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Business 2.0, Sustainability

A (financially) sustainable internet of things (pt. 2)

I “grew up on the internet” during an era when open source and ideas like the Creative Commons were just the “way things were done”. There were often warnings from key influencers like Dan Gillmor, Dave Winer, Doc Searls and others about the threats impending on this ethos and our rights as citizens of the internet. I hold these values pretty dear to my heart.

So I’m finding it challenging to reconcile the conundrum relating to internet of things business models that revolve around the data collected.

While the IoT ideas I am experimenting with may never come to market (I did say “early experiments” in my last post, right?), I am thinking about business models etc. If, as I’ve argued previously, the return on investment rationale doesn’t stack up for energy monitoring devices in an apartment/small-space living context, one thought is that it would be advantageous to cross-subsidise the costs through other means. For example, to provide the device at close to cost (or less than cost, possibly even free) and generating revenue through “other means.” Those other means are likely to involve some way of leveraging the data you have collected.

In what ways is it “evil” to monetise data (taking into consideration privacy concerns and security)? What would be considered ok, and what’s not? Would the value proposition stack up for a subscription-based service (on both sides of the equation—to the end user? To the business?) to avoid having to raise revenue in this manner? Are their ways to balance utility, privacy and financial sustainability in a model?

There are many more questions…

It’s perhaps pertinent to note that in this scenario—energy monitoring—we’re not talking about frivolous profit-(only-)making novelty or enterprise—we’re talking about starting from a position of providing a social/environmental benefit, and seeking a sustainable financial model to support the provision of the relevant products and services.

This begs some further questions? What about if leveraging data collected provides greater utility or environmental/social benefit? Is there a case, then, for a “greater good” argument, if basic privacy and security safeguards are maintained?

I’m not sure that the lines are all that clear in this argument.

When I first started looking into the space, I noticed that Google had previously launched, then retired, the Powermeter API for electricity monitoring. (It is perhaps notable that this API was built by Google’s philanthropic arm.) The retirement announcement is somewhat vague in its reasoning, indicating that increased interest in this space (monitoring and energy data) meant the service wasn’t required anymore. This argument doesn’t ring true to me. And somewhere in my mind I can’t help but think that Google is cognisant of this as a commercial product—something that for me is reinforced by Google’s acquisition of Nest.

There is, of course, also Apple HomeKit. However, the only manufacturer I’ve seen actively embracing this is Elgato. (They even have a HomeKit-ready IoT platform, the Eve Core, that they provide.) While HealthKit has been adopted by a number of app manufacturers that are tied to the iOS platform, I’m not sure the case stacks up as solidly for IoT devices that operate external to the iOS ecosystem—a circumstance that many devices in the home automation and environmental monitoring arena would find themselves.

But these two examples prompt me to think: is there a case for a non-profit, community-led initiative that third-parties (incl. commercial operators) can tap into? Kind of like a non-profit, open source Powermeter API. I suspect that commercial operators would be loathed to use such a service, given the arguments outlined in my earlier post. But how might that work? What sort of model would stack up—balancing value and opportunity with privacy and user control of their own data? Could something like DeviceHive fulfil this role (noting that this approach would require more than just the underlying source code being open)? Or will these sorts of plays find the going tough (as suggested by William Belk)?

Could there be some form of anonymised access to aggregate data that would still enable providers to generate commercial value, but without the inherent moral challenges surrounding commercially-“owned” data? Are there ways to institute an “opt-in” or community-agreed approach (e.g. something akin to the Creative Commons license) for data of this type, that could be audited in some way?

Again, many more questions, I’m sure.

Still not sure where I sit on the spectrum, and plenty of ground to cover before I need to make decisions relating to my project. But it’s still important to start considering these things early, and hash out potential concerns and find what lines need to be drawn before getting too far down the path.

Your thoughts?

Feature image by Dusk/黃昏少年.