Building an IoT company is a great opportunity to work on things you have never done before. Here is a list of my conclusions with brief anecdotes about the difficulties of building az IoT company.
Choose the size of your funding need wisely
When we started, our pre-seed angel investor suggested to close an angel round by involving other investors. The more money you attract at the beginning, the longer runway you have to develop the product that you believe in without having to take away your focus from value creation. It turned out without having the credibility of using small investments wisely and build traction with it you won’t be given the opportunity to get funded with hundreds/millions of Dollars. Build up your credibility together with your venture. One step at a time.
Put a lot of emphasis on organizational structure and have the right people in your team
Your success will be determined how committed your co-founders and early employees. Put a lot of emphasis on their motivation, whether if they motivated to build a company with you. Choosing outstanding people in their area of expertise is one thing, having the right team fit is another. Hire slow and fire fast.
If you adapt the proper development methodology you could have a chance to succeed, otherwise you are going to fail
Building an IoT business is tough, it often needs parallel development in software and hardware. It is important to determine goals based on a product roadmap rather than define goals separately based on area of expertise of the parts of the team. Otherwise you find yourself losing control on the development and you can easily get into trouble with the timing of the market entry. In our case Scrum seems like a good approach to minimise development delays.
Choose the right market development approach, do not try to satisfy everyone’s need at once
Startups tend to get trouble with finding the right product-market fit. It is often happens when there is a cool technology but the real use case that could have a societal and business impact is missing. Build up your roadmap and try to identify the business needs that could make your company sustainable from the financial perspectives and get into the deals with longer sales cycles but potentially better ROI later. Again: Nobody will take you seriously with PPTs among the C level executives of big companies until you prove them the opposite with a great product and satisfied customers.
Choose your suppliers wisely. A bad decision could result that you ran out of cash without successful delivery
It is extremely important to find out who could be your trusted partners and suppliers. We have had remarkable delays because of the late or low quality delivery of components or other hardware related tasks give out to suppliers. I have heard few stories about the same thing that resulted in bankruptcy for the respective startups.
Have an in-depth knowledge about the market then test it and measure your assumptions
It is important to get out from the building an meet your customers, however after a while you will see that the new information coming from each of the interviews will going to decrease. Try to figure out all the aspects of your potential customers’ pain points however if you found them don’t waste too much time on hearing them again and again. Try to solve them instead. Testing the level of the importance of the identified problem with online tools could be a great next step. You identified a problem which is great. How big is the problem? This is the question that should be answered next.
Find out the real motivation of each of your team members
You will be as successful as your team, so build up a mutually acceptable common vision and work on it to achieve could create a great company culture. It is hard to build up a good company culture, but it is easy to ruin so be careful.