Getting your bicycle stolen is frustrating! I happen to live in a city where bicycles are stolen quite frequently, and it is a constant topic for discussion. What if I could track my bike and get it back really easily? But in reality, it may not be so easy, since there are so many stakeholders potentially involved.
I want to use this case as an example, showing how complex the business setup often gets within IoT, even in a simple tracking use case.
From a technological viewpoint, it is pretty straightforward to track a bicycle using IoT. You need:
- Devices (GPS or other positioning device)
- Connectivity (GSM, Wifi, Sigfox,LoRa etc.)
- Cloud service/platform to gather and process the data
- App(s) to present the info in your smartphone or similar. Actually, you will probably need different UIs for different stakeholders (see below).
All of these components are commercially available, and quite easily assembled into an IoT solution. So why don’t we have numerous “Find-My-Bike” apps already? The need is definitely there!
And yes, I realize that a thief might break or dismantle the tracking device, but with some smart engineering, you can solve that.
Let me start by having a look at the different stakeholders. The IoT tracking solution is, of course, not equally valuable to all, but they will be affected by it in some way. The most obvious stakeholders in this case are:
- Logistics provider (bringing the bicycles from the Manufacturer to the Reseller, or directly to the Owner)
- Insurance Company
- Network provider
- Device manufacturer
- Service provider (developer of a “Find-My-Bike” application)
You could probably find several other stakeholders as well. For instance, could the tracking information be used in new, creative ways? But I will leave them out of this discussion.
The two main values that we normally talk about in business terms are:
- Reducing costs
- Increasing revenues
So, in the case of tracking bicycles, what values would such a solution bring to the different stakeholders?
- Manufacturer: Increase revenue by adding value to the product and making it more competitive
- Logistics provider: Reduce cost by always knowing where the bicycle is; Increase revenue by adding value to your service
- Reseller: Increase revenue by selling more bicycles
- Owner: Reduce cost by being able to find your stolen bike
- Insurance Company: Reduce cost by being able to find your stolen bike
- Police: Reduce cost by being able to find your stolen bike more easily
- Network provider: Increase revenue by adding more devices that are handled by the network
- Device provider: Increase revenue by selling more tracking devices
- Service provider: Increase revenue by selling more systems and adding more users
You can, of course, explore this further, finding more values, but now we have more than enough input for this little article.
Solution owner and business model
So now we come to the question of who would benefit the most and have the drive to invest and maintain such a tracking service?
You as an Owner will, of course, be really happy (which maybe is the most important value of them all!) if you easily can find your bike when it is lost. But you will probably not be able to set up and run such a system, right?
Resellers are often not so big either (at least not in Sweden), so I doubt they would be able to provide such a solution.
I don’t think the Police will set up or run such a system either. But all of the others could potentially do some really good business by providing the “Find-My-Bike” service.
Network Provider. Depending on which technology is chosen, the business models differ between network providers. Yet in general, I would say that there is little interest in developing end solutions, since it will require a separate organization.
So, looking at the other stakeholders, then:
The Manufacturer. This is an obvious winner. The bicycle business is extremely competitive, and if you offer bikes with tracking included, you could probably sell a lot more bikes (provided the additional cost is low). In some countries, you could probably also strike a deal with local Insurance companies, since many bikes are sold with an insurance package. However, it would require investments in new skills and organization to handle the new service.
The Logistics Provider. The potential revenue increase is probably not high enough for this stakeholder; but, since many Logistics Providers already have different types of tracking systems, it could be profitable for them to add this service and thus find a new revenue stream.
The Insurance Company. Finding stolen and insured items (not only bikes) so the owners do not have to pay for new things is, of course, a great opportunity for an Insurance Company to reduce costs. Insurance Companies often already have different systems/solutions implemented with an organization that can handle them. So they would just need the technology, which they could either develop themselves or buy from a Service Provider.
Device Provider. If the Device Provider wants to provide the device as a service, this is a great opportunity for them to find new revenue streams. But it comes at a price: they will have to build up new skills and organization.
Service Provider. This is the only way for a dedicated Service Provider to make any money, so this would be a do-or-die for them. This stakeholder would be especially interested in a solution that allows you to retrofit your bike with the tracking device.
So we have a very simple use case, Find-My-Bike, but the number of players involved is quite substantial. And, of course, in more complex use cases, complexity continues to grow. But with complexity comes opportunity, and this is why IoT is so disruptive; it opens up the opportunity for numerous players to provide the same type of service. It is just a matter of deciding how you want to make your money and what type of core business you actually are in.
This also means that companies providing expertise and services to the market on how each company should build their IoT strategy are in high demand.
This article may not provide any answers to the question of why we do not see more commercially available IoT solutions already, but I hope that it will inspire a more in-depth analysis of the stakeholders affected by an IoT solution. And by doing this analysis, you will find a suitable business model/set-up that supports the technical solution.
We at Sigfox are ready with the technology! And I want to be able to find my stolen bike 😀!