The 75th Installment
IoT Will Change the Rules of the Game
by Shigeomi Koshimizu,
Professor, Master Program of Innovation for Design and Engineering
Not a day goes by now without the media using the term IoT (Internet of Things), which aims to connect everything to the Internet. Some people dismiss IoT as a buzzword, but I very much have the sense that it will greatly change our lives. While the conventional Internet was a network of computers, advances in technology are beginning to realize an era in which “things” that were previously not connected to a network will have the ability to exchange information via the Internet. Let’s try imagining the impact that IoT could have on industry.
I currently instruct a master’s course on innovative design, in which I teach the TRIZ theory of inventive problem-solving, which originated in Russia. TRIZ has a concept called “the ultimate invention.” What do you think it means? It is stand-alone function without form. The ideal ultimate invention is said to be only the functions that a customer wants, without form or shape. It’s a rather difficult concept to comprehend, so I talk about it in class by referencing a well-known marketing adage: “What the customer wants is not a drill but a hole.”
It comes from the opening of Theodore Levitt’s 1968 book Innovation in Marketing, where the Harvard Business School professor states that "People don't want to buy a quarter-inch drill. They want a quarter-inch hole!"
Customers want the function of a hole into which they can insert something, so the means of creating the hole is not limited to a drill if another method is available. Many of the students at our school are working adults, so posing this question about the ultimate invention is very effective for converting them to a “market-in” way of thinking (buyer convenience), as they are prone to “product-out” patterns of thinking (maker convenience) from being company workers.
So we’ve talked about drills to this point but, in fact, equipment fitted with tools such as drills are increasingly Internet-connected. The business of monitoring the working status of machinery and remotely diagnosing trouble via the Internet is fast becoming reality. Such monitoring allows one to know how many holes have been drilled in one day. Although makers currently sell single drills to customers, in the future those makers will charge by “the number of holes processed.” I am pressing the point, but I’d like to reiterate: what customers want is a hole, not a drill. Such a billing scheme would be very reasonable with this mindset. So this is how IoT could change the rules of business in various industries.
As a current example, the other month there was news that Amazon was considering a new e-book service that would charge by the number of pages read. We’ve probably all had the experience of buying a book only to stop reading it partway through because it was no longer interesting. In that context, many people might actually welcome such a system!
A few days earlier, when I related the above idea to a graduate of the Master Program of Innovation for Design and Engineering, I received the following tongue-in-cheek response: “Professor, if that’s the case, then the cost of a haircut will change according to the amount of hair cut!” I can’t really say if such a system could be applied to the amount of hair, but if the scissors were connected to the Internet and could automatically count the number of cuts then billing by the number of cuts would be possible. I’m lucky enough to still have quite a bit of hair left, but as I grow balder, charging by the number of scissor cuts might be a good deal. These are the kinds of things I imagine about the coming IoT era.