While there are many reasons machine to machine projects fail, there are some recurring ones that I see time and time again. I have put together a list of what I believe - from experience, are the top five most common reasons m2m projects fail.
1. No One Wants What You Have to Sell.
Have you ever watched late night infomercial’s and thought to yourself “Yes, I really do need a knife that can cut through my shoe!” Well you should think like that in relation to your m2m project. Just because you have a product that you can build - does not mean there is a market for it.
A perfect example of this has been Child Safety Phones. Over the years I have seen many of these come and go. They are basically a small mobile phone with 4 pre-programmed buttons to call parents / caretakers. While they seem a good idea they have never taken off. Partially because of the monthly ongoing costs, but primarily because for the past decade children have been given hand-me-down phones which destroys this market.
You could have the best product in the world but if no one wants to buy it (or you can't use your marketing to make them think they want to buy it) you will fail.
2. No One Wants to Pay For It
One of the biggest issues facing any new development of an m2m product is the cost of the ongoing data. With the maturing Internet of Things (IoT) market, many of those devices have their connectivity powered by existing infrastructure (such as smart phone / wi-fi etc). This is incredibly true of the “wearables market” – products like Fitbit / Samsung Gear etc., creating an expectation on end users that they do not need to pay an extra monthly connection for their m2m devices.
Truth be told, in the machine to machine market – industrial-type products will often need a separate and reliable connection. This means that there will be another monthly cost – so the question which needs to be asked in the planning stage is 'Who will pay for this data?' or 'who will benefit from it the most and hence be willing to pay for it?'
A perfect example of what I am talking about here is medical devices – sleep apnoea machines / connected inhalers / heart monitors / connected blood sugar monitors etc. Often these devices are aimed at the Medical Insurance companies as the data will provide them proof the client is using their equipment and hence lower the risk of further costs.
3. Cheap Hardware
The old adage is true – you get what you pay for. All too often people have a great idea or product and all they need is a modem or module to connect it to the world. The issue with the open market is that there are a number of cheap devices which are available for purchase from China – particularly through sites like Alibaba. These devices, while cheap, often cause many problems down the track. Here are some examples:
- Data hungry: Each market place has different data pricing structures. In China it is not uncommon to get 30mb of data for around $5AUD. This means that many of the devices designed for that market will be aimed at using 30mb of data, which becomes uncompetitive when bringing devices into a market which may be using 3mb as an average for the same solution.
- Poor quality: Often cheaper products are cheaper because of inferior quality components leading to higher failure rates.
- No Approvals: If you are looking to expand into larger markets around the world you need to obtain international approvals. Often the cheaper products only cater for local approvals. To gain approvals from scratch can easily cost from $100k up which has sent some companies bankrupt.
The lesson from all this is to map out what you need in your hardware – not just for now but, for the future, and then find a reputable company to supply it. It's much better to pay a little more now, than a lot later.
4. Data Not Presented in a Useful Format
The ultimate product of any m2m solution is the data. Users need access to the data in an easy to understand format so that they can make business decisions in a timely fashion. It is of no benefit to provide the data to the customer as ‘raw data’ if they are not able to read it – can you read the matrix? Or do you just want to see a pie chart?
Further to this you have to consider not just how you present the information to your customer but how your competitors are doing it. If you can only present the matrix but your competition can present the pie chart where do you think your customers would prefer to go?
5. Re-Inventing The Wheel
By far the biggest mistake I have seen time and time again is people seem to want to create their own device or software from scratch because “They can do it better than anyone else”. The truth is, developing your own hardware - or software - from scratch, is costly and takes a lot of time.
For example there are many different “Tracking” and “Telematics” applications that exist, some of them very innovative. The hardware however, is often very similar, and there are many manufacturers who can supply a device and even modify it, to meet tailor-made, specific requirements, quickly and more cost effectively than you might otherwise be able to achieve on your own.
Why spend a lot of money and up to two years to get to market when it can be done in a fraction of the time. The quicker to market, the quicker you can start selling.
I have seen many companies lose all their sales momentum trying to get their hardware built and approved. If you can use something that is out there - do it. Focus on the sales channel instead and you will have a greater chance that your m2m product will succeed.
As I mentioned, these are the top five reasons I see time and time again working in the m2m industry – it is far from an exhaustive list. We’d love to hear some of your experiences on what makes an m2m project fail or how to help your m2m project succeed.
Image source: http://www.endeavor.org/
Author: Gideon Borden - Business Development Manager KORE APAC
For those of you who are feeling inspired and want to start your own M2M or IoT project, check out our free whitepaper here