On June 24th GE Software announced that they are launching, together with GE Ventures and Frost Data Capital, an Incubator for Industrial Internet – Frost I3. This is yet another step, together with many others, that Аmerican companies make to take a big bite from the promising global market for IoT/Industrial Internet.
I had to admit it: US-based companies act more systematically and consistently when building new markets and the whole eco-system related to IoT and Industrial Internet – start-ups, incubators, VC capital, PR and marketing.
Back in Europe I have thе feeling that time has stopped: everything is happening on a really slow pace. Even when there are people who see the opportunities in connected devices they are not able to speed up the decision-making processes inside their company within reasonable time frame (weeks). I also came to the conclusion that in the US the top-level managers are the ones who drive the change. It is top to bottom and we can clearly see this in companies such as GE, Intel, Cisco, Microsoft and others companies that form the Industrial Internet Consortium for example. In Europe it seems like this change is initiated bottom top, by people in charge of different company divisions. But, since they are not the decision makers in the company, it takes them huge effort and time until they bring it up for discussion to the decision makers.
Another observation of mine on the cultural differences (having spent almost a year in a US-based accelerator with HutGrip, and now operating from Europe) is that in the US the startup ecosystem works really well; in a relatively short time a startup can receive funds, grow the business and either make an exit or fail. Being lean and building MVP is a must. All stakeholders are interested to shorten the time to exit/fail which makes them act faster and faster. Here’s an example: if you are investor in a year you can bet on let’s say 10 startup companies and within several months you will probably have enough information to figure out whether the startup will succeed or not. In Europe, you will be able to invest in 5 companies and due to the lower competition and slower pace you will need more time/resources until you have the same level of information about the startup’s future. But this approach also has its benefit – avoiding the unneeded noise around the startups (yes, it’s cool to have a startup but it is cooler to have a business, right?!) and buying yourself some time to rethink every step of the business development.
The question is – can European startups in the field of Internet of Things technology (and Industrial Internet in US/Industry 4.0 in EU) compete successfully with their US counterparts in the long run? Yes of course. And a possible winning model, I think, could be a partnership between established Iot/Industrial companies and startups. Established players can surely support the startup with connections and introductions to potential customers – which is a major issue for most startups. At the same time, the partnering parties will both benefit from the lean, MVP approach only a startup can afford. The result would be a successful cooperation that allows to gain customers while keeping flexibility on operational level.
Being a startup in Europe, our team at HutGrip is facing just the above ecosystem issues. And we ourselves are determined that the above partnership model might be successful for us. In other words – we are looking for established IoT/industrial companies who would like to join us as partners. If you represent such a company, or would like to refer us to one, please get in touch at info [at] indigoverge [dot] com.
HutGrip is an industrial IoT solution developed and owned by IndigoVerge. If you are interested in IoT consulting and implementation for a similar or another IoT project, please get in touch with IndigoVerge team.