How to Build Sustainable IoT Products

Many companies are looking for ways to become more sustainable and play their part in stopping or slowing down the climate crisis. You’ve probably heard a lot about how IoT can fight the climate crisis by helping integrate renewable energy sources into the electric grid, powering electric vehicles, or optimizing manufacturing processes to reduce their carbon footprint.

Those contributions are certainly meaningful, but what about the carbon footprint and sustainability impact of the IoT products themselves?

How

According to new estimates from the latest Global IoT Forecast report from Transforma Insights, there will be 24.1 billion connected devices by 2030.

All of those IoT solutions will require a considerable amount of energy to run. Our role as Product Leaders is to build solutions that provide value to customers, to our company, and to have a positive (or at least neutral) impact on society and the environment.

Making the Case to Executives – Sustainability is Good for Business

Although the climate crisis is a critical problem in our world today, it’s still challenging to convince executives and other senior leaders to invest in this area.

Our job as Product Leaders is to articulate the benefits of sustainability in business terms. Sustainability can be a big differentiator for your company and your product. In short, sustainability is good for business! Here’s how:

Reduce your product’s total cost of ownership

Industrial IoT is one area where IoT is having the biggest impact and clearest return on investment.

For most industrial customers, their energy bill is a major line-item in their P&L. These companies spend millions of dollars in energy management to keep their electricity bill under control.

Help your customers meet their sustainability goals

Today, more and more companies have aggressive sustainability targets—either because it helps their brand or their bottom line. For example, many leading companies like Amazon, Google, and Microsoft have pledged to become energy neutral in the coming years.

If your IoT product can solve the customer’s pain AND help them achieve their sustainability goals, they are more likely to purchase your solution, even if you are more expensive than the competition.

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Attract talent

The competition to attract IoT talent is fierce. Companies with a focus on sustainability have an advantage as new generations are more purpose-driven, and they are choosing to work for companies that they believe have a positive impact in the world.

Incorporating sustainability practices in your product will give you an advantage when hiring and retaining the best and brightest minds.

Setting Your Sustainability Targets

One of the reasons sustainability efforts fail is because they don’t have clear targets or a distinct definition of success. For many companies, sustainability is just a message from the marketing team, but it doesn’t have real weight behind it.

In contrast, some of the top companies in the world have robust sustainability strategies. For example, check out the sustainability plans from MicrosoftAmazon, or Ericsson.

Before you propose plans to improve the sustainability of your IoT product, make sure you have clear targets to ensure you are moving in the right direction.

A sustainability target includes:

  • The sustainability area to address (e.g., one or more of the UN’s 17 sustainable development goals such as energy consumption or waste reduction.)
  • The desired goal
  • A timeline to reach the goal

For example, the key to halting climate change is eliminating carbon emissions produced by burning fossil fuels. Therefore, a common target is to become carbon neutral by a specific year. Keep in mind, these are usually company-wide strategies, and your product is just one of the components. But, you need to do your part to contribute to that goal.

When defining sustainability goals, you will usually have intermediate milestones along the way. You can leverage these milestones as the targets for your own product roadmap.

A Structured Approach to Sustainable IoT Products

Now that you have the tools to convince executives that sustainability is good for business, and that you’ve set your targets, it’s time to drive action.

For Product Leaders to drive action, we need a structured approach that includes sustainability within our products.

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My proposed approach has three parts:

  1. Define a sustainability baseline for your IoT product
  2. Identify sustainability opportunities for your IoT product
  3. Balance sustainability decisions with the rest of your product strategy

1. Defining a sustainability baseline for your IoT product

Before you create a plan for creating a more sustainable IoT product, you need to start by understanding where you are today. In short, you need a baseline.

Creating a baseline might seem daunting if you think of your product as monolithic. My recommendation is to break down your product in its core components and then analyze each one of them with your team.

2. Identifying sustainability opportunities for your IoT product

Your next step is to identify opportunities where you can improve your product to drive towards your sustainability goal. Walking the IoT technology stack is again a great tool for involving your team in identifying these opportunities.

Below is a list of questions you can use as you walk the IoT Technology Stack with your team. Though the list is not exhaustive, it is a starting point as you prepare to facilitate this exercise.

3. Balancing sustainability decisions with the rest of your product strategy

Once you identify sustainability opportunities for your IoT product, it can be tempting to start implementing them right away. Before you dive in, it’s crucial to evaluate the impact of those opportunities across your current product strategy.

Putting your sustainability plan into practice may require changes to your product, your processes, and your supply chain. You need to be aware of how those changes will impact your user experience, your data strategy, your business model, etc.

  • UX Decision Area: how does changing this chip impact the user experience of all the personas that interact with our product?
  • Data Decision Area: how does swapping this chip impact the amount of data my device produces or transmits to the cloud?
  • Business Decision Area: how does this hardware change impact my pricing and profit margins? And what impact does it have in my partner structure?

To learn more about how to use the IoT Decision Framework, read my article here. If you are looking for a deep-dive into the IoT Decision Framework to improve your overall product strategy, I recommend checking out my online course: The IoT Product Manager Certificate Program.