Mister Beacon Episode #57

The Future of the Beacon Market

November 01, 2017

Understanding where the beacon market will go is critical for entrepreneurs and solution designers. In a market this complex, it's also very difficult to do. We have the privilege of talking to some amazing players in the beacon ecosystem, which helps inform our annual forecast. In this episode, we focus on our assessment of what's happened in 2017 plus some key predictions for the future.

Transcript

  • Don Rayner Jr. 00:07

    Welcome to the Mr. Beacon podcast, Mr. Beacon.

    Steve Statler 00:10

    Yeah, this is funny, because normally you're behind the camera, and you're kind of making fun of me. But now I get to have some fun with you on camera.

    Don Rayner Jr. 00:17

    Well, it's a real privilege to sneak out from behind the camera for this one episode. Not to mention the fact that we didn't have any guests lined up for this week. So we're taking a little bit of liberty here.

    Steve Statler 00:27

    Yeah, that's true. But actually, there's some, I think we're gonna cover some great content. So Wiliot's doing some stuff, we're not going to talk a lot about what the company that sponsors this is doing, because it's too early to do that. But I do want to talk about two things with you. And one is contact, I have started this tradition of getting people pundits, people like me and a bunch of other people to predict what's going to happen in the beacon ecosystem, the Beco system. And so I wrote a piece, which haven't been doing a lot of writing recently, because I'm kind of busy. But I thought there's some interesting things that we should talk about that. So it'd be great if we can go through that. But also, on behalf of Wiliot, and also the Mr. Beacon blog, I've got some speaking engagements. So I'm going to plug those if that's okay. And the first one is actually going to be in in San Jose, but not the one that you're thinking of, it's actually San Jose in Costa Rica. And I'm going to be presenting quite a long, like a 90 minute thing on the ecosystem at the next gen summit there, which FW marketing, organizing, and it's just going to be amazing. There's other speakers who are going to be talking about AR and a bunch of futuristic things. So that's going to be really cool, some great brands there. So I'm looking forward to that, going forward to Costa Rica. And then from there, it's Amsterdam. This is tough life. We're here at Wiliot. It really is. And on November the third, I'm going to be at the Active Intelligent Packaging Industry Association Conference in Amsterdam. And I'm going to be covering a little bit on what we're doing. Wiliot is doing with passive Bluetooth tags and packaging, it was one of our use cases. But I'm also going to be sharing some information about numbers that we captured in terms of engagement using the Physical Web, San Diego airport, where we got amazing results where we benchmarked Physical Web, versus NFC and QR codes. So if you're interested in that, and you're in the packaging business, and you want an excuse to go to Amsterdam, be there. And then the last thing is a show called id Tech x, which is going to be in Santa Clara. And that's going to be November the 16th. And so we're just one of like 100 presentations, that's actually going to be about what Wiliot's doing? So if you're wondering what will yachts doing, and you're in the Bay Area, show up to the show. And I'm gonna be giving an overview which generally we only give in private to brands and talking about the future of passive Bluetooth. Basically Bluetooth without batteries. So that's that's kind of my plug.

    Don Rayner Jr. 03:15

    Well, that sounds fantastic. So on. On that note, what are some of the trends that you see coming up in Bluetooth for 2018? What are the most important places where you think Bluetooth technology is going to take us?

    Steve Statler 03:29

    It's a good question. I think for anyone that's working in the Bluetooth business. It's like what the heck's happening? Where are we going? How quickly are things going to evolve? And it's question I involved, I ask guests on this podcast all the time. And so I actually came up, and people should go to contact Iowa's website when this is published, assuming that they actually publish what I gave them, which they did last year. So I'm hoping they will this year, and they'll see but basically, four things that I see are really important trends. One is beacons in the enterprise. And that's, you know, what I find is there's been this pivot, when Bluetooth beacons first came out, the big thing was shopping and retail and so forth. And that's still happening. But what I see is that almost every company that sells a beacon hardware product is pivoting, and then moving to enterprise applications, because there's a lot more control over the deployments. You know, if you're an enterprise and you decide you're going to do asset tracking, then you're doing asset tracking, you don't have to convince users to start using an app and so forth, and the ROI is there and and we're seeing some great results. So I think that's gonna go much bigger. And I think it's gonna get even bigger because the Bluetooth SIG are going to be announcing new things in the standard that will make accuracy much more precise. And so I think the gap between perception expectations and reality will get smaller. And we'll be able to do pinpoint accuracy. And it's going to be very cool. So that's one thing. The second thing was beacons everywhere. And that's really looking at what Wiliot's doing. So what we're working on, without going into a lot of details is going to bring the cost of Bluetooth beacons down to less than a buck. And so and they're going to be small, I'm going to be stickers. And so I think they're going to be everywhere they're going to be, rather than a beacon in a room, there'll be like, it'll be in the wallpaper, it'll be in. So just massive deployment, massive deployment. And I think that's gonna have really interesting implications in terms of public safety 911, there's this amazing project that we've had the privilege to work on, which is called near the national emergency address database, which is getting your phone to turn into a different mode. If you're in trouble, you'll dial 911, and there's a standard, it's already been ratified. And it's being deployed by the carriers. And there's more waves of this to come. But basically, your phone will start looking for Bluetooth beacons. And ultimately, there's this amazing dynamic that will hopefully save lives. Time is brain, if you're having a stroke, getting you to hospital quickly is super important to your survival and your ability to function. And I think well will will save people's lives by getting first responders to the right address to the right floor, and even the right room. And beacons will be part of that. And venues will be incented to deploy beacons, because it's going to bring down their liability and therefore their insurance rates. So there'll be an ROI, which is my insurance will cost less or or more if I don't deploy beacons. So that's kind of beacons everywhere. beacons and everything, again, is back to this kind of passive Bluetooth trend, it's going to bring the cost down. So there'll be in in apparel and packaging. So I think that's going to happen. And then beacons in advertising. You know, it's been kind of interesting to see what Google and Facebook have been doing Google with their standards, the Eddystone, standard, and Facebook with giving away beacons. And I think we've only just started see the surface level of what's happening there. And I believe that will go bigger. And I think it will end up generating billions of dollars of revenue for those companies. And if you look at the successful beacon companies, the ones that have generated profits, and there's not very many that are, it's companies that have cracked Bluetooth beacons in advertising markets, it's companies like in market, companies like Verve who are growing, and they've and Shopkick. And all of them are using beacons in advertising. And what they've done is they've kind of done it in very focused verticals. But I think companies like Facebook and Bluetooth content, and Google can take it to Bluetooth to the next level. So that's those are kind of the four things to beacons in advertising, beacons in everything packaging beacons everywhere, and beacons in the enterprise.

    Don Rayner Jr. 08:30

    I see. So just I'm going to jump ahead for just a quick second here. You wrote the book, The Hitchhiker's Guide to the ecosystem. It's been about two years now. Yes. Okay. So these predictions that you just made? Were those those evolves since the time that you wrote the book?

    Steve Statler 08:45

    That's a good question. They have no question. But I'm actually really pleased the book, I think, still is, is valid, I thought it would be obsolete within about six months, but it's still absolutely valid. And the last chapter is about beacons in the knee ad system. And it's a little bit of a different take. It was like a plea to stakeholders to get with it. And what I've seen since then, is actually this is happening. So it's kind of cool.

    Don Rayner Jr. 09:17

    Yeah. Well, so what is holding beacon technology back? And what hurdles must it overcome in in 2018?

    Steve Statler 09:25

    Well, it's funny, I like that positive, rosy picture that I just gave you this, you know, I think there's friction that's holding back all of those things. If we look at advertising to start off with advertising is those dollars make the world go round? It pays for the internet. But the, you know, the problem is advertising is all about scale. And until you have beacons everywhere, then it really isn't going to take off. And so that's why those companies that I've mentioned that have been successful in this they've been very, very focused. So she, you know, Shopkick has been about certain marquee retailers that they've been able to control their deployment of this beacon technology. And in market has been focused on grocery. And now they're moving into, they've moved into kind of entertainment venues, restaurants and clubs and stuff. So I think it's really a matter of time to get the infrastructure out. So that's so scale, and pervasiveness, a holding back advertising, and that's why it's such a long fuse on that really exploding with enterprise, then I think part of it is that businesses that wants to deploy asset tracking, they're not interested in buying beacons, they want to complete solution. And the solutions haven't been complete. And the accuracy hasn't been, hasn't been fantastic. But the accuracy is getting better. The solutions are being built out, the hooks are starting to appear in light SAP and so forth. So I think that is, that's still we need to see more progress. And we need to go from the early adopters and the innovators to the early majority. But I am seeing that in our consulting activities, which we're continuing to do, even though we're part of a semiconductor company, that that that is happening. And I'm seeing lights gone in at sea levels when they when they can see a dashboard, and they see all their products in real time moving around. It's kind of an emotional response. It's like, Yeah, let's do this. This is working. So I think that I'm very confident that that is going to expand, but it takes time. So that's part of the friction, then I think one of the other things that's holding things back and will continue to hold things back is confusion over NFC. So people see NFC as kind of being this competitor to Bluetooth that I really think they're complementary, but their Apple has now opened up and increased support for NFC beyond Apple Pay. So before the iPhone didn't have NFC and so that was really holding it back, then they added NFC but only Apple Pay could use it. And now with iOS 11 apps can use NFC, but you have to have the app running. And so really, that's a big limitation on what NFC can be used for. But it's going to confuse people. And so I think it's kind of it's gonna take some of those Bluetooth use cases that are still valid, that can't be filled by NFC. And people are gonna say, Oh, why can't we use NFC, and then they're gonna figure out, oh, actually, I have to have an app running and, and Bluetooth is all about working in the background and starting apps that aren't running. And so we're gonna have a bit of confusion over that. So those are, those are my three things that are really holding, holding stuff back.

    Don Rayner Jr. 12:48

    Back to 2017, what would you consider to be the biggest story or innovation or upset in 2017?

    Steve Statler 12:56

    Well, I think the Physical Web is one of those things. So you know, everyone was expecting the physical. So the Physical Web is beacons, rather than broadcasting numbers, they broadcast your ELS web addresses wonderful. We don't need an app. And I think folks were expecting that to appear in the browser, the Chrome browser to be exact, and it hasn't, it was in beta, and it's been pulled from the beta. And that's kind of disappointing. So that disappointment and there's companies that have built their business around this. And so I think those companies are kind of reexamining what they're going to do. And I think a lot of them have already started adapting they have, they've been looking at QR codes and NFC, and they've kind of been broadening their portfolio. But the fact that the Physical Web didn't make it into the Chrome browser is definitely an upset. But it's still there in the Android operating system as part of nearby. So you're still gonna see URLs popping up on Android phones, on the lockscreen. And on the status bar. And we've seen amazing results just from that. So I still think there's a play with the Physical Web. But its ability to engage people on iOS, because it's been pulled from the the Chrome browser on iOS. That's a big disappointment. Maybe Maybe there'll be other browsers that will come in to fill that vacuum. And, you know, my sense is that the folks at Google kind of looked at it, and they were just worried that there would be spam. And they have to guarantee a great user experience, because they're selling something bigger than just beacons. It's the whole platform. So I think that's probably one of the biggest ones. And if I look at other things, I think consolidation, there's companies that are disappearing. There's companies that are being bought beacon companies that are emerging, and it's because this chasm that we're crossing to the bounty fall, huge money flowing from lots and lots of huge projects that's taking longer than everyone hoped. I think it's still coming. And so what we'll find is the strong companies will, they'll manage their cash flow, and they'll raise money because they've got customers. And so they'll, they'll do more fundraising rounds. And so they'll be fine. But there'll be companies that disappear. And and there are companies that have disappeared and merged. And so that's kind of sad. But it's inevitable with the new technology. And I just hope people don't look at the inevitable thing that happens when you have 100 startups or 200, or 300 startups happen, most of them are going to fail. But there's still some very healthy companies out there that are doing some very cool things. So those, those are some of the key things that I would look back on that worth noting.

    Don Rayner Jr. 16:01

    Well, this is my favorite question of the interview. Because, you know, you and I were co workers at Qualcomm for many years. And we actually met on opposite sides of the camera, I was on the proper side, which is behind it. And you were on the side that that suits you the best is in front of it. And and then the next thing you know, we both sort of left Qualcomm at different times. And you went off and wrote this book. And then you started evangelizing this, this ecosystem technology, in in an amazing way, you started doing a podcast, and I remember working with you on some of the initial production techniques, and yet, we talked about lighting and cameras and audio and things like that. And the next thing, you know, it really took off for you. And I've actually joined in the last handful of episodes, which is, which is great.

    Steve Statler 16:45

    Yeah, the standards definitely gone up since you got involved and since Wiliot are actually is sponsoring it, and we're able to kind of find a way of having this code coexist within Wiliot. I think it's definitely the quality, the audio quality is certainly a lot better.

    Don Rayner Jr. 17:03

    Well, what I want to know, and I think what some of the viewers might want to know, what was the thing that fueled this passion for you this passion for for Bluetooth technology, I know you were involved in it in work in retail, you know, scenarios and things like that, but you wrote a book, and then you started interviewing these amazing guests. And it's gained steam. So what what initially motivated you to do that?

    Steve Statler 17:29

    Well, I have a terrible memory. So I have to write things down anyway. And I just started, I did a training course for San Diego International Airport, it was like a whole day. And so the book came out of the training course. And it came out of a need to just write stuff down. And also I just felt like if other people are going to come into this business, it's crazy that they have to, it's taken me years to learn this stuff. So why not just write it down so other people can get up to speed quickly. And then that was the research for this. I thought I knew beacons really well. But they say, you know, the real way to learn is to teach. And so I did that, and I learned some more. And then you can learn even more when you try and write a book. Because you're second guessing yourself. And that forces you to interview lots of people. And I just love doing these interviews because you talk to very interesting people, you learn things. And so when the book was over, and like, oh, I don't get to do these interviews anymore. And so I thought, well, I can still ask people if they want to chat on camera. And so I have and yeah, it's been over 50 episodes. We've had Google Cisco on three times, HP Aruba twice, and CEOs of some amazing startups. So we're going to try and keep in keep on doing it. It's you've definitely helped because we can do a better job in a shorter period of time. So yeah, if people have got an interesting story, they want to tell, we'd love to talk to them and help spread the word about what's happening in the in the beacon ecosystem.

    Don Rayner Jr. 19:00

    All right, Steve Statler, Mr. Beacon. Thank you very much. It's been an honor to be on the other side of the camera with you.

    Steve Statler 19:08

    Yeah, it's been a real pleasure.

    Don Rayner Jr. 19:22

    What most people don't realize the guests know this because they're on the show. But the audience may not realize that the three songs tomorrow's question comes at the very beginning of the interview. And then we edit it to put it at the end. But as a musician, I've been thinking about this question, and I don't think I can even answer that. So it's a tough question, but you seem to have your answers prepared for now. So let's hear what three songs would you take to Mars?

    Steve Statler 19:46

    Well, of course this changes constantly in my mind. I went to a pool Well, a concert late last night and I was thinking Going Underground by The Jam. It's got to be there because it was a big part of but it was kind of the theme tune for life in England growing up lots of violence and aggression, punk post punk, but actually, I didn't really enjoy the concert very much. So he's off, he's lost his position in my small list of songs to go to Mars. So it's, it's, it's gonna be Dave Brubeck, Take Five. And that's the first song. And I love the song. It's one that it's actually a song that my parents introduced me to. And so it has those associations. But one of the most fun jobs other than this one, doing Mr. Beacon and working at Wiliot, was running the college radio station I used to I got to give myself a show. And my show was called Brubeck to Bowery. And so we had Dave Brubeck as our kind of theme chip. And then David Bowie. I just love his songs. And if I had an album, if you were giving me an album, which I really am not, it'd be hunky dory. But it's not an album. So I'm gonna go for Diamond Dogs, because I just love that opening guitar riff for Diamond Dogs is my second one. I just have introduced other songs to kind of make it bigger. But that's my second one. And then the third one's got to be Elton John, Captain Fantastic. That was just one of the most amazing concept albums. And I remember sitting in the 70s for going to college getting out into the wide, wide world and just all the images that it comes with the amazing album artwork and being lost in that song, which you could listen to again and again and again. You've got so much out of it. So those are my three songs, Take Five, Diamond Dogs, and Captain Fantastic.

    Don Rayner Jr. 21:44

    And we're the same age and I can relate the Elton John Captain Fantastic was my very first album and I used to sit there and look at those liner notes. And I knew every word to every one of those songs and I can totally relate to that. So those are great choices. Thanks for that.

    Steve Statler 21:57

    My pleasure.