How to Build Sustainable IoT Products

Table of contents:

• Background – Why Incorporate Sustainability into Your IoT Product
• Making the Case to Executives – Sustainability is Good for Business
• Setting Your Sustainability Targets
• A Structured Approach to Sustainable IoT Products
  • Defining your baseline
  • Identifying opportunities for your IoT product
  • Balancing decisions with the rest of your product strategy
• Creating a Plan of Action

Background – Why Incorporate Sustainability into Your IoT Product

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?

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.

That’s why incorporating sustainability principles into your IoT strategy and development process is a must.

One of the challenges with creating sustainable products is that “sustainability” is an umbrella term, and it is difficult to drive concrete action within such a broad and sometimes vague topic.  Implementing “sustainable products” is as elusive as implementing “secure products” or “easy-to-use products.”

Later in this post I’ll provide you with a structured and actionable approach to incorporate sustainability throughout the lifecycle of your IoT product. But first, let’s talk about how to convince your executives to take on this initiative.

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.

When buying new solutions (IoT or otherwise), they evaluate not only the initial price of the solution, but also the total cost to operate it over the years. If your product can solve your customer’s needs AND is more economical to operate than the competition, you’ll have a significant advantage.

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.

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 Microsoft, Amazon, 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.

For example, the Exponential Climate Action Roadmap, a multi-company initiative to address Climate Change, showcases 36 technologies (most of them IoT-powered) that can eliminate 100% of global greenhouse emissions by 2050.

The report defines 2050 as the timeline to reach the ultimate goal, but it describes the steps necessary to get there, including cutting emissions by 50% by 2030, again by 50% by 2040, and again by 50% by 2050.

Using this example your company can craft a similar strategy to reduce emissions from your product by x% by a given year, and y% by the next one, etc.

It is important to secure the support and commitment from executives to implement your sustainability goals, as sustainable practices require investment (time and resources).

Addressing sustainability may impact your roadmap or, existing partnerships, or require you to change vendors across your supply chain. Your initiative will not survive without the support of your executive team.

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.

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

Note: If you are new to the IoT Decision Framework, you can learn about it here.

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.

All IoT products have the same 5 high-level building blocks. Together, these building blocks constitute the IoT technology stack as shown below.

Note: If you’d like an introduction to the IoT technology stack, start here.

Once you identify the building blocks of your IoT solution, the next step is to “walk the IoT technology stack”.

Walking the IoT technology stack is a great exercise to do in a brainstorming/workshop session to allow everyone to contribute their experience. The result will be more engagement from your team, as well as a more robust understanding of the areas that can improve the sustainability of your IoT solution.

As a Product Leader, you’ll facilitate the discussion, explaining the purpose of the exercise and providing seed questions to launch the conversation.

For example, let’s say that your goal is to reduce the carbon footprint of your product by 20% this year. Some sample seed questions include:

• Approximately, how much energy (kWh) does our end-to-end solution consume per month for one customer?
• How much of that energy comes from the devices, the communication channel, the processing on the Cloud, and the applications?

Keep in mind that if sustainability is new to your company your team may not have answers to these questions. In that case, the action item from the workshop can be to create a project to measure the energy output of your end-to-end solution.

Even if your devices don’t have the necessary instrumentation to measure their energy consumption, your team can perform tests in the lab to get a rough estimate. Remember, the key is to keep moving forward with small, but consistent steps.

Once you have a baseline for your product, you can take it a step further and create a baseline for your complete supply chain, including:

• What is the carbon footprint of manufacturing our devices?
• What is the carbon footprint of shipping our solution to customers or to perform maintenance?

These last items can be improved by working with “greener” manufacturers and leveraging an all-electric vehicle fleet to deliver your devices and perform truck-rolls for maintenance. These are big changes, but at this stage, you need to think holistically and find opportunities that your executive leadership can support.

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.

Improve sustainability at the Device Hardware layer: Continuing the example of improving energy consumption, here are some questions you can use to engage your team on how to improve sustainability for your hardware.

• What are the hardware components that are most power-hungry? How can we improve this?
• Can we bring down the energy consumption close to zero when the device is in sleep mode?
• Is it possible to power our devices through renewable energy? (e.g., solar or vibration)

Remember you can craft similar questions for different goals such as reducing waste or pollution, for example:

• Is the packaging of your hardware as sustainable as it can be? (e.g., amount or packaging needed, packaging made of recycled materials)
• Do you have a strategy to recycle hardware after decommission?
• How much pollution does our device produce? (e.g., burns fossil fuels, can leak oil, uses toxic chemicals, produces noise pollution, etc.)

Improve sustainability at the Device Software layer:

• What is our strategy for power management at the device level?
• Do we have a strategy to orchestrate all devices across our fleet to balance energy consumption as needed?
• Do we have a way to detect and control energy spikes?

Improve sustainability at the Communications layer

• Are we using the most energy-efficient connectivity technology for our application?
• Can we optimize the frequency we transmit data to save energy in the device?
• Are we sending or receiving unnecessary data that is causing us to waste energy in the device?

Improve sustainability at the Cloud Platform layer

• Is our Cloud provider powering their data centers with renewables?
• Can we schedule any non-real-time, computation processes to execute at night to avoid consuming large amounts of energy during the electric grid peak times? (a.k.a. load shifting)

Improve sustainability at the Applications layer

• Are your front-end applications power-hungry?
• Can our applications track energy consumption?
• Can we add instrumentation to troubleshoot remotely as much as possible to avoid truck rolls?

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.

An easy way to evaluate the impact of these decisions is to walk your proposed sustainability improvements through my IoT Decision Framework.

For example, let’s say your top opportunity to build a sustainable IoT product is to replace some power-hungry chips in your device hardware with more efficient ones. To determine the impact in your strategy, you can go through the IoT Decision Framework asking:

• 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.

Creating a Plan of Action

The last step in the process is to create a plan to turn these findings into action. And to be honest, this is where most sustainability initiatives go to die. Every company has good intentions, but they lack a concrete, actionable plan to achieve their goals.

Your plan of action should have two parts:

1. A discovery plan:

Create a discovery plan to fill in any unanswered questions. This might include defining targets, setting baselines, identifying opportunities, or evaluating the business impact. Work with your team and with other stakeholders to get buy-in into the sustainability initiative and identify the people within the company who will drive this part of the project forward. (This most likely isn’t a Product Manager).

2. An execution plan for your product:

For us Product Managers, this usually means updating our roadmap. The key is to ensure that any sustainability-related changes are included in the roadmap so they can be prioritized as equals with any other feature (internal or external).

If these changes are not in your roadmap, approved by stakeholders, and have people assigned to them, then your company is not serious about meeting their sustainability targets. It’s that simple.

The Bottom Line

As Product Leaders, we are responsible for creating value for our customers, our company, and our society. An important part of that value is the environmental impact that our products have in the world. Now more than ever it is important for our profession to push sustainability as a key pillar of Product Management.

Sustainability is not “someone else’s responsibility.” It’s everyone’s responsibility, and I’m counting on you to have an impact through the IoT products you build.