I had the opportunity to speak at ARM’s TechCon 2015, presenting a VC’s perspective on the Internet of Things (IoT). Highlights of that talk can be viewed here:
We believe the term Internet of Things (IoT) has become semantically overloaded. The press often refers to IoT as a single entity, yet each article ascribes vastly different characteristics and goals to IoT. At Lemnos, we monitor three distinct IoTs, with further subdivisions anticipated. Consumer, enterprise, and industrial each have a distinct IoT emerging around them, with separate stacks, requirements, and value chains. There are definitely elements in common between each, but saying that the same technology, partners, value propositions, and requirements exist for high voltage power lines, factory floor automation, and the pedometer on your wrist is quite a stretch.
I made the argument in this speech that we’ve reached a base camp of sorts for IoT, especially consumer IoT. Taking advantage of the commoditization of many sensors, we’re now highly if not over-saturated in certain product segments. From fitness to wearables, home automation and security, we’ve seen an explosion of products with similar feature sets and capabilities. CES 2016 could have been characterized as “The Attack of the Clones”.
We believe that the saturation of consumer IoT was inevitable, and the maturation of the market leads to consolidation. It will also herald the transition from instrumentation to behavioral modification. At Lemnos we love to say that we frown on applications for consumer IoT whose founding team lacks a clinical psychologist. It’s not enough to know you’ve on average walked 6543 steps per day over the last month. You bought a device to get into better shape, not to get a step count. The next generation of consumer IoT startups need to modify personal behavior and assimilate heterogeneous home gizmos into a simple and elegant solutions to more complex problems than simply turning on the lights when you get home.
To do this we’ll see amazing companies focusing both on vertical solutions and missing horizontal platform components. The IoT stack, regardless of consumer, enterprise, or industrial application, is still immature. Security, communication, semantic consistency, command and control are still far below what is needed for robust solutions. Entrepreneurs have opportunities to deliver build great companies improving the respective IoT platforms or creating customer value on top of these emerging platforms.
Lemnos Labs is almost more bullish on the enterprise and industrial IoT opportunities. Our investments in Ceres Imaging, Swift Navigation, Enview, and AquaCloud highlight our excitement about entrepreneurs solving problems in under-served but lucrative markets where instrumentation, analytics and reporting, and hardware-generated information to improve efficiency can unlock billion dollar opportunities. We might not have reached base camp #1 for enterprise and industrial applications, but many companies are pushing to get us there.
The full slides for the presentation are below, and we look forward to your thoughts and comments on what the opportunities around consumer, enterprise, and industrial IoT are!