The Inversion Factor: What it means for the IoT world and its consumers

Events, High Technology, Innovation Posted Jan 19, 2018 by Kayla Krause

Last night I had the pleasure of attending a wonderful and very thought-provoking event with a handful of colleagues. Hosted by the MIT Enterprise Forum of Cambridge, two authors Linda Bernardi, chief product and strategy officer at Element AI, and Prof. Sanjay Sarma, vice president for Open Learning and Fred Fort Flowers (1941) and Daniel Fort Flowers (1941) professor of Mechanical Engineering at MIT, took centerstage at the MIT Stata Center to discuss their book, “The Inversion Factor.”

Kicking off the fireside chat, Bernardi and Sarma dove into the book, which discusses why companies today will have to abandon the product-first orientation. Instead of us – the consumer – adapting to companies and their products, companies must adapt to us and create technology products that fulfill our needs. Via the Internet of Things (IoT), businesses are changing its fundamentals – relying less on brands and more on culture.

It may seem obvious since we all use smart phones and communicate through technology, but we all are engaging in IoT whether we realize it or not. IoT is where the real (us, humans) and the digital (smart phones, the internet, etc.) coincide to fill our everyday needs. However, from a business perspective, IoT is changing the way companies operate. As Bernardi and Sarma discussed, global giants like Amazon and Uber started this shift – online shopping and delivering goods to your doorstep, instead of going out to the store; and having a car show up wherever you are rather than calling a taxi or renting a car. Companies like these essentially lead the way for other companies to follow.

With a successful vision, inversion can be achieved. Imagination coupled with technology, especially IoT technology, allows the unthinkable to happen. For instance, Google’s self-driving cars. We live in such a technology-advanced world that self-driving cars are now possible. This business concept is represented in a mechanism that Bernardi and Sarma describe as the inversion triangle: innovation – imagination of what the consumer needs; technology – the technical expertise to make the product; and culture – the social, political and institutional environment within an organization. Put the three together and voila, a business success.

As Sarma said last night, “consumers will use any technology to own the experience.” This is how companies are transforming their business, by thinking like a consumer. In today’s world the sky is honestly the limit. We imagine what we want and will do anything to get that experience, whether it’s getting into a self-driving car or having a week’s worth of food delivered to our door with measurements and cooking instructions. We will use whatever means necessary to get the experience we’re looking for – we just need to the product or service to be created.

However, there are some caveats that come with this advanced technology – security and privacy. With a fast-paced market and every growing list of new innovations, there is a large attack surface for malicious and non-malicious opportunities. Bernardi and Sarma addressed these vulnerabilities saying how complex they are, and that organizations are aware and plan to incorporate them into their business plans.

That being said, as a consumer, I personally wonder how the inversion factor will play out in the future. Our society today is already very much involved in smart phones, apps, and other inter-connected products that I am curious to see just how dependent we’ll become on them as more and more companies adapt to this business model. The IoT connects us to all our devices, which leaves little room for personal productivity when our steps are counted for us or our calendar is synced to our significant others – so rather than estimating how far you walked that day or calling your significant other to see if that date works to go out to dinner, we inevitably become more reliable on our devices that we lose that human interaction.

We are so connected to our devices that they are starting to streamline simple things for us. As Bernardi and Sarma mentioned, we’re already seeing it when we go into Starbucks and you say how much you like the song that’s being played and suddenly that song shows up as “suggested” on your Spotify playlist; or you’re browsing on Amazon for new Echo speakers and suddenly there’s an Echo speakers’ ad on your Facebook newsfeed.

As we become so reliable on connectivity, it continues to push compute closer to the edges, further developing the inversion factor. So, what will come next? With the rate at which companies are creating things, my guess is we’ll find out sooner rather than later.

This presentation was live-streamed and can be viewed here:

The third and co-author to the book, The Inversion Factor, Kenneth R. Traub, sadly passed away but his impact is ever present.