The Global Rail

By Dave Holloman

September 30, 2009

iControl Networks has a product that allows consumers to remotely control various devices in the home through the internet.  Want to activate your alarm while out of town?  No problem.  Change the thermostat?  Check.  Want the lights on?  Sure.  iControl expects to enter new markets at the end of the year through an alliance with ADT Security.   If you have an ADT security alarm, expect to be able to have a web-based application in the near future that can allow you to do all of these things. 

After a few false starts, the market for home automation appears to be coming into its own.  For at least a decade, the market for “last mile services to the home,” has been a popular topic amongst those companies that offer home data access.  These include phone companies, cable providers, and yes, security companies.  For a time, the rate of data access possible through old infrastructure was the barrier to these new services.  Companies faced broadband constraints in the last transmission step to the home.  For telecom, it was the copper twisted pair wires that couldn’t carry digital at required rates.  For cable, it was old coaxial cable infrastructure.  Many of those constraints are now gone in major population centers.  This has now opened up emerging opportunities, and a competitive battle, to capture “last mile services to the home” revenue.

This is just one example of innovation opportunities in last mile services.  Across almost any industry, technology now makes possible new markets in this area.  If you are an entrepreneur, you will find new opportunities thinking through how to tackle “the last mile problem” in your industry.   When exploring for opportunities, think of last mile situations as –

-  The last step in a business process.  Multiple business processes and multiple parties often converge near their closure.  These situations are “convergence” opportunities which provide opportunity to increase productivity.

-  The last step in providing a service or product.  Often, the chain of events to deliver a service or product crosses multiple organizations.  At its final point of consumption, the product or service being consumed is dispersed.  Up to recently, technology and fixed cost constraints made visibility at this final point of consumption prohibitive.  Not anymore.  These situations are “visibility” opportunities, providing insight into real product demand and customer/consumer behavior.

Let’s look at an example of a convergence opportunity.  Textura is a company that is solving an age old problem in construction.  If you are constructing a building, it is amazing the number of companies involved that you need to work with.  There is the title company.  All the sub-contracting companies involved in construction.  Lenders that need to be paid.  Etc.  Here is the problem.  One of the last steps in a construction process is payment.  Today, it’s all manual work to get the approvals necessary to release payment funds to all the parties involved.  Meanwhile, cash is tied up.  Labor dollars are spent.  It becomes difficult to track the money.  The web-based solution created by Textura automates this last step and makes it visible to all involved parties, at the click of a mouse.   Last mile problem solved.

The company I am helping build is also focused on solving a last mile problem.  Market6 is a company focused on the last mile of the consumer goods supply chain – that is, the last mile from manufacturing, shipping, and stocking a product on the grocery shelf that consumers buy.  While manufacturers have invested billions of dollars tracking these steps from the raw inputs used through to warehouses used for distribution, the resulting efficiency rate and visibility fall as their products enter the last mile into retail.   The technology exists, but has yet to be harnessed to drive efficiencies and visibility into what actually happens as product moves into a grocery store and is purchased by consumers.  Another example.

Private equity investment in the last year has radically shifted towards green technology.  One of the targeted areas of investment is waste in the current distribution of power.  One of the greatest sources of power leakage is – you guessed it – in the last step of power transmission.   As one example of innovation in this area, Google is looking to exploit this need in the market through its PowerMeter service.  Another example of innovators offering solutions for this last mile problem is the Current Group.  This company places IP-based sensors into a power grid to anticipate failures and route power more efficiently.  From power grid to point of usage, the amount of power wasted that could be captured is phenomenal.  Alternative energies may be getting the hype, but much of the opportunity in green technology lies in improving the efficiency of current distribution in the last mile.

Across a spectrum of industries and customer experiences, opportunity lies in gaining efficiencies within the last mile.  Providing visibility into the last step of a process.  If you are looking for innovation, look in the last mile.