Making Money from the Internet of Things
Don’t Get Left in the Dust Again
I’ve been following what the industry has affectionately dubbed “IOT” for “Internet of Things” now for quite a while and recently decided I should be paying attention to the investment opportunities IOT may provide.
If you are paying attention, there are loads of opportunities to sweeten your portfolio even while this market continually tests new highs.
Here’s the deal. I was one of the first users of what back then was called a “GUI” (“Graphical User Interface”), but failed to realize how could make money off my insider view of a new world order. As a technocrat I was all excited about Compuserve and AOL but had no idea that they were forging a whole new industry where the masses could now interact with our up until private little world called the World Wide Web. Did I invest in AOL when I was one of its first users? No!
Call me dumb as a rock if you want, but this time around I plan to get in on the action. Many are saying the Internet of Things and other new technologies will transform our lives in ways we can’t even yet imagine.
The Internet of Things
So what is this “thing” called the “Internet of Things,” you ask? In its simplest form, it is the concept of embedding technology into, well, things. You may not have even noticed, but almost every “thing” you now own has some kind of intelligence built in.
From TV’s to appliances to guitars to medical devices small enough to be swallowed, “things” have intelligence built in from the factory and can be accessed by, you guessed it, the Internet. Hence, the “Internet of Things” and it allows manufacturers of virtually any “thing” to remotely control, access, direct, place orders, check status and otherwise interact with their devices.
So enough with the technical tutorial. How will all these pending changes impact you and how can you benefit financially from the explosion that is happening before your eyes?
So How Can You Make Money?
Our primary focus for this article is on how you can anticipate and discover companies that are actively engaged in the world of IOT and then ump on their bandwagons sooner rather than later.
For now, we’ll divide the opportunities into a few fairly obvious sectors and invite you to stay tuned or subscribe to our paid newsletter for more specific recommendations. By the way, and this is very obvious, you make the most money when you spot an “up and comer” vs. an “already arrived.” We’ll explore some of the “already arrived,” but are really looking for the break- through companies and “up and comers.”
There are several very obvious places to begin looking for opportunities and some others that may not be so obvious. We’ll explore a few here and drill down in later articles to identify some hidden gems that are worth your attention.
We’re not looking for the already arrived like Apple, Google, and Amazon. They obviously get IOT and are jumping in with their full arsenal of buying power and marketing prowess. You can figure that out for yourself so we will focus on some that are making some very interesting moves right now that should want you to dig a little deeper.
The best opportunities are often buried in vague references and little known companies that are working on a break-through technology or concept that is still just in somebody’s head but has not yet seen the light of day.
Industries and Manufacturers Already Aggressively Embracing IOT
Online Retailers are selling all sorts of IOT devices that are now connecting to the internet and people are buying in droves even though they may not even know the term. For example, if you are in the market for a home security system, you can buy one at Lowe’s, Home Depot, Best Buy, Target, Walmart, K Mart and dozens of online sources.
Every one of the little devices that make up a home security system (cameras, monitors, switches, etc.) are “things” that eventually get connected to the Internet and allow consumers to control their thermostat, security system, lighting and power from a mobile phone anywhere in the world.
So here is your first play. Research for a good entry point and buy Lowe’s, Home Depot, Amazon, Best Buy and anyone else who is jumping on the IOT bandwagon even though they may not even call it that!
Who is Building Technology into Their Products Today?
Another very interesting opportunity is identifying manufacturers who are embedding intelligent devices into their appliances to proactively monitor and order consumables like filters. Think refrigerators, humidifiers, HVAC systems, etc. etc. etc.
What companies are seeing the light and embracing the new technologies? They understand that the internet allows them to remotely monitor their devices in residential and commercial environments to predict service outages, parts wearing out and more. It may sound a bit to “Big Brotherish,” and meddlesome to some, but I, for one, love the idea of having my HVAC system automatically order a replacement filter and have it show UPS show up with the replacement I need before I even knew I needed it.
The opportunities for innovative use of the IOT are endless. Your mission, should you choose to accept it, is to find those manufacturers who “get it,” who are seeing the future and embracing it rather than keeping their heads buried in the sands of the past.
Your Second Play and this is really fun, is to open your eyes and see who is aggressively embedding technology into their products anticipating how they can drive incremental revenue from consumables and replacement parts. You can take a trip to your favorite big box retailer and read the labels. Who is putting intelligence into their devices? They are likely good candidates for some of your investment dollars.
So look not only for the device itself but who is making the little bits and pieces that the manufacturers are inserting into their products. Not only find out who is embedding the devices, but find out who makes the widgets that make it all work.
Companies Who Develop Products for Others
The most fun and biggest opportunities are identifying companies who are developing the innovative products and technologies being embedded into the devices. I’m going out on a limb a bit here because just because I don’t know about it, does not mean it is not happening.
Here are a few Third Act Opportunities for you:
- Automotive and Airlines – predictive monitoring of every variable in their massive worlds. There are inventors and developers creating all kinds of mini devices that will attach to the IOT – cars that drive themselves are already in play and they are using GPS as the cornerstone of the process. There are countless companies that serve these industries. Let’s go find some.
- Energy – Wow! The opportunities for innovative developers of IOT connected devices is mind boggling. Monitoring and dispatching utility
- Health Care – the combination of decoding the DNA and embedded technologies is creating what industry observers call a revolutionary movement in medicine. There are thousands of companies lining up to share in the new world of embedded medical treatments.
I’ll leave you with these for now but stay tuned. The juices are just beginning to flow and I will not be left behind this time!