(Talk given at a Telenor event in Oslo on January 10th 2017.)
I’ve just come back from CES in Las Vegas and I can tell you, what can be connected is definitely on its way to being connected.
Cities, homes, cars and much more. But the devil is in the details so I’ll be the devil’s advocate.
Who is paying?
Smart cities is an area where connecting everything sounds like a great idea. Hello Lamp Post is a great, playful example of what we should be able to expect from our city’s infrastructure. The problem is of course that there is almost no such thing as ‘public goods’. The bins are made by a private company (Big Belly for eg.) and installed by another private company (Veolia). Your water is distributed by a private company, so is your energy. Connecting these various elements to make a citizen’s life easier isn’t actually easy. Cars are very disruptive to a city’s pollution levels but collecting parking fines is an important source of finance for cities. And if a city isn’t collecting much taxes it will avoid spending it on investments where the ROI isn’t important enough. Many connected services also need capital investments that cities can’t afford. To offer smart parking you’d need to strap a camera on every street light or more dramatically dig out the tarmac to put sensors in the ground. Sounds great but if this isn’t financed artificially (EU-funding or other) many cities would prefer pouring their money in waste management, policing and emergency services as they are where financial planning is more predictable. Moving away from the status quo comes at a price for the cities like Vegas that would benefit the most from connected services simply because the capital investment, to make a real difference, is too large. For additonal reading take a tour of the recent posts made by the biggest casino’s recently, they have gone into detail with their predictions of a smart Vegas.
Who is buying?
CES was full of connected pet trackers, fridges, ovens and other novel applications of connectivity. There is often a lag between the ability to technically execute a new product offering and when consumers buy into them. The microwave for eg. was patented in 1945 but it wasn’t until the 80s that it became a household item in 90% of American homes. The first mobile phone was developed in 1973 but until the 2000s most people didn’t own one for leisure. An early instance of a connected fridge delivery service was meant to be developed in 2001 by Tesco the british retail giant and Glue, a swedish company has just received funding to do the same last year. But it only works with Scandinavian locks. That’s the type of problems you get when you try to scale and that’s how long ideas can take to be developed and adopted. It’s also rare that entirely new categories are created.
Global vs local scales of development
The world isn’t flat. Even McDonalds makes its product differently for everyone. Nest worked in the US because there you can do whatever you want to your electric system. In the UK however, it’s illegal to play around with your electric setup so you need an approved installer. The scalability of connected solutions always sounds nice on paper but the reality of hardware is different. People’s habits and behaviours are also different around products. People honk in the west to indicate their frustrations but in India, you honk to let someone know you’re behind them. On some American roads speeding is expected and flashing your lights indicates to others there is a police car nearby. Imagine a smart car in these contexts, the same sensors would create a very different map of cities and driving behaviours if you are locally aware. They would not make any sense if you are looking at the data through a machine’s view only.
Seamless connectivity is a dream we hold on to for the development of many products. But the reality is our cities, countrysides, rural areas and even our homes make for very different connectivity environments. Recognising that multiple modes of communication are needed at any point is hard, it’s expensive. The chipset prices vary widely so product designers tend to pick one over others and pay the price at some stage. The idea of seamless connectivity is dangerous because it fouls consumers into thinking they should be getting it from the get go. We’re not that lucky and the quicker we can manage expectations or offer alternatives the better. It’s expensive as it means handling returns but it’s the right thing to do.
Data, whose data?
Speaking of the right thing to do, well the internet of things presents us with many opportunities to inform consumers about their data and what rights they have over it. So why don’t we? Most consumers have absolutely no idea what happens to the data they create when using a product. No idea as to when that data is being taken and where it ends up, or even what it is. This will present the industry with ethical and corporate social responsibility problems. I’ve proposed a labelling system which is far from perfect but whoever decides to implement this first will lead the industry in being transparent about the invisible strands between a consumer and the company they are invisible linked to.
Damn pesky people
At the end of the day there is also the dirty secret of connectivity which is that you know precisely when and where someone has stopped using your service or how ineffective it may be. And instead of admitting it, most companies stay mute. Wearables are a perfect example, as they are linked to an unhealthy habit of thinking, every January usually, that you’ll lose weight this year. Most people stop using them within a short period of time and it has very little effect in changing our habits it turns out. Instead of building return/reuse services or a deeper more tailored service, wearable companies take whatever data they can get and move on to the next consumer. What a lost opportunity to change people’s lives for the best.
Finally if there is an aspect of society which connectivity and telcos like Telenor can help build and invest in well it’s to build solutions to problems no-one wants to address, the problems for which markets are terribly ill-equipped. The elderly care market, personal security devices, smart flood warning systems and others are niche applications that can change people’s lives. The ability to execute small pilot projects to prove to other partners the effectiveness of a solution is key. Only companies like Telenor have the capital to invest in these kinds of solutions, solutions where a little bit of connectivity will go a long way.