January 09, 2017 / 11:26 IST
What is the Startup idea? The startup idea is to create an Internet of things (IoT) startup to manufacture and sell smart garden devices. The system will inform you about you what’s happening in your garden through a device that will be embedded in the soil, and the IoTsensor in it will gather data about changing weather and soil conditions. This data will be displayed through an app on your mobile phone or laptop and will push alerts, suggestions or make real-time changes to the drip irrigation devices controlled by it for making the plants healthier. Market Definition Internet of things (IoT) is a growing market with an ever-increasing presence in our everyday lives. It is estimated to be USD 1.7 trillion industry by 2020, according to an article by Wall Street Journal. According to a report by GrandviewResearch, the global gardening equipment market size was valued at USD 74.1 billion in 2015 and is expected to witness significant growth owing to its growing adoption in the residential and commercial construction industry. The report also states that North America had the largest market share in 2015 and accounted for over 30% of the industry share. However, Asia-Pacific is projected to be a fastest-growing market for lawn tools which is anticipated to grow at a CAGR of over 4.0% from 2016 to 2025. According to the National Gardening Survey for the USA, as reported by gardencentermag.com:
- The highest spending was among Baby Boomers, married households, those with an annual income of more than $75,000 and college graduates – but the most significant market force was 18 to 34 year-olds. Five million of the six million "new" gardening households were Millennials;
- The average amount spent on the backyard or balcony nationwide in 2015 was $401 per household, up from $317 in 2014.
- Food and Flower gardening were the most popular gardening activities in 2015;
- About one out of three households participated in food gardening (36 percent) or flower gardening (34 percent). Households spent an estimated $3.6 billion growing vegetables, fruit, berries and herbs and $2.7 billion on flower gardening.
Competitor Analysis IoT market is seeing innovation, and gardening IoT is not far off too, there are many companies which have innovated and have launched products. Greenbox's device is very thick in sprinkler systems market. Edyn is a device built around providing you with information about the soil.
Pain Point & Target Audience The target customer market for this business is "mid and high-income individuals and households who are engaged in gardening activity". There is a serious lack of knowledge around the aspects of gardening like how much water needs to be provided and maintaining moisture, heat and sunlight levels for different plants. Another pain point for working professionals who are interested in the maintenance of gardens is that they have very limited time to spare for gardening. They need devices which can help them maintain beautiful gardens without having to spend a lot of time.
Value Proposition Not everyone who wants or would want to maintain a beautiful garden has the proper understanding of plant's requirement or has time to track its health properly. With a device which monitors how much water needs to be given and automatically controls the sprinkler or a device that monitors the moisture, heat and sunlight level for a plant, one can maintain a beautiful garden with even little understanding about gardening and limited time.
Business Model The business model for this idea would involve two streams. The first stream is, of course, the sale of the IoT devices. The second stream will be providing other gardening equipment and material which may be required by a user. The company may come up with an application through which a user can monitor and control the IoT devices.
Way to market The first step is to manufacture the smart devices mentioned above. The startup would need to partner with nurseries and offer its devices at a special price to the customers of such nurseries to acquire the initial set of users. The startup should also consider social media marketing targeting the users who have been searching for various issues related to gardening. Facebook will be a perfect place for starting the social media campaign. Another aspect which the startup should focus is quality content creation around gardening issues and possible solutions. It needs to continuously write various blogs which will help in bringing organic customers to the startup.
Milestones The first step would be to work on some of the existing sensors and fine tune & combine them to make the iot device. The startup should test the usability of the product with at least 500 users across different segments. Once the product is validated, the startup should price the products aggressively and target selling 20,000 products in the first 18 months. Once the startup has sold a decent number of devices, it can launch the next revenue stream of selling other equipment and material required for gardening. On the sidelines, the startup should continue working on their application to seamlessly integrate the monitoring process and the products which it is selling through its platform.
Investment Needed For Prototype For testing & building the prototype, pitch for raising 100K USD from angel investors or incubators in your country The startup can reach out to startgarden, which is an incubator which helps ioT gardening startups. There are other accelerators as well which focus on IoT startups. Some of them are Seamless, Ericsson IoT accelerator, Startup Scaleup: IoT accelerator, Startupbootcamp IoT - Connected Devices and Industrio. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology.
Team Capability This startup requires deep expertise in ecology and soil sciences; You would need to have experts from the domain to build the product. In addition to this, you would need experts from data sciences to create algorithms, a smart devices expert to make the hardware and a tech expert to do the app and programming backend.
Investors / Expert Take IoT is need of an hour and investors recognise that. However, the IoT market has come to a stage where little innovation will not be enough. A startup will have to successfully show a demand for the product to achieve traction and success. A start in a similar arena, Edyn recently raised USD 2 million in the seed round. Funds like Fenox Ventures, Idea Bulb Ventures, Morningside Group, and Indicator Ventures invested in Edyn and could be interested in other similar startups as well. In case you are keen to build an IoT business, please do write us at YoStartups.com and we will be more than happy to support you in building this venture.
