Hello, and welcome to all of you. As some of you already know from my past courses, my name is Tobias Kretschmer. And I want to welcome you to our capstone project in Competitive Strategy and Organization. The project is designed to let you apply the knowledge you've gained throughout this specialization for advising a real company. And I'm actually standing right in front of the headquarter of a really interesting young firm. We are at the Munich headquarter of KONUX, a young German company dedicated to developing innovative solutions for establishing an industrial Internet of Things. In a second, we will enter this store and learn more about KONUX and their solutions for real-time data tracking of machines. Let's see what one of the founders of KONUX and his colleagues can tell us about their company and the challenges that they are facing. Are you curious? I am. [MUSIC] >> KONUX was founded in March 2014. The founders, Andreas Kunze, Dennis Humhal and Vlad Lata met while studying at the Technical University in Munich. The KONUX office is situated in the old Philip Morris factory in Metasedling where the company moved at the beginning of the year. KONUX has rapidly grown from six employees in its first year to approximately 35 team members at present. KONUX offers an end to end solution made up of smart sensors and AI based analytics, enabling industrial and railway companies to implement predictive maintenance. [MUSIC] KONUX works with industrial companies, as well as with the biggest railway operator in Europe, Deutsche Bahn. Through real-time switch monitoring, KONUX provides insights into the infrastructure health and predict maintenance needs. KONUX is funded by both German and Silicon Valley investors. [MUSIC] >> Dennis. >> Yes, nice to meet you. >> So you founded this company a couple of years ago, and that's really quite the project. I'm sure many of our learners are currently thinking about. Now what I'd like to know is a bit more about the history of KONUX and basically what made you found KONUX. What made you come up with the idea of KONUX, and what was your initial vision? >> So very early when I worked for different industrial companies, I realized the lack in data driven decisions in value added activities which are very cost effective. This causes high costs due to a machine failure, a machine downtime at the end. And when I met Andreas in flat, right from the beginning we shared exactly this experience. And we had the same vision, to help these industrial companies to become much more data driven with today's capabilities we have. Because we have the capabilities in terms of sensor technologies available on the market to really collect data efficiently. But we also have the capabilities today in terms of the data analytics approaches, like machine learning, to really handle this data efficiently. >> So cool, so you're really combining precise sensors and smart analytics, right? And if you wish, you're often called a company that you would say provides solutions to companies in the industrial Internet of Things. Now KONUX is often described as a company that provides solutions for the industrial Internet of Things. Now could you explain to someone who really has no idea about it, what the Internet of Things actually is. >> The industry Internet of Things, as the name suggests, it's using the IoT technology, Internet of Things technologies we have in industrial work. And all of us are surrounded by the IoT today. Even your washing machine could be connected to the Internet today. All the devices, all the things you use every day are connected to each other and to the Internet more and more. And so that you have the possibility of that you are able to always know the status and get information and alerts in real-time. And for the industrial world, it's the same. You collect and combine data in new ways. You connect machines and devices to each other and to the Internet. And thereby you are able to really make decisions based on real-time data. And thereby increase your overall efficiency, which is always the highest goal for an industrial company. >> Well, sounds pretty fancy schmancy, excellent. So as the founder of KONUX, what makes KONUX special? >> So at KONUX for me, it's really about the people at KONUX. Having a team following one vision, following it with the same passion like me. And also delivering outstanding performance day by day is for me personally really a feeling I have never experienced before. And for me it's also about the partners around KONUX, which are very unique, in my opinion. Thereby, we have an ecosystem to solve also the biggest challenges on our way to enable a data driven industrial world. >> Actually speaking of partners and speaking of the biggest challenges, one of your recent amazing successes was that you started up a partnership with Deutsche Bahn, right, a massive industrial giant in Germany. Now as a small young company like KONUX, how can you deliver value to a huge client like Deutsche Bahn? >> Our product combines sensor data and smart analytics to allow our customer, in this case, especially the Deutsche Bahn to monitor the health status of assets of their infrastructure in real-time. So anomalies and potential defects can be detected as early as possible in real-time. And thereby, it allows the Deutsche Bahn to reduce the downtime of their whole infrastructure. Thereby, reduce the train delay minutes and increase the end user satisfaction. And KONUX combines all the capabilities and all the know how and experience you need to really get a working product to address this in a short time. >> Well, again, I have to say I think it's really fascinating, it's very cool. So this was a great introduction, but you have to excuse me. I now have to go. I need to find out more about the strategy of KONUX. Thank you so much. >> Thank you. >> Cheers. >> Bye. >> Bye, after speaking to one of the co-founders of the company, we now have a pretty good idea of the challenges that KONUX is facing. So I heard Vlad is an expert in the product and technology space. I would suggest we pay him a visit to find out more. Vlad, hello there, it's really nice to meet you. >> Nice to meet you also, yes. >> So Vlad, you're the co-founder and currently the chief technical officer or the CTO of the company. So what I'd be interested in from a technological point of view, what are the main challenges that you're currently facing? >> I think we could summarize them in two main questions. So on one side, all these industrial companies that are our customers have their own data silos. So the question for us is, how much of the stack do we cover? Do we do all the visualization? Do we do the centers? Do we do the analytics? And how does this integrate with their own product? The second question would be, looking at the IoT industrial space, you have a lot of applications. So for us, it's important to understand, do we want to scale first horizontally and build a platform? Or do we want to go vertical by vertical and challenge, and take each of these challenges at once? >> Well, excellent, because that really ties into a lot of the things that we did in the course, right? A lot of it was about product strategies, right? And so product strategies include, amongst others, things like product differentiation and positioning, utilizing network effects optimally, and also designing a set of complements, right? So are these issues that you think about in your work? >> It's very relevant to us. Because as you understood, we have different applications we're working with. And then we have to decide which are the best partners for working within those applications. So it would be very helpful for us if students look at these whole questions and think of them from the perspective of okay, what are complementary technologies we could use. How do you we use network effects with other companies and different industries? But also, how we differentiate our product, to have a more concrete USB for our customers. >> Excellent, so I mean, if I were to paraphrase the stuff that I know about your company, I would say it's really about designing an IT infrastructure, right? And so that's a highly technological issue. Are technological recommendations also important and relevant to you? >> Yes, of course. So if there are any students that have worked in other companies, they know any best in class architectures or some technologies that they have been using which have been proven in the industrial space, those recommendations are very welcome for us. And we're looking forward to hearing them. >> Excellent, well, it really sounds like that's a perfect match. And we're really looking forward to seeing what the students will come up with. >> Yeah, I also. >> So thanks very much for that short interview and I hope to see you later, cheers. >> Thank you, cheers. >> Bye-bye, so I now have one last appointment with Milos to talk about market related challenges. >> Hey, Tobias. >> Milos, it's very nice to meet you. >> Nice to meet you. >> You are responsible for market development, is that that right? >> Correct. >> Now what are the main things that are spinning around in your head right now? >> So in general, there are two streams which are important for us at the moment. The first thing is how do we satisfy our current customers? What other products we can offer them in addition to the products they're already using? How can we improve our delivery? How can we make them happy? The other question for us is, where do we actually go as a company? Where do we want to grow? Which are the next segments to go to? How do we approach these segments? What are threats which are waiting there for us? So in general, it's about the question, what is the winning strategy in industrial IoT? >> Cool, well, and that covers quite a few things, and various aspects that we have to take into account when looking for that particular winning strategy. Competitors, customers, as you mentioned, product design and how it fits with whatever the competitors do. Also, what the customers want. So what would you most like to learn from our students of all this, all these different things? >> In fact, it's exactly what all the aspects you mentioned. The question is, which is the right segment for us to go next? And of course you have to cover a variety of different aspects there. Competitors are definitely important for us, but also the customers, what are their needs, what is maybe even their willingness to pay. Another point after the identification of the right segment is, of course, how do we approach it? What are channels to go there? How do we promote our products here? So in the end, a bunch of different criteria will be important for the winning strategy. >> Awesome, well, thanks very much, Milos. >> Thank you. >> Looking forward to seeing what the students come up with, thanks. >> Thanks. >> I also want to thank our course participants for watching this video and for taking part in the capstone project. You now have a first idea about our partner company and the challenges that they're facing. So the two main challenges at the moment are, first, components or full stack. How should KONUX's product and services solution for the industrial Internet of Things look like? For instance, should KONUX pursue a platform strategy or offer industry-specific solutions? How should the IT infrastructure be designed? Second, what is the best competitive strategy for KONUX to succeed in the industry Internet of Things? As Milos said, for KONUX, it is interesting to either learn more about ways of satisfying current consumers or to get recommendations about which new markets and consumer groups to target, and the strategy to do so. For instance, think about KONUX's competitors, customers, product positioning and other strategic aspects that are important for KONUX to gain a competitive advantage. Now it's your turn. You've learned a lot throughout the three courses. And it is now time to apply this knowledge and conduct a little research project to consult KONUX. Your task is to choose one of the two questions and start your own research process. So you first gather information on the question, analyze the information, develop recommendations for KONUX, and in the end, write a short consulting report for KONUX. You will find more information about the process in the material uploaded in each week. For now, you had a first live insight into KONUX and their work. I'm already really curious to read your reports in the end. Good luck and success for the assignment, and I'll see you soon.
