Designing an IoT business model in 2 days

As the IoT continues to grow, it will open up a lot of possibilities for developing new business models and extending existing ones. The digital component in such models can be refreshingly diverse due to the many applicable modeling patterns – gamification, for example.

These are the takeaways from the two-day hackathon I attended, in which we developed a business model for a new car-sharing experience – with technology based on the Bosch mySPIN sensor interface / head unit.

Idea pitches & team building

The Connected Car hackathon started with an informal phase where we had the chance to pitch our ideas. The team-building process progressed quite naturally, and soon teams of 4-6 members had formed. Our team came together by merging the idea of “car-sharing gamification” with “eco-friendly driving” ; we dubbed it “Greenify.”

Ideation & mySPIN first contact (sensors!)

Thrilled by the countless sensor data end points available through mySPIN, we started the ideation process. In a relatively short amount of time, we had more than enough material to add substantial value to the car-sharing experience as we know it today.

Propelled by my own game development experiment, “Doodle Monsta,” and the consensus of the team, we confirmed that the model would be based mainly on aspects derived from gamification. The most important ones were challenges, competition, and a reward system. Drivers would earn badges for safe and eco-friendly driving or for picking up passengers. They would also be able to become better drivers by consulting the community and other drivers to share their experiences and helpful tips.

Greenify: car-sharing gamification meets eco-friendly driving.

Dipping deep into Sensorland

The overwhelming amount of sensor data soon led us to speculate about what future sensor end points could be and how they might be useful for our app. (More on the impact that the IoT can have on the feedback loop from software to hardware during the design process in the “Reflection” at the end of the post.)

Importance of UX & GUI

After identifying the three key challenges that would form the basis for our reward system, we moved on to designing the main user experience story; namely, driving a shared car from A to B and tracking the occurrences (= challenges) along that route. We worked hard on getting the whole driving experience right: from starting the app, getting into the car and driving, to leaving the car and seeing what badges were earned.

Designing the main user experience story

 

Drivers will earn badges for safe and eco-friendly driving or for picking up passengers.

Although it’s already common practice for most of developers out there, making your GUI responsive is a very important factor. Why? Because the head unit installed in the car will most certainly have a different screen resolution than the connected smartphone.

Business modeling and stakeholder on-boarding

One question that was in our minds the whole time was what the added value for the stakeholders was: car-sharing companies, car-sharing users, and third parties. We took this side of the modeling very seriously, as it is the one differentiator that will turn a nice-to-have app into a winner on the market.

We also talked to some Bosch business model experts, Veronika Brandt among them, to discuss the possible models the solution could be patterned after. Options included designing it as a gatekeeper app or making it an add-on for existing car-sharing offerings.

The added value for the stakeholders: car-sharing providers, car-sharing users, and third parties.

Connecting to the car

After we had finished the theoretical work, it was time to get some code written down. As our idea turned out to be quite hypothetical and futuristic, we reduced the app’s functionality to the basic connectivity options the mySPIN system had to offer: switching screens from the smartphone over to the car and then just showing the mock-ups we had finished. It was enough to illustrate the envisioned process and make the prototype feel real.

Reflection

Back at home, I took a step back and mulled over my impressions of the hackathon. I came across two interesting white papers about business modeling in the context of the IoT, published by Bosch and the University of St. Gallen under Prof. Elgar Fleisch. Soon I realized that we had instinctively applied some of the ideas mentioned there. Still, I highly recommend that you read them, and if you’re interested in business modeling, you should make habits of the approaches they highlight.

One of the enlightening points for me was the “high-resolution management of the physical world”. Prior to the IoT era, this kind of high-resolution management was possible only in the digital world. Nowadays, we can generate many times more data from real world processes than we could before. For us, it was the huge amount of information generated by the driving itself that provided the high-resolution data we used to derive a business model. In other words: the IoT is like a magnifying glass on physical events , and we decide what to do with the information we are now able to see. Be creative!

Summary

Ultimately, it seems that developing IoT business models is not so much – or at least not solely – about technology, but more so a way of thinking. It is about combining existing business patterns to create something new that wasn’t possible before, and doing so with the help of a new kind of information: sensor data. I can imagine it will take some getting used to, but in the end it will broaden your own horizons. Diving into this world hands-on at the Connected Car hackathon was a great experience and a pleasure. Thanks to the organizers, promoters, and Bosch for having me!

Watch this video to learn more about business models and the Internet of Things:

 

About the author

Matthias Max

Matthias Max

I’m a digital product designer & developer with a diploma in business IT. My background lies both in creative as well in technical disciplines. As a songwriter I have had international top 10 successes, as an entrepreneur I have worked for corporates and German Mittelstand developing business solutions in the triangle of technology, business & design. My main interest & goals are innovation, creativity, interdisciplinary cooperation & stakeholder best-value.
Matthias Max is a guest author to the Bosch ConnectedWorld Blog.