How to make any IoT business model work – or not?

Published On - September 11, 2018

CloudExis Pvt Ltd

When creating new IoT business models, corporates are often unsure how to get started. They spend too much time discussing their business models, instead of directly testing them. This presents a significant hurdle to creating innovative solutions rapidly. In addition, corporates often lack experience in working with agile and iterative methods. These aspects usually lead to mistakes during the innovation process that could be avoided.

The four most common mistakes corporate teams tend to make when creating new IoT business models:

  1. Working until the solution is perfect
  2. Waiting for the right moment to launch
  3. Over-deliberating project execution
  4. Making many wrong assumptions

The last point in the list above is one that most corporates struggle with, even though it is the easiest mistake to fix. Let me take you on a little journey into my past to show you what happens if you make the wrong assumptions.

Assumptions my younger self made when selling on the flea market

I have participated in flea markets many times to sell stuff I no longer wanted. I started when I was still a child, and in the beginning, I was hopeless. In retrospect, I set up my booth at the market based on several wrong assumptions. Just to name a few:

  1. People like thrift shopping.
  2. People will pay me my highest asking price for the stuff I want to sell.
  3. People will like my old stuff, and I will be able to sell of all of it.

What lesson did I learn? My entrepreneurial younger self intuitively started validating the assumptions and doing some research. I identified what locations and things my potential customers liked, and what prices I could ask for. After having figured this out, everything changed. Suddenly, it was easy to sell my things, and I made a good profit!

Nonetheless, uncertainties remained, like bad weather, which can put people off coming to the flea market. Validating assumptions helps you reduce overall risks to a minimum.