Interested in connecting with Pavel? Reach out to him on Linkedin!

About Blynk: Blynk IoT platform offers a full suite of software allowing to prototype, deploy, and remotely manage connected electronic devices at any scale: from small IoT projects to millions of commercial connected products. Blynk has pioneered the low-code approach to IoT app building and gained global popularity for its best-in-class mobile app editor.

Over 500,000 developers and business clients in 136 countries use Blynk spanning industries from Smart Home and Agriculture to HVAC and Asset Tracking. Platform is offered branded or white-labeled.

Key Questions and Topics from this Episode:

(01:01) Introduction to Pavel Bayborodin

(01:51) Intro to Blynk

(06:39) What does the typical customer journey look like going from prototype to product launch?

(09:06) Most common hurdles and challenges?

(10:43) How do you approach the need to integrate IoT into a business' existing infrastructure?

(12:42) What are the common questions companies have around monetization strategies and how do you approach them?

(18:03) In both enterprise and small business settings, where do you see the greatest potential for growth in terms of IoT needs?

(20:48) What are some of the unseen cost drivers in implementing IoT?

(22:56) What are your thoughts on the democratization of IoT?

Transcript:

- [Narrator] You are listening to the IoT For All Media Network.

- [Ryan] Hello everyone and welcome to another episode of the IoT For All Podcast on the IoT For All Media Network. I'm your host, Ryan Chacon, one of the co-creators of IoT For All. Now before we jump into this episode, please don't forget to subscribe on your favorite podcast platform or join our newsletter at iotforall.com/newsletter to catch all the newest episodes as soon as they come out. But before we get started, does your business waste hours searching for assets, like equipment or vehicles and pay full-time employees just to manually enter location and status data? You can get real-time location and status updates for assets, indoors and outdoors at the lowest cost possible with Leverege's end to end IoT Solutions. To learn more, go to iotchangeseverything.com. That's iotchangeseverything.com. So without further ado, please enjoy this episode of the IoT For All Podcast. Welcome Pavel, to the IoT For All show. How's your week going so far?

- [Pavel] Hi Ryan, nice to meet you. Yeah, it's pretty busy for us. I'll explain later why, but yeah.

- [Ryan] Well, fantastic but hey before we get into that, let's talk a little bit more about your, who you are, background experiences, kind of things. Introduce yourself to our audience a little bit and then we'll go from there.

- [Pavel] Sure, so my background is in the user experience and product experience design. Before starting Blynk, I have been working in an automotive industry, working with giants, like Ford, Chrysler and other players in this space. So we've been building machine learning for these companies, and my role was to run a team of user experience designers who would define how drivers would interact with all these new capabilities of machine learning inside of the connected cars.

- [Ryan] Fantastic! Now, I'm going to Blynk, the company that you founded and we're kind of focusing on today. Tell us about Blynk, what you all do, the focus you have in IoT and then also I'd love to hear a little bit more about the story behind, kind of the founding of the company, you know, why was it started? What was the opportunity you saw in the market? All that kind of good stuff.

- [Pavel] Sure! So Blynk, today is a Internet of Things platform. And while there are many, many other IoT platforms out there, our primary focus is on enabling people, and by that, I mean individuals and businesses to actually focus on the practical applications of the Internet of Things. So we offer different products that allow them, not only to connect the device and start harvesting the data from it, but we focus a lot about on building applications for that. So basically we offer Drag and Drop UI builders for their mobile applications for iOS and Android, and we of course offer all the fundamentals like Cloud Infrastructure agent for the hardware, all of that. But yeah, our focus is on bringing great user experience for those who will be interacting with these connected devices.

- [Ryan] Fantastic, and when the company was founded, what was the opportunity that you kind of saw in the market and why was Blynk, kind of the answer to all that?

- [Pavel] That's a funny story, actually. So as I said, my background is in automotive and when I was working there, at some point, I realized that we have to build prototypes with electronics. So we had to set up our smartphones and tablets so that they work with different electronics in the car so that we can kind of test our assumptions for the drivers experience, for the user experience. And this is what kind of brought me into electronics world. And there, I discovered that there's no way to, kind of to prototype, basically, prototype any software that would interact with electronics. There were some solutions but they were too clunky, absolutely non user-friendly. And then at that stage, there was like the internet was already pretty developed. You could build a website very easily. And I thought, okay, maybe there's an opportunity that we can build an easy way for people like me, who are not really great at coding and providing their own kind of applications. And also not really good at the electronics as well, so that they kind of try very easily to build something tangible, something practical that they can use. This is where I discovered how doing all, all this like electronics kits, and this is where basically the idea of Blynk started. And then I partnered with my co-founders, Dmitriy and Volodymyr and we started a company on the Kickstarter. We had a really, really amazing feedback from the community of engineers who work with electronics everyday and we realized, okay, we are onto something. So basically our first product was a Drag and Drop UI Builder that works with any electronics and we supported like 400 different microcontrollers and like, Texas Instruments, Raspberry Pi, all of that. And then it kind of slowly developed into being a commercial solution when other companies are using the same instruments and the same kind of flexibility and simplicity, to build commercial grade products with Blynk.

- [Ryan] Gotcha and from a focus standpoint, where are you guys kind of focus on from, like on the industry side of things? And if there are any potential use cases, deployments, in the real world that we could talk a little bit about more here would be fantastic.

- [Pavel] Absolutely. So because we offer a kind of a constructor, there are multiple applications of Blynk and different verticals, however, we definitely see a lot of applications in Smart Home. This is, like 50 to 60% of all the products that are built with Blynk, mostly wifi connected. The next big niche for us would be HVAC. So Heating, Ventilation and Air Conditioning. For example, we work with a company called RayPak, Raypak is a part of Rheem, which is the third biggest manufacturer of HVAC equipment in the world. So yeah, we worked with them by deploying a new generation of connected boilers, for example, and which basically dramatically changed how this company operates today.

- [Ryan] Fantastic. So while I wanna take a step back from talking about the company and the history of the company, which is always great and talk a little bit more about your experiences with working with customers and that journey from prototype to product launch, getting near to the commercial scale side of things. Just take me through what a typical journey looks like from prototype to product launch, from your perspective and then I have some follow-up questions from there.

- [Pavel] Sure. So we see a typical journey, like a very pretty straightforward. So basically this all starts with an idea or a business opportunity and then usually most of the company, most of the clients we work with, they have some sort of an engineering background, right? So they manufacture something that is controlled by electronics and they have certain department in their company who kind of knows how it works but beyond that, they don't usually have a lot of expertise. But the next steps for them would be to define, definitely define the hardware and the connectivity to method and it really depends on the application that they're working on and where these devices would be deployed, obviously. From there, they would need to build some sort of a, a very simple prototype, which would, first of all, connect to some sort of server, whether it's local one or cloud hosted, and then they would need to start initiating the communication between the server and the device so that we can receive the data, store it, and then we can also send the data back to the device, including all of their updates and all of that. So that would be the first step. After that, we need to make something practical out of it because it's like, of course it depends on the use case, but most likely there will be a certain user interface, whether it's something that's used internally in the company or something that's used by end customers. So there'll be like a next step of prototyping, some sort of an interface that would work with this device. After that, we typically see kind of the next stage of this prototype, where it's scaled up a bit to where like a larger fleet of devices. And it really depends on devices sometimes, and maybe it's 40 devices sometimes it's 200. Typically, obviously like something around 200 at max for this stage. And after that, usually some feedback collected from the potential customers, from the focus group, if a company can allow them to do it. And after that, they trying to roll it out like full scale with the final deployment. And of course after that, the journey just begins because after that they can develop the product, they can make it better, they can improve it over time, change it because IoT allows all of that just for the software.

- [Ryan] So if somebody you were kind of just first meeting and talking about their journey that they wanted to go on to bring in IoT product solution to market and they asked you, "What are the most common hurdles or challenges that they're probably going to have to think about and overcome and how they can prepare for them?" What would you say to that?

- [Pavel] I think that currently from what we see, I mean, I'm of course kind of leaning towards our solution at the software so we try to make it very, very simple to use the software. But even with that, we see that the majority of the complexity goes into the actual product design and then the hardware design because the rest is more or less solvable, whether by using certain platform or by maybe bringing people in house with certain expertise, it depends on the budget that you can allow. But at this first stage, even for the companies who are focused on manufacturing, it's still like a long way. So just to give you an example, we have clients who develop their product for two years and then they called us and we deployed them in two weeks, commercially, right, for the client already. So yeah, I think that, that this is the biggest challenge, the hardware connectivity part, defining how it should work, so that it's kind of long-term solution, that it's reliable and that it solves all the kind of requirements of the product as it was designed.

- [Ryan] Right, that makes a ton of sense. And one of the things I wanted to ask is, when you are working with these organizations, what are your thoughts? And this might not even be directly with the companies you work with, but just perception from the market. There's always the conversation that kind of comes up around integrating IoT, into existing business processes and the systems kind of that are already in place. How do you kind of handle that on your end and what general advice do you have for companies who are kind of concerned about that piece?

- [Pavel] Yeah, that's a great question. Thanks for asking. So we see that this item is very often overlooked by companies who integrate the IoT solution and it just happens because usually the decision comes somewhere from the product department or from engineering department because they follow their technologies, trends and everything and I think on how it can be used for their product or some R and D departments, right? But then let's say the product is ready and it's deployed. And after that, this innovation, first of all, it can change how companies operate dramatically. Like for the technical support, it's such a game-changer for marketing, they have a new maybe direct channel of communicating with the customers. So we need to onboard the whole organization, all the departments, they can benefit from this solution. And this is something that is real way on the plan for the IoT integration, usually it's all about like technology, hardware, connectivity to cloud scaling and all of that. But yeah, this is a very important thing, you need to have trainings, you need to have brainstorms with different teams because once they understand the kind of what they're getting out of it, they generate amazing ideas for themselves, how this technology can be used internally in the organization. And this is a really kind of long and complex process that should be somehow planned and budgeted and basically you just can't ignore it.

- [Ryan] Absolutely. No, I think it's something that companies might sometimes be a little naive to when they're coming into it but it's important to know that there's experts out there that they can work with, who really understand how to integrate IoT technologies and systems into existing business processes and systems to provide the value that they're seeking and I think it's something that's oftentimes overlooked.

- [Pavel] That's true, yes.

- [Ryan] So what I wanted to ask, following this conversation, is around the monetization side of things, when you're talking with customers, what are the common questions that people have around monetization strategies when it comes to IoT and how do you and your clients kind of approach this?

- [Pavel] Yes, I think that's one of the biggest questions usually during the initial calls and yeah, we see that the whole monetization thing is also very often overlooked as well. So people, you know, companies don't plan a lot about that. So they just try to kind of follow the trends and get on the IoT train and like be competitive and this and that but yeah, they definitely should start thinking about monetization because first of all, Internet of Things products, they acquire recurring, kind of expenses and this is something that is also part of a decision that companies should make, how they will make return on their investments. And there's always, there are different strategies. I would separate them into two major buckets as I can see them. The first one is something I call Indirect Monetization. For example, if you're just collecting the data from, let's say boilers that are out there in the wild, and this is something that you haven't done before, and now you have a full visibility on the fleet of devices. You can see how they perform, how they fail, what leads to failure and this gives you a way to improve your product over time. And even if you don't monetize your customers, this is already like an investment that brings you certain returns indirectly, this way or another. And this is just one of the examples of the indirect monetization. And of course there are direct monetizations, where first of all, you can include the costs, the projected cost of the software and other services into the price of the product. It's a bit difficult, but it's doable as well. Of course it can increase the price significantly, but you still have to plan for it, otherwise there will be no returns. The other way would be to charge customers for premium services, which is a very common thing in the software as a service world, just offer premium features for a monthly fee, for annual fee. A very interesting direction in monetization is replenishment and we see this trend is picking up very, very much. Basically if there is a product that requires certain refills, for example, like it's a printer with an ink cartridges that needs to be replaced or if it's a water filter where you need to replace filter at certain times. So this is a great opportunity for companies to reduce the turn, definitely because if it's working kind of automatically in the background and the device reordering this kind of supplies, then people just don't think about it, it's very kind of convenient. It's great and it helps companies to continue upselling customers so it's a very nice way of monetizing. I'm definitely sure that there are like more creative ways for doing that but I would say that these are the major ones that we see today.

- [Ryan] Yeah, I think we're gonna see monetization strategies evolve over the course of the next number of years with IoT. And it really depends on kind of the angle you approach it from as well. So, you obviously have a monetization strategy, the customers you work with may or may not have a monetization strategy, whether they're building something for themselves or for a customer to resell. But it kind of definitely varies by industry, varies by the business model that it's kind of being associated with. I mean, it really does depend on the business that they're in because you can't just force a monetization model on a particular business or industry. It has to make sense for kind of everyone involved in order for it to succeed so I think we're gonna see it grow as IoT grows on the different kinds of monetization models that come out and the ones that kind of work the best.

- [Pavel] Can't agree more. And a good example would be a smart home world. People who buy smarter products, they're just not ready to pay for any additional services. I mean, they pay for like camera recordings, storage and all of that but at the core, you won't be paying for like a Phillips hue bulb. So additional, I mean, apart from the product. And this is why it kind of brings many questions to the company who is manufacturing and how are going to keep the servers running and keep the people updating their products and all of that. So that's a big challenge for this industry, absolutely.

- [Ryan] Absolutely. So let me ask you kind of a broader question about the focus that we either should be seeing or need to see as it relates to the growth of IoT and those needs associated with enterprises versus small businesses. So as enterprises and small businesses adopt IoT, where do you see the most need kind of coming from in those two areas? So larger enterprise companies and smaller businesses, where do you kind of see those needs and the focus as we kind of grow going forward?

- [Pavel] Sure, that's a pretty good question. I think that in general, they are facing the same challenges, but the magnitude of this challenges is just different. And I think that the major challenge, common company, any company would face is usually, lack of expertise. So in terms of the things, multi-experts, kind of, multicultural, multi-expertise domain. How on one side, you have this oldest electrical things and electronics and connectivity, connectivity by the way, it says the next domain. Then we have the scaling of the backend infrastructure, which is a completely different thing and requires different specialists in this area then also would need to provide the support, which would bring us to the developer operations. Then when you have a completely different area of expertise, which is product experience and product design, how people will be interacting with this product. And it would be like designers who are working on that. It will be front-end engineers or application engineers who are working on that. So there's just so many moving parts and if connectivity doesn't work, then everything else doesn't matter. So they're so interconnected and this is the biggest challenge because a small company, for example, they don't have resources for hiring that many experts in this many areas so they have to, I would recommend just sticking to a certain solution that would solve their needs, like certain platform. But even for the big companies, we see that they're struggling with the same things, because this is new, this is complex and while they can definitely hire engineers in house still, it kind of increases the time to market and increases the investments that they do. So I think that these are the biggest challenges in the beginning and then definitely defining the best business model, finding the best monetization strategy would be the next one I would mention stress on.

- [Ryan] Absolutely. That's great. And one of the last questions I had kind as we're wrapping up here is when it comes to the IoT development what are the major cost drivers in that, or maybe some of the unforeseen cost drivers that are worth mentioning.

- [Pavel] Sure. So I think that we kind of briefly touched already a few of them, and I think there are certain kind of, visible things that are more or less clear and straightforward, and there are just many, many, many hidden things like I think we discussed with integrating within the bigger organization. This is like usually not planned at all. Of course, the majority, in terms of the product development, I would say that the software versus hardware should cost somewhere the same. So from our perspective, so if you kind of manufacture product, it costs, let's say $100, then you should plan at least $100 for the software, because software has just, you've can't kind of eliminate this factor from the internal fix, it's just a very important one to work. And then of course, that brings to the major cost of the development of that. So we need the engineers who who will be building that. And whether you choose the platform, it might cost much less. If you want to build in house, it would cost much, much more. And of course, something to feel ready to test as well. You need to plan for ongoing and recurring costs and I can't stress more about that because not everyone thinks about that when they start their new IoT startup or a new company where you're building a new product line, you just need to understand how you are going to support that. Basically, it requires the same team of people to support it and in the same amount of people who would need to build it and it's all ongoing costs as well, not to mention servers and yeah, everything else.

- [Ryan] Yeah, it's a lot to think about. The last question I had is kind of unrelated to anything we talked about. It's a very general of a question because it's something that is brought up a lot in the democratization of IoT. When somebody says that to you, what does that mean to you and kind of what does it make you think about when people bring that up?

- [Pavel] I think that first of all, it makes me think about Blynk because this is our mission. So we are, we really tried to, I mean, this is actually our mission in the company. We tried to, to make it, first of all, affordable for a business of any scale to build a connected product but this is just the one thing, because second one, we're trying to make it very, very simple and I think that the democratization where democratization is kind of happening. So we need to make it affordable and available for everyone who is trying to make a business in this industry. So I think that's basically the two pillars of democratization and in the Internet of Things.

- [Ryan] Fantastic. Last thing I want to ask you before we finish up is regarding Blynk, any news or anything kind of coming on out on the horizon that we should be on the look out for? And if our audience has more questions, wants to follow up, kind of get a better sense of what you're all doing, what's the best way to do that?

- [Pavel] Yeah, so it's a pretty good timing because we just launched the new generation of Blynk platform, which brings another level of democratization, to the Internet of Things.

- Fantastic.

- [Pave] So basically any business can build a connected product and have mobile applications to present it to the end customers. And then whether it's a Blynk application as a kind of a global portal, which works with multiple devices, or it's a standalone application with your brand, with your application icon name or published to the Google Play and App store. So we offer all these options and we offer all the backhand and the cloud infrastructure, and we offer the full the console, which is the management dashboard where you can oversee your devices, clients, all the other departments of the organization to over the air updates and all of that. So basically it's a complete set of software that you would need to build a connected product. We see working with different clients that currently at this stage, we cover about 90 to 100% of all the IoT use cases company would face in the next, let's say five years of their IoT journey right now.

- [Ryan] Fantastic. Well, we appreciate the time, truly. This has been a fantastic conversation, and it sounds like you guys have a lot of exciting things going on over at Blynk so I'm excited to kind of stay up to date and see what comes out next. We'll make sure we link up all the necessary information for our audience if they have questions and want a follow up, can reach out. So thanks again for your time and we'd love to have you back sometime in the future.

- [Pavel] Absolutely. I also write articles to IoT For All sometimes so people can share this as well. Thanks a lot for the interview. It's a pleasure speaking and thanks for a great job you're doing with this portal, bringing the news of the industry-

- I appreciate that.

- [Pavel] To everyone who's interested.

- [Ryan] Thank you so much. I appreciate that. All right everyone, thanks again for joining us this week on the IoT For All Podcast. I hope you enjoyed this episode and if you did, please leave us a rating or review and be sure to subscribe to our podcast on whichever platform you're listening to us on. Also, if you have a guest you'd like to see on the show, please drop us a note at [email protected] and we'll do everything we can to get them as a featured guest. Other than that, thanks again for listening and we'll see you next time.