This document discusses the need for a new approach to developing ventures for the Internet of Things (IoT). Existing models used by corporations, venture capitalists, and private equity firms are not well-suited for early stage IoT opportunities. Large organizations also tend to have disconnected functions that inhibit collaboration needed to realize new smart systems opportunities. The document advocates for an integrated approach that leverages all available skills, relationships, experiences and assets to conceive, design, and develop smart systems and services.

1. smart systems
and business
design
Page 28
Design and development of
all hardware/software/service
elements for launch
Alliance network and/or
ecosystem mapping and
definition
Coordination of
common information
sources and partner
protocols
Development plan
3
1
4
2
Software Information Devices
(from embedded to Web services)
User Information“Devices”(from end-
user to service provider)
Data/Information Sources (liquid flow of
information throughout system)
Activities/Information Design (defines the
business blueprint and currency)
Formulate business
capitalization
requirements
5
Venture Development For The Internet of Things Requires A Different Approach .......
An Approach That Can Span From Very Early Stage To Growth Maturity .....
Early stage nurturing of
new technology ventures
is really a “no-man’s” land
today
These types of
opportunities are not
well addressed by either
corporate venture
programs or institutional
investors
The “spread bet” mode
of venture capitalists &
private equity firms has
been increasingly trending
towards more and more
conservative investments for
several years .....
Corporations have become addicted to acquisitions
and consolidation as a growth mechanism ........
companies are willing to overpay for established
businesses to mitigate risk ........ players need to
understand that to create sustaining value they must
take risks .....but how?
Existing schemas, institutions and
approaches for new venture development
are, for the most part, broken....
The complexity, interdependent
relationships and related timing required
for new growth ventures in the Internet of
Things arena only compound the challenges
Diversifed Industrial Players Need To
Completely Re-Think How To Create New
Growth Ventures...
In Most Businesses Today, New Venture Development Is Broken ...

2. smart systems
and business
design
Page 2
In Most Companies Today, People, Functions & Processes Are Too Disconnected
To Realize New Smart Systems Opportunities....
Large organizations have many rules and policies that often
seem completely disconnected. We have created language,
business processes and systems that seem to be a triumph
of technique over value and performance. Consequently,
most businesses today are organized around functional
disciplines that only interact on an“as needed”basis.
Most knowledge comes from human experience and
expertise. Today, however, knowledge and expertise largely
resides in functional silos and systems dispersed across
organizations. Acting singularly, functional organizations
are constrained by the resources under their control.
Legacy processes and habits inhibit any natural ability to
communicate and work together to solve big problems or
create new solutions. In many companies, lean practices
have been applied so aggressively that people are simply
consumed by“running the business.” It restricts their ability
to harness the collective intelligence available throughout
a company and its networks to ensure timely decisions and
creative solutions.
In our work, we see‘disconnects’around us all the time -
between people, functions, organizations and leadership.
This reminds us that life and business are complex, and as
new business designers and developers, we must resist
the seduction of simplicity and the safety of Byzantine
processes and decision models that allow good ideas to
fade too quickly. In this environment growth is dependent
on interacting in new and creative ways. Linking functions
by breaking down the barriers to communication is the first
step, but it can’t stop there. The key is building collaborative
networks.
It’s Not Just About Ideation, Strategy, Design or Planning ..........
R&D &
New Business
Development
Marketing
& Sales
Purchasing &
Strategic
Sourcing

3. smart systems
and business
design
Page 1
The solutions we are describing
here have no managerial hierarchy,
command and control decision making
or proprietary ownership of ideas.
These networks will be self-organized
by people who are motivated to
explore and develop ideas they care
deeply about. Collaborative innovation
will extend beyond ideas about new
products and services to the very
manner in which business is conducted.
To discover, design and develop
innovative systems, organizations must
consider all the elements involved and
the context they fit into.
Developing Solutions
Based on User
Centered Experience
Organizing The Rapidly Growing
Amounts of Data From Open
Systems For Wider Use, Awareness
and Collaboration
Utilizing New Modes
of Collaboration &
Integration Tools To
Leverage The Wealth
of Experience Across
Venues and Markets
Leveraging Human Capital
and Skills In This Connected
World Will Create Entirely
New Solution Values
Potential To Engage
& Leverage Extended
Communities of Users,
Companies, OEMs,
Suppliers With Real-
Time Interactions and
Information Value
Emerging Technologies, If Properly
Nurtured and Applied, Can Foster
Many Opportunities To Disrupt
Current Competitive Structure
TechnologySkills
Relationships
Experience
Content
Behaviors
SMART
SYSTEMS
FRAMEWORK
A New Frame Of Reference Is Required .............. How Do We Connect The Dots?

4. smart systems
and business
design
Page 3
To Conceive and Design Smart Systems & Services, Organizations Need An Integrated Approach.....
Many organizations today do not even recognize the many smart connected
product and services oppprtunities that surround them.
DESIGN
We believe design needs to transcend discrete product or service innovation.
Assuming that the role of design is only about making existing products
or services more attractive no longer works. Business designers need
to creatively imagine fully developed systems and whole marketplaces.
Companies need to envision the design role as one that can address product,
service and business systems.
RELATIONSHIPS
Problem solving for new Smart Systems opportunities must address
tough questions: how can an organization turns its workers, partners, and
customers into believers and contributors? How can we make changes that
can impact multiple functions and organizations and ultimately solve really
big problems or create unique new offerings? We are firm believers in the
human element - the community as a manifestation of the system and visa
versa. Behaviors of users, customers, teams, functions, leadership, all need
to considered. Understanding empathy, participation, motivations - putting
human sensibilities and behaviors at the center of the solution is key.
SKILLS
Companies need to move beyond a conventional orientation to technology
skills and knowledge. Organizations need a disciplined process focused
on optimizing all tangible and intangible skills and assets including people
and competencies, brands and positioning, technologies and intellectual
property, alliances and relationships, and manufacturing and distribution
capacities.
DISCOVER
How to use customer
experience and technology
uncertainty to reveal new
opportunities
DEFINE
Specific development
opportunities including
formal and informal
relationships
DESIGN
System and services
delivery modes including
go-to-market design
DEVELOP
Align investments
with strategy and
model
Understand
likely evolution
of competitive
environment
Business model
design and
validation
User experience
and understanding

5. smart systems
and business
design
Page 4
Processes To Design and Develop Smart Systems Must Leverage All Value Participants...
Determining Value
Creation Role
Model
What characteristics should we use to
segment our markets & articulate the
benefits of our proposed offering?
Which actual or anticipated segments are
most attractive?
What role/s can we play in the proposed
system?
What eco-system configuration best
supports our strategy; open; closed;
hierarchical; select members?
Which value elements should we own;
which should we obtain by partnering?
What are the business model alternatives;
which business model best aligns with
the opportunity?
Innovate
What technology innovation is available
to enhance or extend our system’s value?
What is the architectural“blueprint”
behind the customer experience?
What technology alllies will be required
for product/service realization?
Validate
How can we best test our design? What
is the best means to prove our system’s
value in the field?
How attractive are the economics of the
business case; what will it cost to bring
the system to market? Will it result in cost
savings; new values; new experience?
Building
The Platform
Discovering
Emerging
Smart Systems
Opportunities
Connect
Who are our natural allies (players; devices;
peers? Who is best poised to help develop
our opportunity; what participants and
companies will play in the new system?
What formal and informal relationships
might exist in the future?
Participate
How can we best test our hypothesis? Who
can we invite to collaborate?
What manner of interactions can we use to
drive empathy? involvement? innovation?
Interact
Is there an explicit (or implicit) community
of participants? If so, which participants
interact with which value elements?
What are the critical information interfaces?
Interactions? How will information flow
between and among constituents?
Prototype
How should we prototype the customer
experience?
What are the key system elements & design
factors?
How can we quickly iterate our assumptions
to learn more; which potential participants
can help us best understand the potential
user system experience?
Explore
Who are our customers? What are their
experiences?
What personas, applications, devices &
systems does our product or service touch?
What is the nature of the interactions?
How can we best use technological and
market uncertainty to our advantage?
Experience
What primary customer activities can we
observe; be involved with?
Which activities represent opportunities for
us? Do these activities benefit from smart
devices and/or services?
What adjacent activities can we observe; be
involved with? Will these activities benefit
from smart devices and/or services?
Map
What elements will combine to create value
for the customer? What benefits can be added
over time & what advantages will they bring?
Are there special challenges in making the
value salient to the customer?
Do these elements extend existing product or
service offerings or are they completely new?
Based on desired peer interaction &
technology maturity, is the timing right?
Anticipating Interactions,
Relationships & Collaboration
Architect
What are the key eco-system design
factors? How will our role or the role of
others evolve?
What is the business system that will best
enable the customer experience
How should the new system be
positioned in the marketplace?
Invest
How can we align investments and
resources with our chosen strategy?
How should we approach critical make,
buy, partner decisions?
Build
What technology allies will be required
for product / service / system realization?
What organization levers will best drive
this business? What leadership priorities
will drive the most effective market role?
How should the new business relate to
the parent?
What are the critical path elements that
need to addressed: activities; timing;
responsibilities; costs; uncertainties?
Support
What key on-going support elements
need to be in place to continue to
enhance our objectives?
What will be the mode of iteration for
improving and expanding the business?
Discover
Define
Design
Develop
Discovering
Emerging
Smart System
Opportunities
Anticipating
Experiences,
Interactions
and
Relationships
Determining
Value Creation
Role
Building
The
Platform