How entrepreneurs can make the most of the growing trend in wearables

Entrepreneurs are always on the hunt for the next opportunity. Being an outlier, an upstart, a challenger - that’s where the adventure lies. Doing things as they’ve always been done doesn’t lead to innovation, it’s the safe bet and favours the status quo. Slow and steady wins the race, so they say. But that’s not an option for an entrepreneur: they have to disrupt how things are, do things differently and take on new risks and challenges.

So what is the next challenge? The next unicorn? It’s already here. It’s been creeping up on us for some time in fact. And the question for entrepreneurs is whether they realize its potential, and if they do, what to do about it.

Welcome to the world of wearable tech

Well-known examples include Apple Watch, Fitbit, Google Glass and WiFi-enabled GoPro. Those are all fairly obvious examples but as technology continues to diminish in size, shape and form, it will become harder to spot. In some cases, you won’t even see it. Hannes Sjoblad for instance, Chief Disruption Officer at Epicenter in Stockholm, Sweden, has had a radio-frequency identification (RFID) microchip implanted under his skin.

It lets him swipe into his office, set the alarm system, register loyalty points at nearby retailers and access the gym. This may be an extreme route taken as a proof of concept rather than a wider practice, but it makes the point. The future of using wearables to simplify mundane tasks or make things more convenient and sometimes more secure is not a distant, dreamy future. It’s real and it’s happening now.

The opportunity is vast

The technology behind these devices isn’t the only thing that’s rapidly evolving. Consumer demand for them is too. Research by Gartner suggests that “By 2016, wearable smart electronics in shoes, tattoos and accessories will emerge as a $10 billion industry.” With 5G connection capabilities in development, more powerful devices will be created and coveted by early adopters.

For entrepreneurs wanting to get in on the game, attending an event like IDTechEx Wearable Europe is a good place to start. It’s where a range of fully functional tech such as printed flexible displays, stretchable lighting, sensors, pads and wireless charging incorporated into textiles are on show. Seeing the tech in action, can inspire and ignite the senses.

It’s not about inventing a new device

Entrepreneurs don’t have to be developers. What they can bring to the table is the ability to make new connections between previously unconnected or unrelated elements. When daring minds see how wearable tech can be used, packaged and sold - or how it could be combined with existing tech or business operations – new markets spring to life, more profitable ways of doing business are born.

For instance, one insurance company spotted an opportunity to use wearable tech to engage with consumers in a new way. They’re giving policy discounts to customers wearing a Fitbit that shares information over the internet, in exchange for being able to analyze its data. They’re also awarding reward points when customers undertake certain actions which benefit their health. Wearable tech has helped them reposition the established view and role of insurance. It’s not just about being there when something goes wrong any longer, it’s about helping customers live healthier lives.

As wearable technology, as with the insurance company above, is adopted it will allow consumers to use their data as a commodity and trade with companies to gain better service or discounts.

Unlocking opportunity

Other possibilities abound. People renting a property using Airbnb almost always have to meet the owner, or their representative, to collect the keys to the property. A physical transaction, costing time and effort for all parties. But what if the guests could use their smartwatch to verify their identity and unlock the door on arrival and departure? Owners could concentrate on other matters; guests could have an uninterrupted stay. That’s just one idea. As wearables evolve, other opportunities will arise.

The unknown risks

No entrepreneur worth their salt goes into anything blind. They do their research and mitigate risks as best they can. When it comes to wearable devices, the key thing to understand is that it is an emerging and fast-evolving industry. In many cases, new materials and technology are being used in new ways to create things like stretchable electronics or biotech tattoos.

But the rules, laws, standards, security, consumer expectations and social norms may not yet exist or be fully formed around these emergent devices. However, while uncertainty may not be a friend to entrepreneurs, it can be very attractive: it’s a chance to innovate and lead the market.

The known risks

If you do identify a business opportunity to create or deploy a wearable - or access the data on one - understanding the role of privacy, security and communication is essential. These aren’t the only risks but they are high on the agenda.

Privacy

Consumers want to know who can access their data and what it will be used for. As good as your new business idea might sound, it could fall at the first hurdle if your potential customers don’t know what you’re doing with their data or agree to trust you with it.

According to the latest Mobile Ecosystem Forum’s Global Consumer Trust Report, over 40% of app users, for instance, don’t want to give access to personal information but know they need to in order to use an app. This has grown from over 30% in 2014, and is associated with a decrease in consumer trust.

Security

In the rush to market, security can often be an after-thought. But that’s a mistake. It should underpin everything you do. If your new business is dependent on a wearable device, or the data it provides, it needs to be secure.

Tony Anscombe, Senior Security Evangelist for AVG Business, a worldwide provider of security solutions, advises: “Wearable tech is still in its infancy. Products and services need to adopt a ‘secure by design’ approach; unfortunately, this is not always the case. Hackers know this. They’ll be looking for ways to steal or compromise the data in a new device, or to gain access to other systems the wearable is sharing data with.”

The solution?

“Treat wearables the same as any other device. Install the latest software patches as they may include important security updates. Make sure that the devices a wearable connects with use up to date antivirus software, strong passwords and where possible two-factor authentication. Those are the must-have foundations which need to be in place.”

Communication

Even if a consumer gives you permission to send them messages via their Smart Watch, for instance, doesn’t mean you should. It’s not an open invitation.

Imagine if you were buzzed every five minutes with an offer or alert of some description. The potential for distraction and irritation should not be underestimated. It could easily encourage a negative sentiment towards your fledgling business. Customers might switch off your communications entirely, shutting you out.

Five takeaways to consider:

1. Wearable tech is happening now.
2. The market is global, demand is growing quickly and has huge financial and technological potential: wearable devices will soon come into existence that have not yet been imagined.
3. Entrepreneurs don’t have to be developers. If you have an idea, explore it. Someone else might know how to make it technologically possible.
4. There are unknown risks: some of the technology behind new wearable devices is uncharted water: navigate with caution.
5. There are known risks: privacy concerns relate to consumer confidence and trust, data and device security should be built in from the start, and managing communication with consumers is key.

The future

Even if some early to market wearables haven’t become as popular as anticipated, like Google Glass, other products will be developed that will. And as they continue to develop, the laws and culture surrounding their use will become clearer, and better codified too. If you are thinking of diving into the wearable opportunity, the key to managing any risk – known and unknown - lies in awareness and understanding how best to mitigate it.