Smart Meters Did Not Work, Let's Avoid The Same Mistake With IoT/IIoT
- January 25, 2018
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During the three-people-in-a-room early days of running Power2Switch, we made a decision to take every customer call we received. It was easy in those early days, the calls came directly to my phone! As we grew and launched in several US states we maintained this culture but had only one person taking the calls. As you can imagine, it became stressful for Victoria H (our all-around amazing operations person) as we hit tens of thousands of residential and small business customers. So we went back to everyone on the team taking a call and it was great. Great because it kept everyone on the team fully aware of what was going on with our customers.
Most of our customers did not understand their electricity bill and we got a lot of calls asking what things meant on the bills. One day, a customer called in and it routed to my phone. The customer called in because he’d received a ‘smart meter installation’ notification from his utility and he wanted to know how a smart meter benefited him. I gave him the typical response that the meter helped the utility get better data on his usage and it would lead to better customer service from his utility. He laughed and said (and I’m paraphrasing here)
“the utility has never done anything for me, I’m certain this smart meter thing is actually to benefit them as always”
That customer was right. And he hit at the core of the issues with deploying smart products that provides more value to the company deploying than to the customer receiving the product. It’s a trap that many IoT/IIoT (PDF) devices fall into. And it will be a huge issue as Gartner predicts that by 2020 95% of new product designed and released into the market will be IoT devices.
Who Actually Got The Value?
An impressive 7M customers in Texas have smart meters. Smart meter deployments have been completed in 271 of 488 zip codes in the coverage area for Comed in Illinois. What have these customers, who for the most part do not care about these smart meters, found out about the benefits?
- Closed networks, security, infrastructure constraints and technology obsolescence: the smart meters deployed in the last 1–3 years are already obsolete in terms of the data communications standards, hardware and cybersecurity capabilities that exist on these meters. For the customers who are tied to the utility provided smart meter they are stuck with these problems until the utility decides to upgrade the meters. This won’t be happening soon.
- The data captured from the smart meters served the utilities by providing more visibility into usage and demand profiles. This enabled the utility to better plan and manage their own generation assets. The customers that benefited were the ones that already cared about their energy usage before they got the smart meters. I met a customer back then who had used Excel to track his energy usage for ~10 years before his smart meter was put in. He was an engaged customer and even he only got marginal benefits from the meters.
- The customer experience issues that existed with interactions with the utilities were never resolved with smart meters. That poor bill and information display issue mentioned above? Still, the case because the terms and approaches to communicating esoteric information to customers didn’t really change with smart meters.
Suffice to say, the only metric on which these smart meter deployments could be considered as successful would be number of meters deployed. And this is only because they were essentially mandated.
What Lessons Can Be Learned?
What are companies deploying IoT devices, which is what the smart meters were, able to take from what can be considered a failed attempt to engage with customers? While the deployments have gone well, due to mandated adoptions, there are lessons drawn from questions for (these same utilities and) any company deploying hardware into a customers home. The questions are not exhaustive, just some questions that require deep thought and clarity over the long-term. Questions I should have answered well before I failed at my own water IoT device startup:
- Does the product serve the customer or the company that developed the product? It’s easy to convince yourself that your whizbang gizmo provides value to the customer. We all do that. But, if you cannot articulate what that benefit is without referencing your product, then you are not actually solving a problem that the customer has.
- What is your ‘product obsolescence avoidance’ plan? With the pace of technological change it is inevitable that your product will quickly become obsolete unless you are intentional about preventing that. How can you develop your product to remain relevant, regardless of the sustaining innovations that are bound to happen in your industry? What are you doing to ensure that the disruptive innovation that is inevitable comes from your company? Have a plan. We know few plans match the reality when the rubber hits the road, but have one as a guide.
- How does your product serve the customer within the (new) ecosystems of product groups? The era of thinking about your product as just one thing a customer buys is over. Think about it within the holistic context of what the consumer is experiencing and engaging with within the home, the city and other contexts that are now being directed by ubiquitous technology like our smartphones. Simply put, your product no longer exists in a vacuum. Build with that in mind.
What other considerations should a product developer/IoT company or deployer bear in mind?