IoT Leaders
IoT Leaders

Episode · 1 year ago

How IoT is Driving Agility and Disruption w/ Peter Van Der Fluit

ABOUT THIS EPISODE

Have you ever thought about what would happen if the strength of a big company combined with the agility and focus of a startup?

What if I told you that thought is an everyday reality for Peter Van Der Fluit?

In this episode of IoT Leaders, Nick Earle, CEO of Eseye, talked with Peter Van Der Fluit, Principal Consultant at The Chasm Group, about helping technology-based companies achieve market-leading positions through a variety of channels.

Here's what was covered:

  • The two types of innovation, Disruptive and Continuous
  • Experimenting in this early phase of the IoT Market
  • Working with visionaries and pragmatists within IoT


If you have ideas for future episodes, input or have questions, email IoTLeaders@eseye.com or connect with Nick on LinkedIn.

This discussion with Nick Earle was taken from our show IoT Leaders. If you want to hear more episodes like this one, check us out on Apple Podcasts.

If you don’t use Apple Podcasts, you can find every episode here.

You're listening to Iot leaders, a podcast from Si that shares real IOT stories from the field about digital transformation, swings and Mrs, Lessons Learned and innovation strategies that work. In each episode, you'll hear our conversations with top digitization leaders on how Iot is changing the world for the better. Let iot leaders be your guide to Iot digital transformation and innovation. Let's get into the show. Welcome to the IOT leaders podcast with me, your host, nickel, CEO of Si. On today's podcast I'm delighted to be joined by Peter Vanderfloat, who is principal consultants at the Chasm Group. Peter, Welcome. Thank you, nick and screat to be here with you now. You know, for our listeners, some of them will know what the chasm group is and some of them be scratching their heads right now, thinking what is the Chasm Group? Can you use tell me a little bit more about what it is and what you do? Yeah, Nick, casm group is possibly well known in the small group of high tech entrepreneurs who are working with disruptive innovation. The companies actually founded by Jeffrey Moore, who is the author of the book called crossing the Casm Man's the name casm group. Crossing the chasm is kind of the Marketing Bible for Igh Tech entrepreneurs who are focusing on disruptive innovation. And what Jeffrey did he codified what it takes to actually go from a startup to a success, as for scale up, by crossing the chasm and obtaining niche market leadership. That's right, and I've certainly been an Iot for, I'm ashamed to admit it, but forty years and it's been my Bible throughout that journey. So I'm very familiar with it and it's extremely effective. But a lot of people will won't know and I'll find your intro fascinating. So perhaps I can you just briefly explain and bit more detail the whole concept of the chasm, which is central to everything that you do. Yes, actually,...

...the origins of the chasm goes back to how innovation gets adopted, with was at work from Kenneth Rogers back in the think even the s or the s s from last century. What he discovered was that there are different personas adopting innovation and this is the kind of the famous five person as with the earlier doctors to the later doctors and you can derive from that the escurve. So the as curve is actually the the curve which investors and company founders are interested in, because it only takes off once early majority customers start adopting. And what Jeffrey discovered was that actually, pre charsm, you have the visionaries in the tects buying, but postcasm it is the early majority customers buying and that causes the steep growth and companies to take off. Now a lot of companies are actually confusing early customers with early majority customers and they kind of keep approaching them the same way. And if you do that, you actually end up in the chasm, you get stuck and you will never turn from a start up in the scale, and that, of course, is detrimental to any start up because you know your dream will not be gone to fruition, investors will not actually basically might lose their investment or, E. could he get diluted to an unacceptable level. So what Jeffy, working originally in the silicon value with a lot of startups, discover it was well, if we create a playbook of how you cross that cast, and that's basically by designing a go to market strategy around his market leadership, you can actually overcome this scasm problem and hence do a lot of good, not only for the founders but also for the shareholders and and you know, in the context of Iot, I think we are absolutely at that point as an industry. I mean...

I talked about it in the last podcast with our guests from Talis in the module space. You know, for years and years and years, since two thousand and eleven, lots of big companies were predicting the by two thousand and twenty we'd have fifty billion Iot things connected. Actually, here we are in two thousand and twenty, and so really unique position. We can look back and the answers eleven billion, not including cell phones. But they were talking about things and when you look at those eleven billion in need click it down. It's it's a lot of experimentation, it's some early innovators, but we really haven't hit the sort of mainstream adoption and Iot. Eighty percent of all the things in the world are still not smart, they're dumb, and so I think Peter in a beens in you of you on this. I think that means that we are at. We are perched on one end of the chasm. We're we're staring at the chasm and I think the challenge for all of us in IOT is to cross that chasm so we can truly get to that fifty billion and realize the business potential of Iot. We would you agree that that's where we are? Yes, absolutely, and I think what's behind here is a couple of concepts. Are you crossed the chasm, basically going from what we call techy bias and visionary bias to the pragmatic buyer. And you know, takey bias. Always like to experiment with new technologies right. Hence that a lot of IOT projects are kind of done with what I call the product developers, prototyping here, menting and seeing, Hey, is this technology is something I can do with right now. It taken needs to find a visionary, a buyer. The visionary actually is in there to build a competitive advantas they want to be the first in the industry, and they lose interest. Basically have a lot of people do it. So once you know, once and you see some of these IOT initiatives where a vision very buyer...

...basically said, okay, let's do a project. Let's roll this out and see what this can mean. Right now, when IOT basically is in the chasm, it could be that there are a lot of vitamin pill experiments, and vitamin pill I meaning there's not really a compelling reason to do something for a pragmatic buyer. The pragmatic buyer only engages when something is what we call a pain pill right. It needs to deliver direct business outcomes, business benefits. So the trick is to experimental lots in these early phase in the market and then pick a use case which really you can take across the chasm. So it has to be a pain pill, it has to address a business out neat, but more than that, it also you have to create what we call an all off. It needs to be complete. fishionaries are okay with projects. Pragmatist like to make sure you have a complete solution that works. And not only that, and Pragmati is also like you to show some other practicists who actually have used are using it and have obtained critical business outcomes with it. And that's of course a little bit of a catch twenty two of how you do this. So in the ITT world you see vitamin pills now, examples would be, you know, connected shavers or tooth brushes which are Internet enabled, right, but you also have pain pill iot solutions are called, you know, a lot of the IOT enable devices, for example vehicles, drones, containers, but other devices which are IOT enabled. So basically, you know, I've worked three years at g digital where we developed an Iot strategy. We called it industrial Internet because we were not interested in consumer Iot things, but more industrial its. And we looked at two axes. We looked at asset optimization and at operations optimization. And asset optimization the...

...key thing was how can I make dumb machines smart so that I have less downtime or no implant downtime, and operations optimization was how can I make assets smart so I can increase the throughput through a hospital network, I can increase the throughput through a railroad network, or I can increase the fruit put of a wind energy park, and those things we adds actually at demonstratable results. So those were nice applications, use cases which you can put across the chasm solving a key problem, creating a whole of her around this one. And I think we are right at that moment where you do see some of these examples and they will take off. You know, I think Si you you kind of you have a project with Costa coffee right out vendor and vending machines which are IOT enabled. You know you clearly can make a bit. Is this case to a vender machine owner that it actually can increase the revenues because they know that the machine is always on, so the downtime will be less and all just that it added. I totally agree with you. And it's not just that. I mean in the case of cost or express the vending machine, the Roi isn't the ability to serve a cup of coffee from a machine. I mean that that's for all compending machines do. But what it, what you're talking about, is that as you cross the consum the business justification gets unlocked, the budget gets unlocked. But the budget comes from a cross functional process optimization and it also comes from the ability to competitively disrupt. So it could be simplification of the supply chain because they have one coffee machine they can put in in anywhere in the world, so it's one product. Scuse they say, I'm an IT can supply chain, but actually the business model. Disruption is that they don't the cost or express coffee machines are never in a cost to shop, they're actually in somebody else's premise. So what they're disrupting next generation retail is the fact that you don't need a shop to...

...sell coffee. You just need a smart machine. And and I think in the Post covid world, with the supply chain, the pressure on financial pressure to optimize manufacturing, supply chain, distribution, warranty claims and the next generation disruptive business model leap frog that people are doing, we're going to see more and more of those. And you know, when I talk to customers, Peter, and that leave me to my next question, they've got plenty of ideas. Everyone says, I've got this great disruptive idea, I can leap frog, I can say my company money. So there's no shortage of ideas. But often, you know, it's the small companies, it's the startups that seems to be the most nimble. It's the startups. Always, the little guys always eat the big guys. You know, you mentioned Silicon Valley. What about the big guys? You know, how does a big company go about a structured process for innovation, because it seems like the big guys find this much more despite all of their assets. This is really difficult for them, isn't it? Yeah, it's a great question, right. And of course there are some people, academics, who claim established companies cannot innovate right or disrupted, cannot disrupt, which is of course nonsense. You and I know that. I mean you only have to look at Apple, which disrupted multiple times right categories like the music industry, like the the the phone, mobile phone industry, etc. So big companies actually, if they combine the smart things with startups, can do with the strength a established company has which startups don't, for example access to customers, access to cheap capital and all the things and talent you actually can can significantly disrupt as a large player and make markets. Now there is a, however, a treat to that and our last the latest book which Deeffrey Road, is called zone to win, and the insight here of that book is basically that established organization shoot zone...

...the organization and if you think about innovation, basically have disruptive innovation and continuous innovation. Now, typically seventy percent of an of an innovation comes from continuous innovation. Thinks about the iphone verse and Ten Eleven, Twelve, etc. Right, think about the next teslam. There's nothing disruptive about it anymore. But what these companies have to do is they have to keep walking the adoption innovation, adoption curve, right, because the early majority we spoke about, but there's also a late majority. So the s curve keeps taking off, keeps growing, and that's all, after a while, coming from continuous innovation, the disrupt and you handle that in what we call a performance zone, metch by a productivity zone. A productivity zone is basically identifying processes and programs to make yourself more efficient than effective, and you will become more profitable. Performance on is basically executing like crazy to make sure you keep any new markets, you keep growing your revenue streams. Now, disruptive innovation, on the other hand, do not live well in those two zones. For that you need to set up a separate zone which we call the incubation zone, and the incubation zone is what it says. You incubate ideas, you experiment with ideas, you actually play for options. Right now, dead by itself doesn't give you the next roof. But what you it allows you to do is fire kind of lean start up approach. Fail fast, learn fast and cheap. You identify those options which you elevate to a big bet. The BIG BET has to be placed in what we call a transformation zone, and this transformation zone is what most corporates do not have or don't are not aware they...

...need to have it. The transformations on this basically need the journey between something being very small, let's say one percent of revenues, to becoming ten percent of revenues. It's like if you adopt an organ you know you cannot throw it over the wall to the performance zone because it is too small. Right. So the existing system will just not accept accepted. You need to nurture it, to grow it, fire, building these market leadership basically, so you get it across the chasm, you win a couple of what we call these market segments and then you can move it over to the performance zone and start adding a new big bet into your transformation zone. So my advice to establish places. It's not only innovate using different processes, but also zone your organization and, as you can imagine, each zone comes with its own leadership styles KPI's measurements, funding ways, governance structure, and that's, I think, big contribution of the book song to win. It's, by the way, it's really catching on fire because although Jeffrey is now severally plus, I mean he's nonstop on the road kind of helping executors understand this concert. Yeah, and just the book. I most admit I have to confess I haven't I haven't read it. I've read all the previous books by Jeffreys over. This one's definitely on my Christmas reading list. So let me ask you a question about it. I've seen many of these over my career, these innovative incubators, in house, incubators that failed. As say, there wasn't a transition zone and one of the reasons that they failed was that they became inherently a threat to the larger organizations. I mean, if you just take one of the things about iots that we're going from products to service or from Capex to our PEX, from fixed price to a newity, and so a lot of the innovations where you take a product and you turn it into an annuity and experience a pay for it as you use it, but that can actually cause you know a lot of problems that when you've actually proved the concept,...

...you've got your one percent. If you toss it over the wall, you tossing it into the organization that can it doesn't want it because it threatens all of their metrics. So it seems like CEO levels support for the transition zone and and giving them protected budget and also internal protection. When people say what are these guys doing there? They're disrupting our big line of business that's been our cash cow for years. I think issues like that are really important that love your views on that because you know we are talking about disrupting companies and nobody likes change and and nobody likes their matured. Their metrics drive their behavior. So they support the top down. SUPORTANCA is pretty critical, isn't it? Yes, it's extremely creatical. We actually call call transformation zone initiatives ID CEO signature. So imagine if you kind of you know, you get to meet, I don't know, IDM or and pick any large company right. Your claim to fame will not be to actually keep growing the performance zone. Your claim to frame will be to, you know, to build a complete new business and made sure that the company is set for the next ten years. So the the growth engines. That's what transformations own initiatives are, right, new growth engines for the company, these type of growth engines also, I'm much more critical to your valuation then. You know, then performance own initiatives, because they are basically are maybe all technologies. Right. So adding new growth engines on an ongoing basis, and typically this might happen every two or three years. Right, because the transformations own initiatives not something you do for a year. It has to be that two or three years. You have to have patients. It requires top leadership focus, it requires protection, but it also requires putting on the best people you have and to ensure that everyone in the company rallies behind that and does not subotage this initiative. So...

...sometimes you have to put it in a transformation zone to protect it. Sometimes and start up initiative can can be added to a performance zone if the existing structures allow it and don't work against it. But in most cases a specific transformation zone initiative will actually be the right approach, fully endorsed by the CEO. Otherwise in one work. So let's set bring this real procustomers in the context of Iot and you know, across your many years of experience, and especially recently, Peter, you must have seen some pretty innovative, disruptive Iot case studies. Can you share any stories of any of those that you've come across recently? Yes, nigger, it's a great question. Let me pick an example which combined some of these concepts we have spoken about, like crossing the chasm, zoning the organization and particularly using an Iot example. So I worked at GE digital and as one of the projects we worked on was with the healthcare division or business, which by itself is a very large, eighteen billion dollar business at that time, and they had acquired a company with measures and registers radiation. Now, radiation is, of course highly critical for patient safety, but what they found out was that there's a lot of variation in how much dose patients get depending on who administers the machine, depending on the day or the hour in which the machine is registered. So what thee had to do was build a whole listic approach for those management which obviously you want to measure and registered, and in order to do that you had to Iot enable the radiation equipment by DMA, but then you also had to network the equipment, and not only network the equipment with on the hospital, but kind of in the hospital system, so that you can actually track if I'm a patient and I go multiple times m exposed to those in the hospital network,...

...that actually the operator will know how much I have been exposed and what to save doses would be, etc. So only by Iot enabling these machines you actually elevate these machines from becoming silo or isolated islands right operated by an expert, create them into a network, making them smart so that you elevate any operator to become the best operator, so to speak, using the software. So that's a small example. Now this company, was Ge was struggling because it, you know, when they bought it was probably the twenty customers, a handful in France. And what we had to do is we had to actually elevate it, create a much larger concept and create a what we call removed it from the incubation zone in a transformation zone. We built a dedicate a team go to market. We actually the point of a high potential leader to run it who was directly reporting to one of the CEOS in Galthcare and powered full sponsorship. We funded its milestone based and within four years the actually managed to sign up one thousand hospital networks for this dose management system. So clearly you can see here a you know, a large company can make markets. Of course they were leveraging the strengths of the startup as well as the strengths of the established companies, because the healthcare of course, had access to a lot of customers. But what the secret here was to have a dedicate a team only focusing on those going across the company and building a strong value proposition for the customers. You know, I'm going to share a case study with with you, as one of the things I do on the podcast is I we have two thousand customers and it puts us in a wonderful situation and we all we do is Iot and it puts us in a wonderful situation to...

...see some really innovative case studies. I tooked on previous podcast about the IOT enabled diaper or Nappy, which is a great example. I'm going to actually talk about a company now that I met in South Africa. You know, it's one thing IOT enabling an an existing electronic product like a machine or an instrument, but the idea of IOT enabling powdered spice. So this blew me away. So it one of the world's largest spice companies as a family owned company in South Africa called Freddie Hirsh, and they import spices from Indian Ocean and they've been selling spices and they got around and they started thinking how could we actually sell most spices in an innovative way? In fact, how can we get people to buy our spice and never buy the competitors? So they said, well, who? Where's the big growth for spices? It's not selling bottles in supermarkets. It's actually in sausages, flavored sausages. So they actually started making machines for butchers to make sausages. Okay, so they went into the sausage machine business. And then they said, okay, what if we I ot enable the hopper on the machine so that actually it could sense whether or not pretty hirsh spices were in the hopper versus are competitors spices. So they did chemical analysis on the samples of the spices in the hopper and then they actually created a cellulose casing rather than a pig's bladder and testine, whatever it is, the casing for sausages which would appeal to the Vegan market because you have like apple and Shutney whatever sandwiches with spices and they actually this cellulose pacing for the sausages can react in a very favorable way with the spices to bring out the taste of the spices. So essentially it's it reminded me of HP connected ink. You know my inkjet printer in my house. I don't order ink anymore. It senses when I need ink and it orders it for me. Well, the Freddy Hirsh Machine, Butcher's machine, actually census that it's got the right spices in there and automatically re orders the spices.

So he have a family Spice Company in South Africa exporting machines to butchers in North America and actually increasing sales of their core product by IOT enabling a piece of equipment and linking it to their spices. And you know, if a spice company, I think they're about over a hundred years old, if a hundred year old's family owned spice company can IOT enable and disrupt, there's no limit to what what's out there is that there is not. I think it's a great example. Right, and you know we will hear many, many more. So it's it's still early days for Iot. Internet has been Internet for people, but I think the next ten twenty years will be the Internet of things. And what said, all stakes longer because you know, you have to experiment. You have to make sure that if you cross the chasm, not only you frozon paint pills but also create all offers so that the pragmatist is convinced it's working right and that all the pragmatists can show business results with them. That's a matter of time for many of those initiatives and once you know, as to your example, this spice company, can show hey, I can do significant damage to my competition right, you know, the industry will follow and they might be copied by companies in another industry or competitors of this company will say, Hey, I need to be on board as well, because the world is changing very much like you know, like we other examples we have seen and discussed before and and more fascinates, I think all of us is the thought leadership that these people who are crossing the chasm it up. It often starts with a is a great idea and great thought leadership, and then they start with the idea and then they take it through and they actually produce something which which changes the business model, which disrupts the market, disrupts that competitors. Which leads me to my last question. You know, on this podcast we like to bring thought leaders and visionaries to our...

...audience. You know, which companies or digital thought leaders have you seen out there and actually that you would recommend that maybe we should get on a one of our future shows? Yeah, yeah, I'm kind of very much interested in people like kate raw off with the donut economics. Right. It's the whole principle that grow for the sake of growth. You know those time are Pas se right. We kind of dealing with climate issues, we are dealing with inequality, we have the ESG standards. You know, Kate Raur wrote about the donut economics. So it's all about innovating to create responsible growth. As I called, I'm currently involved in Assa, which is sponsored by the province of kind of the state where I'm living here in the Netherlands, and they actually have gone out of yeah, they do something very unusual for a government. They actually engaged and design them. Expert Andre Cano, who founded in nomics to actually help them. Built an ecosystem bringing all these entrepreneurs together, focusing on things like is D or donate economics type initiative. So I think, think about, you know, food, think about last my delivery to kind of reduce coot to all these type of things, and it's now open running for I think two or three years and you see kind of the energy going in that ecosystem around entrepreneurs, because I firmly believe who can change the world those are the entrepreneurs, whether they are startups or whether they are entrepreneurs right, start up type people, entrepreneurs within established company. So so under a kind of has this vision to kind of make this all work and he kind of gets everyone engaged, including myself. So I help, of course, with crossing the Chasin type of concept. So so you know, and there are a lot of IOT examples here in it, particularly around the...

...last mild delivery, for example, is a company called Avanett easy pack who kind of turns the older delivery of package upside down. Instead of the supplier telling you when the package arise, right, they actually empower the buyer to tell that the supplier when and where the package would be delivered, including smart places, where we're a delivery organization, can actually get a lot of books, like a lot of box. Yes, box, exactly. Yeah. So, and of course what they try to do is get the congestion out of particularly cities, right, because it's crazy that we have all these delivery trucks running off and on and there's no need for it. Because, if you think about it, then they've done and research with a logistics company that, you know, most people might live within five hundred meters distance from places which they frequent, be at a bus stops, be at, you know, kind of stores wherever. So instead of having all the boxes delivered to your own why not drop it to a place where you will be any weightcoming or pass passing along your way from work? Lever. Yeah, and help the environment, make it more greener and and that's a great place to finish it. In fact, Amazon obviously doing very, very similar things with their Amazon lockers project, which, shameless plug for Si Si, I do all the connectivity globally for Amazon's lockers. Peter. It's it's been really fascinating. We could, we could go on, but it would be a very long podcast if we did. So can I just say thank you. I think the Chasm Group, as I said at the beginning, I've I've known the Chasm Group for many, many years and actually Jeffrey I've met him many times and he truly is a visionary for the whole IOT business. And if anybody hasn't read crossing the Chasm, and I'm sure there must be some people somewhere who haven't read it, I would definitely encourage it. But also the latest book. As I said, that's on my Christmas lockdown reading list. And...

...so let's wrap it up there. Thank you for everyone for listening. Please tune in to the next episode of Iot Podcast, will once again bring you some thought leaders in this space, some ideas to inspire you and some case studies of people who really are crossing the chasm and doing this disruption Peter has been talking about. But in the meantime, Peter, thanks again. Thanks for joining me and thanks to all of you for listening. Thanks for tuning in to iote leaders, a podcast brought to you by SI. Our team delivers innovative Global Iot cellular connectivity solutions that just work, hoping our customers deploy differentiated experiences and disrupt their markets learn more at SICOM. You've been listening to iote leaders featuring digitization leadership on the front lines of Iot. Our Vision for this podcast is to be your guide to Iot and digital disruption, helping you to plot the right route to success. We hope today's lessons, stories, strategies and insights have changed your vision of Iot. Let us know how we're doing by subscribing, rating, reviewing and recommending us. Thanks for listening. Until next time,.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (28)