptions, but I suspect not many.

#5 The Right Amount of Data

In order to succeed, your IoT solution needs to gather enough data to create accurate, actionable insights for your users. Is this Big Data? Yes, but your users don’t want and can’t handle big data. They want the processed results.

How do you handle big data if you don’t already understand it? The right thing to do is partner with a company who already has the expertise, of which there are an increasing number. Companies like Etherios, 2lementry and Axeda, just to name a few. Can you develop it yourself? Sure, but see the above discussion about can versus should.

Processed data is where the action is. A typical IoT value chain has a number of components, all of which are easy to get lost in, but processed data, that someone can act on, will drive the success or failure of your product. User experience plays a critical role here as well, although it’s a different set of users: internal users. If your use case involves helping customers achieve better outcomes from their purchase, and it should, then the processed data needs to sit very close to the customer data so people can take quick action on it.

Learning what data is valuable will take some trial and error, and the data that’s valuable today will be different that the data which matters tomorrow.  You need to figure this out for your customers.

#6 Non-Technical Integration

Connected devices open up new and interesting future possibilities, but they have to play well in the current world with all of it’s existing requirements. A good case in point is government regulation.

Brivo Labs is a great example of a company that understands the impact of regulatory requirements on IoT solutions. Brivo Labs is an access management company that’s a spin off of a well established commercial security access control company with a deep understanding of regional building codes. This kind of knowledge is absolutely key to working effectively with existing markets, and they’ve used this to create a number of interesting products, including an iBeacon enabled app that works with Salesforce Identity called Rändivoo.

Nest experienced an interesting result of regulatory requirements when they found a problem with their smoke detectors. They started to fix it and then received a demand for a recall from the Consumer Product Safety Commission – six weeks after their own disclosure and initial action. This kind of interaction can be very distracting for a business, especially when it’s not planned for, but the reality is that even the most leading edge companies are still subject to it.

Source. Note that as of this writing, Nest Protects were not available on the Nest website.  This letter from Nest CEO describes the situation.

Now is the Time to Jump In!

I hope this list is helpful.  The Internet of Things is an architectural style that will drive really interesting innovation in the coming years.  There’s a lot of detail around creating an IoT solution, but you shouldn’t let that stop you from jumping in. Now is a great time.  Companies are increasingly turning to connected customer experiences as a way of delivering what all customers really want: better outcomes.

If you’re looking for more ideas and inspiration, you should take a look at the ever growing list of artifacts created by some of the leading thinkers in the space.  I recommend the videos from ThingMonk, ThingsCon and SolidCon as a great place to start.

I’d love your feedback on this or any other article.