IOT Investment and Monetization-Chances and Challenges-

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

Constraints - Biz Stage: Startup Oriented, Root Up approach - Biz Areas: Generally applicable - Monetization come with Investment & Innovation- In global Innovation Perspective

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 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

Functions and Benefits of IOT

IOT value at

stake=14.4T

Metering

Monitoring

Control

Tracking

Payment

Information

Energy saving

Downtime minimization

Disaster planning

Inventory tracking

Loss prevention

Predictive maintenance

Asset utilization

Demand Forecast

Capacity PlanningCapacity Utilization

Pricing OptimizationNetwork Management

Yield Management

Loading Balance Optimization

2.5 trillion= employee

productivity

2.5 trillion

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

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

IOT: Business Model Matrix

Value

Proposition

Revenue

Model

what

Value

Chain

What

What What

What do you offer to the customer?

3. Devices can take small

1. Cost efficiency can keep short

term

4. Data will give big

2. Innovative tech will last long term

5. Mashup/ Collaboration

Business Model Ontology

Sample BMC: for Health Device

IOT Ecosystem: Complicated

IOT: Value Chain Analysis

Chip vendorModule ventor

App/ midwarevendor

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.

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 arena in IOT by Bosch 2014Basically IOT has same IT marketing channels by SNS and other IT

services

Launch Your IOT BusinessCompanies 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

Manage Your IOT BusinessCompanies 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.

Monetize Your IOT BusinessCompanies 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

Capitalization: Investor EcosystemBootstrap, KickStarter,

Crowdfunding

Angels &

Incubators

($0-10M)

“Micro-VC” Funds

($10-100M)

“Big” VC Funds

($100-500M)

“Mega” VC Funds

(>$500M)

Corporate Innovation CenterCVC CIC CICI model(VC) (Innovat.) (Incubator)

Y-Combinator

TechStars

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

SoftTech (Clavier)

Felicis (Senkut)

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

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 ®

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 ®

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

SocialRecognition

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

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

IOT Investment and Monetization

startup

MVP

Revenue

team

Plan

IP

sensor

Entity

Incubator

CVC/CIC

VC/ Investors

IPO

startup

startup

startup

Seed

Angel

modulation

Biz Modeling

Devicing

Mashup

MVP

gadget

Idea

Unit

Prototype +/- @

Value add Series A-C

Mash up Commercial

version Service

combined Branding

MarketingMass production

Value add M & A

Brand/Market Mash up

Clustering Market Domain

Global Partnership

Post M & A

B2B Frame Global OEM

startup

Series A

SeriesB -C

Series A

Series B -C

Series B-C

IOT capitalization & monetization by Daniel Lee, KOTRA Incubator 2014 ®

Mashup

Mashup

IOT Enterprise Partners/Leaders

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

Standardization of IOT Tech

One M2M Framework

One M2M

WG1

demands

WG5

Management

WG4

Security

WG3

Protocol

WG2

structure

Chronicles & performances

2011: Consensus Meeting2012: 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 interface3) WG4: security standards, countermeasure, token authorization,

- will be approve by end of 2014

4) WG5: device management, semantic standard development.

- OMA + BBF= management standard

- Watch One M2M: http://www.onem2m.org/-

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