Strategic Advice for IoT Startups

Learn important winning strategies for your IoT Startup, and draw from success stories in Europe and Worldwide, from one of the top CVC providers in the world, Wayra from Telefónica.
Chart of devices using IOT and in the center the letters IOT.
Min Read
January 18, 2024

What is IoT?  It is the "Internet of Things", like your vacuum robot, your home camera, and your smart speaker. These are a massive piece of how the world is becoming more connected every day, and at the forefront of this digital revolution are IoT startups.

If you're an entrepreneur, your startup might be harnessing the power of the Internet of Things to create smart, interconnected systems that are transforming how we live and work.

With this approach, you can tackle some of the biggest problems in technology today. You can improve data security, energy efficiency, and even healthcare. And with cutting-edge ideas and bold vision, your startup can shape the future of technology and society.

What kind of strategy will be most effective for your startup here?  Let's dive into the IoT-details, starting with challenges, and then getting into fundamental strategy.

Understanding IoT Startup Challenges a.k.a. Burnt Toast

Internet of Things (IoT) companies are like the new kids on the block. They're cool, they're innovative, and they're facing a whole host of challenges that could make even the most seasoned tech guru break into a cold sweat.

First off, there's the issue of security. It's like trying to keep a secret in a town where everyone knows everyone. With so many devices connected, it's a hacker's paradise. One minute you're controlling your smart toaster from your phone, the next minute someone halfway across the world is burning your toast...

Then there's the challenge of interoperability. Imagine trying to get a large group of people to agree on a movie to watch tonight. That's what it's like for IoT devices from different manufacturers to communicate with each other. It's a constant battle of "my way or the highway".

Next up, we have data privacy. In an age where your fridge can track your cheese consumption, it's no surprise that people are concerned about who else might be watching. It's like having a nosy neighbor, but instead of peeking through the curtains, they're snooping through your data.

And let's not forget about scalability. It's all well and good when you've got a handful of devices, but what happens when you want to connect an entire city?

Lastly, there's the issue of power consumption. With so many devices running 24/7, the ecological concerns are valid. Your energy bills can skyrocket faster than you can say "smart home".

So yes, being an IoT startup is no walk in the park. But despite these challenges, you have a chance to push forward, innovating and problem-solving like there's no tomorrow.

After all, who else is going to ensure that your coffee is ready the moment you wake up?

Spheres connected to a cloud, inside these spheres there are different icons like cell phones, cards, computers.

Understanding Best IoT Startups Fundamentals

Years of experience in startups and IoT have shown us some fundamental truths.  Take a look at these, and evaluate each one carefully for your particular startup and IoT product.

1. Understand Your Market

Before launching your IoT startup, it's crucial to understand the market. Research who your potential customers are and exactly what they need. This will help you create products that meet, and even exceed, customer expectations.

2. Focus on Security

Security is a major concern in the IoT industry. Make sure your products are secure from cyber threats from early design thru implementation. This will not only protect your customers but also build trust in your brand, and mitigate risks from disastrous security incidents.

3. Build Strong Partnerships

Partnerships can be a great way to grow your startup. Look for companies that complement your product and can help you reach more customers.

4. Keep Up with Technology Trends

The IoT industry is always changing. Stay ahead of the latest technology trends and design your products accordingly. This will keep your startup relevant and competitive.

5. Prioritize User Experience

A beautiful user experience will set your product apart from the competition. Make sure your IoT devices are the most easy to use and provide an amazing value to the customer.

6. Have a Clear Business Model

Having a clear business model is essential to attracting investors. Be clear about how your startup will make money and plan for long-term sustainability.  Details matter here.

7. Invest in Talent

Your team is your most important asset. Invest in hiring talented individuals who share your vision and will help your startup succeed.  Your early staff or cofounders must have the needed skill and experience to solve problems independently, as well as collaborate on your shared vision.

8. Be Patient

Success won't come overnight. Be patient and persistent. Keep improving your product and don't get discouraged by setbacks. Yes move fast, and yes take the time to do it well enough.

Now let's look as some standout IoT data.

Global IoT Statistics to Help Your Startup

IoT is a rapidly growing field.  Consider these key statistics about IoT sales and investments, as you plan and grow your IoT startup business:

  1. Global Market Size: The global IoT market was valued at $212 billion in 2019. Experts predict that it will reach $1.6 trillion by 2025.
  2. Number of Connected Devices: There were approximately 22 billion IoT connected devices around the world in 2018. This number is expected to more than double to 50 billion by 2030.
  3. Investment in IoT Startups: In 2019, venture capitalists invested over $30 billion in IoT startups globally. This shows the high level of interest and confidence in this technology's potential.
  4. IoT in Healthcare: The IoT healthcare market is projected to reach $534.3 billion by 2025, growing at a compound annual growth rate (CAGR) of 19.9% from 2020 to 2025.
  5. Smart Home Devices: The smart home market, a subset of IoT, is expected to reach $135 billion by 2025. This includes devices like smart thermostats, security systems, and appliances.
  6. Industrial IoT (IIoT): The IIoT market is predicted to reach $263.4 billion by 2027, demonstrating the significant role IoT plays in industries such as manufacturing, logistics, and agriculture.

This is a massive opportunity, so if your startup is solving a problem before anyone else, or better than your competition, you have a real chance to capture market share in such a rapidly growing market.

Three-dimensional image of a smarth home

Overview of IoT Startups in Germany

You probably own several pieces of German technology today, like a car, computer chip, or something built by a German-made robot.

Germany is known for its highly developed technological and industrial sectors, and has seen a significant rise in the number of IoT startups. Leveraging the country's robust infrastructure and robust support from the government, these startups have been offering unique IoT-driven solutions catering to various industry needs, ranging from healthcare to manufacturing, logistics, and beyond.

One of the key areas where German startups are making strides is in smart home technology. Companies like Tado and Nello are developing products that allow users to control their heating systems and door locks remotely. These innovations not only make homes more comfortable but also help to save energy.

In the automotive industry, startups such as High Mobility are using IoT to revolutionize the way we drive. Their platform enables developers to build apps for cars, paving the way for features like remote vehicle control and real-time diagnostics.

Healthcare is another sector where IoT is making a big impact. Startups like Cara Care are using connected devices to provide personalized care for patients with digestive disorders. By collecting data on diet and symptoms, they can offer tailored advice and treatment plans.

Germany's thriving startup scene is supported by a strong ecosystem of investors, accelerators, and government initiatives. The German Federal Ministry for Economic Affairs and Energy, for example, runs a program called "Digital Hub Initiative" which aims to foster innovation in digital technologies including IoT.

However, there are challenges too. Data security is a major concern in the IoT space, and startups need to ensure that their products are safe from cyber threats. Additionally, the lack of standardization in IoT technology can make it difficult for startups to integrate their solutions with existing systems.

Despite these hurdles, the future looks bright for IoT startups in Germany. With their innovative ideas and the support of a robust ecosystem, they are well-positioned to lead the way in the global IoT revolution.

The IoT Startup München, in Munich, Germany

The city of Munich (München in German) boasts one of the most vibrant startup ecosystems in Germany, and a thriving hub for IoT startups. Over the recent years, Munich has attracted numerous innovators, thanks to its advanced infrastructure, investor interest, and solid support from the government.

IoT in Munich ranges from those involved in smart transportation solutions to those working on predictive maintenance and industrial automation. The thriving industry scene and favorable business climate have led to a significant rise of München IoT startups, drawing innovators from across the globe. Some of the best IoT startups include:

1. KONUX: This Munich-based startup uses IoT to help railway operators automate maintenance predictions.

2. Blickfeld: Known for its pioneering sensors for autonomous vehicles, Blickfeld navigates contract negotiations by setting clear terms related to product specifications, aftermarket services, and warranty conditions, which has helped it build successful partnerships.

4. ProGlove: ProGlove develops smart gloves that help industrial workers do their jobs more efficiently. The gloves have built-in scanners and sensors, providing real-time data to both the worker and management.

5. NavVis: NavVis specializes in indoor spatial intelligence, offering digital twin technology for large industrial and commercial spaces. Their technology captures and analyzes indoor data, improving navigation and operational efficiency.

These startups are just a few examples of how Munich is embracing the IoT revolution. With their innovative solutions, they are changing the way businesses is done today.

As the IoT sector continues to grow, we can expect to see even more exciting developments from this vibrant city.

 Image 3D of two laptops connected to a cloud.

IoT Power for Startups, With Wayra

Wayra Germany, a part of the global network of Telefónica's CVC investment, has several ways to help your IoT startup succeed.

  1. Financial Support: The most obvious benefit is the financial support. This is helping your company to develop its products or services, hire staff, and cover other business expenses.
  2. Access to Global Network: Wayra Germany is part of a global network that spans across 10 countries. This is giving your company the opportunity to connect with potential partners, customers, and investors from around the world.
  3. Mentorship and Guidance: Your company is receiving mentorship and guidance from experienced professionals. This is invaluable for navigating the challenges of starting and growing a business.
  4. Business Development Opportunities: Wayra Germany is also offering business development opportunities. They are helping your company to refine its business model, identify new market opportunities, and develop strategies for growth.
  5. Technological Resources: As part of Telefónica, one of the world's largest telecommunications companies, Wayra Germany is providing your company with access to cutting-edge technology and resources, like our amazing 5G Tech lab.
  6. Market Visibility: Being associated with Wayra Germany is increasing your company's visibility in the market. This is attracting more customers and investors, boosting your growth.

So what does that mean? Wayra Germany offers a comprehensive suite of benefits that can significantly contribute to the growth and success of your IoT startup. And all that with no burnt toast, and plenty of good coffee.

We'd love to hear about your amazing idea. Take a look around and contact us here. See you soon.

Edited images for Wayra, based on the work of: Planet Volumes via Unsplash.

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Written by
Florian Bogenschütz
Written by
Florian Bogenschütz

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