Did you ever ask yourself ...
“I wonder where that company that I was talking to several years ago ended up?”
Chances are if it was in the M2M space, they are no longer in business.
Whether the company was acquired or went out of business on its own, there is no doubt that there is a very high attrition rate in the world of M2M.
Why is that, you may ask?
That is a really good question and here's how I see it:
1. M2M ain’t easy, baby! Let's face it ... I said 20 years ago that we weren't selling chocolate bars and I meant it. The product is very technical and the environment to deploy can be very bureaucratic. That makes it difficult to have a watershed year in our industry. Companies who are superstars today may have their positions challenged by the next company to come along because the scale (and, to some extent, the size of deployments of products and services) of our industry has not yet reached that elastic portion of the demand curve.
2. It is not possible to make money if you just challenge for your slice of the market. It is critical to chase 100% of the Total Available Market (TAM). If you currently can’t pursue 100% of your TAM for any reason, you need to find out ways that you can overcome this. This needs to be a core focus for any company to be successful.
3. People generally have flawed business plans. I am very much in favour of having plans and constantly changing them to suit the business environment...and when I say change, I really mean tweak. Look …what was great 20 years ago is not viable today, and once you start shrinking, its already too late. It is best to have a core business objective and expertise and continually tweak your approach to keep innovating and growing.
4. Businesses are not committed to the space....Look, M2M is hot and sexy now, so everyone is in jumping on the bandwagon ...but where were you when this thing was born? If you weren’t in M2M then….you probably will not be there in the later stages either since you won’t have the technical or logistical chops to be involved. It took many years of trial and error to get companies to acquire that level of knowledge that they have in this space, so if you don’t “buy it”, you won’t have it. This also answers the question of “why do I see the same people at every industry event I go to?” It’s an unhealthy metric of our industry.
5. A lot of customers have wasted valuable resources on whims ... and by valuable resources, I mean money, and by whims, I mean re-inventing things that have already been perfected. The trick is to find some new “secret sauce”, but don’t try to make your secret sauce from someone else’s who has been making that brand of secret sauce for the past 10 years.
I was looking at business cards on my desk and searched to see if any of those companies were still around and low and behold, there they were GONE (old Irish word play)!