The superpower of connecting a product

2014-06-05, 10:27 Posted by: Peter Tyreholt, Senior Advisor

I work as an advisor helping companies around connecting their products (most often put in wireless connectivity) with a focus on lifting the discussion from wifi vs Bluetooth to the business model and product strategy behind the connectivity. Many times when I discuss or help traditional companies they view connectivity as a replacement of a cable or a convenience enabler while you can do something remotely from a smartphone or similar. That is good but by doing so they are missing a big opportunity where the connectivity, if done right, can be a market disrupter and new value creator for customers and the company.

So in this post I will reflect on one of my favorite superpowers enabled when all the products are connected and accessible. I call it collective intelligence and it is closely related to what we have had on the Internet of the web for some time in communities, crowdsourcing, crowed funding etc. When everybody is connected we can create a new power of the community which was more or less impossible before.

So when it comes to products, independently if it is a truck, phone, weather station, kids toy, medical equipment and so on, if they are connected you can be sure that the community of connected products can create a new value for the customer or a completely new customer. Most of the time this is not apparent at first glance, especially if the value created is for a new customer segment.

I have two different examples here coming from the transport industry, TomTom and Volvo Trucks. In the case of TomTom they create value for a completely new customer segment and Volvo trucks enhance the value for their existing customers with a premium product.

TomTom, the classic navigation company, they made their success with small and good personal navigation devices that you put in the car. Now their business is much broader with solutions for Automotive OEM’s, navigation apps for smartphones and map/traffic supplier. All of these (almost) solutions are connected and situated in a car, with this they create real time traffic which is good but they also collect and store the data over time which means that they will have the traffic trends for every road over several years. This is now something they are selling to cities, traffic authorities and communities who receives an easy way to plan new roads and see the effect on the traffic afterwards. All this made possible by a massive amount of products being connected. They also provide some of the data free in a congestion index which is very interesting, you can find it here and follow how the traffic develops in your city. For me it is interesting to follow while in Göteborg we introduced congestion charge in 2013 and at TomTom you can follow the reduction in congestion over time.

Volvo Trucks, one of the world’s biggest truck OEM’s has introduced an interesting feature called i-See which is like an automatic gear control which learns the road topology to optimize the shifting of the gear and the driving. This however require that the truck has driven the road before to save the 5% of fuel but now they are giving the functionality superpowers while by connecting the i-See function it will be enough that a Volvo truck has driven the route before to enable the fuel reduction. So with the connectivity and the installed base of trucks they can give an added value to all their customers.

So if you would connect your product what would the installed base of your products enable? Would you be able find new markets or would you be able to use it to delivery new value to your existing customers?

Peter Tyreholt

Senior Advisor

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