Bench Talk

Business schools teach would-be marketing executives about the major stages in a product’s lifecycle. A key lesson covers the critical transition between initial sales to relatively few early adopters and the device’s take-up by the mainstream market. Variously described as the “void”, “desert,” or perhaps most familiarly “chasm” (named for Geoffrey A. Moore’s bestselling book about marketing and selling disruptive products, Crossing the Chasm), it’s the point at which a product has gained some momentum but not enough for mainstream consumers to start buying it in big numbers. Many promising inventions from start-ups and established firms alike have disappeared without a trace into the chasm, closely followed by cash flow drying up.

One of my favorite examples is the Segway. (To be fair, the Segway has not disappeared entirely, and the company behind it is still marketing the product.) The personal transporter had much to recommend it; it was well designed and engineered, technically advanced and fun. It had its share of visionary buyers too; for example, Steve Wozniak, co-founder of Apple, shelled out for one. So did President George W. Bush.

However, despite a reputed $100 million R&D budget, the Segway turned into a big sales disappointment. The problem was that the public just didn’t “get,” or understand, what to do with the Segway. It was more complicated, heavier, and cost more than a bicycle (which had the added advantage of keeping the rider fit.) The Segway was slower, more exposed, and less versatile than a car. In 2010, it did not help the product’s image a single jot when the British purchaser of the Segway company, Jimi Heselden, passed away after accidentally riding his Segway over a cliff (although an inquest into Heselden’s death noted that rider, rather than machine, was responsible for the tragic event).

The Segway illustrates a key point that it is not just inferior products that fail to cross the chasm. The machine was decent enough yet failed to be a market success. The reasons why good products fail are numerous. Stiff competition, poor marketing, lack of investment, bad publicity, stifling regulation – all can take their toll. Microsoft’s Zune MP3 player, for example, was a very capable device and was not far removed from the Apple iPod family with which it competed. However, the Redmond-based company’s portable music player never achieved more than a single digit percentage share of the MP3 market while the iPod to date represents some 75 percent of all portable digital music players ever sold.

The Internet of Things (IoT) is a little different from the Segway and the Zune in that it is not one product championed by a sole owner. In contrast, in its final form, the IoT will comprise billions of interconnected devices across the globe, in all likelihood based on a complementary range of wired and wireless hardware and communication protocols from many competing commercial companies. However, its current stage of development bears comparison with other technologies that have stood on one side of the chasm looking at hundreds of millions, perhaps billions, of paying consumers just a leap away. Traversing the abyss to reach those consumers is proving a major hurdle to IoT progress.

Part of the problem is that companies are using “the IoT” as a marketing tool to sell all manner of gimmicky technology. Then, few people bother to counter the inevitable bad press those devices engender by educating the consumer about the actual advantages of IoT. Nobody, bar those with enviable disposable incomes, is going to buy smartphone-controlled LED lights when a switch on the wall does the job just as well at a fraction of the price. Similarly, consumers aren’t about to invest in wireless door locks when a key has provided a perfectly good solution for decades.

However, the average consumer could well be interested in a networked lighting system that switches itself off when a room is unoccupied or monitors its own power consumption and reports daily to the owner’s handset about how running costs could be cut. Moreover, locks that can be opened remotely for teenagers who have neglected to take their keys when going out, or can notify a house owner’s smartphone if someone attempts to tamper with the door, suddenly become much more compelling. Passive switches and keys are never going to be able to do such things.

The consumer happily pays for an electricity grid through their utility bill because they understand it distributes power for HVAC, lighting, convenience products, entertainment devices and the other trappings of civilized life. Similarly, freeways enable safe, efficient travel from A to B and the Internet allows people to work from home, remotely order pizza, do banking, and stream the latest movies. The thing that the consumer “gets” about electricity grids, freeways, cellular networks and the Internet are not that they are some sort of magical entity that promise nirvana, rather that they are fundamental technical requirements to support modern life with cool inventions like TV, cars, smartphones and social media.

Despite its current problems, the IoT will inevitably “cross the chasm.” Like the Internet before it, the advantages of IoT technology are great, and society will embrace it in the long run. However, to generate the commercial incentives needed for companies to embark today on solutions to the major engineering challenges that need to be solved, the consumer needs to be educated that the IoT is a platform. The IoT is a platform upon which unique and innovative services can be based—just like the network infrastructures with which the public is already acquainted. The IoT platform is not some “fairy dust” that endows everyday products with gimmicky capabilities like sending a message to a smartphone when the toast is browned (the slices popping up is already a pretty good—and free—indicator that things are ready).