A Product Management Framework for the Internet of Things

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In this post, I share the IoT Decision Framework I developed to help Product Managers tackle the complexity of IoT products. This framework provides an easy-to-follow structure to uncover requirements at each layer of the IoT stack, including business decisions, technical decisions, and more.

Product Management for an Internet of Things (IoT) product can be very daunting and confusing, even for the most seasoned Product Managers. That’s because IoT products are more complex than your average product, with five layers of technology to consider: device hardware, device software, communications, cloud platform, and cloud applications.

Not only do you need to make critical business and technical decisions at each of these five layers, but you need to make sure this myriad of decisions are consistent with your overall strategy and consistent across the five layers. This exponentially increases the difficulty of managing an IoT product.

To help Product Managers tackle this complexity, I developed the IoT Decision Framework, with an accompanying IoT Decision Workbook.

The framework provides a structured approach to creating or enhancing an IoT product. It helps you ensure all your strategic decisions are consistent, setting up your product for success.

This framework will help you uncover pitfalls early on before you have invested time and money going in the wrong direction with your product.

I’ve seen it firsthand when seasoned Product Managers from top Silicon Valley companies attend my Product Management for IoT course at Stanford Continuing Studies or take The IoT Product Manager Certificate Program online.

Throughout the class, students drastically alter their product strategy and plans as they work through the IoT Decision Workbook, because it helps them uncover questions they otherwise would not have considered, questions that could make or break their products.

The workbook, included as part of all my courses, is a document you can use with your team to put the framework into practice right away, as it walks you through key questions you need to answer in order to create a solid product strategy and roadmap.

To get started with the IoT Decision Framework, let’s take a look at the five layers of the IoT stack.

The 5 Layers of the IoT Technology Stack

The greatest challenge of managing an IoT solution is that there are five layers in the IoT technology stack, and decisions need to be made at each layer.

In my previous post, Internet of Things: A Primer for Product Managers, I described these five layers in detail. For reference, they are:

To put things in perspective, a SaaS application only includes the two layers on the right side: Cloud Platform and Cloud Applications.

Those two layers alone are usually enough to keep any Product Manager on her toes. So you can imagine that adding three extra layers becomes exponentially more complex, because you have to make decisions at each of these layers, and make sure your decisions are consistent across all five layers.

As an IoT Product Manager, it can be very daunting to know where to start or how to organize your thoughts. One of the hardest parts is knowing which questions you should be asking.

The IoT Decision Framework

The IoT Decision Framework provides you a structured approach to uncovering the questions you need to ask, and then working with various departments to make the best decisions for your product.

Think of it as a map to help you discover all the things you need to consider as you build your IoT business plan, roadmap, backlog, etc.

The framework focuses on six key Decision Areas you need to consider for any IoT product. These areas are:

User Experience (UX)
Data
Business
Technology
Security
Standards & Regulations

Each of these Decision Areas must be evaluated at each layer of the IoT Technology Stack. You’ll start with UX and work with your teams to discover what makes for a great user experience at the Device Hardware layer, then at the Device Software layer, and so on.

Then you can move to the Data Decision Area and explore Data considerations for your Device Hardware, Data considerations for your Device Software, and so on.

You get the idea. Continue going through the framework left-to-right and top-to-bottom until you cover all areas.

I know this sounds like a lot of work, and it is. But believe me, you’ll be glad you spent the time thinking about implications of all Decision Areas throughout the IoT stack before you start building anything.

That’s how you’ll create a consistent product strategy and learn about all the gaps that you need to spend more time refining.

Each bubble in the IoT Decision Framework is an opportunity to use Product Management tools to make decisions and discover gaps—tools like market research, design research, customer development, prioritization, Lean, NPI, etc. The framework is not a replacement for those. On the contrary, it provides you a map that gives structure to your discovery process.

The Decision Areas

The order in which you go through the framework is important, because each Decision Area feeds into the next one. Let’s take a closer look at each Decision Area.

Note: I’ll be going into each of the Decision Areas in more detail in future posts. I invite you to subscribe to my newsletter to be the first to know when they are released.

1. User Experience (UX)

In this area, you need to understand who your user is, what their needs are, and what would make for a great experience at each layer of the stack. Don’t worry about the technical details at this point. Just think about what this person wants, not how you will deliver it.

Plus, you’ll want to consider the needs of secondary users, like your internal Fleet Operations team, developer partners, sales, installers, and more.

2. Data

In the data area, you need to decide how data should flow through the stack to fulfill the user’s needs.

For example, what type of data does your device need to produce? How much data should be transmitted to the cloud, and how often? Do you need to perform analytics at the edge, in the cloud, or both?

3. Business

Based on your user and data needs, you can now begin to make business decisions that will feed into your business plan and financial projections.

For example, you’ll need to decide your overall business model, which layers of the IoT Technology Stack you will monetize, as well as understanding the costs of providing your service at each layer of the stack. You’ll also make critical business decisions such as whether to build or buy each layer of the stack, and whether to open APIs.

4. Technology

Based on the decisions above, you’ll then decide what technology is needed at each layer to deliver the solution. The key here is not to choose the technology yourself, but to provide your Engineering team the information and requirements they need to choose the best technical solutions.

Together with Engineering, you’ll identify which sensors, device hardware, and device software is needed. You’ll design a communications topology and decide on communications protocols.

You’ll work with your team to choose a cloud platform based on data needs and performance requirements. And you’ll decide on the form factors of your cloud applications that best fit your user’s needs.

5. Security

Next you’ll decide how to secure each layer of the stack. Think about how each layer could be compromised (including device tampering), whether you’ll do security testing in-house or with a vendor, and how to protect your product from being hacked from inside your own company (by employees or unwanted guests).

6. Standards & Regulations

Finally, you’ll identify the standards and regulations that will affect your product at each layer of the stack, based on your type of product, customer, and industry.

For example, does your industry have a standard data format or communication protocol that will enable your product talk with other devices? Do your customers require you to meet certain device safety or cloud security requirements? What laws must your product comply with at each layer?

Note: To learn more, I recommend downloading these 3 free videos that showcase the IoT Decision Framework in action.

Iterate, Iterate, Iterate

The choices you make in each Decision Area and stack layer will have an impact in other Decision Areas and stack layers. You’ll need to iterate several times across the framework before you reach a solution that is consistent with all the areas and has considered all the gaps.

For example, let’s say that in the Data Decision Area, you decide that ideally, your product would provide real-time data to your user. In the Business area, you outline the costs of providing device hardware, device software, and cloud platform that can handle real-time data. And that’s when you realize providing this service will cost more than what your customer is willing to pay.

So you go back and decide that receiving data once a minute will be sufficient to meet your user’s needs. And then you work through the UX, Business, and Technology Decision Areas once again to make all your decisions consistent with the new once-a-minute decision.

An IoT product is more of a system than a stand-alone product. Everything is interconnected, so by using this framework you can make sure the decisions you make across all layers are consistent.

Key Questions - the IoT Decision Workbook

You may have noticed that the framework does not contain an exact list of questions to be answered in each Decision Area and stack layer. That’s because the exact questions will depend entirely on your industry and application.

The framework is intended as a tool to help you organize your thoughts and come up with the questions you need to answer as you develop your product strategy.

However, there are some key questions that every Product Manager should answer, regardless of your application, in order to create a solid IoT product strategy and roadmap.

The workbook is a handy document you can use with your team to put the framework into practice right away, as it walks you through the key questions in each area, with space to enter your answers. It also has space to add your own questions based on your particular situation.

Getting the Most from the Framework

When to Use It

You should use this framework after you have done the preliminary Product work including: defining your target audience, detailing your value proposition, analyzing competitors, and estimating the revenue opportunity.

Once you have a solid idea of what your product is meant to accomplish and why, this framework will help you think through the decisions you will need to make at each layer of the stack to support the strategy you have defined.

You can use this framework as an extra tool while you are:

Creating your business plan
Defining what your MVP should look like
Building and managing your roadmap
Defining new features
Considering a product line extension
Evaluating potential partnerships
Analyzing the risks of changing any area of the technology stack

Work as a Team

Product Managers are accountable for having a strong and consistent product strategy. But that doesn’t mean you should make your decisions in isolation. This framework gives you an opportunity to collaborate with various departments to develop a common understanding of what the product will be.

Start by identifying who needs to be involved in creating your product strategy. Lead strategy workshops to make sure everyone is in alignment. Have working sessions with various departments (UX, Engineering, Finance, etc.) to gather information, generate questions for the framework, and discuss options. And get feedback from stakeholders and executives.

The result will be a stronger, more consistent strategy, and a deeper level of support from your peers and executives.

The Bottom Line

IoT products are more complex than most other technology products. Using the IoT Decision Framework can help you organize your thoughts, identify opportunities and pitfalls, achieve consensus, and release the right solution faster.

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. You may remix, tweak, and build upon this work non-commercially, as long as you credit TechProductManagement and license your new creations under the identical terms.

Businesses are welcome to use this framework for your internal product planning as long as you follow the attribution guidelines above.