Author: Tim Bajarin

Back in 1995, I attended what was then the PC industry’s premier conference known as Agenda. I was invited by venture capitalist John Doerr of Kleiner Perkins to join him and four other analysts and journalists to have dinner with the CEO of a company he had invested in by the name of Netscape. At that time, none of us had even heard of this company. Mr. Doerr and Netscape CEO Jim Barksdale told us about their browser and made the prediction it would revolutionize the PC industry. John Doerr did not become a billionaire by betting on losing companies so, when he emphasized this was a serious winner with major disruptive potential, I listened very closely.

Of course he was right. Marc Andreessen had created what was the first web browser and opened up the Internet to all users. Up to that time, it had been mainly used by government and higher education but, after Netscape launched their browser, they pretty much allowed anyone with a computer to have access to this “web” of information and communications. In fact, the Internet has become one of the most important technology inventions of our time. It powers most of our communications, eCommerce, social media and information services and has brought the planet together in ways none of us could have predicted when this browser first hit the market.

Today we don’t talk a lot about the internet per se, just like we don’t talk about telephone wires or traditional TV airwaves anymore. The idea the internet has now blended into the everyday background was sort of emphasized in a comment made recently in Davos by Google Chairman Eric Schmidt when he was asked about the future of the internet.

“I will answer very simply that the internet will disappear,” Schmidt replied.

“There will be so many IP addresses … so many devices, sensors, things that you are wearing, things that you are interacting with that you won’t even sense it. It will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room.”

I bring this up because this is an important insight. Schmidt of course was talking about IoT and went on to say things will operate together in a seamless way and the internet will not even be noticed. While Schmidt puts this in the future I think it is the way it is today. In a sense, the internet itself now has a different meaning to different people. It is no longer described in just the terms of its past where it was the roadway for what some called the Information Super Highway. Instead, it is thought of as the backbone, the cloud, servers, etc. Even apps are now used to describe the internet without ever naming it.

However, as I look at this disappearing internet and the comfort people now have with technology, I fear people will get too complacent about perhaps the biggest issue facing us — security and privacy. In this context specifically, security and privacy within IoT. This issue is highlighted in a recent update from the Future of Privacy Forum. The forum provided an additional set of comments to the FTC in the wake of the Commission’s workshop on the Internet of Things (IoT) last November.

According to the Future of Privacy Bulletin:

“The FPF’s whitepaper explores why IoT is not well-suited to a one-size-fits all approach to consumer privacy. The myriad types of connected devices and the varied contexts in which those devices will operate will require the implementation of flexible frameworks designed to address evolving privacy issues and consumer preferences. The imposition of rigid or universal standards to promote privacy within IoT may harm innovation and, moreover, be ill-suited to the privacy risks and consumer preferences that ultimately emerge.

Our comments note that data security may have been the most frequently raised concern at the FTC’s workshop. Inadequate security presents the biggest risk of actual consumer harm within IoT. With it, bad actors will have access to all manner of connected devices, and will be able to pry into intimate spaces or perpetrate fraud or identity theft. Company must devote adequate resources to security before and after their products reach the market. Fortunately, companies large and small are aware of this concern and are taking steps to address it.”

At CES 2015, I spent part of a day in the IoT section of the Sands Hotel and, in talking with many vendors creating IoT devices, I hardly heard the term security mentioned when describing their product. Even when it was mentioned, it was in passing as they wanted mostly to share with me the benefits and value proposition of their IoT device. Yet, as the FPF white paper rightly points out “security and privacy presents the biggest risk of actual harm within IoT.”

I believe this issue needs to be raised to the highest levels within the tech industry. I am seeing startups come out of nowhere and using 3D printers and crowdsourcing sites to build IoT products quickly and not actually thinking through the total impact and ecosystem around these products when security and privacy needs to be at the heart of their designs. This is especially true at the IoT end points where it is now easy to create the hardware and make it work with minimal software. Yet, in many cases, especially based on the type of IoT device it is, security and privacy needs to be a priority in any software being designed for these products.

As a consumer, this really concerns me. If I put a Nest thermostat in my house and it is connected to the cloud, is it safe from hacking? Or, if I install a connected door lock, is it hack proof? If I am collecting health data via trackers and sending that data to my doctor via the cloud, is that data secure and private? If my car is always connected, does someone always know where I am and can follow all of my driving habits?

My fear at this point is security and privacy has just not been elevated enough within the IoT development community and I think it needs to be at the top of all IoT design strategies from the beginning.

It is true the really big companies like Apple, Google, Microsoft, FitBit, Jawbone, and many well financed others take this seriously. But with thousands of new companies and startups getting into the IoT space each year, they need to get the message that privacy and security needs to be a top priority with anything they create in this space. More importantly, they need to build it into the product from the beginning.

Groups Like the Consumer Electronics Association and other tech leaders need to take an active role in sharing this mantra. For IoT vendors, security and privacy needs to be a priority, not an afterthought.

At CES in January 2014, I saw the Oculus Rift virtual reality goggles when it was first shown to the public. It was the talk of the show. Those who got to test it said it was the future of virtual reality. Most saw it as a game changer for gamers while its use beyond gaming was in question at that time. Later that year, Facebook bought the product and has made it one of their unique projects they hope will impact the future of gaming as well as social interaction.

I have also used a number of other virtual reality goggles, including Sony’s Morpheus, and a couple of no name versions in the works. Samsung also has the Gear VR Goggles and, while I have not used it yet, I understand it is similar to the competitive models on the market today. Of course, Microsoft has its Hololens that marries VR and AR (augmented reality) to deliver an even more unique experience.

Personally, I love the idea and concept of VR specific goggles, especially for how it delivers a rich and immersive gaming experience. However, if anyone in the VR space thinks we will sell millions of these to consumers any time soon, they need to step back and look at historical adoption cycles for how consumers accept new technologies. If they understand this, they will realize we are at least 5-10 years away from these types of products gaining strong consumer acceptance.

While the VR goggle makers would like to make these useful to everyone from the beginning, the fact is their first market will be what is called vertical. We already know how these VR goggles are used today in military, industrial, pilot training, medical simulation applications, and specialized business settings. At this level, these VR goggles are very pricey. These types of goggles have been in use in these high end markets for well over 15 years.

If you look at the traditional adoption cycle, the very tip of the marketing pyramid represents this upper end use of a new technology. The next segment of user adoption is under the pyramid tip and represents what we would call a small but broader audience. However, most of these are still early adopters and are mostly vertical markets bought by companies or businesses that could not afford them when priced at the upper end of the price curve. Also, most of the apps available in this cycle are specifically designed for vertical markets and are now attractive since prices go down while in this segment of the pyramid. VR goggles are now in this next section of the pyramid and, while most will be business vertically driven, the current models take aim at gamers, which helps broaden the market adoption even more while.

The bottom part of this marketing pyramid spreads out to even more users and, in tech terms, this is when a technology gets to prices and use cases acceptable and of high interest to the consuming masses. From 35 years of experience, I have found from the time a technology gets to the second section of a marketing pyramid to the time it gains acceptance for a broad consumer market is anywhere from 5-10 years. This is true for new hardware-based technologies. In software and services, adoption cycles are faster but, with new hardware, the move from the top of the pyramid to the bottom is a long process.

I recently met with a major consumer brand that told me how they were going use Oculus to show off how they made their product and use it as a branding tool. Like a lot of companies I have talked to, they seem enamored with the concept of VR and want to take an early position to show they are innovative in how they use a technology like this to market a product. I told them I liked their idea but, from an execution point of view and because of these long adoption curves, very few people will actually see their VR promotion for many years. I explained my view of adoption cycles and suggested they make sure they do a Web and mobile app of this promotional material if they want to get any benefit from it now.

I do have one caveat with VR goggles and any potential use of them by consumers. As I mentioned, new software and services adoption cycles move much faster. One of the reasons I believe Facebook bought Oculus is to integrate their social network into delivery of virtual 3D chat rooms to meet. If the experience allowed for friends to be in a 3D VR room and it looked as if they are all together like the real experience, this could be a killer app for them. If these and other VR goggles can be priced well under $500 and focused on these social networking applications, it could move adoption of VR goggles down the pyramid faster. We now know the first generation of Oculus will cost $1500, a price vertical markets and gamers might tolerate. Mainstream consumers, not so much.

There is one other consumer application I am not comfortable talking about but have to be realistic when looking at hardware adoption curves. VCRs originally came out at very high prices and were used by movie and TV studios and video professionals at first. But as the prices came down, the X-rated video market kicked in and their programs were the catalyst to get VCRs into broader consumer usage. Once more people brought VCRs into the home, the traditional movie studios started making software or movies for them and that market exploded.

Interestingly, from a marketing pyramid standpoint, the time from when VCRs came to market and then got broad consumer adoption was about 20 years. However, the X-rated industry actually sped up the latter part of the adoption cycle and eventually VCRs became a standard companion to most people’s TVs.

The other issue is a chicken and egg problem. Even if the prices are high, it is the software and applications that drive demand at any level. However, software developers are not interested in creating apps unless they know the hardware it will be used on sells in the hundreds of thousands and grows to millions in the future. It may pay for them to write vertical apps they can charge a great deal for but they wait to do broader apps for a consumer market until prices go down and they are sure they have a broad group of users who could buy what they create.

In early June I will be attending the Augmented World Expo + VR experience and am willing to be proven wrong. However, if history is our guide, the adoption of VR goggles by broad consumer audiences is not going to happen any time soon.

After WWII, with the return of millions of G.I.’s who gained access to government loans to buy houses, the concept of the middle class in the US began to expand. As they assimilated back into the US and, more importantly, became an meaningful part of the United States’ economic recovery by getting jobs, buying homes and having disposable income, it expanded our consuming culture and helped make the US the prosperous nation we are today. 

What we experienced with the rise of the US middle class in the 1950s has started to take place in broader international markets today. China’s economy has gained strength as millions of agricultural workers have been brought into city hubs to work in factories. Their growing service industry and other jobs have taken them out of poverty and, by their standards, moved them into what they define as middle class. These farm workers who, for most of their lives, earned less than $10 a week, are now working in factories and other jobs making at least $100 a week. By our standards that may not seem much but, in China, this is a huge leap in wages. Also, prices of goods are much cheaper. The last time I was in Shanghai, I went to a local supermarket and splurged on a lot of snacks for my hotel room. I spent around $6 US dollars for what in the US would have been well over $50.

There is a very good book about the rising middle class in China that is a must read if you want to grasp the growth potential in this country. It is called “China’s Super Consumers” by Savio Chan and Michael Zakkour. 

The book looks at one billion new consumers in China and, in particular, the buying habits of the rising middle class. The authors also explain how Apple has gone after this market and why they are poised for even more success in this country going forward. 

I recently interviewed the authors of the book and they told me this new middle class has huge aspirations for their future. While many workers do send some of their paychecks back to the family still on the farm, their gains in wages has given them a consumable income and they see a brighter future for themselves. Some of these kids eventually go to college and get even better jobs with higher wages and they plan to move into the upper middle class eventually. These people buy all types of goods and even save for luxury brands. China is very status symbol driven and, if a person owns even one item of a luxury brand, their status in the eyes of their peers is raised.

The authors also explained that much of their follow up work with US companies is helping them understand the local culture and consumer climate as many tech companies here want to market their products to this rising middle class in China.

A few weeks later I spoke with former Apple CEO John Sculley about his book “Moonshot”. In the book, John says “Every moonshot begins with a noble cause; to invent new technology that can change the world, you have to find your noble cause, your mission.” 

Other moonshots he describes are things like Netscape’s browser, the internet, Google, Facebook and social media which have changed the way people interact and communicate. All of these have had game changing impact on our world and he shares in the book other key trends that may lead to significant new moonshots in the future. 

But there is one area of particular interest to me in the book in a chapter about the rise of the middle class around the world. As the book points out, John has been traveling the world for over 40 years and observing how people use and consume products and technologies. He also has dug deep into the economic trends in many countries and, like others, has seen the rise of a new kind of middle class because personal economic gains have moved from the lower end of the earnings spectrum into what would be defined as middle class in each of their countries. 

In our conversation, he said he sees close to two billion people beginning to move up into newly defined middle class status and they will want to buy things that are as good as the upper end of the market but at much lower prices. They will also buy these products in ways we are not accustomed to today. He sees mobile payments being a main source of how they purchase and sees giving them a great customer experience a key for success in serving this new rising middle class. One of his companies, Obi Mobiles, is making smartphones to sell in India, the Middle East and parts of Africa and start as low as $79 and go as high as $199. Their goal is to create products of high quality yet at price points the new middle class can afford and adopt in large numbers.  

He has deals in India and many African nations as well as some Middle East countries and sees a serious upswing in consumer middle class interest in great products but at lower costs.

I don’t think we can underestimate the rise of this middle class around the world and how it will impact these folks economically along with the various companies that create products for them. This opens the door to US companies in ways they never imagined. Although the internet has made it possible for people to make products and sell them internationally for some time, the idea of creating products for local markets and then selling them effectively creates great opportunities and challenges for US companies. 

The big car, consumer packaged goods, and even PC companies have targeted these international markets for some time. But with the rise of this new international middle class, even they need to rethink their global sales strategy and make it more local. A good example of this is how any major smartphone maker is now being challenged by local smartphone vendors who are much better at localizing content and services. Just having a brand no longer works as consumer products must be much more localized. At the same time, for many US companies who see the US market saturated, they must look internationally for any new and serious growth.

For tech companies, the international middle class could be a green field for them. It comes with localized challenges and obstacles but if they can tailor their products to deliver quality goods at lower prices, their brands could help them gain significant ground with this rising middle class. Although there are still good sales opportunities in developed countries, any real growth going forward must tap into this new middle class if tech companies hope to grow in the future.

One of the hottest areas of wearables are fitness monitors from Fitbit, Misfit, Jawbone, Garmin, etc. In 2014, approx 90 million were sold and the interest in using some type of wearable to monitor health continues to be strong. The folks at eMedCert collected some interesting data points that put the interest and demand in health wearables into perspective:

“The annual smart wearable healthcare market volume will grow from $2 billion in 2014 to $41 billion in 2020, a compound annual growth rate of 65%.”
– Source: Soreon Research

“Over 80% of consumers said an important benefit of wearable tech is its potential to make healthcare more convenient.”
– Source: PwC

“68% of consumers would wear employer-provided wearables streaming anonymous data to an information pool in exchange for lower health insurance costs.”
– Source: PwC

“The wearable band market grew by 684% on a worldwide basis in the first half of 2014 compared with the first half of 2013.”
– Source: Canalys

“Today, 1 in 5 American’s own some type of wearable technology.”
– Source: PwC

“82% of wearable users believe that wearable tech has enhanced their lives.”
– Source: Rock Health

While dedicated health wearables blazed the trail in health monitoring, the Apple Watch and smartwatches in general look like they could end up with the lion’s share of the health wearable market in the future. The chart below from 451 Research shows consumer smartwatches will increase and dedicated health wearables will decrease over time. This is not a surprise as a smartwatch is multi-purpose and most include health monitoring apps, while dedicated health wearables are single purpose. That is why FitBit is moving fast to create a smartwatch of their own as they understand this shift in consumer thinking and want to have their own smartwatch option available to customers. This move will be an important part of their $100 million IPO strategy going forward.

The 451 Research chart below lays out the most important health and fitness features consumers want. Note that “pedometer” is at the top of the list although “heart rate” and “blood pressure monitoring” are high too.

What intrigues me most about this chart is that pedometer tops this list. Pedometers have been on the market for decades and most were analog until only recently. But when they went digital, they became a must have feature for many people. On June 1, 2012, I had triple bypass surgery and ever since, I have had to monitor my health closely. I was told to walk at least 10,000 steps each day. At first, I just used a Radio Shack analog pedometer. But once the Jawbone came out, I have worn some type of wearable step and heart monitor. (side note — When I had my triple bypass, they used the vein from my left arm to repair the arteries. So, when I wear the Apple Watch on my left arm, I have no pulse and the watch can’t track my heart rate.)

As a heart patient, I have a compelling reason to want a health wearable. And, while a lot of people strive to take care of their health, tools like a belt-clipped pedometer were hardly used until it showed up on an all day wearable. The difference seems to be that the pedometer of the past was an add-on used only to monitor a dedicated exercise while a wearable with this feature is less intrusive and always on and with you.

When the Fitbit, Jawbone and other health wearables came out, many people saw these as passing fads. But they struck a real chord, not only with those who regularly exercised but with mainstream consumers too. I happened upon a recent New Yorker article by author and humorist David Sedaris in which he chronicled his love/hate affair with his Fitbit. His tongue-in-cheek commentary chronicles his obsession with having to continue to beat his step record. The essay is a great, funny read:

“I look back on the days I averaged only thirty thousand steps, and think, Honestly, how lazy can you get? When I hit thirty-five thousand steps a day, Fitbit sent me an e-badge, and then one for forty thousand, and forty-five thousand. Now I’m up to sixty thousand, which is twenty-five and a half miles. Walking that distance at the age of fifty-seven, with completely flat feet while lugging a heavy bag of garbage, takes close to nine hours—a big block of time, but hardly wasted.”

Health wearables apparently are now part of our culture.

Perhaps the major thing Fitbit and other health wearables have done is to bring the importance of activity to the forefront. Using these types of health wearables, whether in a dedicated device or a smartwatch, makes monitoring one’s health an integrated part of a lifestyle. The Apple Watch has a feature that, every two hours or so, reminds me to stand up and walk around. It is becoming second nature to me now while in the past, I would sit and write for hours, never leaving my chair unless I had to hit the loo.

The health wearable market is past being a fad. Dedicated wearables that monitor steps, calories burned, etc., have become cheap enough that most people can afford them. And smartwatches are on track to become an even more important wearable that includes health monitoring apps and add more versatility to the overall device market. However, I think it will be the health industry that makes the health wearable a mainstream monitoring tool in the future.

According to Orange Healthcare, 88% of physicians want patients to monitor their health parameters at home. And HMO’s and health care insurers are making wearable health monitoring a key tenet of future health plans. As one HMO exec told me, it is much cheaper to keep a person healthy than it is for them to get sick and have to cover hospital expenses.

According to IDC Health Insights, by 2018, 70% of healthcare organizations worldwide will invest in consumer-facing technology including apps, wearables, remote monitoring, and virtual care. According to CDW Healthcare, wearable technology could drop hospital costs by as much as 16% over the course of five years and remote patient monitoring technologies could save our healthcare system $200 billion over the next 25 years.

Lowering health care insurance premiums and cutting hospital costs will be the real reason the wearable health movement will be sustainable. Obamacare has put personal health care on the front page and pretty much insured that people, at least in the US, are going to be more health conscience. And, if a health wearable is prescribed or highly recommended by their doctor and health insurer, more and more people will adopt its use and make it a part of their normal lifestyle. This part of the tech market, whether delivered via a dedicated health wearable or through a smartwatch, will continue to grow and become an important part of our wearable future.

In March, I wrote a piece in Techpinions entitled, “The Challenge and Virtue of Tiny Screens”.

In it, I discuss how developing apps for smartwatches is very different than developing apps for PCs and tablets and, when developing apps for these devices, the concept of “glanceable data” has to be a key part of the apps design. In Ben’s review of the Apple Watch, he talks about the fact that, with PCs, you may spend hours in front of its screen and with tablets you might spend minutes with its screen. But with smart watches, you will only spend seconds viewing information. He also emphasizes the role of notifications and how Apple did them in the best way possible to make what I call “glanceable data” more meaningful.

I have used 12 smartwatches over the last 18 months and, in my short time with the Apple Watch, it has been clear to me the concept of notifications and glanceable data is morphing into a platform and is one where developers can apply a lot of innovation. In the past, when we wanted to have specific information, we would go to Google or a search engine or check out a direct Web site to get it. In this way we “pulled” information from a specific source. However, with a wearable like a smartwatch, there is a shift that takes place in which data we want is “pushed” to us in glanceble bits of information, many that are in real time and perhaps more importantly, needed exactly at the moment we want it. On the PC, tablet and smartphones we call these alerts. All of these are a form of push not pull.

With the smartwatch and its tiny screen, it is almost impossible (or at the very least difficult) to try and pull information in large amounts to the device. While I can use Siri to search and pull small bits of info in real time to an Apple Watch, the more optimal way to get that data is through push in a defined app or through pre-set preferences. It does mean one must set up the things they want pushed to them. That is where the apps become more of a platform for disseminating information. However, if notifications are thought of as a platform, then these bits of pushed data can also become a form of discovery, too. Innovative developers could create a plethora of apps tied to key bits of data delivered via notifications. In fact, that is precisely what Apple has done with the Apple Watch and they have made it central to its existence. Whether that data is a record of one’s heart beat, calories burned, steps taken, etc., this is all pushed data now available on your wrist and at your fingertips.

In Ben’s review of the Apple Watch he says:

The Apple Watch became my primary notification panel/dashboard. It is not only the most natural place to be notified and to decide what action needs to be done but, because the entire user experience was built for quick interactions, notifications may have found where they were destined to exist.

Apple allows for a tight filtering of the notifications you want to occur. By limiting what I want to be notified of, I am ensured only the most important things — from email, to texts, to calls, and even relevant app notifications — are exactly what I want to be notified about. It ensures each notification is meaningful.

Notifications in the way the Apple Watch delivers them is really a platform for delivering this glanceable data a person wants. Developers need to think about notifications as a platform and innovate with this in mind.

Although I am emphasizing notifications for smartwatches, the reality is notifications are becoming a major form of communications and information dissemination for delivering more targeted data that one might want in real time for any mobile device. While smartphones and tablets are a bit more conducive for searching or pulling information to these screens, the concept of notifications is just as viable for these devices too. Some developers have taken advantage of this and IOS and Android have specific settings for notifications. But developers need to grasp the concept that notifications are becoming a major platform for delivering the kind of data or information we want in the form of push, which is just as viable a form of discovery in the same way search and pulling data to a device is today.

Anish Acharya, the co-founder and CEO of Snowball wrote a good piece in TechCrunch on notifications as a platform. He wrote:

Our engagement is now defined by push-driven notifications rather than the traditional pull-driven experience. We’re “hunting and pecking” through our app grid a lot less; the apps that notify us (without over-notifying to the point of uninstall) are rewarded with our engagement (and our dollars). Based on this data, our fundamental belief is that notifications represent the future access and discovery point for mobile services — that notifications will be the starting point (or “front door”) for all of the interactions on your phone.

However, on a smartwatch, notifications are an imperative and key to their success. App developers need to harness this platform and use it to their advantage. If they do, they will find it becomes a gateway for all types of info discovery that will be a starting point for all types of interactions on a smartphone and smartwatches and can be used to enhance any user’s mobile experience.

When I first started working on tech projects in the early 1980s, the design cycle from product conception to market was about two and a half to three years. Projects I worked on, which included the second generation of the IBM PC and their first laptops, had at least 6-9 months of just discussion about concepts and technology integration before it even got to the initial prototyping stage. Once in that stage, it could take as much as a year to find the right design and then another 9-12 months to get the marketing, channels and channel staff ready to actually sell the product.

But by the mid 1990s, the need to get a product from design to market, due to competition, went into high gear. It would still take 18-24 months to create a new product and get it to market. And, even if we were working on just the next generation of an existing product, it still took 9-15 months to make that happen.

Today, if we had design cycles that took this long, those companies would take a real hit to their market position since competition is more fierce today with start-ups always nipping at the heels of the big tech players and forcing them to move faster than ever before.

One of the major areas where the big companies have had great improvement is in the area of prototyping. Most of the big tech companies have in-house design teams and various means to prototype a product relatively quickly and move it to the next phase of final design and manufacturing fast. I have worked on projects with some of the big players now that could go from concept to final product in 6-9 months and if they were tweaking existing products they could move even faster. But these folks have serious budgets and have acquired specific expertise to do this in-house or through special partners such as those who have the ability to prototype a product even though it might be an expensive proposition.

But what if a smaller company or start-up or even a large company wants to get a product prototyped fast and cost effectively just to test an idea and get it into the hands of some test customers before they decide to go to final manufacturing? One could go to some of the speciality design firms for help, which could be an expensive exercise and, depending the the design firm’s work load, could take a long time. But I discovered an alternative way to do this when a close friend from San Diego recently introduced me to a company that has come up with proprietary technology that can create a 3D model of a product that includes the ability to embed the electronics in the design. They can create a prototype of a product in days or a couple of weeks at the most and for little cost compared to using some of the alternatives today at higher costs and in many cases, longer time tables.

The company is called Nascent Objects and they are based in San Carlos, CA, a city about 20 miles south of San Francisco. My friend in San Diego asked me to go check on them since he had worked with their CEO, Baback Elmieh, in the past to see if I could help them with their business strategy.

When I first met with Baback and his team they told me they learned from their study of more than 500 IoT products created in the last three years that traditional hardware prototyping cycles take an average of five months with a total of 12 months before a product goes to market.

According to Baback, “One reason for this long development time is that building an IoT product requires three separate design processes: electronic hardware, software, and physical form factor followed by series production. In many ways this is a human resources supply chain problem. You have to go shopping for electrical engineers, mechanical engineers, software engineers, industrial designers, and ultimately a manufacturing resource for the finished product. There are huge barriers to entry to put the parts together, getting them to work, testing, and orchestrating a global cast of component, manufacturing, and logistics suppliers.”

What Nascent Objects has done is to create a platform that empowers people to create complete products as opposed to parts. Their web-based design tool lets developers concentrate on form and function of their product while the tool figures out how the product is built mechanically and electronically and how it connects to software services in the cloud and on smartphones.

Unlike traditional product manufacturing, they can produce final parts as customers need them and deliver within days. They can do this because they have created computer graphics algorithms and a new 3D printing process that generates and produces high quality plastic enclosures with embedded conductive circuit traces. They can print the final product instead of putting it together on an assembly line. The need for a complex supply chain, inventory, upfront capital costs, or months of waiting, simply goes away. It puts the creation of IoT hardware on the same time scale as software.

Although their initial products have had an IoT focus, the reality is they can handle products that span various ranges of ideas and needs, although most of their first projects have had an IoT flavor to them. When I first met them, they had taken a Kickstarter project that took 9-12 months from idea to final product and literally recreated it in one day. They have devoloped a fascinating modular approach to tackling some of these projects and, because they have a powerful software engine that can handle design and the electronics integration that can then be applied to the actual 3D prototype design, they can do a lot of these projects very fast and be very cost effective.

Baback also told me, “the cost and complexities in today’s product design process have resulted in significant barriers to innovation. If we can lower these barriers, we foresee an explosion of innovative IoT products and services. Our platform will empower designers and engineers to build and produce their entire product with the same efficiency that we build apps and websites today.”

My own takeaway from my meetings with them is, if their platform is successful, innovators can build electronic products more like software that can get to market in days or weeks no matter how ambitious the idea. These developers will learn more quickly, iterate more quickly, and make products that are a better fit for the problems they solve at a pace that we could never have imagined. While they can’t predict what people will develop on their platform, I could see how Nascent Objects’ approach to rapid prototyping could be a potential game changer for a lot of companies big and small who want to quickly create a product so it can be tested before they take it to the next step — manufactured and into the hands of their intended customers.

Earlier this week, I had a call with John Sculley, the former CEO of Apple. I have known John since he joined Apple and, during his time there, had many conversations about his leadership role at Apple and the vision he had for moving the company forward. During his tenure at Apple, he drove sales from $800 million to $8 billion. In last week’s column, I wrote about one experience John and I had with Steve Jobs and his temper and mentioned how Apple led the way in desktop publishing and multimedia during his time at the company.

I have always found John a straight shooter and a fast learner. When he joined Apple from Pepsi and though he was not part of the techie crowd, he quickly grasped the nuances of the industry and began to shape his own vision that helped drive Apple’s role in the tech market forward. He was also smart enough to hire some of the top minds to help him think more about the future. A good example of this is when he made tech superstar Alan Kay an Apple Fellow and influential in the production of a very forward looking video called the Knowledge Navigator in 1987, a futuristic view of how we would deal with information in the future. Only now are we seeing some of the things portrayed on this video become a reality.

John probably does not know this but he kind of served as a mentor to me during the late 1980’s. Every time I would meet with him, he would have exceptional insight on the market and gave me hints on things to research that helped me land a lot of business in those days. One example was his view on desktop publishing and how he and his team pushed this concept into the mainstream of personal computing. Although I had written a report about the idea of people publishing documents on their desktops after I saw the Canon desktop laser engine in 1982, it took Sculley and his team to marry an Apple laser printer with Aldus’ Pagemaker at the end of 1984, making the Mac indispensable to graphics artists, advertising agencies and many in the publishing world who helped make desktop publishing a big hit in the mid-to-late 1980’s.

When John told me he was going to put CD-ROM drives in all Macs towards the end of 1980’s, he shared a clear vision of how CD-ROM’s would impact the world of publishing, education and information and was the first person I ever heard use the term multimedia-computing. When Dr. Martin Greenberger, Nick Arnett and I talked about doing a multimedia roundtable at UCLA in 1990, John and Apple became the lead sponsor of the event. Only 35 people were invited but it included Nicholas Negroponte of MIT’s media lab, Trip Hawkins who was running Electronic Arts at that time, Bob Lucky, the executive director of Bell labs, Stewart Brand of The Whole Earth Catalog fame and top leaders from the world of Hollywood, television and education to flush out the concept of multimedia computing and how it would impact all of the industries represented at the table. I still have the picture of these 35 leaders on the wall in our reception area and was extremely privileged to be among those who attended this roundtable at what is now considered a very historic event for all of these industries at that time. John’s vision helped drive even more business for me as I wrote some of the first reports on this subject and major companies from these industries brought me in to explain how the new use of multimedia computers could impact their individual markets.

The reason for our call was to discuss a new book John Sculley has written called “Moonshot! Game-Changing Strategies to Build Billion Dollar Businesses”. Here is a brief description of the book:

“The future belongs to those who see the possibilities before they become obvious… This is the most exciting time ever to be part of the business world.”

“Throughout history, there are some events that stand out as so groundbreaking that they completely change life as we know it. The Apollo moon landing of 1969 was one of those events—the invention of the Apple personal computer was another. The time is ripe for a new breed of innovative entrepreneurs to build businesses across industries that will bring in billions of dollars—while changing people’s lives for the better. In this book, John Sculley will show you how to do it.”

In the book, John says, “Every Moonshot begins with a noble cause; to invent new technology that can change the world, you have to find your noble cause, your mission.” 

Other moonshots he describes are things like Netscape’s browser and the internet, Google’s search engine as well as Facebook and social media that has changed the way people interact and communicate. All of these have had game-changing impact on our world and he shares in the book other key trends that may lead to significant new moonshots in the future. 

One area of particular interest to me is described in a chapter about the rise of the middle class around the world. As the book points out, John has been traveling the world for over 40 years and observed how people use and consume products and technologies.

He also has dug deep into the economic trends in many countries around the world and, like others, has seen the rise of a new kind of middle class because personal economic gains have moved from the lower end of the earnings spectrum into what would be defined as middle class in each of their countries. 

In our conversation, he said he sees close to two billion people beginning to move up into newly the defined middle class and they will want to buy things that are as good as the upper end of the market but at much lower prices. They will also buy these products in ways we are not accustomed to today.

He believes mobile payments will be a main source of how they purchase and sees giving them a great customer experience as a key for success in serving this new rising middle class. One of his companies, OBiMobile, is making smartphones to sell in India, the Middle East and parts of Africa and start as low as $79 and go as high as $199. Their goal is to create products that are of high quality yet at price points the new middle class can afford and adopt in large numbers. 

I bought up what I consider another moonshot opportunity that involves bringing close to two billion more people on to the internet over the next five to seven years. This group desperately wants to participate in the connected community but is at the bottom end of the earning spectrum. A smartphone for them probably can’t cost more than $50-$75. Yet, they want to use them to help run their farms, communicate with the family and friends, and, when possible, even use them to purchase things they need or want via their smartphone. 

Supplying products and services for both of these groups will need moonshots of their own if they are going to partake of the value a connected world affords them.

I found Dell Yocum’s short review of the book especially good. Mr. Yokum was one of John’s lieutenants when he was at Apple and an industry pioneer in Silicon Valley.

“John Sculley’s insightful book explains “the convergence of exponentially expanding technologies (cloud computing, wireless sensors, mobile devices and Big Data)” that can and will allow you, the customer, to be in control…… And John gives plenty of examples that allow all of us to understand each of these technologies and learn how to integrate each of them into our thinking.

John believes that these technologies will help shift power from the “producer-in-control” to the “customer-in-control”. He shows us (entrepreneurs and business executives alike) how to use these technologies to build successful businesses, not only within the U.S., but in global emerging markets as well (and especially within the emerging middle classes in those markets). He presents “game-changing” strategies that will influence not only your thinking; but, I believe, your future actions.”

John also explains what happened during his time at Apple and how it ended. The story of how the board wanted to clone the Mac vs John’s insistence to keep it proprietary is what forced him out and we all know the move to clone the Mac nearly destroyed Apple. I was close to what was happening inside Apple then and watched in horror and amazement at the Apple board’s decision to clone the Mac and just make it another PC in a market where clone makers by then were falling by the wayside.

As I read the book, I felt as if I was back at the time John and I would talk while he was at Apple and he was giving me new thoughts and insight about the market and trends he saw that would be driving our tech world forward. As many reviewers state, this book is full of great information about tech and economic trends and business practices happening around the world and how to think about creating “game-changing strategies for creating billion dollar businesses.”