“Hardware is hard.”
That’s the one big lesson Kate Carruthers took out of her IoT hardware start-up MooresCloud. Launched in late 2012 with a Kickstarter campaign the business made internet-connected lights but was put into voluntary liquidation in late 2014, with Carruthers citing differences in direction.
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Carruthers is now CEO of a new IoT start-up called IoTM.com.au, an online marketplace which connects makers with manufacturers with the aim of helping IoT hardware start-ups navigate the long and arduous road from idea to prototype to commercially viable product.
You can pick any number of figures being thrown around to illustrate the size of the IoT hardware opportunity — Gartner predicts there will be 20.8 billion IoT devices by 2020. Australian research outfit Telsyte forecasts Australian early adopters will spend about $383 million on range of IoT products and services for the home in 2016, growing rapidly to $4 billion by 2020.
Whatever the exact figures, the consensus is the number is a big one and growth will be rapid.
Carruthers said IoTM meets a need by providing small start-ups an opportunity to get a foot in the door by introducing them to a curated the list of Chinese manufacturers which have passed a quality standard check.
“Our business will hold the funds in escrow for you so that there is certainty on the factory’s side that they are going to get paid but there’s also certainty on your side that you haven’t just thrown your money into the ether never to be seen again,” Carruthers.
“That process for me with my previous start-up was really scary. You are putting $40,000 on the internet and sending it off and hoping something will come back.”
Apart from the initial introduction between factories and the makers, IoTM will also provide high value services such as trade finance, safety certifications, insurance and logistics.
“Start-ups don’t know what they don’t know. So they’ve got the great idea and they start down the track and then they discover all this stuff through trial and error,” Carruthers said. “There’s a whole lot of services that you might not think that you need at the beginning to help you navigate your way through to production.”
IoTM is planning to launch in early 2017, initially focusing on attracting makers in Australia, US and UK.
“We don’t see ourselves as an exclusively Australian business, we see ourselves as a global business because everybody that wants to manufacture has these same problems. It would be very easy to take this model and take it global,” Carruthers said.
Carruthers acknowledged that the marketplace model can be replicated by others but believes the size of the IoT market will leave room for multiple players.
“There are other people doing this kind of thing, but our angle is fairly unique to try and make it a one-stop shop for makers so they can focus on developing their product and growing their business rather than trying to work out the logistics of trying to get production.”
Carruthers believes the timing is right for a product like IoTM, “because the market is there, the manufacturers are there and the makers are there in sufficient volume now.”