After successfully building IoT middleware company Relayr, Harald Zapp began a new project as CEO of Next Big Thing AG. Discover Harald's thoughts on the future of IoT, the political and cultural aspects that will drive growth and where he sees NBT fitting into all of this...

How do you think IoT will transform our lives in the next 10 years?

There are a number of ways I can envisage IoT changing our lives, but in Germany, we have to learn first, how IoT changes businesses and behaviour. The wealth of data that we will have access to is a prime example of this. As ‘things’ become more and more connected and embedded, the quantity of data gathered will dramatically increase. Data-based insights will help companies better understand their consumer and it will cause a huge shift in the way businesses reach and direct products to their consumer.

Why are you so passionate about the IoT in Germany?

We need more deep tech startups in Germany. VC in Germany is famous for the platform economy, especially e-commerce with a high capital lockup for marketing spend, but much less tech innovation, and this is what Germany is historically famous for. Germany should take the role of an innovation leader in the world again - focusing, specifically, on the Internet of Things and new data driven services. There is tremendous opportunities in the area of IoT (Internet of Things) and IoS (Internet of Services) and it’s about finding how best to leverage these emerging technologies and behavioural shifts.

What are the major barriers in Germany to achieve that?

One of the main challenges I see, is getting past the culture of small investment. Providing venture capital that is beyond these smaller investments will drive the growth of the IoT in Germany. There was €2.4 billion invested in German startups in 2015, compared with the €60 billion in Silicon Valley. Similarly, in comparison to Silicon Valley, our approach to failure is much worse. We don’t look upon failure as growth as we should. All of this, coupled with the bureaucratic elements and the complications of getting VC awarded, are what I believe to be the major barriers in Germany.

"R&D in Germany is too often focused on short-term success and proven business models - gaining better productivity but not true digital disruption."

Where do you see the most exciting opportunity spaces for IoT?

The most interesting opportunity spaces for me are in Property and Facility management, Smart energy, Health / Ambient Assisted Living (AAL). Our early startups at NBT span all of these different spaces.

And what about the big businesses and industries? How do they push this?

Their R&D is all about incremental innovation and often miss disruptive innovation, but this is what we need. R&D in Germany is too often focused on short-term success and proven business models - gaining better productivity but not true digital disruption. Today, we see some spin-offs and innovation teams working completely separate from the R&D team to develop disruptive tech innovations, but this is too far away from the main business. We all remember the so called “Nokia effect”.

Where do you envision NBT fitting into this?

To give them a home to develop disruptive technologies out of the box. We check ideas, support technical innovation, provide horizontal technologies, challenge business models, help with prototyping and provide seed money. I am confident we will help launching the next industrial (IoT) killer application that is made in Germany.

Thanks, Harald!