The IoT start-up acid test, according to the man behind Hive

Pilgrim Beart, the man behind the technology for British Gas’ Hive thermostats, suggests that IoT start-ups should put themselves through an acid test.

Beart is the man behind one of the most successful IoT start-ups in the UK to date; AlertMe. The company was acquired by British Gas in February 2015 for $100m, and is perhaps best known for the technology behind British Gas’ connected home arm Hive.

When British Gas first launched its connected home brand Hive back in September 2013, it did so with its Hive Active Heating product, which enabled customers to control their heating and hot water remotely from a smartphone or tablet – this was powered by AlertMe’s platform.

In the years since being acquired, IoT has garnered mainstream attention – with stories of fridges being hacked, and estimates into the number of IoT devices to be around by 2020 ranging from 20 to 50 billion.

But with a background in launching a successful IoT company, Beart warned that many of the products that get coverage from events like CES such as internet-connected kettles, fridges and toasters aren’t ideas that will get traction from consumers.

“Just taking an existing product and sticking connectivity on it, with no real thought as to why, is unlikely to deliver value,” he told Internet of Business.

He suggested that the real acid test for IoT offerings was to ask whether they actually made people’s lives better, when the hassle of using them has been subtracted from the benefit of using them.

“Large hassle, or small benefit, means that the product is probably [not useful],” he explained.

Beart says that a lot of effort has to be put into making a product simple to use – as he found out at AlertMe.

“To get user experience right, it is necessary to understand deeply the context within which a product will be used and solve the actual problem,” he states.

Another part of the IoT acid test is to determine how much they’re involved in everyday use cases without people thinking about them consciously.

Beart says that the IoT products worth looking at seriously are the ones which don’t force people to look at them.

“They are the things which quickly fall into the subconscious 99 percent of your daily life. In the home, that’s things like security, energy and telecare, and elsewhere it’s systems for managing infrastructure efficiently like streetlights, traffic or energy use,” he states.

But Beart predicts that IoT won’t just be full of older devices and processes which have connectivity added onto them, as completely new propositions will arrive onto the scene as a result of the new functionality and economics that IoT delivers.

“I can’t – by definition – predict what these will be, but they’re probably in the same category as the iPhone – something that people had a hard time imagining until it existed,” he states.

The sizable task of scaling-up

Despite Beart’s suggestion that areas like street lights, traffic and energy use are areas in which IoT can be exploited – not all projects in these spaces have been successful.

For example, Milton Keynes Council, which was part of the UK’s first city-wide, open-access demonstration network for IoT dubbed the Future City Programme, struggled to see the benefits of some of its IoT pilots, and in many cases couldn’t see how the pilots could be scaled up.

Back in September at Capita’s Channel Shift Conference in London, Sarah Gonsalves, head of policy and performance at the council said that the organization had looked at putting sensors in its bins and trying to collect waste less often, but said “it’s not been as easy as you’d think, and the benefits were on quite a small scale”.

Milton Keynes also deployed parking sensors in a bid to create a more effective parking system but the council hadn’t provided compelling use cases to scale up these programs – Gonsalves said this was a huge challenge for the council.

These projects would likely fail Beart’s own acid test, but he suggests that the first application in any sector is always hard.

“It has to create an infrastructure, it’s where all the hard lessons are learned, and it has to reach a certain scale before it’s really interesting,” he says.

“This is now happening in several Smart City applications, for example there are more than a million connected streetlights now deployed globally,” he adds.

The immediate benefits are better energy management, and the ability to fix broken bulbs on demand, but Beart says that once such a ‘pathfinder’ application has done all of the hard work, other applications can ride on the back of them relatively easily.

“For example, smart parking or smart bin propositions could re-use a lot of the network and platform investment already made for smart lighting,” he says.

“There are many cities that are already making a success of IoT, for example Smart Bins are now mainstream in some Dutch and Scandinavian cities, where they simultaneously halve the lorry-miles, by emptying on demand, and also deliver a much better customer experience – with no overflowing bins, for example. As with an initiative, even as mundane as moving to a recycling economy, a certain amount of medium-term commitment and investment is necessary to push the system over the hump and down the other side to a better world,” he adds.

How AlertMe became Hive

AlertMe – now better known as Hive (you can see our review of Hive 2 here), was founded back in 2006 because of three trends that Beart and his colleagues believed made what we now call the Connected Home an eventuality.

1) Homes were getting more connected, thanks to broadband

2) People were getting more connected, thanks to mobile data

3) Short-range networks like ZigBee and Bluetooth make it possible to deploy battery-powered devices that last for years

So they created a platform to take advantage of these trends.

What Beart believes made Hive so interesting to British Gas, was that prior to that, they were a seller of energy that was being forced to sell less and less of that commodity because of climate change.

“So, with what was really quite a surprising enlightenment they decided they had to change the rules and find a proposition which brought much greater value to their customers, justifying their position as a premium brand and diversifying their service offering – much in the same way that telco’s like to offer a ‘bundle’ of propositions to their customers – and it worked,” he says.

And British Gas hasn’t stopped there with its investment on IoT; it’s recently acquired FlowGem – another UK IoT start-up, which focuses on detecting leaky water pipes in homes – for £13m ($15.6m).

Meanwhile, Beart has launched another IoT start-up dubbed DevicePilot, which enables companies to locate, monitor and manage their connected products.