7 Mantras To Fuel New Age Startups

“Schopferische zerstorung” lays the foundation of new age capitalism, ironically derived by from a work of Karl Marx, the father of socialism by Joseph Schumpeter. He described this German phrase as “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”

In short ‘gale Of Creative Destruction'.

Anyone who can be connected is getting connected through smartphones and wearables, anything that can be connected is getting connected through Internet of things, creating a deluge of Data, Big data. Big opportunity to use insights from this data to engage users. Meaningfully. Profitably.

Many an old guard will get waylaid by the nouveau, the smart stalwarts will quickly collaborate with new players to stay relevant. This ‘gale of creative destruction’ will touch many an industry.

For those who are feeling the itch to be the new player, the just released Verizon report on State of Market: Internet of Things 2016 throws up some really interesting facts and very actionable insights.

If you are planning a Start-up, these are my seven mantras to sail the new age gale of creative destruction: 

Enterprise not Consumer - From both funding and revenue perspectives it is better to have a product or service that is aimed to meet the needs of Enterprise. In 2015, in raising VC funding, enterprise outpaced consumer by around 75 per cent, in 2016, the expectation is that enterprise will be 2 – 3 times more than consumer. In revenue generation too businesses servicing enterprise needs will have clear and present revenue streams vs servicing the needs of consumers

IoT at heart – Worldwide Internet of Things market spend will grow from $591.7 billion in 2014 to $1.3 trillion in 2019. The installed base of IoT endpoints will grow from 9.7 billion in 2014 to 30 billion in 2020. IoT is driving new revenue streams for businesses and revenue growth is by far the biggest factor driving IoT adoption. Start-ups with IoT as the core of their product/service will have the opportunity to ride this revenue wave. 

Focus on being an accelerator – Accelerators are those who intersect tech innovation with Industry X and give birth to new categories and services, makes products and services cheaper, and drive consumption. Chances for success goes up for Start-ups that bring an IoT innovation to one industry, perfect their innovation there and then then roll it out in other relevant industries. And it is good to focus on industries that have adopting IoT and are showing high growth rates. The ones with the highest revenue growth thru IoT are; Energy/Utilities (58%), Home monitoring (50%), Smart communities/smart cities (43%), Transportation/Distribution (49%), Agriculture (33%) & Healthcare (26%).

Analytics of things – this is a big one - Gartner estimates that “IoT will support total services spending of $235 billion in 2016” which means that Companies of all sizes will invest in creating and selling new services based on insights generated by data from IoT-connected devices. Insights generated from analytics will play a critical role. Those who focus on using big data to move beyond descriptive data collection to predictive and prescriptive analytics will be in demand. Help the customer move from ‘what has happened’ to ‘what could happen’ and ‘what should we do’.

Build automation and predictive solutions – as companies start using predictive and prescriptive analytics there will have a need to be able to act on the insights as close to real time as possible, this is where automation solutions will come into high demand and to feed the automation machine will be required assets and solutions prepared in advance. Thus providing opportunity for premium revenue streams for your start up.

Shared economy – Asset tracking at some point will metamorphosis into asset sharing. If your product/service factors this into its architecture, you will be future ready. Also a lot of large enterprises will want to partner with IoT technologies and weave it into their existing products/ services. When drawing the architecture of your product keep a provision to be able to collaborate with other data owners so that you can engage with other companies and interchange data there by adding a new layer of economic value to the IoT ecosystem.

‘Creative destruction’ also reminds one of age old Hindu mythology. After destruction by Shiva, new creation happens. Tis time for the new world order to take shape, tis again an era of adventure, of invention, of creation. Happy opening shop.