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80 CEOs and founders gathered at Built In Colorado's invite-only event for digital leaders Tuesday to hear from three local experts in the connected device industry. Techstars CEO and founder David Cohen - who has invested in all of the following companies - moderated the discussion between Mike Dee, Head of Sales for revolv, Danny Newman, CEO and founder of Roximity, and Paul Berberian, CEO and founder of Orbotix.
Here are the top takeaways from the Digital Leaders Luncheon sponsored by Trueffect:
1. What’s in a name? The 'Internet of Things' vs. 'connected devices':
It was unanimously agreed upon that the term the "Internet of Thnigs" is detracting to consumers. Despite the fact that the industry widely is placed into one simple category, there are specific distinctions to take into account.
Paul: “IoT is a catchphrase - connected device industry falls into broad buckets but products are engineered for specific market. The connectivity specifics are designed with more in mind. But a lot of companies won’t make it - they’re all competing for attention.”
Mike: “IoT as a term isn’t consumer-friendly. But, because of the proliferation of WiFi and the smartphone, there is demand by big brands to get into the industry
2. Rational fundraising presents a medlley of challenges:
Paul: “We raised money incrementally. The West Coast is throwing money at connected devices like drunken sailors, they’re not waiting to see how the product goes to market and how the adaptation is received. We went to investors with a ‘wacky ball’ and they responded with rational funding and a series of consistent meetings. Here, investors are willing to stick with you. Not like irrational funding, which forces companies to do odd things. Even for us, with solid introductions and consumer traction, it was really hard to raise money. You have to knock on a lot of doors. “
3. It’s all in the data: What the big players mean for startups and small fish.
Mike: “Apple’s HomeKit play gives legitimacy to the industry and gives the consumers the ability to understand new technology and industry trends. it introduces us. We also have to provide value in the space they create and look at it as an opportunity to work with Apple, start the conversation.”
Danny: “From the investor’s point of view, Apple creates awareness. Large companies get in and acquire for the data.”
Mike: “Google bought Nest to scrape data and sell it; moves like this are big data plays.”
4. The definition of privacy is changing.
Danny: “In essence, you’re trading privacy for utility. Full automation also means dependence.”
Paul: “The attitude on privacy has to change. We track our robots every 20 seconds, so that our product gets better with the more data with gather. You cant stop the flow of data if you want the benefits- there are trade-offs.”
5. Consumer products often transfer to business applications due to cost efficiency.
Paul: “It all comes down to cost engineering. Consumer side spills into the business side. Consumer applications move into the industrial applications because they’re usually less expensive and easier to introduce after the initial consumer traction. “
6. Distribution means are muddled and pose logtistics & capital problems.
Getting the product out in front of the consumer, and completing the transaction, is one of the hardest parts and involves a indirect, inefficient process.
Danny: “The largest barrier to entry is that IoTs are capital-intensive and the distribution/sales means are convoluted."
Paul: “Retail is messed up. International retail is demand-driven, companies order rationally. The US wants to order a ton and pay when they sell; for a young startup, this is a big issue and the heavy cost is an impediment."
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