Pitfalls of Connected Product Development

January 16, 2023

The Internet of Things (IoT) is challenging, both on a technical and business level. SpinDance has worked with many customers at various stages in their IoT journey. This includes those in the early exploration stages or those in the later stages where we’ve helped rescue a project that has gone off track. As software consultants focused on IoT, our job is to understand the challenges our customers can face and how to help our customers chart a path to success. 

Over time, we’ve collected a list of common pitfalls. These are patterns that you can fall into if you aren’t careful. Whether you are creating a product for consumer, commercial, or industrial markets these are challenges you need to be aware of and avoid. 

Pitfall #1 – Building the Wrong Product

There is a tendency to jump in and start building a product before you really know what the product should be. You can waste a lot of time solving challenges that don’t amount to much in terms of value for your customers. 

Many companies have a long history of success in their respective industries. However, making a shift into IoT products and services requires new ways of thinking and new ways of working. This leads to a lot of unknowns. Some companies assume they can proceed like they have the same clarity as if they were building their traditional products. However, without a strong focus on understanding the nuances of connected product experiences, their new IoT products and services may miss the mark.

How do I build the right thing?

Our philosophy is simple, IoT is about empowering people. If you’re looking to bring value to your customers and you’re trying to help people, you’re on the right track. If you find yourself simply using technology for the sake of technology, you’re going to fail. In the early phases of IoT, people tried a bunch of crazy things that didn’t offer a lot of true value. However, if you’re focused on your users, and creating things that help them, you will be off to a really great start. 

To help you build the right product, we recommend several activities, including Innovation Workshops, which help you explore areas of innovation, and Value Proposition Workshops, which help you define the value you can bring to your customers. 

Check out this white paper on Business Value and Monetization for IoT and this webinar – Show Me the Money! Developing a Compelling IoT Value Proposition & Business 

Pitfall #2 – Trying to Do Too Much Too Fast

Usually getting things right takes time. It takes experience. It takes input from customers. Often companies want to tackle projects with the most efficiency. Therefore they try to make a comprehensive plan with hard requirements and try to minimize potential changes along the way. However, with software you may not know if you designed the right thing until after you’ve gotten it in the hands of some customers.

Many companies want to design a product or service to go straight to production, skipping testing the core value proposition. Some companies want to go for a fully functional prototype, but haven’t proven the core functionality or theory that will make the product successful or not, which could be done with a much cheaper Proof of Concept (PoC). 

How to know how fast you can go? 

We believe in Lean Principles, which focus on determining the items of largest risk and reducing that risk before you spend a ton of money. We also believe it is important to focus on what differentiates you. If you don’t know what that is, then this is the first problem to solve. 

Don’t lose sight of learning. Very important tools for learning and reducing risk are Proof of Concepts (PoCs) and Minimum Viable Products (MVPs). Each is intended to validate your assumptions in order to progress to the next level. 

You need to evaluate a problem, think about alternative solutions, and make sure there is enough utility in solving that problem such that customers will be delighted to pay for it. 

We recommend Roadmapping Sessions to build out plans. We also highly recommend creating PoCs and MVPs. Check out this webinar Accelerating IoT – Fastest way to MVP.

Pitfall #3 – Poor User Experience

Your IoT product is the sum of the devices, connectivity and digital services. Your customers will judge you on how well the parts all work in concert. They all have to work together to provide a great product experience.

Some companies want a 5-star mobile app, but they neglect their device firmware or their cloud infrastructure, thus systemic issues get exposed by usability problems in their mobile app. Also, when interfaces are inconsistent across multiple interfaces, this can cause cognitive overload for users. IoT experiences are unique. There are specific user flows around connected devices that take experience to develop. 

How do you create a great user experience for IoT? 

Holistic design with a firm that has experience in IoT and connected user experiences can really help. Working with a company that has expertise in all the domains of the system – cloud, mobile, web, embedded. Building the system to handle the performance required at production scale. 

We strongly believe that engaging in thoughtful System Design and Architecture can greatly improve the performance and effectiveness of systems. 

It is also crucial to engage a firm that specializes in User Experience & User Interface Design for connected-products and IoT. 

Holistic design is covered in the 7 Business Essentials of IoT webinar. 

Pitfall #4 – Abandoning your Apps (and your Users)

When you launch a product you may be tempted to have a party and give each other high-fives. The feeling of launching a product is great and you should celebrate! Don’t forget though,  that for your customers, the work has just begun. They will need support and guidance. The software will need to be updated. Systems will need to be monitored. 

Many companies assign resources to work on a new product and then reassign them to other products after a product has launched. This can work well for physical products, however with software and connected products, the work is ongoing as long as your customers are using the product. Some companies who don’t plan for this fact release software that never gets updated. This leads to the customer experiencing problems that never get fixed. It results in stagnant applications that wither and die. Lack of maintenance, continuous monitoring, and improvements can all lead to the death of your product or service. 

Want to keep your IoT software alive and thriving?

WIth IoT, the systems and software are ongoing because your customers’ interactions with it are ongoing. Device firmware, cloud & mobile applications can and should be updated and improved over time.  We recommend you assign a Product Owner to monitor and react to the feedback from your product. They can then direct an appropriately sized team to address maintenance, bug fixes, product improvements.

Affording to keep your staff going requires that you price your products and services accordingly to account for maintenance & support. Make sure to build that into your budget. 

We recommend establishing a plan for Maintenance and Monitoring. It is also incredibly important to get your teams trained to support and maintain your software. 

More information on Maintenance available here.

Pitfall #5 Losing Control (or Never Having It)

Often companies’ first step into IoT is to use a software platform, which is a pre-made software product. You can think of it as the plumbing of a software system. There are hundreds of platforms in the market today. You might get lucky and choose a good one, but often we see that companies tend to outgrow platforms over time. As they grow, their needs change and their desire to adapt and customize increases. When companies are tied too strongly to a single platform, they are beholden to an outside company that they have no control over. Will they be around in a few years? Will they provide good support? Will the platform continue to perform well over time? Those are all important questions to consider. 

Similarly, if you outsource too much technical work, you may find that you don’t have the internal knowledge or control to make the right decisions for your company and your customers. 

Some companies find themselves in a situation where they have outsourced the core technology that differentiates them. Thus they are truly locked-in to another firm for their success. Additionally, some firms find that they have lost their leverage to control costs.  

We have spoken with some companies that realized that they don’t own the domain names or the cryptographic keys that underpin the critical technology that their company relies on. 

Do you control your own destiny? 

We recommend being mindful to build organizational knowledge and strategically staffing key roles. Seek independent advice. Grow your experience over time. Consider building software and solutions that you ultimately can own and control. 

We recommend Consulting and training services to get your team the advice and skills you need to achieve the most success. We also recommend Roadmapping sessions to map out how to achieve your short and long term goals which also provide you with the freedom to control where you want to go. 

Check out this guide on selecting an IoT Platform

When you are ready, consider the design and development of a custom solution that balances your needs for control with the cost to create. 

Pitfall #6 – Poor Performance

There are lots of ways to create a system with poor performance. This includes systems that are slow, buggy, or unreliable, as well as systems that are overly complex and overwhelming to users. Many companies that are building an IoT system for the first time have trouble architecting for the scale of many IoT projects. 

We’ve seen systems that rely heavily on single points of failure as well as performance bottlenecks. Also, we’ve seen systems that apply paradigms that are effective in traditional systems, but ineffective in IoT applications. Such systems typically can only scale vertically – meaning the only way to get more performance is to increase the horsepower of the computer running it. 

How do you create a system that can handle performance at production scale?

Architectures for IoT need to be horizontally scalable – meaning additional instances of a sub-system can be added or removed as necessary to meet increasing or decreasing demands. Putting together horizontally scalable systems is much easier to do at the onset of a project, but difficult to add later. 

Additionally, databases often form a crucial part of IoT systems. There are many different types of databases depending on the use case. it is okay to use multiple database types in a system if different sub-system use cases justify it. Alternatively, using the wrong type of database for a particular job can lead to dramatically bad results. Cloud providers such as AWS offer many databases and horizontally scalable services that are optimized for different features, thus giving companies the ability to choose the best one for the job.  

We recommend design & architecture services from an experienced firm who focuses on IoT systems. 

Pitfall #7 – Poor Security

Security is critical with IoT, but good security doesn’t come for free. It is very possible to create products and services that have good security without breaking the bank. However, for many companies, the added cost of doing things right can lead to sticker shock. Thus, they avoid thinking about the risks of bad security and rationalize taking shortcuts. 

There are numerous examples of products in the market where security shortcomings have led to serious problems, both regarding the products themselves and with the reputation of the product maker. 

How do you design IoT products with great security? 

In our blog series about security, we listed 10 security protections that we consider must-haves. These are things we always recommend for a good level of security. 

Check out IoT Security Must Haves – Part 1 and Security Must Haves -Part 2.

We recommend software & system assessments of existing products or services. Also, we strongly recommend design and development services that treat security as a top priority. Additionally, getting the advice of a firm that specializes in security can be of great value. Having a security firm perform penetration testing on your systems can uncover problems and get them fixed before they become an issue. 


The world of IoT product development is rife with potential pitfalls. Some problems are inevitable, however, with the right mindset, approach, and partnerships, you can achieve great success. As you progress on your journey, you may look back in several years and be amazed by how far you’ve come and what your team has achieved. 

We would love to help you. SpinDance is a consultant specializing in IoT. We offer several services that help our customers launch IoT products and services. These services include: 

  • Training
  • Consulting
  • System Assessments
  • System Design
  • Software Development 

Have questions or need the guidance of an expert? We can help! 


About the Author

Mac Lobdell is a Solution Architect at SpinDance with 20 years of experience in embedded systems and software. He holds an MBA, a BSEE, and is a Certified AWS Cloud Practitioner. As a Solution Architect, he helps define solutions that bring together good business strategy, technological innovation, and outstanding customer experiences.