Tagbusiness

How to build a responsible Internet of Things

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Over the last few years, we have seen an explosion of new products and services that bridge the gap between the internet and the physical world: The Internet of Things (IoT for short). IoT increasingly has touch points with all aspects of our lives whether we are aware of it or not.

In the words of security researcher Bruce Schneier: “The internet is no longer a web that we connect to. Instead, it’s a computerized, networked, and interconnected world that we live in. This is the future, and what we’re calling the Internet of Things.”1

But IoT consists of computers, and computers are often insecure, and so our world becomes more insecure—or at the very least, more complex. And thus users of connected devices today have a lot to worry about (because smart speakers and their built-in personal digital assistants are particularly popular at the moment, we’ll use those as an example):

Could their smart speaker be hacked by criminals? Can governments listen in on their conversations? Is the device always listening, and if so, what does it do with the data? Which organizations get to access the data these assistants gather from and about them? What are the manufacturers and potential third parties going to do with that data? Which rights do users retain, and which do they give up? What happens if the company that sold the assistant goes bankrupt, or decides not to support the service any longer?

Or phrased a little more abstractedly2: Does this device do what I expect (does it function)? Does it do anything I wouldn’t normally expect (is it a Trojan horse)? Is the organization that runs the service trustworthy? Does that organization have trustworthy, reliable processes in place to protect myself and my data? These are just some of the questions faced by consumers today, but they face these questions a lot.

Trust and expectations in IoT
Trust and expectations in IoT. Image: Peter Bihr/The Waving Cat

Earning (back) that user trust is essential. Not just for any organization that develops and sells connected products, but for the whole ecosystem.

Honor the spirit of the social contract

User trust needs to be earned. Too many times have users clicked “agree” on some obscure, long terms of service (ToS) or end user license agreement (EULA) without understanding the underlying contract. Too many times have they waived their rights, giving empty consent. This has led to a general distrust—if not in the companies themselves then certainly in the system. No user today feels empowered to negotiate a contractual relationship with a tech company on eye level—because they can’t.

Whenever some scandal blows up and creates damaging PR, the companies slowly backtrack, but in too many cases they were legally speaking within their rights: Because nobody understood the contract but the abstract product language suggests a certain spirit of mutual goodwill between product company and their users that is not honored by the letter of that contract.

So short and sweet: Honor the spirit of the social contract that ties companies and their users together. Make the letters of the contract match that spirit, not the other way round. Earning back the users’ trust will not just make the ecosystem more healthy and robust, it will also pay huge dividends over time in brand building, retention, and, well, user trust.

Respect the user

Users aren’t just an anonymous, homogeneous mass. They are people, individuals with diverse backgrounds and interests. Building technical systems at scale means having to balance individual interests with automation and standardization.

Good product teams put in the effort to do user research and understand their users better: What are their interests, what are they trying to get out of a product and why, how might they use it? Are they trying to use it as intended or in interesting new ways? Do they understand the tradeoffs involved in using a product? These are all questions that basic, but solid user research would easily cover, and then some. This understanding is a first step towards respecting the user.

There’s more to it, of course: Offering good customer service, being transparent about user choices, allowing users to control their own data. This isn’t a conclusive list, and even the most extensive checklist wouldn’t do any good in this case: Respect isn’t a list of actions, it’s a mindset to apply to a relationship.

Offer strong privacy & data protection

Privacy and data protection is a tricky area, and one where screwing up is easy (and particularly damaging for all parties involved).

Protecting user data is essential. But what that means is not always obvious. Here are some things that user data might need to be protected from:

  • Criminal hacking
  • Software bugs that leak data
  • Unwarranted government surveillance
  • Commercial third parties
  • The monetization team
  • Certain business models

Part of these fall squarely into the responsibility of the security team. Others are based on the legal arrangements around how the organization is allows (read: allows itself) to use user data: The terms of services. Others yet require business incentives to be aligned with users’ interests.

The issues at stake aren’t easy to solve. There are no silver bullets. There are grey areas that are fuzzy, complex and complicated.

In some cases, like privacy, there are even cultural and regional differences. For example, to paint with a broad brush, privacy protection has fundamentally different meanings in the US than it does in Europe. While in the United States, privacy tends to mean that consumers are protected from government surveillance, in Europe the focus is on protecting user data from commercial exploitation.

Whichever it may be—and I’d argue it needs to be both—any organization that handles sensitive user data should commit to the strongest level of privacy and data protection. And it should clearly communicate that commitment and its limits to users up front.

Make it safe and secure

It should go without saying (but alas, doesn’t) that any device that connects to the internet and collects personal data needs to be reliably safe and secure. This includes aspects ranging from the design process (privacy by design, security by design) to manufacturing to safe storage and processing of data to strong policies that protect data and users against harm and exploitation. But it doesn’t end there: Especially the end-of-life stage of connected products are important, too. If an organization stops maintaining the service and ceases to update the software with security patches, or if the contract with the user doesn’t have protections against data spills at the acquisition or liquidation stage of a company, then the data could have been safe for years but all of a sudden poses new risks.

IT security is hard enough as it is, but security of data-driven systems that interconnect and interact is so much harder. After all, the whole system is only as strong as its weakest component.

Alas, there is neither fame nor glory in building secure systems: At best, there is no scandal over breaches. At worst, there are significant costs without any glamorous announcements. In the same way that prevention in healthcare is less attractive than quick surgery to repair the damage, it is also more effective and cheaper in the long run. So hang in there, and the users might just vote with their feet and dollars to support the safest, most secure, most trustworthy products and organizations.

Choose the right business model

A business model can make or break a company. Obviously, without a business model, a company won’t last long. But without the right business model, it’ll thrive not together with its customers but at their expense.

We see so much damage done because wrong business models—and hence, wrong incentives—drive and promote horrible decision making.

If a business is based on user data—as is often the case in IoT—then finding the right business model is essential. Business models, and the behaviors they incentivize, matter. More to the point, aligning the organization’s financial incentives with the users’ interests matters.

As a rule of thumb, data mining isn’t everything. Ads, and the surveillance marketing they increasingly require, have reached a point of being poisonous. If, however, an organization finds a business model that is based on protecting its users’ data, then that organization and its customers are going to have a blast of a time.

To build sustainable businesses—businesses that will sustain themselves and not poison their ecosystem—it’s absolutely essential to pick and align business models and incentives wisely.


  1. Bruce Schneier: Click Here to Kill Everyone. Available at http://nymag.com/selectall/2017/01/the-internet-of-things-dangerous-future-bruce-schneier.html 
  2. See Peter Bihr: Trust and expectations in IoT. Available at https://thewavingcat.com/2017/06/28/trust-and-expectation-in-iot/ 

On Business Models & Incentives

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We’ve been discussing ethics & responsibility in IoT specifically, and business more generally, a lot lately. This seems more relevant than ever today, simply because we see so much damage done because wrong business models—and hence, wrong incentives—drive and promote horrible decision making.

One blatantly obvious example is Facebook and its focus on user engagement. I’d like to make clear I pick Facebook because it is simply the best known example of an industry-wide trend.

Advertisers are sold on “engagement” as a metric since the web allowed to measure user behavior (ie. what used to be called “Web 2.0”, now “social media”). Before that (early Web), it was various flavors of page impressions as a proxy for reach. Before that (print, TV) it was calculated/assumed reach based on sampling and the size of print runs.

It’s important to keep in mind that these metrics have changed over time, and can change and be changed any time. They aren’t a divine hand-down, nor a constant in the world. They are what we, as an industry and society, make them.

Now, for a few years advertisers have been sold on, and have been overall quite happy with, having their ad efficiency and effectiveness on engagement. This term means how many people didn’t just see their ads, but interacted (“engaged”) with them in one way or another. Typically, this means clicking on them, sharing them on social media or via email, and the like. It’s a strong proxy for attention, which is what advertisers are really after: They want potential customers to notice their messages. It’s hard to argue with that; it’s their job to make sure people notice their ads.

That said, the focus on engagement was driven forcefully by the platforms that profit from selling online ads as a means to differentiate themselves from print and TV media, as well as the online offerings of traditionally print/TV based media. “Look here, we can give you much more concrete numbers to measure how well your ads work”, they said. And they were, by and large, not wrong.

But.

The business model based on engagement turned out to be horrible. Damaging. Destructive.

This focus on engagement means that all incentives of the business are to get people to pay more attention to advertisements, at the expense of everything else. Incentivizing engagement means that the more you can learn about a user, by any means, puts you in a better position to get them to pay attention to your ads.

This is how we ended up with a Web that spies on us, no matter where we go. How we ended up with websites that read us more than we read them. With clickbait, “super cookies”, and fake news. Every one of these techniques are means to drive up engagement. But at what cost?

I truly believe you can’t discuss fake news, the erosion of democracy, online harassment, and populism without discussion online surveillance (aka “ad-tech”, or “surveillance capitalism”) first.

Business models, and the behaviors they incentivize, matter. Facebook and many other online advertisement platforms picked horrible incentives, and we all have been paying the price for it. It’s killing the Web. It’s eroding our privacy, the exchange of ideas, and democracy. Because where our communications channels spy on us, and the worst and most troll-ish (“most engaging”) content floats to the top because of ill-advised and badly checked algorithmic decision-making, we can’t have discussions anymore in public, or even in the spaces and channels that appear to be private.

It doesn’t have to be that way. We can choose our own business models, and hence incentives.

For example, over at ThingsCon we were always wary of relying too much on sponsorship, because it adds another stakeholder (or client) you need to accommodate beyond participants and speakers. We mostly finance all ThingsCon events through ticket sales (even if “financing” is a big word; everything is mostly done by our own volunteer work). Our research is either done entirely in-house out of interest or occasionally as a kind of “researcher-for-hire” commission. We subsidize ThingsCon a lot through our other work. Does that mean we lose some quick cash? Absolutely. Do we regret it? Not in the very least. It allows a certain clarity of mission that wouldn’t otherwise be possible. But I admit it’s a trade-off.

(A note for the event organizers out there: Most of the sponsors we ended up taking on were more than happy to go with food sponsoring, a ticket package, or subsidizing tickets for underrepresented groups—all entirely compatible with participants’ needs.)

If we want to build sustainable businesses—businesses that will sustain themselves and not poison their ecosystem—we need to pick our business models and incentives wisely.

Is Apple building a car?

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Full disclosure up front:

  • I have worked with automotive companies and suppliers, and with Google, in some minor roles.
  • I hold no stock of Apple or any automotive companies or suppliers.
  • I have no inside information that’s going to go into this bit of analysis, it’s all publicly available (and linked).

Now, let’s dive right in.

The tech news have been full of buzz about rumors of Apple building a car. The thinking isn’t silly, of course: A tech company sitting on a giant pile of cash, lots of movement in the connected car space, where parties as diverse as car manufacturers, web giants (Apple, Google, Nokia/HERE), mapping companies (TomTom, Nokia/HERE, Google), big data and connectivity companies, even a new car manufacturer (Tesla), and many more are shuffling for a seat at the table. It’s a backdrop for epic drama, disruption and intrigue. It’s even code-named “Project Titan”, and how ambitious and gigantic does that sound, eh?

So is Apple going to compete with Tesla and working on their own car?

I don’t believe so. And here’s why.

(more…)

ThingsCon Update: We have a program

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Good news! I’m excited to say that we more or less have a program for ThingsCon. I’m mostly copying & pasting this from the current program page, so keep an eye on the actual program page.

 

Also, now is the perfect time to get one of the very few available discounted early bird tickets!

 

So here goes!

Day 1

Day 1 is dedicated to in-depth workshops (either 2h or 4h long) and hands-on sessions. Dive deep into topics you want to learn more about and get some actuall hands-on experience.In parallel, Hardware Day Berlin takes place across town, so you can choose between a wide range of meetups, pitches, lunches, and other satellite events outside the conference, too.

We’re still building the workshop day program. Give us another few days.

Day 2

Day 2 features a wide range of talks, presentations and conversations and will take place at the conference venue from about 9:30 until 18:00, followed by a party. Please note that this is a draft: Some slots are likely to still change, and we’ll add details as soon as we have them.

We’ll have two stages full of program running in parallel.

9:30 – 11:00 Opening (Stage 1 exclusive)

Stage 1: Kickoff session

  • Opening keynote: Alexandra Deschamps-Sonsino (Good Night Lamp)
  • Brady Forrest (Highway1)

Coffee break

11:30 – 13:00

Stage 1: Founders Stories

Building a company is a personal journey – we’ll invite experienced hardware entrepreneurs to take a look back at the path they’ve come and share their individual insights and learnings – and discuss the challenges they faced along the way. These sessions are both very personal and highly interactive, giving you the chance to discuss the pressing issues that kept you awake all night. Chance are, they’ve been there.

  • Gavin Dapper (Phonebloks)
  • Olivier Mével (23 de Enero)
  • Matt Biddulph (Product Club)

Stage 2: Funding your business

Today, there are more ways to fund a company than ever before: from bootstrapping to accelerating to venture capital, all the way to crowd funding (or crowd investing even): We’ll take a deep dive into what it takes to fund a hardware business. Talk about when running a Kickstarter makes sense and when it doesn’t. We’ll explore various strategies and shed some light on interesting ways of funding.

  • Beth Koby (Technology Will Save Us)
  • TBA
  • Panel discussion: Beth Koby, Brady Forrest, TBA

Lunch break

14:30 – 16:00pm

Stage 1: Design

There are many ways to describe the conception of building a hardware product: Product design, open design, or service design, are just some of them. In this session, we’ll explore the challenges and opportunities of design against the backdrop of connected devices and hardware in general – we’ll and take a look at unconventional takes on designing a delightful experience around your hardware or connected devices.

  • Louisa Heinrich
  • Alasdair Allen
  • Rachel Rayns (Raspberry Pi)

Stage 2: Ethics & Sustainability

We all love our gadgets, and many of us are in the business of designing and producing them, too. Together with some of the pioneers in the field, let’s have a look at how sustainability and ethical considerations affect production. What’s possible today, what are the challenges and pitfalls to avoid? And how can we work towards more ethical and sustainable production while producing competitive, delightful products?

  • Miquel Ballester(Fairphone)
  • Jessi Baker (Provenance)
  • Panel discussion: Gawin Dapper, Jessi Baker, Miquel Ballester

Coffee break

16:30 – 17:30

Stage 1: Founders Stories

Building a company is a personal journey – we’ll invite experienced hardware entrepreneurs to take a look back at the path they’ve come and share their individual insights and learnings – and discuss the challenges they faced along the way. These sessions are both very personal and highly interactive, giving you the chance to discuss the pressing issues that kept you awake all night. Chance are, they’ve been there.

  • Matt Webb (BERGCloud)
  • Emily Brooke (Blaze)
  • Panel/Interviews: TBA

Stage 2: Open source hardware

Many of technologies that we use today have their roots in open source tech communities. This especially holds true for a new generation of hardware systems and tools. We’ll discuss the potential of Open Source Hardware, how to build your company around it, how to integrate open design principles into your own product, and show you promising new open source business models.

  • Siert Wijnia (Ultimaker)
  • Reto Wettach (Fritzing/IxDS)
  • Peter Troxler

17:30 – 18:00 Closing (Stage 1 exclusive)

  • Closing remarks
  • Closing keynote: Usman Haque

It’s time to take a fresh look at THINGS

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Things

 

We’re organizing Things, an independent two day event about the future of hardware and the hardware business. This is why, and what we’re planning.

Basic info

  • Date: 2-3 May 2014
  • Location: Berlin (details TBD)
  • Format: 2 day conference full of talks, demos, learning & networking
  • Website: thingscon.com
  • Twitter: @thingscon
  • Sign up for launch news here

Why ThingsCon? Why now?

Over the last few years, we’ve been seeing three trends — or rather, narratives — emerge.

1. Hardware and software are increasingly merging

Hardware and software are merging, and in many ways becoming more similar. This goes by many different names, all strongly related and with only slightly different focus. To name just a few: Internet of Things (IoT), connected devices, post-digital, smart things, machine-to-machine (M2M), physical web. (There are many more names.)

No matter which terminology you prefer, what we see is the culmination of a number of developments that lead to devices of all sorts being connected to the internet.

That kind of changes everything: Devices can communicate, so they produce data that can trigger actions beyond said devices. Devices can respond to external triggers. They stop existing as a discreet unit and rather become part of a larger system, an ecosystem, a responsive environment.

It also means that product design becomes a whole different beast. Now a device isn’t “done” once it leaves the factory, rather it can be updated like software (because it is part software), it evolves over time. We need to rethink obsolescence, maintenance, compatibility over time. Once connected, devices — more than ever — have implications for privacy, security and data ownership (see the Declaration of the Open Internet of Things Assembly).

Once devices are connected, it means they become more responsive, maybe even context-aware. The same goes for environments, like your city, once a layer of data covers the world.

All this is somewhat vague as terminology, understanding and ethics aren’t fully matured in this space yet – in fact the space itself isn’t fully defined as of yet, as lines are blurry. Yet, we see lots happening there, and the impact can be felt already – only, as so often, this particular part of the future isn’t equally distributed yet.

 

The Good Night Lamp from Good Night Lamp on Vimeo.

An example of how connectedness changes everyday objects: The GoodNightLamp, a family of connected lamps.

2. New manufacture changes production

Related, yet a distinctly different thread, is the emergence of new manufacture, or what’s often referred to as 3D printing and related technologies. (Here, the terminology is much more clearly defined, but in the mainstream discourse mostly turns up referred to as something like “3D printing and stuff”.) Additive and substractive production methods, rapid prototyping, open hardware all have reached a point of maturity where capacities once reserved to big industry is more or less in the hands of individuals that a few years ago wouldn’t have been able to access it.

As a simple example, think of 3D printing. The automotive industry has long been using additive manufacturing (laser sintering, etc.) for rapid prototyping of their models. Dental clinics are printing a good chunk of their dental replacements these days. Architects have been 3D printing and laser cutting models for ages.

Yet, only over the last few years amateurs (in the sense of “non-professional, interested individuals”) and tinkerers have gotten their hands on similar tech. Starting out in the hacker and DIY scene, these production capabilities are entering the mainstream. Not mom-and-pop stores just yet, but almost certainly in every major city you’ll find a maker space that lets you use a printer should you need it. And with more patents expiring every month, we see the field maturing to a point where the production quality gets very close to industrial grade manufacturing, and prices drop to allow for a wide range of new products, services and business models.

 

Makie Makies are dolls, made possible through custom, on-demand 3D printing.

3. Berlin’s emerging startup ecosystem

These trends lead to a whole new emerging ecosystem of startups, entrepreneurs, ideas, services around the globe. But it’s still early days. So far, the most promising hubs include San Francisco, New York, London and a few others.

I believe that Berlin is in an excellent position to establish itself as a leading hub for the new hardware business. The city’s emerging startup ecosystem, its strong hacker and DIY culture, relatively low cost of living that allows for experimentation, and Germany’s strong tradition in industrial production means Berlin should be capable of enabling a new crop of entrepreneurs to take their ideas from prototype to business, at scale. A number of policies and initiatives aimed at fostering innovation and the connections between industry (Germany’s famous Mittelstand) and the entrepreneurial scene certainly won’t hurt.

This isn’t about competing with other cities — it’s about realizing Berlin’s huge potential.

 

Electric Imp demo at IoTBerlin Prototype demo at an IoT Berlin meetup.

ThingsCon is where these three narratives connect

We put together Things because we think it’s important to interweave the three narratives laid out above — it’s where they culminate in a concrete time and space. Because it’s exchanging ideas and fostering lasting relationships — in other words, building a community — that in my experience helps more than any big initiative. Peer exchange, learning from each other, helping each other — and knowing who to call when you hit a wall of some sorts — is incredibly valuable.

We believe that Things can help with that, and provide the kind of space for these kinds of connection to be built. So let’s get this done together!

So what are we planning to do concretely?

Primarily, we aim build an awesome event for exchange, learning, networking. A space to connect and foster lasting relationships. To learn from others who’ve been there, done that. To learn how to best get from prototype to designing for scaling, to building a business. Hosted in Berlin, but with an international focus, the focus is on building connections between Berlin and not just the rest of Germany, but all of Europe (and beyond, wherever possible). We’ll get the most interesting folks from all over Europe together in Berlin, put them in a room, shake it up thoroughly, and surely some amazing things will emerge.

 

ThingsCon target audience Sketch: Our mental model of who ThingsCon is for.

 

Leading up to Things, we’re currently planning a road trip where we take a number of entrepreneurs, innovators, tinkerers, startups and what have you to meet more of the Mittelstand, to visit production facilities and industry representatives and researchers. By fostering that dialog, we believe we can help create lasting relationships and lots of value as both sides can help each other and learn from each other. And, of course, do business together.

Third, we’ll announce Hardware Day Berlin. Think of it as a flag in the ground for other events to gather around and turn Berlin into a hardware hub for the day, with lots of workshops, meetups, events of all kinds. Hardware Day Berlin will (most likely) take place on 2 May 2014, the first of two days of ThingsCon.

If you’re interested in attending, stay tuned for updates here, on Twitter and sign up for our newsletter. If you’d like to get involved in some role (as a sponsor, by organizing an event on Hardware Day, as a speaker, or as a partner for our IoT-meets-Mittelstand road trip), or if you just want to learn more, please ping us.

Thank you and see you soon at Things!

Collaborate on a trust-only basis, or why it’s a good idea to go against traditional business wisdom

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Kozyndan: Rainbow Narwhal Spirit Animal

I wrote a little thing on the role of trust-based collaborations (as opposed to setting up formal organizations and getting the lawyers involved at or even before the start) over on Medium.

In startup land, as in most traditional business contexts where intellectual property counts as an asset, we’re usually told to guard our ideas, our prototypes, our processes. Here’s a rallying cry to go the opposite direction: To share ideas, to openly collaborate before getting the lawyers involved. To iterate not just on a product, but on the the very nature of our business relationships, our collaborations, our organizations.

Full text here.

Merging book stores & ebooks

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filed under: to read/re-read

I love bookstores. I love them for their curation. I particularly love how smaller bookstores have a fantastic selection. However, I have a dark secret — I almost only go to bookstores when I’m traveling, and I go to great pains not to carry more stuff than I absolutely need. So I rarely buy printed books in stores, ever.

Instead — and this sounds (and is) a little sad — I jot down the books I want in the bookstore and buy them later, often online. This feels deeply unfair, almost like cheating on the bookstore owner.

So I’m wondering how both worlds can be merged for the better. In other words, how can we enjoy the curatorial services of a well-run bookstore and make sure the shop stays in business — without having to lug around books in a carry-on?

Here’s an idea: We cut bookstores in on every sale they help generate.

The mechanism could be relatively simple. A store owner signs up online with the big platforms and publishers — say, Amazon. When I go to a bookstore and find a book, I scan the book’s barcode with the store’s Kindle app to buy an electronic copy. The app checks my location, asks me to confirm the store I’m in, and registers all book sales through the app to that store. While the ebook downloads to my device of choice, the shop collects a commission. Amazon (or any other platform or publisher, for that matter) sells another book, I can keep traveling light, and the store gets its fair share. Everyone’s happy.

Where the billing takes place doesn’t really matter at this point: In this example it’s through Amazon, but it could be any number of new umbrella services or publishers’ platforms. There’s probably room in this space for half a dozen startups. But no matter how it happens, the important thing is that bookstores get a share in exchange for their curation. Because we really don’t want to have to rely on Amazon’s recommendation services alone.

Is anyone working on this yet?

 

Update: David D. Levine kindly pointed me to this cooperation between Powell’s Partners and Kobo. Thanks, David!

Update: I re-wrote and polished this post up a bit to re-post it to Medium.

Update: Thanks to the fine folks at Medium, notably Kate Lee, the post has been featured in Medium’s Editors’ Picks as well as the collection The Future of Publishing.