Smart products that are dumb

How smart does your toaster need to be?

In the race to get on the Internet of Things (IoT) bandwagon, many companies are trying to make their products smarter by adding connectivity and intelligence. In theory, these products are supposed to make customers’ lives easier. But in practice, how do “smart” products actually perform?

Keeping up with the Jetsons

The concept of the connected home and what is now called IoT goes back at least as far as 1988: a New York Times article predicted a future where you could call your house from your car phone to tell the oven to start cooking the roast and the refrigerator to defrost a pie for dessert. More recently, at the 2011 Consumer Electronics Show in Las Vegas, panelists promised household devices of all kinds would soon be connected to one another and the Internet.

So just how far have we got?

How about a smart umbrella with a “loss alert” functionality? Or a Bluetooth-connected toaster that lets users control its temperature through a mobile app? And for those who aren’t worried about their cholesterol, there’s an egg tray that syncs with your phone to remind you to buy more eggs. The problem is these products can be more trouble than they’re worth. Trying to configure the accompanying smartphone app has replaced stopping the blinking “12:00” on the VCR.

A solution looking for a problem

It’s not hard to see that the products mentioned above have no real value. For most customers, buying another $10 umbrella might be a better solution than using an app to figure out where your umbrella went and traveling to a lost and found somewhere to retrieve. A smart egg tray isn’t really that useful unless you’re obsessed with eggs.

The proliferation of many smart products that people don’t need helps explain why bold predictions for the growth of IoT are being readjusted. Ericsson, for instance, has shaved 20 billion off its 2010 prediction that there would 50 billion Internet-connected devices by 2020. Gartner says the IoT market is experiencing “inflated expectations,” with many companies struggling to find uses cases for their ideas.

5 questions to ask about your smart product

The reality is that while IoT is new and exciting, succeeding in this market requires following many fundamental rules of product innovation.

In a recent Harvard Business Review article, Carey Smith, founder of fan and light manufacturer Big Ass Solutions, shares of those basic rules. His advice is based on his experience building smart fans that didn’t exactly become huge hits in the market. He recommends asking five questions before launching a smart product or feature:

1. Does it solve a real customer need? Companies need to know their customers deeply to deliver truly innovative products. “The traditional business model is based on identifying a need and meeting it, or defining a problem and solving it,” Smith writes. “So far, most connected products have been solutions in search of problems to solve.”

2. How big is the market for this product? “Just like a carpenter must measure twice before cutting, manufacturers should poll their customers at least twice before committing to the new technology,” writes Smith. Don’t believe your own hype—talk to consumers to validate that you have a market.

3. What are the economics? Your forecast should cover both revenue and costs.

4. Should we outsource manufacturing? While doing it in-house is a huge commitment, outsourcing brings unexpected costs, according to Smith.

5. What’s the impact on customer experience? As you enter the IoT market, you’ll need to have staff who are equipped to engage with technologically advanced users.

Peak IoT?

Big Ass Solutions is not the only company to make mistakes in the growing IoT market. As Bloomberg reported earlier this year, “one of the most lavishly funded gadget startups in Silicon Valley” in 2016 was juice machine maker Juicero Inc. Investors liked the idea of an Internet-connected kitchen appliance that converts single-serving packets of chopped fruits and vegetables into a healthy drink.

With $120 million in funding, the startup began selling its machine for $400 a pop, plus the cost of individual juice packs delivered weekly, essentially making it a “Keurig for juice.” But not long after hitting the market, some investors discovered a much cheaper alternative: Squeeze the Juicero bags with your bare hands, an approach that was faster and yielded just as much juice.

So what did Juicero wrong? It comes back the the first question Smith brought up: lack of consideration for what the product is supposed to do for the customer. As Kevin Ashton, the technologist who coined the term “the Internet of Things,” said in a recent webinar. The purpose of Juicero’s connectivity was to make sure customers used the company’s fruit packets to make their juice. The company failed to consider what it’s in for the customer.

Don’t make “smart” mistakes

Ultimately, winning the IoT landscape isn’t only about having the right technology. Brands that want first-mover advantage in making smarter, connected products need to add value to their customers’ lives—and in order to do so, they need insight on real customer pain points. In the long term, companies also need to keep up with evolving customer attitudes and preferences, and continue to address unmet needs.

That’s not to say that people will ever need smart toasters that talk. I’m willing to bet they won’t.