With big bets by the titans of technology and consumer finance, 2011 is becoming the year that American business got serious about jumpstarting the “Internet of things“—a broad web of digitally enhanced locations that consumers can navigate the same way they now use smartcards to pay their bus fare or open security doors at work.
For Seattle startup Iota, that transformation isn’t happening fast enough. This team of former T-Mobile employees is aiming its considerable experience in the mobile sector at a new type of device that it says is ready to go right now. They believe it can be made cheaper, easier, and more open than expensive new radio frequency ID-enabled smartphones controlled by the big market players. Their mission is to put the futuristic promise of what’s called “near-field communications,” or NFC, into the hands of anyone who doesn’t have a smartphone, or wants to spend less time digging around in a field of apps. The company, based in Seattle’s hip Capitol Hill neighborhood, has raised $1.4 million so far and is currently about $600,000 of the way through a $1 million convertible-note round, founder and CEO Russ Stromberg says.
Iota’s first device is called the Tapp. With physical design from partners here in Seattle, the Tapp looks and feels a bit like a thicker Zippo lighter, with a slit in the middle that kind of reminded me of a futuristic moneyclip. Inside are an RFID reader, a cellular radio, and a Bluetooth radio.
The initial idea behind the Tapp is making it easy and entertaining for people who don’t have cell phones to check in to places via social networks and collect consumer discounts by physically activating an RFID tag, rather than digging around in a smartphone app and hitting a touchscreen button. With cheap, reprogrammable RFID tags embedded in logos or advertising collateral on a retailer’s countertop, for instance, a consumer can wave their Tapp device nearby and collect rewards, while also spreading the word to friends about where they are.
Sounds fairly cool—but another device? Isn’t the market racing toward two powerful chunks of computing hardware at maximum? Iota gets this question a lot. The answer rests on two major points.
First, while smartphone use is on a rapid ascent, there’s still a big chunk of people in the U.S. who haven’t chucked their old-style mobile phones. The latest estimate from research firm Nielsen says that 38 percent of mobile users are using an iPhone, Android, or some other smartphone device—a considerable leftover of people with older-style feature phones.
The other part of Iota’s answer points to successes from companies like Nike, which has seeded its Nike Plus fitness monitoring technology into watches and other small devices, and Amazon.com, which upended the book industry again with the Kindle e-reader.
“Users will migrate towards the simple. I can download the Kindle app on my iPhone, but I still want the Kindle because it’s portable and it’s much better for reading books,” Stromberg says. “The mobile consumer space is ginormous. It’s interesting—when you talk about the number of startups that are
