Internet of Things: Connecting the Future

Hector Shibata
7 min readNov 3, 2020


“Internet of Things is transforming the everyday physical objects that surround us into an ecosystem of information that will enrich our lives. From refrigerators to parking spaces to houses, the Internet of Things is bringing more and more things into the digital fold every day, which will likely make the Internet of Things a multi-trillion dollar industry in the near future.” — PricewaterhouseCoopers report

Can you imagine a world where all things are connected to service your needs?

You get up in the morning and ask Alexa to play your favorite song. You walk down the aisle and the lights turn on automatically. You enter the kitchen, open the refrigerator and finish the milk and yogurt that remains, at that moment the fridge automatically orders these products to your preferred supermarket. Immediately, your order is processed by the retailer’s data center and it sends out the information to the nearest micro-fulfillment center, where a computer processes your order. Then, a robot picks your products and transfers them to the dispatch area. Another robot loads them into an autonomous vehicle which instantly finds the most efficient route to deliver them to your doorstep. Along the way, the vehicle reports to the control center real-time information, such as its physical position, the container’s temperature, the pressure between packages and the route performance (ie. gas consumption, engine status, etc.). A short time after, you receive a notification that the products are at your doorstep, and you just get out to get them.

This situation is a reality nowadays thanks to the Internet of Things (IoT), a technology that emerged through military applications initially, and that today is transforming everyone’s lives.

What have been the historical milestones and use cases of IoT?

a. Military

Although the military did not have the term coined or much less, military units had the most important basis, the internet, hence, a lot of the applications of the Internet of Things that we know today had their origin in the military field. For example, just consider the connectivity protocols and the electromagnetic stenographer in 1832, which was used to communicate two machines through the transfer of electrical signals.

b. People

One of the first experiments was done in 1982 at Carnegie Mellon when they connected a Coca-Cola vending machine to the ARPANET (internet precursor) with the objective of inventory accounting. Later, it came to the WWW standardization driving new different solutions focused on connecting devices that could simplify people’s daily lives. The first registered IoT device (1990) was a toaster that controlled remotely its electric ignition and toasting of the bread. In 1993, other experiments were conducted, such as a coffee machine that took photos of the cups to report the fill levels. In the year 2000, LG put up for sale a fridge that gave notice of available inventory; however, its high cost led to failure.

Continuous innovation and technological development have allowed the creation of new and more advanced IoT devices, such as: the iPhone, autonomous cars, wearable technologies like Google Glasses, and more recently, voice assistants like Alexa.

c. Industry

While LG advertised its “internet fridge”, P&G experienced the tracking potential of a new technology called radio frequency identification (RFID), and its potential application within the value chain. This would be the beginning of the Industrial Internet of Things (IIoT), an IoT on a much broader scale looking for innovations in intelligent processes, prediction technology, business intelligence and what would become the fourth industrial revolution (Industry 4.0).

The use and application of IoT is based on the technological architecture composed of the following elements:

a. Capture: It is any sensor or device that receives information from the outside context, with the capacity to store and distribute. There are different types of sensors that capture information from different physical and chemical mechanisms. The most common are to report temperature, atmospheric pressure, radiation, PH, and physical impact, among others. Multiple sensors can be combined and mounted into a single device with multiple functionalities.

b. Connectivity: This is the “language” and communication path that devices will use to transmit the captured information to the processing point. The decision to use it depends on the range required between the transmitter and the receiver, the frequency of transmission, as well as the energy available to perform this work.

PAN: Personal area network

LAN: Local area network

MAN: Metropolitan area network

WAN: Wide area network

c. Data Processor: It is the software that manages and manipulates the data in order to obtain valuable information of any given activity or process. In the early years, this process was done on a specific physical server. However, in 2002, Amazon, through Amazon Web Services (AWS) made cloud technology commercially possible, enabling cost-efficient remote processing for any company. Today, edge computing solutions allow anyone to take care of critical information at the server point and enable cloud processing for complementary processes.

d. Interfaces: This is the point of interaction between the user and the result of data processing. It gives access to valuable information and allows the user to modify the parameters of analysis for future processes.

IoT as a technology has found multiple use cases at the industrial level, leading the development of a market that is worth today USD$82.4bn, being its most relevant applications the following:

a. Retail

The commercial, brick-and-mortar, sector is one of the industries that has made the most profits from IoT. Some applications include autonomous checkout solutions, eliminating the need for a physical cashier in the store, such as Zippin in the United States. It also has applications in consumer analytics to enable CPGs to send out real-time targeted promotions, like Intouch.

b. Manufacturing

Since the installation of the first assembly line by Henry Ford in 1913, the manufacturing sector has always sought productive efficiency and financial profitability, hence, it has adopted several IIoT applications. For example, the standardization of communication between new custom-made machines and legacy machines already existing in the same production plant, as Coretigo. Additional use cases include to control and optimize the inventory of a warehouse, such as Beam Tracking.

c. Supply Chain

The logistics sector seeks the optimization of the processes involved in the storage, shipment, and receipt of cargo. In this case, an example of IIoT is the end-to-end visibility of each container’s journey, from the boarding point to the delivery point, as Sensefinity does. Knowing exactly when the new inventory arrives and when it leaves a warehouse leads to more efficient use of space, using IIoT technology now it is possible, such as Clearblade does.

d. Mobility

The mobility sector seeks to monitor efficiency in the performance of moving assets. For example, route freight management and preventive maintenance solutions, such as Fleetup.

e. Smart-city

Interest in IIoT has led to solutions that can be implemented within cities, turning them smarter every day. Examples of applications in the field are smart parking lots, navigation enablers, and public transport location solutions, such as the ones Nanobile offer. The applications are almost infinite, companies like Bin-e are doing smart trash bins to generate insights into how the people process their waste.

f. Insurance

The insurance sector seeks to identify and measure risks at different events. In the case of the MDGO, it is done through a tag that reports time, possible causes and a comprehensive summary of the most important variables of a car incident.

g. Fintech

Fintech has focused, among other things, on making payment processing more efficient, faster and frictionless through contactless solutions. For example, 48% of iPhone users in 2019 used ApplePay for contactless payments. There are as well sound-based solutions to enable digital payment methods, such as Tone Tag in India.

h. Healthcare

In the healthcare space, IoT technology has improved people’s life quality by enhancing the monitoring of their vital signs and of pre-existing diseases, as Elfi-Tech is doing. Monitoring the composition of the human voice to know the progression of diseases or detection of possible conditions is another application, such as Vocalist Health solution.

i. Sports

In the sports industry, this technology has been used to monitor the performance of athletes, safety protocols in stadiums and to improve the engagement of fans in sports activities remotely, such as Oliver’s helping trainers taking decisions and strategies in the field are factored in by soccer teams’ managers by IoT tech solutions. Wingfield keeping track of the score, analyzing strokes and giving personal feedback right after matches or practice sessions at the tennis court.

The Internet of Things (IoT), independently of its applications and use cases, always seeks technological collaboration, obtaining and processing data, and automation of tasks or processes to provide visibility of people or assets, improving the user’s experience and the efficiency of different assets through customizable applications.

“When we talk about the Internet of Things, it’s not just putting RFID tags on some dumb thing so we smart people know where that dumb thing is. It’s about embedding intelligence so things become smarter and do more than they were proposed to do.” — Nicholas Negroponte, Co-founder of MIT Media Lab

Hector Shibata. Director of Investments & Portfolio at ACV a global Corporate Venture Capital (CVC) fund and Adjunct Professor for Entrepreneurial Finance.

Ana Maury Aguilar. Investment analyst at ACV.

ACV is an international Corporate Venture Capital (CVC) fund investing globally in Startups & VC funds.

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Hector Shibata

Investor in VC/growth/PE supporting startups and VC funds in the US, Latam, Europe, India and Israel. Also, Fintech entrepreneur, IB, board member and speaker.