My Twitter feed is full of stories of Amazon seizing the lead in the smart home industry. While the Amazon Echo Show is an impressive addition to the repertoire of voice and video monitoring systems in this growing market, it’s not the product features that are drawing attention. Rather, it is Amazon’s smart home product strategy. By continuously increasing the number of third-party devices that its voice service assistant Alexa can integrate with, Amazon is making sure its user base keeps growing.
It’s the product strategy of companies like Amazon that will chart the final leg of the smart home industry’s journey: the one that will see smart gadgets getting into the mainstream and working seamlessly in our homes.
Smart home appliance companies have spent much of the last decade engaging in a “my-gadget-is-fancier-than-yours” stand-off, and the flurry of competing technologies and protocols has been confusing. If your favorite smart gadgets don’t synchronize, then there is less of an incentive to integrate them into existing home systems. Full home automation is still nowhere on a househunter’s must-have list.
But I think this is poised to change. I believe we are on the edge of steep and continuous growth in the home automation market.
Five Smart Home Truths
Here are five smart truths about this industry for product managers to take on board:
- Have the right team in place. The complexity of product management in the smart home space arises from all the IoT technology stacks involved. Most of these technologies are evolving every day. It would be ideal for a product manager to be expert in all these technologies, but having the right team in place means you can be just as effective. A expert in your team to consult with over each of the IoT technology stacks makes your business decision making more straightforward. Nevertheless, as product manager, you need to have at least a working knowledge of the technology stacks.
- Hit the right price points. The global smart home market is expected to grow at a CAGR of 14.5% between 2017 and 2022. The market was worth $24.1 billion in 2016 and is expected to grow up to $53.45 billion by 2022. Product managers should be particularly mindful of pricing as the market grows, because hitting the right price points will be key. In fact, Blaze Konak, analyst at IHS Markit, has commented consumers are holding back because they aren’t sure they’re getting the right bang for their buck.
- Be an evangelist. Consumer research confirms that customer confusion is holding back progress in the smart home market. For instance, people tend to classify their smartphone as a smart appliance (in reality, your smartphone is the interface between you and your smart appliance). If the market is better educated, there will be direct benefits to the technology roadmap and product pricing. Product managers are well-positioned to be smart home evangelists because they need to understand the industry from multiple perspectives: that of the buyer, the seller, and the maker. Product managers can directly impact their own product revenues, customer base, and speed to market through education.
- Have an integration strategy. With a great team in tow, you may have devised the perfect product strategy and delivered a stellar new product that your customer loves. Your job doesn’t end with the sale, though. In a connected home, seamless integration with other devices is one of the most important criteria for a “good” smart home device. A service outage for any of several devices, therefore, could potentially incapacitate a smart home. For example, when Amazon Web Services went down earlier this year, customers started flipping out. Product managers, through a service integration strategy, need to address this serious concern. Service integration tactics could be as basic as commissioning task forces to put out fires, and round-the-clock at-home customer service.
- Incorporate stringent security. There’s a certain amount of vulnerability associated with home automation: the more smart gadgets you own, the more access points you create for hackers. Safe practice tips followed by smart gadget owners currently range from good password etiquette to refraining from buying “too many gadgets”. Clearly, the industry needs to work towards creating more preventive security measures as home automation moves into the mainstream. Smart home product managers must rev up the speed and intensity of incorporating more stringent security measures onto their product technology roadmap, such as inclusion of inbuilt anti-hacking security software in smart devices.
Effective Smart Home Product Delivery
Technologies such as voice recognition, text-to-speech, artificial intelligence, machine learning and the Internet of Things have brought us close to the smart home dream. However, effective product delivery relies on the usual disciplines – voice of the customer, product usability testing, quality control and market research – as the basis for product management activities. This is especially true for smart home gadgets because of the baggage of perceived complexity associated with them. A case in point is the Samsung smart refrigerator, launched in 2016. The product failed to meet expectations, but it may be worth understanding how well they were set in the first place and how well the requirements were understood.
Product managers can add the greatest value by bringing the customer’s perspective to the foreground and understanding which product features make the most sense. Combining this knowledge with the five smart-home truths will most likely lead to the desired outcome: well-loved products seamlessly functioning in a fully automated and highly integrated smart home.