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IOT Investment and Monetization 
-Chances and Challenges- 
Constraints 
- Biz Stage: Startup Oriented, Root Up approach 
-...
Overviews: IOT for Smart World
IOT Getting Hot!: Hype Curves 
-Gartner, 2012-
What does it Mean?
IOT Market Sizes and Shares
IOT Market Side and Chances
5 Tips for IOT Monetization
IOT Opportunities-Frameworks 
Industry 4.0 Welcome, IOTs! Why? 
Smart phone uses expanded 
• Sensor price down 
Device Tec...
Functions and Benefits of IOT 
Metering 
IOT value at 
stake=14.4T 
Monitoring 
Control 
Tracking 
Information 
Payment 
D...
IOT Creates New Business Model 
-Based on IDC & EMC Model 
New biz 
model 
-biz create new 
value stream in 
B2B/ B2C for ...
IOT: Business Model Matrix 
Value 
Proposition 
Revenue 
Model 
what 
Value 
Chain 
What 
1. Cost efficiency 
can keep sho...
Business Model Ontology
Sample BMC: for Health Device
IOT Ecosystem: Complicated
IOT: Value Chain Analysis 
Chip vendor 
Module 
ventor 
App/ 
midware 
vendor 
Service 
provider 
MVNOs/ 
aggregator 
SI (...
IOT Value Chain by Whom
Devices: Hardware Ecosystem
IOT Market Opportunities
IOT Marketing Model 
Adopting sales and marketing approach is necessary because IOT might 
create channel conflicts: Sales...
Launch Your IOT Business 
Companies new to The Internet of Things face three main challenges. To build a profitable busine...
Manage Your IOT Business 
Companies new to The Internet of Things face three main challenges. To build a profitable busine...
Monetize Your IOT Business 
Companies new to The Internet of Things face three main challenges. To build a profitable busi...
Capitalization: Investor Ecosystem 
Bootstrap, KickStarter, 
Crowdfunding 
Angels & 
Incubators 
($0-10M) 
Y-Combinator 
T...
Invest. & Monetization: 4 Key Players 
•MVP Value-added 
•Mass Production 
•Market Revenue 
• Market Domain 
• Branding 
•...
Challenges for Business Enterprise 
Software complexity: embedded system demands 
Interoperability: different devices need...
Problems and Solutions 
Classification Problem Solution 
Hardware 1) Short battery life 
2) High price 
1) Focus on distin...
Challenges in IOT Organization 
Create C level position in 
identifying and 
overseeing new digital 
biz opportunities: 
D...
IOT Investment and Monetization 
startup 
Idea 
MVP 
Mashup 
Revenue 
team 
Plan 
IP 
sensor 
Entity 
Incubator 
CVC/CIC 
...
IOT Enterprise Partners/Leaders
Targeted Changes for IOT Biz 
• Fusion with Existing biz/ Industry 
- Combine Solutions: sensor, device, communicat. 
Netw...
Standardization of IOT Tech 
- Watch One M2M: http://www.onem2m.org/- 
One M2M Framework 
WG1 
demands 
One M2M 
WG5 
Mana...
Watch out Asia and Latin America
Smart World by IOT
Thank you 
Contact 
Daniel Lee, JD, MBA 
Executive Coordinator 
Kotra Startup Center 
startupc@kotrasv.org
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09.01.14.iot monetization chances and challenge1

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This is IOT monetization lecture material which I used for IOT Conference in Oct 21st 2014, Moscone Center http://www.iotaconf.com/

Published in: Business

09.01.14.iot monetization chances and challenge1

  1. 1. IOT Investment and Monetization -Chances and Challenges- Constraints - Biz Stage: Startup Oriented, Root Up approach - Biz Areas: Generally applicable - Monetization come with Investment & Innovation - In global Innovation Perspective Daniel S. Lee, JD, MB - Executive Coordinator, Kotra SV Startup Center - SV Advisor, Actner-Lab IX IOT Incubator -Co-Organizer of Meet up Emerging Wearable and IOT Tech
  2. 2. Overviews: IOT for Smart World
  3. 3. IOT Getting Hot!: Hype Curves -Gartner, 2012-
  4. 4. What does it Mean?
  5. 5. IOT Market Sizes and Shares
  6. 6. IOT Market Side and Chances
  7. 7. 5 Tips for IOT Monetization
  8. 8. IOT Opportunities-Frameworks Industry 4.0 Welcome, IOTs! Why? Smart phone uses expanded • Sensor price down Device Tech Improved • Better Size and connection Network & Connection • Network Costs down • High Speed Internet Available •Various Platform available Aspiration of New Market and Innovation Data> intelligence Operational value Cost v. benefit
  9. 9. Functions and Benefits of IOT Metering IOT value at stake=14.4T Monitoring Control Tracking Information Payment Disaster planning Downtime minimization Energy saving 2.5 trillion Inventory tracking Loss prevention Asset utilization Predictive maintenance Demand Forecast Capacity Planning Capacity Utilization Pricing Optimization Network Management Yield Management Loading Balance Optimization 2.5 trillion= employee productivity 2.7 trillion= supply chain/ logistics 3.7 trillion for customer experience 3.7 trillion for innovation/ marketing improv. Credit for IDC/EMC University + Ciosco Whitepaper on IOT
  10. 10. IOT Creates New Business Model -Based on IDC & EMC Model New biz model -biz create new value stream in B2B/ B2C for speedy market performance Real time info. -can capture more data about process/products for operational efficiency Diversificatio n of revenue stream -can create new service and revenue added to existing one. (eg. Vending machine) Global visibility -makes it easier for biz to see across regardless of location, by tracking effectiveness and efficacy. Efficient, Intelligent Operation Access to info from autonomous end points as smart grid already supplies to utilities help to make decision for price, sales, and support
  11. 11. IOT: Business Model Matrix Value Proposition Revenue Model what Value Chain What 1. Cost efficiency can keep short What 2. Innovative tech will last long term What What do you offer to the customer? term 3. Devices can take small 4. Data will give big 5. Mashup/ Collaboration
  12. 12. Business Model Ontology
  13. 13. Sample BMC: for Health Device
  14. 14. IOT Ecosystem: Complicated
  15. 15. IOT: Value Chain Analysis Chip vendor Module ventor App/ midware vendor Service provider MVNOs/ aggregator SI (system integrator) 5-10% 15-20% 30-40% 15-20% 15-20% Total Value ? % A mobile virtual network operator (MVNO), or mobile other licensed operator (MOLO) is a wireless communications services provider that does not own the wireless network infrastructure over which the MVNO provides services to its customers. An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently.
  16. 16. IOT Value Chain by Whom
  17. 17. Devices: Hardware Ecosystem
  18. 18. IOT Market Opportunities
  19. 19. IOT Marketing Model Adopting sales and marketing approach is necessary because IOT might create channel conflicts: Sales arena Basically IOT has same IT marketing channels by SNS and other IT in IOT by Bosch 2014 services
  20. 20. Launch Your IOT Business Companies new to The Internet of Things face three main challenges. To build a profitable business (or line of business) around connected devices, you have to: Launch your connected service. Once you have identified a business model that leverages the power of The Internet of Things for your business, you’ll have to: . Enable • Enable devices to connect to the wireless Internet. integrate • Integrate into mobile operator networks, anywhere and everywheren the world. Define • Define use cases and map out business and operational requirements for every stage of your product lifecycle. integrate • Integrate your new Internet of Things business with your existing infrastructure. configure • Configure application programming interfaces (APIs) to meet your unique business need and requirement of each and every mobile operator you work with Deliver • Deliver the new applications and services to the market
  21. 21. Manage Your IOT Business Companies new to The Internet of Things face three main challenges. To build a profitable business (or line of business) around connected devices, you have to: Launch your connected service. Once you have identified a business model that leverages the power of The Internet of Things for your business, you’ll have to: Monitor • Monitor your connected devices in real-time, tracking data usage,connectivity, etc. . Run • Run diagnostics to identify and troubleshoot issues on any device, anywhere at any time. Define • Define the events that trigger each device’s activation and deactivation. Set up • Set up real-time controls that give you visibility into every deployed device and let you manage data usage.
  22. 22. Monetize Your IOT Business Companies new to The Internet of Things face three main challenges. To build a profitable business (or line of business) around connected devices, you have to: Launch your connected service. Once you have identified a business model that leverages the power of The Internet of Things for your business, you’ll have to: . Set Rate • Set rates for each type and level of service you offer and define how those plans will be managed over time (e.g. free trial periods, introductory discounts, subscriptions of different lengths, renewal plans, split billing, etc.) Handle • Handle billing, charges, and payments to and from customers, operators, OEMs, partners, suppliers, etc. Establish • Establish data usage thresholds and cost controls. Gather • Gather intelligence from all the data you’re now gathering and use it to create new revenue streams, optimize processes, build new products, and improve existing ones. Anal/Opt • Analyze and optimize your supplier costs in real-time Automate • Automate every stage of the billing process
  23. 23. Capitalization: Investor Ecosystem Bootstrap, KickStarter, Crowdfunding Angels & Incubators ($0-10M) Y-Combinator TechStars “Micro-VC” Funds ($10-100M) “Big” VC Funds ($100-500M) “Mega” VC Funds (>$500M) SoftTech (Clavier) Felicis (Senkut) Corporate Innovation Center CVC  CIC  CICI model (VC) (Innovat.) (Incubator) SV Angel (Conway) Floodgate (Maples) 500 Startups Plug & Play First Round Union Square Atomico Greylock A16Z Sequoia Google INTEL E bay/Amazon IBM QUALCOMM CISCO Incubation Seed Series A Series B Series C+ IPO, M & A, Market True Foundry Originally by Dave McClure of 500Startups, modified by Daniel Lee for educational purpose
  24. 24. Invest. & Monetization: 4 Key Players •MVP Value-added •Mass Production •Market Revenue • Market Domain • Branding • Clustering • Hybrid MVP • Value Add • Modulate • Idea • Team • MVP Startups Incubators Investors Innovation Center IOT capitalization & monetization by Daniel Lee, KOTRA Incubator 2014 ®
  25. 25. Challenges for Business Enterprise Software complexity: embedded system demands Interoperability: different devices need to work together Scalability: devices and service need to collaborate Data: how to handle volume and interpretation Instant Availability: situational spontaneous operation and also instant identification of service Battery: Power: Supply: need to be longer lasting and flexible, at the end. Fault Tolerance: Things works properly in changing context with uncertainty Security and Privacy : security for crime/ Privacy for Constitution issue IOT capitalization & monetization by Daniel Lee, KOTRA Incubator 2014 ®
  26. 26. Problems and Solutions Classification Problem Solution Hardware 1) Short battery life 2) High price 1) Focus on distinctive service (narrow use) 2) Attractive design User Interface 1) Voice/ action activation short 2) Smart phone domain 1) Minimize data entry 2) Operation integrated smart phone Social Recognition Privacy; leaking personal info; security Anonymous data from beginning of use Service 1) Too focused on gaming 2) Supplier oriented service Custom tailored idea/ service by utilizing user’s action/ health info
  27. 27. Challenges in IOT Organization Create C level position in identifying and overseeing new digital biz opportunities: Develop and revise execute team’s understanding of the new digital landscape for biz Design and Execute a plan for accelerate Investments in digital biz tech & skills • CDO/ CIO+@ • Responsible for finding new revenue stream • See who’s the competitors • How to cooperate to make disruption? • Relocate the resources across biz based on key initiative • Invest in key data collection and analysis area • Invest human capital Credit for IDC/EMC University
  28. 28. IOT Investment and Monetization startup Idea MVP Mashup Revenue team Plan IP sensor Entity Incubator CVC/CIC VC/ Investors IPO start up start up start up Seed Angel modulation Devicing Biz Modeling Mashup MVP gadget Unit Prototype +/- @ Value add Series A-C Mash up Commercial version Service combined Branding Mass Marketing production Value add M & A Mash up Brand/Market Clustering Market Domain B2B Frame Global OEM Global Partnership Post M & A start up Series A Series B -C Series A Series B -C Series B-C IOT capitalization & monetization by Daniel Lee, KOTRA Incubator 2014 ® Mashup
  29. 29. IOT Enterprise Partners/Leaders
  30. 30. Targeted Changes for IOT Biz • Fusion with Existing biz/ Industry - Combine Solutions: sensor, device, communicat. Network with Industries: construction, agricultural, manufacturing, healthcare, and etc. - Industry specific knowledge for traditional industry • Mash-Up: One Source Multi-Use or 2 sources to combine for value addition - BM to utilize infor/data collected by things, will accelerate IOT industry • Intelligence Oriented Design - Build up system/service based on targeted Intelligence to secure utility in ROI • Collaboration in Ecosystem - startups, Investors, innovation center or other enterprises
  31. 31. Standardization of IOT Tech - Watch One M2M: http://www.onem2m.org/- One M2M Framework WG1 demands One M2M WG5 Management WG4 Security WG3 Protocol WG2 structure Chronicles & performances 2011: Consensus Meeting 2012: 1st Executive Committee Seattle (MOU + 20 enterprises) Now: Tech. Committee with 5 Working Groups 1) WG1: 2 Tech Reports 2013 08 approved - Tech Reports: ROA method + SOA under development: Resource of Architecture combined with Service of Architecture 2) WG3: protocol analysis for necessity on each interface 3) WG4: security standards, countermeasure, token authorization, - will be approve by end of 2014 4) WG5: device management, semantic standard development. - OMA + BBF= management standard
  32. 32. Watch out Asia and Latin America
  33. 33. Smart World by IOT
  34. 34. Thank you Contact Daniel Lee, JD, MBA Executive Coordinator Kotra Startup Center startupc@kotrasv.org

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