Knowns and Unknowns in IIoT Projects

I believe that one of the most important issues in IIoT projects is to think about your project and the individual aspects of your project along the dimension of unknowns and knowns. This distinction will have broad consequences on effective ways to organize and run your project. This concept comes from Steve Blank, a long time entrepreneur, college professor, and thought leader in the lean startup world. (1)

Steve characterizes startups as facing a “Series of Unknowns”. The typical startup doesn’t really know who the customers will be, why they will buy, what the product or service will be, how much they are willing to pay, how to sell to them, and a long list of other “Unknowns”.  He recommends intensive interaction with potential customers in a series of experiments to understand all the Unknowns and make a successful business. He characterizes established businesses as a “Series of Knowns”. When you’re doing version 7.0 of something, you have existing customers, your sales force interacts with them every day, you have a working sales channel, you pretty much know pricing, and other “Knowns.” For a startup, it is expected that “No business plan survives contact with potential customers unchanged.” For an established company, it is expected that success is a matter of execution of “the plan.” The path to success for a startup and an established company are very different.

However I think this is a simplified stereotype of reality. Established companies trying to do new things will find some “knowns” and some “unknowns”. IIoT often introduces new aspects that are unknowns: new customers, new influencers, new business models, new sales channels or others. A team that thinks it is facing a “known” but is actually facing an “unknown” will develop a plan up front and execute. The chances of this plan succeeding are very low. If a team is facing an “unknown” and knows it, and acts in appropriate ways, it can do 10s or hundreds of experiments that iterate toward a solution that works. Success isn’t guaranteed, but if the team is skilled in this approach, the probability of success in the long run can be fairly high.

These ideas are not new and not unique to IIoT. I’ve quoted Steve Blank but others who have been developing and talking about these ideas are Eric Ries, Dan Olsen, Marty Cagan, and many more. These ideas are known as “Lean Startup”, Startup Way”, and others. These ideas have become mainstream in the startup community and in internet businesses, but are often little known elsewhere. Another good characterization for this distinction is between “its an experiment” and “just execute”. In a situation of “unknowns”, a series of experiments is the best and maybe only path to success. In a situation of “knowns”, “just execute” is often the shortest and best path to success.

I’ve attempted to provide a short description of these approaches above, but the whole story is quite complex and powerful. I hope these few paragraphs have convinced you that getting the known vs unknown story wrong can easily result in the failure of an IIoT project.

In subsequent blogs, I’ll provide many other details, examples, and implications of this distinction.

(1) Steve Blank describing Knowns and Unknowns

IIoT = Technology + Business Value

There’s a lot written about IIoT. IIoT is hot, and in many ways the success of IIoT is inevitable. If you’ve read very much of what’s written on IIoT, you might come to the conclusion that it’s all about the technology, the platforms, security, analytics and the like. I’m convinced that the business side of IIoT is just as important as the technical side. My goal for writing this blog is to make the argument for the business side and stimulate your thinking about the business value of IIoT.

Providing advice about the business is something that is hard to do in general, because the business side of IIoT is about your business. And one business is often wildly different from another. So we have to look at IIoT and businesses in broader terms, yet say something generally correct and useful.

As a bit of a preview, here are some of the ways that I think it can be helpful to look at businesses and how these apply to IIoT.

  • The unknowns and knowns of your business
  • Finding and delivering business value
  • Product Management and Project Management for IIoT projects
  • Maybe you need an innovation portfolio or pipeline
  • Is there value in your organization in a tight feedback loop between prospects (or customers) and your IIoT development team? If yes, how can you achieve that feedback most effectively
  • Is your IIoT project an experiment? Or is it mainly execution? Or a mix of the two.
  • What can we learn from The Startup Way?
  • What can we learn from Design Thinking?

Check back for more on these topics in this blog. Or sign up to the mailing list and I’ll send announcements of new blog postings. And if you’d like to talk about the business issues in IIoT, contact me, I offer one-half hour “Office Hours” sessions at no charge.