SECTIONS - Caught in the Crossfire
November 25, 2015

My Hype Gripe

As most of my readers know, I only throw softballs to the people I interview. James Brehm ribs me all the time that I never call people out on their stuff when they should have a safe harbor decal on their forehead.

In addition to my normal kindness, I think that ranting about someone else’s bull stuff gets into ego boosting rather than industry support. I keep my ego in check by constantly trying to learn from much smarter people than myself.

The good news is the industry is full of them. For me to write this rant shows a frustration level and a genuine concern that the hype of some is impacting us all. We are living in interesting times. As of today there are 124 billion-dollar startups. Many of these startups represent companies competing for the same vision.

Given I meet with company spokespeople every week, I feel I am a pretty good judge as to what is hype and what is not.

Joe Mazzeo, my mentor, told me normally a good way to tell what is real versus vision is to watch the body language. The more the hands go above the shoulders, the more the vision is removed from reality. Unfortunately, today there is a lot of money looking for something better than sub 2 percent growth, so we have a seller’s market for hype.

If your goal is to exit, there may be no better time to exit than next year. If your goal is to stick around, you may find a lot of temptation in the M&A world that will sound synergistic. However, the monies coming in have the first goal in mind, so you may find the price to pay will not be revealed until it’s too late.

Let’s get down to the concerns.

1) Alternative Wireless Services: While the carriers love talking about IoT and LTE, the reality is disconnected. The networks’ capabilities and the sensors’ requirements are very different. Like the environment that followed the divestiture and the Telecommunications Act of 1996, the industry is buzzing with alternative wireless technologies and the counter weight of new bandwidth restrictive antenna features. This is a land grab, and it will be hard for a company to win without capital. However, we have so many entrants, we can end up with an IoT equivalent to fiber glut of the 2000s.

2) Web/Cloud IOT Ecosystems: A lot of so-called platform companies prided themselves on solving IoT scaling and deployment issues by using brand name cloud companies. Now these companies have decided that they are competing with their customers that service IoT and have declared themselves platforms. While these cloud companies will make it easier for enterprises and developers to connect generically to IoT modules, it will also flatten the vertical opportunities.

3) Wall Street/M&A: The growth stories by analysts make it sound like every company in IoT should be part of the billion-dollar startup club. The reality is that some markets are laggards and others are hyped. The impact for public companies and private investors is we have IoT irrational exuberance. This is going to force some stable moderate companies to maximize their value.

The bottom line is that we have real business that is being skewed by noise. I recommend you learn to speak hype when being publicly interviewed; recognize hype when partnering; and stay focused when you and your customers design, develop, and deploy IoT.

Edited by Ken Briodagh

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