|
Did you receive this newsletter as a forward? Subscribe here
|
|
| OK, let's talk about that big Helium story |
| |
| By Stacey Higginbotham |
Earlier this week, Liron Shapira, a self-proclaimed Web 3.0 skeptic, shared an article from The Generalist newsletter that dug deeply into the Helium Network and with it, his skepticism about the business. One of the biggest shockers in the article — and his related tweet thread — was the fact that Nova Labs, the company behind the Helium Network, made just $6,500 in revenue in June.
Nova Labs CEO Amir Haleem didn't refute that number. But I'd like to put it into context and explain why it isn't the indictment against the business model others may think it is while also explaining my own concerns about Helium's future. |
|
|
First, a refresher. Nova Labs, which changed its name earlier this year in an attempt to distance itself from the low-power long-range Helium Network, has a long history in the IoT sector. The company was started in 2013 and went through several pivots before settling on the idea of using tokens to incentivize people to place Helium hotspots in their homes. The hotspots act as wireless gateways, receiving LoraWAN or Helium's own proprietary LongFi radio signals and using the hotspot owner's broadband network to transfer the data to the internet.
To reward users who put the hotspots in their homes, Nova Labs established the Helium Network Token (HNT). A hotspot owner generates HNTs by providing both coverage and transferring data. And companies that want to buy data on the network use the HNTs to buy data credits. Each data credit is worth $0.00001. So the June revenue reported by Nova Labs from data transfers represents 650 million data packets.
As a point of disclosure, I run a Helium hotspot in my home, and have since 2020. I made about $20,000 by selling HNTs in 2021 and currently have 126 HNTs worth about $1,195 at the current price of roughly $9. In the time I've had the hotspot, the price of HNTs has ranged from less than $1 to a high of around $55, peaking as interest in cryptocurrency peaked.
Which leads to the first big question anyone interested in the Helium network should be asking: What happens to a decentralized wireless network if people who purchased their hotspots expecting to make $50 a week start making a mere $4 a week? Indeed, is that post-crypto crash rate enough incentive for people to maintain their hotspots? It is for me because I went into this thinking it would be fun to support an IoT network. And I didn't spend $500 or even a few thousand dollars on a hotspot during the frenzy of 2021 expecting to make bank.
Tens of thousands of people did, however. Kevin, my colleague on the podcast, is one of them. He ordered his hotspot in March 2021 and it arrived in April 2022. He paid $450 for it, and based on the prices of HNTs today he can expect to make $15.75 a month. But while he's understandably disappointed in the ROI, that wasn’t his main purpose for buying the hotspot. Like me, he's interested in supporting a decentralized IoT network, so he says he'll happily keep it operational.
In the meantime, Helium has added roughly 500,000 hotspots to the network in the last year alone. They are operated not just by individuals, but by businesses that were created to buy and distribute hotspots to specific areas and homes in exchange for a cut of their HNTs. How many of those businesses want passive income in the $15 per month range?
Moreover, since many of the inflated income numbers were created by the speculative frenzy around HNT and the heightened ability to mine HNTs during the earliest stages of building a network, what will the true income opportunity be?
I may have bad news on that front. One reason Helium is so compelling to me as an IoT reporter is that it fundamentally changes the cost of delivering data over a LoRaWAN network. Such networks are useful for sending small bits of data over large distances.
Cellular networks can also provide this type of long-range connectivity, but they cost more. For example, some of the best pricing I've seen on the cellular side comes from companies such as Hologram or Blues Wireless. Hologram charges 78 cents per MB per month per device (70 cents per month for the device and 8 cents for a MB of data), and Blues lets a customer buy a module with an MCU and connectivity for $49 in exchange for 500MB of data over the subsequent 10 years. Both companies offer different pricing based on volumes.
They also use LTE CAT-M networks or even full 4G, which means they can send a lot more data than a LoRaWAN network, so this isn't an apples-to-apples comparison. Nova Labs COO Frank Mong told me that Helium's packets are about 24 bytes in size. But the devices running on the Helium network aren't going to need multiple megabytes of data. According to previous conversations with Mong, a packet is enough to send a GPS location, time, and temperature, or another bit of data. So if you had a sensor transmit every five minutes, the year-round cost would be about $1.05 on the Helium network.
If I wanted to send that same amount of data using Hologram, I'd pay $8.40 for the device and 8 cents per MB of data. Based on the number of packets I'd send in the earlier scenario, the end user would rack up roughly 2.5 MB of data, leading to an annual cost of $8.64 per device. The discrepancy in costs is partly because the Hologram charge includes an eSIM and device management and partly because the customers of each network have different levels of technical expertise and needs.
But the important takeaway here is that the Helium network is designed for hundreds of millions of devices to send small bits of data really cheaply. Which means that we won't see amazing revenue from Nova Labs until we start seeing hundreds of millions of devices on the network. Today Nova Labs has Lime, Cisco, MyDevices, and Careband as customers on the Helium network, but many of those are in trial phases or selling relatively few LoRaWAN devices.
This is exactly how the network is supposed to work. This isn't a network designed for connected vehicle trackers or hot tubs. This is a network designed for the likes of UPS to install a cheap sensor on every package and monitor its progress around the country. It's for a few hundred million outdoor weather stations or mailbox sensors. As such, it needs to be cheap and it needs to convince customers to put billions of devices on the network.
Which takes us to another challenge the Helium Network faces, and one that could affect its overall $1.2 billion valuation. There are still too few LoRaWAN devices out there. When I was giving a talk at the LoRaWAN World Expo earlier this month, I was dismayed both by the lack of sensors and the subsequent frustration expressed by many attendees, who said it was still too hard to get LoRaWAN devices online easily.
Without LoRaWAN devices, the network will remain empty and won't ever achieve the volumes it needs to drive revenue into the hundreds of millions it would need to support its valuation. Nor will it generate the data transfers over hotspots that will, in turn, generate more HNTs for the hotspot owners that comprise the bulk of the Helium network. And if those owners aren't incentivized to keep operating their hotspots, the network will lose coverage and capacity, which will make customers reluctant to use it.
Basically Nova Labs is performing a big experiment in market-making and cryptocurrency at the same time. Each is difficult, but its attempt to do both at the same time is fun to watch. |
|
|
|
|
| Real-Time Edge Data Insights SPONSORED |
| |
|
The need for new solutions at the edge, combined with an exponential increase in data from edge devices, creates challenges around managing and using that data effectively.
InfluxDB supports edge and cloud use cases. Running InfluxDB at the edge enables data collection, storage, and analysis for critical insights in real time. At the same time, users working in the cloud also need edge data, or subsets of it, to meet alternative needs and requirements.
Learn more and get started here. |
|
|
|
|
| For $8 a month, this company will track your tools |
| |
A few months ago, we had some tree work done on our property, and while here the crew left behind a water bottle, a rake, and a chainsaw. When we called to tell them, they weren't concerned about the water bottle and rake; it was, however, worth it for them to come and fetch the chainsaw. But what if we hadn't called?
It's possible that such a valuable piece of equipment would be counted as lost, costing the business money and — until they purchased another chainsaw — productivity. Preventing gear from being lost and/or finding it once it has been is one reason businesses are interested in asset tracking services. But the current process and business model associated with trackers can make it hard to track anything but the most expensive items, such as cars or large equipment. So a company called Momentum IoT hopes to bring that price down. |
|
| — The Toolie device costs $8 a month and is the size of a quarter. Image courtesy of Momentum. |
|
|
Momentum, a SaaS-based asset tracking business based in Long Beach, Calif., has created Toolie, a tiny device that affixes to customer equipment and works in conjunction with the company's car-based cellular gateway, which is known as the Eagle One. To date, customers have been putting an Eagle One in their trucks to track their fleet of vehicles. Now they can use it to extend their tracking capabilities to the Toolie.
The Toolie is about the size of a quarter, and uses Bluetooth to talk to the Eagle One. It also contains an accelerometer which can be used to indicate when someone is using a tool. The combination of tracking and tool usage data opens up a bunch of use cases for customers. According to Momentum CEO Justin Silva, the Toolie has been in beta testing for the last three months and he's already impressed with some of the use cases people have come up with.
For example, a customer in the landscaping industry uses the Toolie to track how productive employees are across different jobs and then rewards the highest performers (and presumably dumps the worst ones, although in this labor market that seems unlikely.) The customer can see when tools such as a lawnmower, an edger, and a blower are unloaded from the truck and how long each of them are in use, as well as the time spent driving to each job. Tracking which tools are in use at what times also helps the customer better pace jobs, because certain tools are only used at the end of an engagement.
David Clifford, the COO of Turfmaster Lawn Maintenance Inc. in Indianapolis, told me that he's using Toolies to make sure the right tools for the job are on a truck when the truck goes out. He can also use them to see if something has happened to stop a job so he can go out and check on the crew. But mostly he's appreciative of the devices because they help him show his clients that his crew was where they were supposed to be, on time, and doing the work that they hired Turfmaster to do.
Several of his clients are municipal entities, and he's constantly dealing with competitors trying to disparage his work in the hope of getting the public contract for themselves. But with the documentation provided by the software, he can defuse those accusations with data. He also plans to use Toolies to track necessary maintenance. As he said to me, since he can use a Toolie to track how many hours a piece of equipment runs, he can easily see what needs maintenance at the same time.
"To be able to make money nowadays, you'll need to be better able to understand your business and analyze the data," Clifford told me. Given the pressures of the labor market and the almost commodity nature of the landscaping business, it's not enough to simply show up and do a job.
Clifford currently has seven Toolies. He's affixed them to snow removal equipment, lawnmowers, blowers, and some heavy earth-moving equipment. And he's sure that the more stuff he can track, the more he can improve his operations, so he's excited to see costs come down even further.
Clifford pays $12 a month for the Eagle One devices in his fleet and $8 a month for each Toolie, which is less than what his prior fleet tracking company charged him. The prior supplier charged him for the devices for his cars as well as a $15-a-month service fee, but it is now getting out of that business. The all-SaaS model is also a plus for Clifford.
Silvar told me the all-SaaS model is a big differentiator for Momentum. Each Toolie device will have a roughly two-year battery life, and when the backend software sees the battery getting low, the customer will get a notification and Momentum will ship out a new Toolie. The payback on the Toolie, Silva said, is really fast.
I like the model. I also like the idea of a future in which you can track smaller and smaller tools used in lawn maintenance, construction, building cleaning, and other use cases. A lot of companies providing these services are small, so the ability to easily pull data off of their equipment could really help them compete against bigger operations or at the very least, keep costs down in the face of inflation.
This is where the IoT can shine, using cheap connected devices, cloud analytics, and data to make the invisible visible. |
|
|
|
|
| Developing an app for a connected device?
SPONSORED |
| |
|
When you partner with intent, you don't just work with a build team - we act as a ‘think-partner’ to guide your hardware project to success.
intent has 12+ years of experience in delivering stunning IoT and connected device projects including Ōura ring, Bose and McIntosh in-car entertainment systems. With an extensive background in mobile and web app development, firmware and hardware, we help design and build software solutions for the world of connected devices - from net-new ideas, to products entering an established niche.
See our success stories at https://withintent.com/portfolio |
|
|
|
|
| Episode 382: Is Helium full of hot air? |
| |
We start this week’s show with a deep dive into a popular post from this week about the Helium network. The report pointed out that Helium only made $6,500 in the month of June from data rates. We explain why that’s not a surprise and what it will take to get those numbers up. Then we talk about Apple’s Air Tags and their potential use ability to track thieves and suitcases. Then Kevin reviews the Eve Motion with Thread sensor and then we focus on the excellent article from CNET that documents when Ring, Nest, Arlo and other camera companies will share your video data with police. Then we cover shorter stories from Drover AI, two satellite deals including a $3.4 billion European acquisition deal, and updated lighting features from GE Cync.
|
|
| — My suitcase and obligatory Air Tag. Image courtesy of A. Allemann. |
|
|
Our guest this week is Jim Ethington, CEO of Arable, a precision agriculture company. He’s on the show to talk about Arable’s $40 million in funding, and what Arable has learned in the last six years of operation. We also talk about the myth of using data to create “perfect predictions” and what sorts of predictions are more realistic when discussing how farm sensors can help farmers increase yields. Then we discuss why farmers are looking beyond simple ROI measurements when adopting technology and how sensor platforms such as Arable’s can help make their investments in sustainability or traceability pay off. We end with a list of hardware that Ethington would like to see for future field sensors. These include better connectivity options and sensors that provide more options for detecting different wavelengths of light. Enjoy the show.
|
|
|
This week on the Hotline, we answer a listener question about Insteon’s plan for an annual fee for cloud connectivity and services. The IoT Podcast Hotline is brought to you by Works With.
Works With by Silicon Labs has emerged as the go-to developer conference for building the skills needed to create impactful connected devices. On September 13–15, Silicon Labs is bringing together the most influential technology brands, ecosystem partners, and developers for three days of technical training, keynotes, and expert panels. Learn more at workswith.silabs.com |
|
|
|
|
|
| The Eve Motion adds Thread for a better sensor |
| |
|
| — Kevin tried out the latest Eve Motion sensor. The sensor costs $40 and uses PIR and a LUX sensor to track motion and light levels, respectively. It also adds Thread as a way to make it faster and to prep it for the upcoming Matter smart home interoperability standard. See what he thinks here. |
|
|
|
|
|
|
|
| News of the Week |
| |
More details on when video camera providers turn data over to law enforcement: After Ring said it released video footage to law enforcement 11 times last year without homeowner permission, other video camera companies have shared their policies. CNET did an excellent article, and now Consumer Reports has added to their information by noting that while Google and SimpliSafe will share data with law enforcement when requested under specific circumstances, they hadn't yet done so. Eufy said it had fielded two requests from law enforcement, but couldn't actually offer up the data since it was stored locally on the consumer's device. Which basically means if you don't want to become an unwitting accomplice to overzealous demands by police, you may want end-to-end encryption or the ability to keep the data stored locally. However, if you do this, it will change the user experience for you. (Consumer Reports)
The Chips Act is about to become law: Congress has approved $52 billion in subsidies to boost U.S. chip manufacturing and technology R&D after years of the industry trying to maneuver during a shortage of silicon for automotive, IoT and even entertainment devices. President Joe Biden is expected to sign the Act into law next week. The law will provide subsidies for manufacturing plants in the U.S. as well as investment for research into new manufacturing processes. I'm more excited about the latter given how tough it is to stay on the cutting edge when it comes to manufacturing. But don't expect this to change the shortage anytime soon. Chip plants are already being planned here in the U.S. but it will be years before they are built and shipping silicon. (Reuters)
Spotify gets out of the hardware biz: This week, during its second-quarter earnings call, Spotify reported that it was taking a $31 million charge as it ends its experiment with selling hardware. The company had previously introduced Car Thing, an $89.99 device that was designed to play Spotify in the car. The large physical controls and screen lent itself to a car experience, since spending too much time clicking through songs and albums on a screen while on the road can be deadly. But users weren't convinced that they needed the device. It's a shame. I hate the trend toward bigger screens and fewer physical functions in cars because finding controls on a screen takes more time and is less intuitive than a physical control. (The Verge)
You can now send Nest camera data to your Chromecast: It's the ninth anniversary of Google's Chromecast smart TV dongle, and to celebrate the folks at Google have made it easy to automatically send Nest video data to a TV using Chromecast. This is great for people who watch a lot of TV and for those who might not have a Nest display, which also has the ability to get video images from Nest devices. (Google)
Will muscle-oxygen sensors become the new HRV? For fitness freaks and those enmeshed in the fitness tracking world, heart rate variability, or HRV, came out of nowhere to become a hot biometric for measuring how ready an athlete was to engage in intense training. The fitness company Whoop really helped drive this metric, which has since been adopted by Fitbit and Apple on their devices. This article shares the existence of a new type of sensor to measure athletic performance — the muscle oxygen sensor. This sensor costs a lot, which limits its current use to sports labs, but the focus here is on driving down the costs and convincing coaches and athletes of its efficacy as a better measuring tool. Maybe in 10 years it will trickle down to the rest of us. (Outside)
An easier way to install a car charger: Siemens and ConnectDER have created a new way to install a 240-volt car charging outlet in homes without requiring new outlets, circuits, or wiring. The concept is a car charger that plugs directly into the electric meter inside or outside of a home. In some cases the utility might have to give permission for the installation, making this possibly less efficient than hiring an electrician, but it is also less than the cost of getting more electricity wired to the home. Because about half of homes have older wiring and a breaker box that is often at capacity, adding a new car charger isn't as simple as finding an unoccupied circuit in the box. Instead, customers have to call the electric company and hire an electrician to bring in more amps and a new box. This new meter-connected car charger takes care of that problem. (ConnectDER)
How to build a software bills of materials: I've written before about the importance of software bills of materials, or SBoMs, when it comes to the IoT. These are documents that clearly list what software has gone into the creation of any connected device, at all levels. With an executive order mandating their use in a variety of industries that sell to the government, the use of SBoMs is on the rise. This article shares eight tools you can use to create them. (CSO Online)
This is a nice overview of the DECT-2020 LPWAN option: Close readers of this newsletter may recall my articles about DECT-2020, an ICT 5G standard for massive IoT. This is another low power, wide-area network tech that's being pushed by Nordic Semiconductor and Wirepas. The article explains the tech including its benefits and its shortcomings. A big shortcoming is that the equipment to build these networks doesn't exist yet. (EEtimes)
Will someone hack an EV charging network? Probably. (Ars Technica)
Is the next trend putting quantum in front of existing buzz words like AI and digital twin? I hope not, but it's looking like a possibility based on this story about a deal between Bosch and Multiverse. (IoT Enterprise Insights)
Want to support this newsletter and my podcast? We have some upcoming advertising opportunities. Request a media kit for more details. Thanks!
|
|
|
|
|
|
|
|
|
|
