Start Your IoT Startup
Are you a developer with great IoT ideas? Wondered how to take your ideas to the market? This blog will show you how to start your own IoT startup with these steps using RAPIFIRE as the IoT plaform.
First come up with a few startup business ideas. IoT products/services are either software based, hardware based, or a combination of both. The best ideas are those which solve problems in areas which you are an expert. The advantage of being a domain expert is that you know what the problem is in detail and understand the value of the problem being solved. Remember customers only buy if the value of the product exceeds the cost of the product significantly. If the idea is cool but provides little value compared to the hardware or service cost it's a dead idea. Keep brainstorming ideas until you find one worthy to move to the next step.
Validate your ideas with potential customers to select the best potential idea. Remember the customer knows best the true value of a product. After brainstorming several ideas it's time to narrow down your idea. For example you have a startup IoT idea to have parking lot sensors which guide the car drivers to an available spot and another idea for smart IoT sensors which monitor the health status of patients at retirement homes. Which idea is best? Approach potential customers and ask if they would buy your product. Select the product idea which has the best potential. Let's say for this example that parking lot owners are more interested in your parking space sensor since they are already into automation (parking lot payment machines) and want to improve their service. Retirement homes are less interested since they already have nurses who regularly monitor their retirees and are not so keen to buying your IoT product. It is important to get the customer's input on a idea since it will save you wasting time and money on building products which are not marketable. Lastly don't forget to check out the competition's products. Your IoT product/service needs to provide some advantage over the competition otherwise you will just be fighting over marketshare. Determine your edge over the competition at this stage.
Build a prototype. Use off the self hardware components such as motion sensors and Arduino or Raspberry PI. For the backend system to process the sensor data use RAPFIRE. Don't worry that your protoype is not a fully ready system. You just need to get a prototype for demonstrating the product to funding sources to convince them that the idea is implementable. You can also show this product to potential customers at this stage to confirm that are still interested in the idea.
Build a core team. Find entrepreneurial people to join your startup. Your should include a hardware engineer, software programmer, tester, and a salesperson. The team members required varies according the product being developed. The best people to join your team are friends or co-workers who you have already worked together on projects. Asking new people to join your team comes with the risk that they won't work well on your team. You want a lean, mean, but time tested team. Of course if you don't know anybody you have no choice. Finding other non-core team members is not so important and will be added after the funding has been found.
Find funding. At this stage you have several choices as listed below:
- Crowdfunding is now gaining more popularity for startups. It has the great advantage that besides getting funds, it gives customer feedback if the product idea is a good one. Bad ideas don't attract contributors. Popular crowdfunding websites are gofundme, Kickstarter, and indiegogo. Most crowdfunding sites charge 3% to 10% in fees to use their platform. They are still worth a try.
- Seed accelerators and incubators are great since they provide mentorship, access to technology, office space and an innovative community. Seed accelerators provide support for a short time frame of 3 to 4 months while incubators offer a longer time period. See here for a list of accelerators and here for a list of incubators.
- Selling shares to VC investors and angel investors. This is the traditional route of most startups. You'll end up writing a business plan and making lots of pitches before some investor takes a risk on your idea, but don't give up. Check here for a list of venture capitalist firms in the USA.
- Get loans from banks and family. Some banks such as the Silicon Valley Bank are geared to lending money to startups. Most banks are not so interested however you can always rely on bank credit cards. Family members are good if they have spare funds, however don't let grandma risk her pension nest egg to start your risky startup. You might get disinherited if you lose her golden nest egg.
- Apply for government grants and loans. They are good funding source but the process might be long and require filling lots of forms.
Build real product. Now that you have the funds go build the product/service. Make sure to test it well before releasing it so that you don't disappoint your customers.
Launch and market, market, and market your product! IoT products/services rarely sell on their own unless your sales team advertises, make calls, emails, tweets, and hits the road to attend trade conferences. This is the most critical moment since you need to find paying customers before you run out of cash and end up like many other failed startups. The clock is ticking! Sell, sell, sell! Get everyone to put on their salesman's hat and promote your product. Even the programmers need to reach out to customers when not fixing bugs. Don't waste time on adding more features until you sell your minimum value product.
Get feedback from customers and improve. If your product is not selling then pivot to another product which your customers are willing pay for. Listen to your customers carefully and adjust your plan before you run out of cash.
Grow the business. Congratulations! You've found customers who are buying your product. Now it's time to grow the business and expand into other IoT products. Well done. You can now pat yourself on the back.
Now you know how it's done, go ahead and create the next great IoT company. Good luck!