Designing Profitable, Impactful, Ethical consumer IoT products: A framework proposal
By
Abstract
The rapid growth of the Internet of Things (IoT) industry has revolutionized how consumers interact with technology, offering unprecedented convenience, efficiency, and connectivity. However, this rapid adoption has also introduced pressing ethical, societal, and environmental concerns, such as privacy violations, unsustainable practices, and manipulative design strategies. This paper proposes the PIE framework—focused on creating consumer IoT products that are Profitable, Impactful, and Ethical. Aimed at guiding designers and innovators during the early stages of product development, the framework emphasizes a holistic, entrepreneurial approach to ideation and innovation.
The framework comprises five key guidelines: Holistic User-Centered Design, Readiness of the Market and Consumer Demand, Sustainability Beyond the Environment, Respecting Consumer Behavior, and Privacy-Conscious Development. Each guideline addresses critical aspects of IoT product design, ensuring inclusivity, sustainability, and long-term market success while prioritizing ethical considerations. Through case studies such as Amazon Echo, TOMS Shoes, and My Friend Cayla, the paper highlights real-world applications of these guidelines and explores how adaptability and pivoting can address unforeseen challenges.
The PIE framework bridges existing gaps in methodologies by integrating entrepreneurial strategies with ethical design principles, providing a structured yet flexible approach to developing consumer IoT products. While the framework lays a strong foundation for responsible innovation, its adaptability allows designers to incorporate complementary methodologies, tailoring their approach to specific product goals. As the IoT sector continues to grow, the PIE framework offers a pathway to designing products that balance profitability with social and environmental responsibility, creating a meaningful and sustainable impact.
Role: Researcher
Duration: 3 months
Introduction
The rise of the Internet of Things (IoT) has transformed the way we live, work, and interact with technology. With an estimated 20 billion IoT devices expected to be in use by 2025, it is evident that IoT has become an integral part of our daily lives (Hilty et al. 2019). Consumer IoT has gained immense popularity with products ranging from smart home devices, wearables, and health monitors to entertainment systems and smart appliances. These products have revolutionized how we interact with our homes, our bodies, and the world around us.
However, the increasing adoption of IoT raises concerns about data privacy, security, and environmental impact. The exponential growth of IoT products also brings a significant risk of unethical and unsustainable practices that can harm consumers and the environment. This risk underscores the importance of designing consumer IoT products that are not only profitable but also ethical and impactful.
The need for a comprehensive framework is especially critical at the early stages of design because it helps guide innovators to balance ethical, environmental, and user-centered considerations. By having a framework that integrates these aspects, designers can ensure that their products will be accessible, market-ready, and aligned with current ethical standards. Furthermore, such a framework encourages sustainable practices that prevent negative environmental impacts. Early-stage frameworks also support market success, as they provide the basis for understanding both consumer needs and market demand. In essence, a well-structured framework enables designers to navigate complex requirements, such as data privacy, while ensuring product longevity and consumer trust.
The proposed framework in this paper, referred to as the PIE (Profitable, Impactful, Ethical) framework, aims to provide a holistic approach to designing consumer IoT products that prioritize these critical factors. This framework consists of five guidelines: (1) Holistic User-Centered Design, (2) Readiness of the Market and Consumer Demand, (3) Sustainability Beyond Environment, (4) Respecting Consumer Behavior, and (5) Privacy-Conscious Development. Each guideline is designed to address specific areas of product development, supporting designers in creating products that are successful in the market, beneficial to society, and sustainable.
Literature review
The IoT industry’s rapid expansion has led to a proliferation of frameworks and methodologies aimed at addressing various ethical, environmental, and design challenges in the development of IoT products. However, these frameworks often focus on single aspects, such as sustainability or user-centered design, and do not fully address the combined needs of profitability, ethical impact, and long-term market viability. This section reviews key frameworks that contribute to ethical and sustainable design, highlighting their strengths and limitations in the context of IoT product development.
Existing Frameworks and Their Limitations
IoT Design Manifesto
Created by the IoT community, the IoT Design Manifesto outlines ten principles for ethical IoT development, such as transparency, accessibility, privacy, and security (Bauwens, 2017). It emphasizes the need for ethical practices across the IoT product lifecycle, guiding designers to respect user autonomy and avoid exploiting consumer data. However, the Manifesto lacks specific provisions for balancing ethical considerations with business objectives, making it less practical for startups that need to prioritize profitability alongside ethics.
Circular Design Guide
Developed by IDEO in partnership with the Ellen MacArthur Foundation, the Circular Design Guide promotes sustainable product development within a circular economy framework. It encourages designers to consider the entire lifecycle of a product, from resource extraction and production to disposal or recycling (IDEO, 2018). While this guide provides strong principles for environmental sustainability, it lacks a focus on consumer demand and market readiness, which are crucial for IoT entrepreneurs aiming to commercialize their innovations effectively.
Design Justice Network Principles
The Design Justice Network’s framework centers on social justice, advocating for design processes that address inequities and avoid reinforcing power imbalances. This approach emphasizes inclusivity, encouraging designers to prioritize marginalized communities and address social biases (Irani and Dey, 2019). Though valuable for social impact, this framework does not address profitability or market competitiveness, limiting its direct application for consumer IoT startups focused on balancing ethical and business goals.
Lean Startup Methodology
The Lean Startup methodology, popularized by Eric Ries, is widely used in the tech industry for rapid iteration and market validation. It emphasizes creating minimum viable products (MVPs) and using consumer feedback to pivot as necessary (Ries, 2011). This approach is particularly valuable for quickly adapting to market needs; however, it lacks a structured approach for addressing ethical considerations like privacy and sustainability. In the IoT context, this limitation could lead to products that prioritize speed over consumer trust or environmental impact.
Design Thinking
Design Thinking, advocated by IDEO, is a user-centered approach that encourages empathy-driven solutions, prototyping, and iterative feedback (Brown, 2008). While Design Thinking promotes innovative and human-centered products, it does not inherently address data privacy, long-term sustainability, or ethical considerations specific to IoT. As a result, IoT designers may find it lacks the necessary guidelines for ensuring responsible data usage and lifecycle sustainability.
Ethical OS Toolkit
Developed by the Institute for the Future, the Ethical OS Toolkit offers a proactive framework for identifying and addressing ethical issues in technology development. It includes scenarios, questions, and strategies to help designers consider potential risks related to privacy, security, and misinformation (Institute for the Future, 2018). Although useful for foreseeing ethical challenges, the Ethical OS Toolkit lacks a business focus, making it difficult for IoT startups to balance ethical considerations with market demands.
While these frameworks are useful, they do not fully address the need for a comprehensive framework that focuses on the entrepreneurial approach and considers both the ethical and profitability aspects of IoT products. This is where the PIE framework comes in. The PIE stands for Profitable, Impactful, Ethical, and it’s a new framework that proposes guidelines that specifically address the needs of designers and innovators in the early stages of product development. By incorporating the guidelines of this framework, designers can create products that are not only ethical and sustainable but also profitable.
The PIE framework recognizes the importance of considering all stakeholders in the design process, including but not limited to the end-users, the market, and the environment. The guidelines address key ethical and societal concerns related to IoT products and help designers make informed decisions in the early stages of brainstorming and product development
The PIE framework
The PIE (Profitable, Impactful, Ethical) framework offers a structured and holistic approach to designing consumer IoT products that prioritize profitability, societal impact, and ethical considerations. In the fast-evolving landscape of IoT, designers, and innovators often face the challenge of balancing these three pillars while meeting the demands of a competitive market. The PIE framework provides practical guidance to address these challenges, particularly in the early stages of design and innovation.
Unlike existing frameworks, which often focus on specific aspects like sustainability, user-centered design, or rapid prototyping, the PIE framework integrates these considerations into a cohesive model tailored for consumer IoT products. This framework was developed by analyzing case studies of both successful and failed products, revealing gaps in how ethical and profitable design practices are applied. By bridging these gaps, the PIE framework empowers designers to create products that not only succeed in the market but also contribute positively to society and the environment.
The PIE framework is built around five key guidelines:
Holistic User-Centered Design – Encourages designers to consider all stakeholders throughout the product lifecycle, including end-users, installers, manufacturers, and recyclers.
Readiness of the Market and Consumer Demand – Highlights the importance of assessing market readiness and understanding consumer needs to ensure adoption and success.
Sustainability Beyond Environment – Expands the concept of sustainability to include social and economic factors alongside environmental considerations.
Respecting Consumer Behavior – Promotes ethical engagement with users by avoiding manipulative practices and fostering trust.
Privacy-Conscious Development – Emphasizes the importance of incorporating privacy-by-design principles to protect user data and build trust.
In the following sections, we will explore each of these guidelines in detail, examining their importance, providing relevant case studies, and offering actionable insights for designers and innovators.
The PIE framework is designed for industrial designers and innovators and product managers with an entrepreneurial mindset, aiming to equip them with tools and principles to avoid common pitfalls in IoT product development. By focusing on early-stage ideation, the framework ensures that critical factors like sustainability, user behavior, and market demand are addressed proactively, reducing the risk of product failure and enhancing long-term success.
3.1. Holistic User-Centered Design
When designing consumer IoT products, it is crucial to take a holistic user-centered design approach. This guideline emphasizes the importance of considering not just the end user, but also all other stakeholders involved throughout the product lifecycle. These stakeholders include manufacturers, shippers, retailers, installers, and recyclers, whose roles significantly impact the usability, sustainability, and profitability of the product. By addressing the needs and experiences of all these groups, designers can create products that are not only impactful and user-friendly but also sustainable and efficient across the supply chain.
Unlike traditional user-centered design, which primarily focuses on the end user, a holistic user-centered design approach takes a broader perspective. This approach ensures that products are designed to meet the requirements of all users and systems they interact with, reducing inefficiencies and improving the product's long-term value. For instance, by considering the recyclability of a product during the design phase, manufacturers can reduce waste, appeal to environmentally conscious consumers, and align with sustainability goals.
A notable example of holistic user-centered design is Nest, a company known for its smart home devices. Nest's products, such as the Nest Thermostat, are designed to be intuitive for end-users while also addressing the needs of other stakeholders. For instance, the devices are easy to install, reducing the complexity for installers. Nest has also worked with utility companies to provide incentives to customers who use their products to conserve energy, creating a mutually beneficial ecosystem. Moreover, the company incorporates sustainable practices in its manufacturing and packaging processes, further demonstrating its commitment to a holistic approach (Hong et al., 2019).
Another example is Patagonia, though not an IoT company, its principles align with holistic design. Patagonia incorporates sustainability across its supply chain by using materials such as organic cotton and recycled polyester. Additionally, the company actively encourages customers to repair and recycle their products, reducing waste and extending the product lifecycle. Patagonia’s design philosophy demonstrates how a user-centered approach can include broader stakeholders, such as recyclers and environmental organizations, while ensuring a positive societal impact (Margolis, 2018).
The concept of holistic user-centered design aligns closely with circular design, a methodology that considers the entire lifecycle of a product—from production and distribution to end-of-life recycling. Circular design emphasizes creating systems that minimize waste and promote the reuse of materials. By adopting principles of circular design, IoT designers can ensure that their products contribute to environmental sustainability while addressing the needs of all stakeholders (Carroll and Tani, 2021).
To implement a holistic user-centered design approach, designers should:
Map the Product Lifecycle: Identify all stakeholders involved, from manufacturers and distributors to recyclers, and address their needs during the design process.
Design for Accessibility: Ensure that products are easy to install, maintain, and recycle to reduce inefficiencies and increase adoption.
Collaborate Across the Ecosystem: Engage with utility providers, environmental organizations, and other key stakeholders to create systems that align with sustainability and user goals.
Integrate Circular Design Principles: Incorporate recyclability and reuse into the product’s lifecycle to align with global sustainability standards.
By considering the broader ecosystem of users and stakeholders, designers can ensure that IoT products are impactful, profitable, and sustainable. Holistic user-centered design not only addresses the practical needs of various users but also enhances the product’s long-term success and societal value.
3.2. Readiness of the Market and Consumer Demand
The success of consumer IoT products heavily depends on two interconnected factors: the readiness of the market and the level of consumer demand. These factors influence whether a product will gain traction or struggle to find its place in the competitive IoT landscape. Designers and innovators must carefully assess both market readiness and consumer demand during the early stages of development to avoid potential pitfalls and maximize product adoption.
Market readiness refers to the extent to which the external environment is prepared to support a product’s adoption and functionality. This includes technological infrastructure, consumer awareness, and complementary ecosystems. For example, when the Amazon Echo was first released in 2014, the smart home market was still in its infancy, with limited interoperability between devices. However, as the market matured and more IoT devices became compatible with Alexa, the Amazon Echo gained widespread adoption and became a cornerstone of the smart home ecosystem. Amazon’s ability to pivot and adapt the Echo to evolving market conditions played a critical role in its success. By contrast, Google Glass, launched in 2013, failed to gain traction largely due to a lack of market readiness. The wearable technology space was not yet mature, and the product faced resistance due to privacy concerns and limited practical applications (Bilton, 2016).
Consumer demand is determined by the product’s ability to address a specific need or solve a problem for its target audience. A common reason for IoT product failure is the lack of alignment between the product's features and consumer needs. According to a study by CB Insights, 42% of startups fail due to a lack of market need (CB Insights, 2020). This highlights the importance of conducting thorough research to understand consumer preferences and pain points before launching a product. For example, wearable fitness trackers like Fitbit succeeded because they tapped into growing consumer interest in health and wellness, offering a solution that was both timely and relevant.
Case Studies and Lessons
Success: Amazon Echo
Amazon's ability to adapt the Echo to the growing smart home market demonstrates the importance of timing and flexibility in product development. By integrating with a wide range of third-party devices and expanding its ecosystem, Amazon successfully addressed market readiness and created demand for its product.
Failure: Google Glass
Google Glass serves as a cautionary tale of releasing a product ahead of its time. While innovative, the device lacked practical applications, faced resistance from consumers, and struggled to address concerns about privacy and usability. This highlights the importance of aligning product development with market readiness and consumer expectations.
To ensure the market readiness and consumer demand of IoT products, designers should:
Conduct Market Research: Assess the maturity of the market, including technological infrastructure, competing products, and consumer awareness.
Identify Pain Points: Engage with target users to understand their needs and ensure that the product provides clear value.
Anticipate Future Trends: Monitor emerging trends and evolving consumer preferences to design products that remain relevant over time.
Test for Compatibility: Ensure that the product integrates seamlessly with existing ecosystems and technologies to reduce barriers to adoption.
Be Ready to Pivot: Remain flexible and prepared to adjust the product or strategy based on market feedback and changing conditions.
By addressing both market readiness and consumer demand during the ideation phase, designers can increase the likelihood of creating products that not only succeed in the market but also deliver meaningful value to users.
3.3. Sustainability Beyond Environment
Sustainability is a critical consideration when designing consumer IoT products, but it must go beyond environmental factors alone. While addressing environmental impact is essential, true sustainability also encompasses social and economic dimensions. This guideline urges designers to adopt a more comprehensive approach, ensuring that IoT products are sustainable in all aspects—environmental, social, and economic.
Why Sustainability Beyond Environment Matters
Traditionally, sustainability in design has focused primarily on reducing environmental harm, such as minimizing carbon footprints or designing for recyclability. While these efforts are vital, they often neglect broader social and economic impacts. For instance, a product that is environmentally friendly but undermines local economies or disregards cultural values may ultimately do more harm than good. Considering sustainability in its entirety ensures that products align with ethical standards, foster community well-being, and remain economically viable.
The Pitfalls of Narrow Sustainability: Insights from TOMS Shoes
An illustrative example of the pitfalls of overlooking broader sustainability is TOMS Shoes. TOMS implemented a "buy one, give one" model, donating a pair of shoes for every pair sold. While the model appeared to promote social good, it inadvertently caused harm in the regions receiving donations. The influx of free shoes disrupted local markets, reducing demand for locally produced footwear and leading to economic challenges for small businesses. Additionally, the donated shoes often failed to align with cultural or practical needs, limiting their usefulness and acceptance (Kochhar, 2019). This example highlights the importance of considering social and economic factors alongside environmental sustainability.
Applying This to IoT Products
IoT designers can take inspiration from this lesson by thinking beyond environmental impact. Products should consider their role in supporting local economies, respecting cultural contexts, and fostering economic accessibility. Designers must also evaluate their product’s lifecycle holistically, considering how their materials, production processes, and usability contribute to long-term sustainability. Addressing these broader dimensions can help IoT products succeed not only in reducing environmental harm but also in creating value for communities and promoting ethical business practices.
In summary, sustainability beyond the environment challenges designers to address all aspects of a product’s impact, ensuring that it supports social and economic well-being alongside environmental goals. By adopting a broader perspective, IoT products can align with consumer expectations for responsible design while fostering trust and long-term success in the market.
3.4. Respecting Consumer Behavior
In designing consumer IoT products, respecting consumer behavior is paramount. This means understanding how users interact with technology and ensuring that these interactions are not manipulated for profit at the expense of trust and well-being. IoT products often leverage algorithms and design techniques to engage users, but failing to respect consumer behavior—by exploiting vulnerabilities or using manipulative practices—can have ethical, legal, and reputational consequences.
Understanding Consumer Behavior in IoT Design
Respecting consumer behavior involves designing products that align with user needs, preferences, and values, without coercing or misleading them. This requires transparency, user control, and ethical use of algorithms. Failure to respect these principles can result in significant backlash, as seen in the case of TikTok. Research shows that TikTok’s recommendation algorithm rapidly personalizes content feeds to maximize user engagement, often leading users, particularly adolescents, into harmful "rabbit holes" of content related to eating disorders and self-harm. A study by Amnesty International and findings reported in the American Journal of Law & Medicine revealed that these algorithms often amplify harmful behaviors, exploiting user vulnerabilities to increase time spent on the platform (Amnesty International, 2023; Cambridge University, 2023). These examples highlight the dangers of designing IoT platforms that prioritize engagement over user well-being.
The Importance of Transparency and Avoiding Manipulation
Algorithms in IoT products must prioritize ethical engagement over manipulation. Designers should avoid “dark patterns”—interface design tactics that intentionally deceive users into performing unintended actions, such as oversharing data or extending usage time. A notable critique of platforms like TikTok is the lack of transparency in how its algorithm decides what content is shown. Research indicates that such opaque practices undermine user trust and can lead to regulatory scrutiny or reputational harm (Center for Countering Digital Hate, 2022).
Designing for Trust and Ethical Engagement
To foster trust, designers should aim for clear communication, transparent algorithmic decision-making, and user autonomy. This includes:
Providing users with control over their data.
Implementing measures to prevent harmful content from being promoted disproportionately.
Aligning design practices with user values and avoiding coercive engagement tactics.
By respecting consumer behavior, IoT designers can build products that not only meet user needs but also maintain ethical standards and foster long-term trust. The case of TikTok serves as a cautionary example, highlighting the risks of prioritizing profit over user well-being. Designers should commit to ethical practices, ensuring that their products align with both business goals and the principles of respectful engagement.
3.5. Privacy-conscious development
Privacy is a critical factor in designing consumer IoT products. With the proliferation of IoT devices collecting, transmitting, and storing vast amounts of sensitive data, ensuring privacy is both a legal requirement and a key to fostering consumer trust. A privacy-conscious development approach is vital to addressing these challenges, ensuring that privacy is considered at every stage of the design process.
Why Privacy Matters in Consumer IoT
Consumer IoT products, such as smart home devices and wearables, often handle sensitive personal information, including health data, location history, and activity logs. If mishandled, this data could lead to significant consequences for users, including identity theft or breaches of confidentiality. Designers must proactively address these risks by implementing robust privacy measures from the outset. The Privacy by Design (PbD) framework developed by Ann Cavoukian outlines principles such as embedding privacy into the design process, ensuring privacy as a default setting, and achieving full functionality while maintaining privacy protections. These principles provide a robust foundation for addressing privacy challenges in IoT development (Cavoukian, 2010).
Lessons from Past Failures
Failures to prioritize privacy in IoT products have often resulted in regulatory and reputational consequences. For instance, the IoT-enabled toy My Friend Cayla was banned in Germany for recording and transmitting children’s conversations without proper consent. This example underscores the importance of compliance with data protection laws and the need to design products that prioritize privacy from the start (Almuhimedi and Ray, 2018).
Guidelines for Privacy-Conscious Development
To build privacy-conscious IoT products, designers should:
Minimize data collection to only what is essential for functionality.
Provide clear, transparent explanations of how user data is collected, stored, and used.
Integrate strong security protocols, such as data encryption and multi-factor authentication, to prevent unauthorized access.
Ensure compliance with relevant privacy regulations, such as GDPR or COPPA, especially for products targeting vulnerable populations like children.
By embedding privacy considerations early in the design process, IoT products can earn consumer trust, enhance user satisfaction, and ensure long-term success. Privacy-conscious development is essential for the ethical and successful design of consumer IoT products. The integration of frameworks like Privacy by Design provides a structured approach to proactively addressing privacy concerns. By prioritizing user trust and data protection, designers can create IoT products that align with ethical standards and meet regulatory requirements while achieving market success.
Learn to Pivot
As seen in previous examples such as TOMS Shoes, companies and designers often encounter unforeseen challenges or mistakes during the product design process. Therefore, designers must remain open to pivoting or modifying their approach when necessary to address issues and improve the product. This approach emphasizes the importance of continuous evaluation and adaptation, rather than rigidly adhering to the original plan.
Pivoting can involve changes to various aspects of a product, including its design, target audience, marketing strategy, or even core functionality. This iterative process ensures that the final product aligns with market needs, user expectations, and ethical considerations. For example, TOMS Shoes adjusted its business model after criticism of its “buy one, give one” initiative, shifting its focus toward empowering local economies and making a more sustainable impact. In this way, the company demonstrated the importance of being flexible and responsive to feedback.
In the IoT space, the Amazon Echo is another example of a product that benefited from a strategic pivot. When first released in 2014, the Echo struggled to gain traction due to limited consumer awareness and the lack of a robust ecosystem for smart home devices. However, by collaborating with other IoT manufacturers and emphasizing interoperability, Amazon transformed the Echo into a central hub for smart home technology. This shift not only revived the product but positioned it as a market leader.
According to a study by CB Insights, 42% of startups fail due to a lack of market need, while 29% fail due to running out of cash. These statistics highlight the importance of pivoting as a strategy for addressing potential gaps and ensuring the product meets genuine consumer demand. Designers must incorporate this mindset into their processes, constantly reassessing their assumptions and adapting when necessary.
By being open to change, designers can turn challenges into opportunities, ensuring that their products are better aligned with both consumer needs and long-term market trends.
Conclusion
In conclusion, the PIE framework provides a comprehensive approach to designing ethical, impactful, and profitable consumer IoT products with an entrepreneurial mindset. By addressing key considerations through its five guidelines—Holistic User-Centered Design, Readiness of the Market and Consumer Demand, Sustainability Beyond the Environment, Respecting Consumer Behavior, and Privacy-Conscious Development—this framework ensures that designers and innovators are equipped to create products that balance business objectives with societal and ethical responsibilities.
Each of the guidelines serves as a critical component of product development. Holistic User-Centered Design ensures that all users involved in a product's lifecycle are considered, fostering inclusivity and usability. Readiness of the Market and Consumer Demand addresses the importance of timing and genuine need, minimizing the risk of premature launches or irrelevant solutions. Sustainability Beyond the Environment encourages a multidimensional approach to sustainability that considers environmental, social, and economic impacts. Respecting Consumer Behavior safeguards trust and well-being by avoiding manipulative practices, while Privacy-Conscious Development proactively addresses concerns about data protection and user security, critical in the data-driven IoT ecosystem.
The PIE framework also highlights the need for adaptability through iterative processes, such as learning to pivot, as demonstrated by the successes and failures of products like Amazon Echo, Google Glass, and TOMS Shoes. This adaptability ensures that products can evolve in response to user feedback, market dynamics, and ethical considerations.
It is important to note that while the PIE framework provides a robust foundation, it is not exhaustive. Designers and innovators should complement it with other methodologies, such as Lean Startup, Design Thinking, and Privacy by Design, tailoring their approach to the unique nature of each project. The integration of diverse frameworks can strengthen the development process, ensuring that products are not only profitable but also meaningful and responsible.
As the IoT industry continues to expand, the principles outlined in the PIE framework are more critical than ever. By adopting this structured, multidisciplinary approach, designers can create consumer IoT products that not only thrive in the marketplace but also contribute positively to society and the environment.
References
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Amnesty International. TikTok’s “For You” Feed Risks Pushing Children Towards Harmful Mental Health Content. Amnesty International, 2023. https://www.amnesty.org.
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Designing Profitable, Impactful, Ethical consumer IoT products: A framework proposal
By
Abstract
The rapid growth of the Internet of Things (IoT) industry has revolutionized how consumers interact with technology, offering unprecedented convenience, efficiency, and connectivity. However, this rapid adoption has also introduced pressing ethical, societal, and environmental concerns, such as privacy violations, unsustainable practices, and manipulative design strategies. This paper proposes the PIE framework—focused on creating consumer IoT products that are Profitable, Impactful, and Ethical. Aimed at guiding designers and innovators during the early stages of product development, the framework emphasizes a holistic, entrepreneurial approach to ideation and innovation.
The framework comprises five key guidelines: Holistic User-Centered Design, Readiness of the Market and Consumer Demand, Sustainability Beyond the Environment, Respecting Consumer Behavior, and Privacy-Conscious Development. Each guideline addresses critical aspects of IoT product design, ensuring inclusivity, sustainability, and long-term market success while prioritizing ethical considerations. Through case studies such as Amazon Echo, TOMS Shoes, and My Friend Cayla, the paper highlights real-world applications of these guidelines and explores how adaptability and pivoting can address unforeseen challenges.
The PIE framework bridges existing gaps in methodologies by integrating entrepreneurial strategies with ethical design principles, providing a structured yet flexible approach to developing consumer IoT products. While the framework lays a strong foundation for responsible innovation, its adaptability allows designers to incorporate complementary methodologies, tailoring their approach to specific product goals. As the IoT sector continues to grow, the PIE framework offers a pathway to designing products that balance profitability with social and environmental responsibility, creating a meaningful and sustainable impact.
Role: Researcher
Duration: 3 months
Introduction
The rise of the Internet of Things (IoT) has transformed the way we live, work, and interact with technology. With an estimated 20 billion IoT devices expected to be in use by 2025, it is evident that IoT has become an integral part of our daily lives (Hilty et al. 2019). Consumer IoT has gained immense popularity with products ranging from smart home devices, wearables, and health monitors to entertainment systems and smart appliances. These products have revolutionized how we interact with our homes, our bodies, and the world around us.
However, the increasing adoption of IoT raises concerns about data privacy, security, and environmental impact. The exponential growth of IoT products also brings a significant risk of unethical and unsustainable practices that can harm consumers and the environment. This risk underscores the importance of designing consumer IoT products that are not only profitable but also ethical and impactful.
The need for a comprehensive framework is especially critical at the early stages of design because it helps guide innovators to balance ethical, environmental, and user-centered considerations. By having a framework that integrates these aspects, designers can ensure that their products will be accessible, market-ready, and aligned with current ethical standards. Furthermore, such a framework encourages sustainable practices that prevent negative environmental impacts. Early-stage frameworks also support market success, as they provide the basis for understanding both consumer needs and market demand. In essence, a well-structured framework enables designers to navigate complex requirements, such as data privacy, while ensuring product longevity and consumer trust.
The proposed framework in this paper, referred to as the PIE (Profitable, Impactful, Ethical) framework, aims to provide a holistic approach to designing consumer IoT products that prioritize these critical factors. This framework consists of five guidelines: (1) Holistic User-Centered Design, (2) Readiness of the Market and Consumer Demand, (3) Sustainability Beyond Environment, (4) Respecting Consumer Behavior, and (5) Privacy-Conscious Development. Each guideline is designed to address specific areas of product development, supporting designers in creating products that are successful in the market, beneficial to society, and sustainable.
Literature review
The IoT industry’s rapid expansion has led to a proliferation of frameworks and methodologies aimed at addressing various ethical, environmental, and design challenges in the development of IoT products. However, these frameworks often focus on single aspects, such as sustainability or user-centered design, and do not fully address the combined needs of profitability, ethical impact, and long-term market viability. This section reviews key frameworks that contribute to ethical and sustainable design, highlighting their strengths and limitations in the context of IoT product development.
Existing Frameworks and Their Limitations
IoT Design Manifesto
Created by the IoT community, the IoT Design Manifesto outlines ten principles for ethical IoT development, such as transparency, accessibility, privacy, and security (Bauwens, 2017). It emphasizes the need for ethical practices across the IoT product lifecycle, guiding designers to respect user autonomy and avoid exploiting consumer data. However, the Manifesto lacks specific provisions for balancing ethical considerations with business objectives, making it less practical for startups that need to prioritize profitability alongside ethics.
Circular Design Guide
Developed by IDEO in partnership with the Ellen MacArthur Foundation, the Circular Design Guide promotes sustainable product development within a circular economy framework. It encourages designers to consider the entire lifecycle of a product, from resource extraction and production to disposal or recycling (IDEO, 2018). While this guide provides strong principles for environmental sustainability, it lacks a focus on consumer demand and market readiness, which are crucial for IoT entrepreneurs aiming to commercialize their innovations effectively.
Design Justice Network Principles
The Design Justice Network’s framework centers on social justice, advocating for design processes that address inequities and avoid reinforcing power imbalances. This approach emphasizes inclusivity, encouraging designers to prioritize marginalized communities and address social biases (Irani and Dey, 2019). Though valuable for social impact, this framework does not address profitability or market competitiveness, limiting its direct application for consumer IoT startups focused on balancing ethical and business goals.
Lean Startup Methodology
The Lean Startup methodology, popularized by Eric Ries, is widely used in the tech industry for rapid iteration and market validation. It emphasizes creating minimum viable products (MVPs) and using consumer feedback to pivot as necessary (Ries, 2011). This approach is particularly valuable for quickly adapting to market needs; however, it lacks a structured approach for addressing ethical considerations like privacy and sustainability. In the IoT context, this limitation could lead to products that prioritize speed over consumer trust or environmental impact.
Design Thinking
Design Thinking, advocated by IDEO, is a user-centered approach that encourages empathy-driven solutions, prototyping, and iterative feedback (Brown, 2008). While Design Thinking promotes innovative and human-centered products, it does not inherently address data privacy, long-term sustainability, or ethical considerations specific to IoT. As a result, IoT designers may find it lacks the necessary guidelines for ensuring responsible data usage and lifecycle sustainability.
Ethical OS Toolkit
Developed by the Institute for the Future, the Ethical OS Toolkit offers a proactive framework for identifying and addressing ethical issues in technology development. It includes scenarios, questions, and strategies to help designers consider potential risks related to privacy, security, and misinformation (Institute for the Future, 2018). Although useful for foreseeing ethical challenges, the Ethical OS Toolkit lacks a business focus, making it difficult for IoT startups to balance ethical considerations with market demands.
While these frameworks are useful, they do not fully address the need for a comprehensive framework that focuses on the entrepreneurial approach and considers both the ethical and profitability aspects of IoT products. This is where the PIE framework comes in. The PIE stands for Profitable, Impactful, Ethical, and it’s a new framework that proposes guidelines that specifically address the needs of designers and innovators in the early stages of product development. By incorporating the guidelines of this framework, designers can create products that are not only ethical and sustainable but also profitable.
The PIE framework recognizes the importance of considering all stakeholders in the design process, including but not limited to the end-users, the market, and the environment. The guidelines address key ethical and societal concerns related to IoT products and help designers make informed decisions in the early stages of brainstorming and product development
The PIE framework
The PIE (Profitable, Impactful, Ethical) framework offers a structured and holistic approach to designing consumer IoT products that prioritize profitability, societal impact, and ethical considerations. In the fast-evolving landscape of IoT, designers, and innovators often face the challenge of balancing these three pillars while meeting the demands of a competitive market. The PIE framework provides practical guidance to address these challenges, particularly in the early stages of design and innovation.
Unlike existing frameworks, which often focus on specific aspects like sustainability, user-centered design, or rapid prototyping, the PIE framework integrates these considerations into a cohesive model tailored for consumer IoT products. This framework was developed by analyzing case studies of both successful and failed products, revealing gaps in how ethical and profitable design practices are applied. By bridging these gaps, the PIE framework empowers designers to create products that not only succeed in the market but also contribute positively to society and the environment.
The PIE framework is built around five key guidelines:
Holistic User-Centered Design – Encourages designers to consider all stakeholders throughout the product lifecycle, including end-users, installers, manufacturers, and recyclers.
Readiness of the Market and Consumer Demand – Highlights the importance of assessing market readiness and understanding consumer needs to ensure adoption and success.
Sustainability Beyond Environment – Expands the concept of sustainability to include social and economic factors alongside environmental considerations.
Respecting Consumer Behavior – Promotes ethical engagement with users by avoiding manipulative practices and fostering trust.
Privacy-Conscious Development – Emphasizes the importance of incorporating privacy-by-design principles to protect user data and build trust.
In the following sections, we will explore each of these guidelines in detail, examining their importance, providing relevant case studies, and offering actionable insights for designers and innovators.
The PIE framework is designed for industrial designers and innovators and product managers with an entrepreneurial mindset, aiming to equip them with tools and principles to avoid common pitfalls in IoT product development. By focusing on early-stage ideation, the framework ensures that critical factors like sustainability, user behavior, and market demand are addressed proactively, reducing the risk of product failure and enhancing long-term success.
3.1. Holistic User-Centered Design
When designing consumer IoT products, it is crucial to take a holistic user-centered design approach. This guideline emphasizes the importance of considering not just the end user, but also all other stakeholders involved throughout the product lifecycle. These stakeholders include manufacturers, shippers, retailers, installers, and recyclers, whose roles significantly impact the usability, sustainability, and profitability of the product. By addressing the needs and experiences of all these groups, designers can create products that are not only impactful and user-friendly but also sustainable and efficient across the supply chain.
Unlike traditional user-centered design, which primarily focuses on the end user, a holistic user-centered design approach takes a broader perspective. This approach ensures that products are designed to meet the requirements of all users and systems they interact with, reducing inefficiencies and improving the product's long-term value. For instance, by considering the recyclability of a product during the design phase, manufacturers can reduce waste, appeal to environmentally conscious consumers, and align with sustainability goals.
A notable example of holistic user-centered design is Nest, a company known for its smart home devices. Nest's products, such as the Nest Thermostat, are designed to be intuitive for end-users while also addressing the needs of other stakeholders. For instance, the devices are easy to install, reducing the complexity for installers. Nest has also worked with utility companies to provide incentives to customers who use their products to conserve energy, creating a mutually beneficial ecosystem. Moreover, the company incorporates sustainable practices in its manufacturing and packaging processes, further demonstrating its commitment to a holistic approach (Hong et al., 2019).
Another example is Patagonia, though not an IoT company, its principles align with holistic design. Patagonia incorporates sustainability across its supply chain by using materials such as organic cotton and recycled polyester. Additionally, the company actively encourages customers to repair and recycle their products, reducing waste and extending the product lifecycle. Patagonia’s design philosophy demonstrates how a user-centered approach can include broader stakeholders, such as recyclers and environmental organizations, while ensuring a positive societal impact (Margolis, 2018).
The concept of holistic user-centered design aligns closely with circular design, a methodology that considers the entire lifecycle of a product—from production and distribution to end-of-life recycling. Circular design emphasizes creating systems that minimize waste and promote the reuse of materials. By adopting principles of circular design, IoT designers can ensure that their products contribute to environmental sustainability while addressing the needs of all stakeholders (Carroll and Tani, 2021).
To implement a holistic user-centered design approach, designers should:
Map the Product Lifecycle: Identify all stakeholders involved, from manufacturers and distributors to recyclers, and address their needs during the design process.
Design for Accessibility: Ensure that products are easy to install, maintain, and recycle to reduce inefficiencies and increase adoption.
Collaborate Across the Ecosystem: Engage with utility providers, environmental organizations, and other key stakeholders to create systems that align with sustainability and user goals.
Integrate Circular Design Principles: Incorporate recyclability and reuse into the product’s lifecycle to align with global sustainability standards.
By considering the broader ecosystem of users and stakeholders, designers can ensure that IoT products are impactful, profitable, and sustainable. Holistic user-centered design not only addresses the practical needs of various users but also enhances the product’s long-term success and societal value.
3.2. Readiness of the Market and Consumer Demand
The success of consumer IoT products heavily depends on two interconnected factors: the readiness of the market and the level of consumer demand. These factors influence whether a product will gain traction or struggle to find its place in the competitive IoT landscape. Designers and innovators must carefully assess both market readiness and consumer demand during the early stages of development to avoid potential pitfalls and maximize product adoption.
Market readiness refers to the extent to which the external environment is prepared to support a product’s adoption and functionality. This includes technological infrastructure, consumer awareness, and complementary ecosystems. For example, when the Amazon Echo was first released in 2014, the smart home market was still in its infancy, with limited interoperability between devices. However, as the market matured and more IoT devices became compatible with Alexa, the Amazon Echo gained widespread adoption and became a cornerstone of the smart home ecosystem. Amazon’s ability to pivot and adapt the Echo to evolving market conditions played a critical role in its success. By contrast, Google Glass, launched in 2013, failed to gain traction largely due to a lack of market readiness. The wearable technology space was not yet mature, and the product faced resistance due to privacy concerns and limited practical applications (Bilton, 2016).
Consumer demand is determined by the product’s ability to address a specific need or solve a problem for its target audience. A common reason for IoT product failure is the lack of alignment between the product's features and consumer needs. According to a study by CB Insights, 42% of startups fail due to a lack of market need (CB Insights, 2020). This highlights the importance of conducting thorough research to understand consumer preferences and pain points before launching a product. For example, wearable fitness trackers like Fitbit succeeded because they tapped into growing consumer interest in health and wellness, offering a solution that was both timely and relevant.
Case Studies and Lessons
Success: Amazon Echo
Amazon's ability to adapt the Echo to the growing smart home market demonstrates the importance of timing and flexibility in product development. By integrating with a wide range of third-party devices and expanding its ecosystem, Amazon successfully addressed market readiness and created demand for its product.
Failure: Google Glass
Google Glass serves as a cautionary tale of releasing a product ahead of its time. While innovative, the device lacked practical applications, faced resistance from consumers, and struggled to address concerns about privacy and usability. This highlights the importance of aligning product development with market readiness and consumer expectations.
To ensure the market readiness and consumer demand of IoT products, designers should:
Conduct Market Research: Assess the maturity of the market, including technological infrastructure, competing products, and consumer awareness.
Identify Pain Points: Engage with target users to understand their needs and ensure that the product provides clear value.
Anticipate Future Trends: Monitor emerging trends and evolving consumer preferences to design products that remain relevant over time.
Test for Compatibility: Ensure that the product integrates seamlessly with existing ecosystems and technologies to reduce barriers to adoption.
Be Ready to Pivot: Remain flexible and prepared to adjust the product or strategy based on market feedback and changing conditions.
By addressing both market readiness and consumer demand during the ideation phase, designers can increase the likelihood of creating products that not only succeed in the market but also deliver meaningful value to users.
3.3. Sustainability Beyond Environment
Sustainability is a critical consideration when designing consumer IoT products, but it must go beyond environmental factors alone. While addressing environmental impact is essential, true sustainability also encompasses social and economic dimensions. This guideline urges designers to adopt a more comprehensive approach, ensuring that IoT products are sustainable in all aspects—environmental, social, and economic.
Why Sustainability Beyond Environment Matters
Traditionally, sustainability in design has focused primarily on reducing environmental harm, such as minimizing carbon footprints or designing for recyclability. While these efforts are vital, they often neglect broader social and economic impacts. For instance, a product that is environmentally friendly but undermines local economies or disregards cultural values may ultimately do more harm than good. Considering sustainability in its entirety ensures that products align with ethical standards, foster community well-being, and remain economically viable.
The Pitfalls of Narrow Sustainability: Insights from TOMS Shoes
An illustrative example of the pitfalls of overlooking broader sustainability is TOMS Shoes. TOMS implemented a "buy one, give one" model, donating a pair of shoes for every pair sold. While the model appeared to promote social good, it inadvertently caused harm in the regions receiving donations. The influx of free shoes disrupted local markets, reducing demand for locally produced footwear and leading to economic challenges for small businesses. Additionally, the donated shoes often failed to align with cultural or practical needs, limiting their usefulness and acceptance (Kochhar, 2019). This example highlights the importance of considering social and economic factors alongside environmental sustainability.
Applying This to IoT Products
IoT designers can take inspiration from this lesson by thinking beyond environmental impact. Products should consider their role in supporting local economies, respecting cultural contexts, and fostering economic accessibility. Designers must also evaluate their product’s lifecycle holistically, considering how their materials, production processes, and usability contribute to long-term sustainability. Addressing these broader dimensions can help IoT products succeed not only in reducing environmental harm but also in creating value for communities and promoting ethical business practices.
In summary, sustainability beyond the environment challenges designers to address all aspects of a product’s impact, ensuring that it supports social and economic well-being alongside environmental goals. By adopting a broader perspective, IoT products can align with consumer expectations for responsible design while fostering trust and long-term success in the market.
3.4. Respecting Consumer Behavior
In designing consumer IoT products, respecting consumer behavior is paramount. This means understanding how users interact with technology and ensuring that these interactions are not manipulated for profit at the expense of trust and well-being. IoT products often leverage algorithms and design techniques to engage users, but failing to respect consumer behavior—by exploiting vulnerabilities or using manipulative practices—can have ethical, legal, and reputational consequences.
Understanding Consumer Behavior in IoT Design
Respecting consumer behavior involves designing products that align with user needs, preferences, and values, without coercing or misleading them. This requires transparency, user control, and ethical use of algorithms. Failure to respect these principles can result in significant backlash, as seen in the case of TikTok. Research shows that TikTok’s recommendation algorithm rapidly personalizes content feeds to maximize user engagement, often leading users, particularly adolescents, into harmful "rabbit holes" of content related to eating disorders and self-harm. A study by Amnesty International and findings reported in the American Journal of Law & Medicine revealed that these algorithms often amplify harmful behaviors, exploiting user vulnerabilities to increase time spent on the platform (Amnesty International, 2023; Cambridge University, 2023). These examples highlight the dangers of designing IoT platforms that prioritize engagement over user well-being.
The Importance of Transparency and Avoiding Manipulation
Algorithms in IoT products must prioritize ethical engagement over manipulation. Designers should avoid “dark patterns”—interface design tactics that intentionally deceive users into performing unintended actions, such as oversharing data or extending usage time. A notable critique of platforms like TikTok is the lack of transparency in how its algorithm decides what content is shown. Research indicates that such opaque practices undermine user trust and can lead to regulatory scrutiny or reputational harm (Center for Countering Digital Hate, 2022).
Designing for Trust and Ethical Engagement
To foster trust, designers should aim for clear communication, transparent algorithmic decision-making, and user autonomy. This includes:
Providing users with control over their data.
Implementing measures to prevent harmful content from being promoted disproportionately.
Aligning design practices with user values and avoiding coercive engagement tactics.
By respecting consumer behavior, IoT designers can build products that not only meet user needs but also maintain ethical standards and foster long-term trust. The case of TikTok serves as a cautionary example, highlighting the risks of prioritizing profit over user well-being. Designers should commit to ethical practices, ensuring that their products align with both business goals and the principles of respectful engagement.
3.5. Privacy-conscious development
Privacy is a critical factor in designing consumer IoT products. With the proliferation of IoT devices collecting, transmitting, and storing vast amounts of sensitive data, ensuring privacy is both a legal requirement and a key to fostering consumer trust. A privacy-conscious development approach is vital to addressing these challenges, ensuring that privacy is considered at every stage of the design process.
Why Privacy Matters in Consumer IoT
Consumer IoT products, such as smart home devices and wearables, often handle sensitive personal information, including health data, location history, and activity logs. If mishandled, this data could lead to significant consequences for users, including identity theft or breaches of confidentiality. Designers must proactively address these risks by implementing robust privacy measures from the outset. The Privacy by Design (PbD) framework developed by Ann Cavoukian outlines principles such as embedding privacy into the design process, ensuring privacy as a default setting, and achieving full functionality while maintaining privacy protections. These principles provide a robust foundation for addressing privacy challenges in IoT development (Cavoukian, 2010).
Lessons from Past Failures
Failures to prioritize privacy in IoT products have often resulted in regulatory and reputational consequences. For instance, the IoT-enabled toy My Friend Cayla was banned in Germany for recording and transmitting children’s conversations without proper consent. This example underscores the importance of compliance with data protection laws and the need to design products that prioritize privacy from the start (Almuhimedi and Ray, 2018).
Guidelines for Privacy-Conscious Development
To build privacy-conscious IoT products, designers should:
Minimize data collection to only what is essential for functionality.
Provide clear, transparent explanations of how user data is collected, stored, and used.
Integrate strong security protocols, such as data encryption and multi-factor authentication, to prevent unauthorized access.
Ensure compliance with relevant privacy regulations, such as GDPR or COPPA, especially for products targeting vulnerable populations like children.
By embedding privacy considerations early in the design process, IoT products can earn consumer trust, enhance user satisfaction, and ensure long-term success. Privacy-conscious development is essential for the ethical and successful design of consumer IoT products. The integration of frameworks like Privacy by Design provides a structured approach to proactively addressing privacy concerns. By prioritizing user trust and data protection, designers can create IoT products that align with ethical standards and meet regulatory requirements while achieving market success.
Learn to Pivot
As seen in previous examples such as TOMS Shoes, companies and designers often encounter unforeseen challenges or mistakes during the product design process. Therefore, designers must remain open to pivoting or modifying their approach when necessary to address issues and improve the product. This approach emphasizes the importance of continuous evaluation and adaptation, rather than rigidly adhering to the original plan.
Pivoting can involve changes to various aspects of a product, including its design, target audience, marketing strategy, or even core functionality. This iterative process ensures that the final product aligns with market needs, user expectations, and ethical considerations. For example, TOMS Shoes adjusted its business model after criticism of its “buy one, give one” initiative, shifting its focus toward empowering local economies and making a more sustainable impact. In this way, the company demonstrated the importance of being flexible and responsive to feedback.
In the IoT space, the Amazon Echo is another example of a product that benefited from a strategic pivot. When first released in 2014, the Echo struggled to gain traction due to limited consumer awareness and the lack of a robust ecosystem for smart home devices. However, by collaborating with other IoT manufacturers and emphasizing interoperability, Amazon transformed the Echo into a central hub for smart home technology. This shift not only revived the product but positioned it as a market leader.
According to a study by CB Insights, 42% of startups fail due to a lack of market need, while 29% fail due to running out of cash. These statistics highlight the importance of pivoting as a strategy for addressing potential gaps and ensuring the product meets genuine consumer demand. Designers must incorporate this mindset into their processes, constantly reassessing their assumptions and adapting when necessary.
By being open to change, designers can turn challenges into opportunities, ensuring that their products are better aligned with both consumer needs and long-term market trends.
Conclusion
In conclusion, the PIE framework provides a comprehensive approach to designing ethical, impactful, and profitable consumer IoT products with an entrepreneurial mindset. By addressing key considerations through its five guidelines—Holistic User-Centered Design, Readiness of the Market and Consumer Demand, Sustainability Beyond the Environment, Respecting Consumer Behavior, and Privacy-Conscious Development—this framework ensures that designers and innovators are equipped to create products that balance business objectives with societal and ethical responsibilities.
Each of the guidelines serves as a critical component of product development. Holistic User-Centered Design ensures that all users involved in a product's lifecycle are considered, fostering inclusivity and usability. Readiness of the Market and Consumer Demand addresses the importance of timing and genuine need, minimizing the risk of premature launches or irrelevant solutions. Sustainability Beyond the Environment encourages a multidimensional approach to sustainability that considers environmental, social, and economic impacts. Respecting Consumer Behavior safeguards trust and well-being by avoiding manipulative practices, while Privacy-Conscious Development proactively addresses concerns about data protection and user security, critical in the data-driven IoT ecosystem.
The PIE framework also highlights the need for adaptability through iterative processes, such as learning to pivot, as demonstrated by the successes and failures of products like Amazon Echo, Google Glass, and TOMS Shoes. This adaptability ensures that products can evolve in response to user feedback, market dynamics, and ethical considerations.
It is important to note that while the PIE framework provides a robust foundation, it is not exhaustive. Designers and innovators should complement it with other methodologies, such as Lean Startup, Design Thinking, and Privacy by Design, tailoring their approach to the unique nature of each project. The integration of diverse frameworks can strengthen the development process, ensuring that products are not only profitable but also meaningful and responsible.
As the IoT industry continues to expand, the principles outlined in the PIE framework are more critical than ever. By adopting this structured, multidisciplinary approach, designers can create consumer IoT products that not only thrive in the marketplace but also contribute positively to society and the environment.
References
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Designing Profitable, Impactful, Ethical consumer IoT products: A framework proposal
By
Abstract
The rapid growth of the Internet of Things (IoT) industry has revolutionized how consumers interact with technology, offering unprecedented convenience, efficiency, and connectivity. However, this rapid adoption has also introduced pressing ethical, societal, and environmental concerns, such as privacy violations, unsustainable practices, and manipulative design strategies. This paper proposes the PIE framework—focused on creating consumer IoT products that are Profitable, Impactful, and Ethical. Aimed at guiding designers and innovators during the early stages of product development, the framework emphasizes a holistic, entrepreneurial approach to ideation and innovation.
The framework comprises five key guidelines: Holistic User-Centered Design, Readiness of the Market and Consumer Demand, Sustainability Beyond the Environment, Respecting Consumer Behavior, and Privacy-Conscious Development. Each guideline addresses critical aspects of IoT product design, ensuring inclusivity, sustainability, and long-term market success while prioritizing ethical considerations. Through case studies such as Amazon Echo, TOMS Shoes, and My Friend Cayla, the paper highlights real-world applications of these guidelines and explores how adaptability and pivoting can address unforeseen challenges.
The PIE framework bridges existing gaps in methodologies by integrating entrepreneurial strategies with ethical design principles, providing a structured yet flexible approach to developing consumer IoT products. While the framework lays a strong foundation for responsible innovation, its adaptability allows designers to incorporate complementary methodologies, tailoring their approach to specific product goals. As the IoT sector continues to grow, the PIE framework offers a pathway to designing products that balance profitability with social and environmental responsibility, creating a meaningful and sustainable impact.
Role: Researcher
Duration: 3 months
Introduction
The rise of the Internet of Things (IoT) has transformed the way we live, work, and interact with technology. With an estimated 20 billion IoT devices expected to be in use by 2025, it is evident that IoT has become an integral part of our daily lives (Hilty et al. 2019). Consumer IoT has gained immense popularity with products ranging from smart home devices, wearables, and health monitors to entertainment systems and smart appliances. These products have revolutionized how we interact with our homes, our bodies, and the world around us.
However, the increasing adoption of IoT raises concerns about data privacy, security, and environmental impact. The exponential growth of IoT products also brings a significant risk of unethical and unsustainable practices that can harm consumers and the environment. This risk underscores the importance of designing consumer IoT products that are not only profitable but also ethical and impactful.
The need for a comprehensive framework is especially critical at the early stages of design because it helps guide innovators to balance ethical, environmental, and user-centered considerations. By having a framework that integrates these aspects, designers can ensure that their products will be accessible, market-ready, and aligned with current ethical standards. Furthermore, such a framework encourages sustainable practices that prevent negative environmental impacts. Early-stage frameworks also support market success, as they provide the basis for understanding both consumer needs and market demand. In essence, a well-structured framework enables designers to navigate complex requirements, such as data privacy, while ensuring product longevity and consumer trust.
The proposed framework in this paper, referred to as the PIE (Profitable, Impactful, Ethical) framework, aims to provide a holistic approach to designing consumer IoT products that prioritize these critical factors. This framework consists of five guidelines: (1) Holistic User-Centered Design, (2) Readiness of the Market and Consumer Demand, (3) Sustainability Beyond Environment, (4) Respecting Consumer Behavior, and (5) Privacy-Conscious Development. Each guideline is designed to address specific areas of product development, supporting designers in creating products that are successful in the market, beneficial to society, and sustainable.
Literature review
The IoT industry’s rapid expansion has led to a proliferation of frameworks and methodologies aimed at addressing various ethical, environmental, and design challenges in the development of IoT products. However, these frameworks often focus on single aspects, such as sustainability or user-centered design, and do not fully address the combined needs of profitability, ethical impact, and long-term market viability. This section reviews key frameworks that contribute to ethical and sustainable design, highlighting their strengths and limitations in the context of IoT product development.
Existing Frameworks and Their Limitations
IoT Design Manifesto
Created by the IoT community, the IoT Design Manifesto outlines ten principles for ethical IoT development, such as transparency, accessibility, privacy, and security (Bauwens, 2017). It emphasizes the need for ethical practices across the IoT product lifecycle, guiding designers to respect user autonomy and avoid exploiting consumer data. However, the Manifesto lacks specific provisions for balancing ethical considerations with business objectives, making it less practical for startups that need to prioritize profitability alongside ethics.
Circular Design Guide
Developed by IDEO in partnership with the Ellen MacArthur Foundation, the Circular Design Guide promotes sustainable product development within a circular economy framework. It encourages designers to consider the entire lifecycle of a product, from resource extraction and production to disposal or recycling (IDEO, 2018). While this guide provides strong principles for environmental sustainability, it lacks a focus on consumer demand and market readiness, which are crucial for IoT entrepreneurs aiming to commercialize their innovations effectively.
Design Justice Network Principles
The Design Justice Network’s framework centers on social justice, advocating for design processes that address inequities and avoid reinforcing power imbalances. This approach emphasizes inclusivity, encouraging designers to prioritize marginalized communities and address social biases (Irani and Dey, 2019). Though valuable for social impact, this framework does not address profitability or market competitiveness, limiting its direct application for consumer IoT startups focused on balancing ethical and business goals.
Lean Startup Methodology
The Lean Startup methodology, popularized by Eric Ries, is widely used in the tech industry for rapid iteration and market validation. It emphasizes creating minimum viable products (MVPs) and using consumer feedback to pivot as necessary (Ries, 2011). This approach is particularly valuable for quickly adapting to market needs; however, it lacks a structured approach for addressing ethical considerations like privacy and sustainability. In the IoT context, this limitation could lead to products that prioritize speed over consumer trust or environmental impact.
Design Thinking
Design Thinking, advocated by IDEO, is a user-centered approach that encourages empathy-driven solutions, prototyping, and iterative feedback (Brown, 2008). While Design Thinking promotes innovative and human-centered products, it does not inherently address data privacy, long-term sustainability, or ethical considerations specific to IoT. As a result, IoT designers may find it lacks the necessary guidelines for ensuring responsible data usage and lifecycle sustainability.
Ethical OS Toolkit
Developed by the Institute for the Future, the Ethical OS Toolkit offers a proactive framework for identifying and addressing ethical issues in technology development. It includes scenarios, questions, and strategies to help designers consider potential risks related to privacy, security, and misinformation (Institute for the Future, 2018). Although useful for foreseeing ethical challenges, the Ethical OS Toolkit lacks a business focus, making it difficult for IoT startups to balance ethical considerations with market demands.
While these frameworks are useful, they do not fully address the need for a comprehensive framework that focuses on the entrepreneurial approach and considers both the ethical and profitability aspects of IoT products. This is where the PIE framework comes in. The PIE stands for Profitable, Impactful, Ethical, and it’s a new framework that proposes guidelines that specifically address the needs of designers and innovators in the early stages of product development. By incorporating the guidelines of this framework, designers can create products that are not only ethical and sustainable but also profitable.
The PIE framework recognizes the importance of considering all stakeholders in the design process, including but not limited to the end-users, the market, and the environment. The guidelines address key ethical and societal concerns related to IoT products and help designers make informed decisions in the early stages of brainstorming and product development
The PIE framework
The PIE (Profitable, Impactful, Ethical) framework offers a structured and holistic approach to designing consumer IoT products that prioritize profitability, societal impact, and ethical considerations. In the fast-evolving landscape of IoT, designers, and innovators often face the challenge of balancing these three pillars while meeting the demands of a competitive market. The PIE framework provides practical guidance to address these challenges, particularly in the early stages of design and innovation.
Unlike existing frameworks, which often focus on specific aspects like sustainability, user-centered design, or rapid prototyping, the PIE framework integrates these considerations into a cohesive model tailored for consumer IoT products. This framework was developed by analyzing case studies of both successful and failed products, revealing gaps in how ethical and profitable design practices are applied. By bridging these gaps, the PIE framework empowers designers to create products that not only succeed in the market but also contribute positively to society and the environment.
The PIE framework is built around five key guidelines:
Holistic User-Centered Design – Encourages designers to consider all stakeholders throughout the product lifecycle, including end-users, installers, manufacturers, and recyclers.
Readiness of the Market and Consumer Demand – Highlights the importance of assessing market readiness and understanding consumer needs to ensure adoption and success.
Sustainability Beyond Environment – Expands the concept of sustainability to include social and economic factors alongside environmental considerations.
Respecting Consumer Behavior – Promotes ethical engagement with users by avoiding manipulative practices and fostering trust.
Privacy-Conscious Development – Emphasizes the importance of incorporating privacy-by-design principles to protect user data and build trust.
In the following sections, we will explore each of these guidelines in detail, examining their importance, providing relevant case studies, and offering actionable insights for designers and innovators.
The PIE framework is designed for industrial designers and innovators and product managers with an entrepreneurial mindset, aiming to equip them with tools and principles to avoid common pitfalls in IoT product development. By focusing on early-stage ideation, the framework ensures that critical factors like sustainability, user behavior, and market demand are addressed proactively, reducing the risk of product failure and enhancing long-term success.
3.1. Holistic User-Centered Design
When designing consumer IoT products, it is crucial to take a holistic user-centered design approach. This guideline emphasizes the importance of considering not just the end user, but also all other stakeholders involved throughout the product lifecycle. These stakeholders include manufacturers, shippers, retailers, installers, and recyclers, whose roles significantly impact the usability, sustainability, and profitability of the product. By addressing the needs and experiences of all these groups, designers can create products that are not only impactful and user-friendly but also sustainable and efficient across the supply chain.
Unlike traditional user-centered design, which primarily focuses on the end user, a holistic user-centered design approach takes a broader perspective. This approach ensures that products are designed to meet the requirements of all users and systems they interact with, reducing inefficiencies and improving the product's long-term value. For instance, by considering the recyclability of a product during the design phase, manufacturers can reduce waste, appeal to environmentally conscious consumers, and align with sustainability goals.
A notable example of holistic user-centered design is Nest, a company known for its smart home devices. Nest's products, such as the Nest Thermostat, are designed to be intuitive for end-users while also addressing the needs of other stakeholders. For instance, the devices are easy to install, reducing the complexity for installers. Nest has also worked with utility companies to provide incentives to customers who use their products to conserve energy, creating a mutually beneficial ecosystem. Moreover, the company incorporates sustainable practices in its manufacturing and packaging processes, further demonstrating its commitment to a holistic approach (Hong et al., 2019).
Another example is Patagonia, though not an IoT company, its principles align with holistic design. Patagonia incorporates sustainability across its supply chain by using materials such as organic cotton and recycled polyester. Additionally, the company actively encourages customers to repair and recycle their products, reducing waste and extending the product lifecycle. Patagonia’s design philosophy demonstrates how a user-centered approach can include broader stakeholders, such as recyclers and environmental organizations, while ensuring a positive societal impact (Margolis, 2018).
The concept of holistic user-centered design aligns closely with circular design, a methodology that considers the entire lifecycle of a product—from production and distribution to end-of-life recycling. Circular design emphasizes creating systems that minimize waste and promote the reuse of materials. By adopting principles of circular design, IoT designers can ensure that their products contribute to environmental sustainability while addressing the needs of all stakeholders (Carroll and Tani, 2021).
To implement a holistic user-centered design approach, designers should:
Map the Product Lifecycle: Identify all stakeholders involved, from manufacturers and distributors to recyclers, and address their needs during the design process.
Design for Accessibility: Ensure that products are easy to install, maintain, and recycle to reduce inefficiencies and increase adoption.
Collaborate Across the Ecosystem: Engage with utility providers, environmental organizations, and other key stakeholders to create systems that align with sustainability and user goals.
Integrate Circular Design Principles: Incorporate recyclability and reuse into the product’s lifecycle to align with global sustainability standards.
By considering the broader ecosystem of users and stakeholders, designers can ensure that IoT products are impactful, profitable, and sustainable. Holistic user-centered design not only addresses the practical needs of various users but also enhances the product’s long-term success and societal value.
3.2. Readiness of the Market and Consumer Demand
The success of consumer IoT products heavily depends on two interconnected factors: the readiness of the market and the level of consumer demand. These factors influence whether a product will gain traction or struggle to find its place in the competitive IoT landscape. Designers and innovators must carefully assess both market readiness and consumer demand during the early stages of development to avoid potential pitfalls and maximize product adoption.
Market readiness refers to the extent to which the external environment is prepared to support a product’s adoption and functionality. This includes technological infrastructure, consumer awareness, and complementary ecosystems. For example, when the Amazon Echo was first released in 2014, the smart home market was still in its infancy, with limited interoperability between devices. However, as the market matured and more IoT devices became compatible with Alexa, the Amazon Echo gained widespread adoption and became a cornerstone of the smart home ecosystem. Amazon’s ability to pivot and adapt the Echo to evolving market conditions played a critical role in its success. By contrast, Google Glass, launched in 2013, failed to gain traction largely due to a lack of market readiness. The wearable technology space was not yet mature, and the product faced resistance due to privacy concerns and limited practical applications (Bilton, 2016).
Consumer demand is determined by the product’s ability to address a specific need or solve a problem for its target audience. A common reason for IoT product failure is the lack of alignment between the product's features and consumer needs. According to a study by CB Insights, 42% of startups fail due to a lack of market need (CB Insights, 2020). This highlights the importance of conducting thorough research to understand consumer preferences and pain points before launching a product. For example, wearable fitness trackers like Fitbit succeeded because they tapped into growing consumer interest in health and wellness, offering a solution that was both timely and relevant.
Case Studies and Lessons
Success: Amazon Echo
Amazon's ability to adapt the Echo to the growing smart home market demonstrates the importance of timing and flexibility in product development. By integrating with a wide range of third-party devices and expanding its ecosystem, Amazon successfully addressed market readiness and created demand for its product.
Failure: Google Glass
Google Glass serves as a cautionary tale of releasing a product ahead of its time. While innovative, the device lacked practical applications, faced resistance from consumers, and struggled to address concerns about privacy and usability. This highlights the importance of aligning product development with market readiness and consumer expectations.
To ensure the market readiness and consumer demand of IoT products, designers should:
Conduct Market Research: Assess the maturity of the market, including technological infrastructure, competing products, and consumer awareness.
Identify Pain Points: Engage with target users to understand their needs and ensure that the product provides clear value.
Anticipate Future Trends: Monitor emerging trends and evolving consumer preferences to design products that remain relevant over time.
Test for Compatibility: Ensure that the product integrates seamlessly with existing ecosystems and technologies to reduce barriers to adoption.
Be Ready to Pivot: Remain flexible and prepared to adjust the product or strategy based on market feedback and changing conditions.
By addressing both market readiness and consumer demand during the ideation phase, designers can increase the likelihood of creating products that not only succeed in the market but also deliver meaningful value to users.
3.3. Sustainability Beyond Environment
Sustainability is a critical consideration when designing consumer IoT products, but it must go beyond environmental factors alone. While addressing environmental impact is essential, true sustainability also encompasses social and economic dimensions. This guideline urges designers to adopt a more comprehensive approach, ensuring that IoT products are sustainable in all aspects—environmental, social, and economic.
Why Sustainability Beyond Environment Matters
Traditionally, sustainability in design has focused primarily on reducing environmental harm, such as minimizing carbon footprints or designing for recyclability. While these efforts are vital, they often neglect broader social and economic impacts. For instance, a product that is environmentally friendly but undermines local economies or disregards cultural values may ultimately do more harm than good. Considering sustainability in its entirety ensures that products align with ethical standards, foster community well-being, and remain economically viable.
The Pitfalls of Narrow Sustainability: Insights from TOMS Shoes
An illustrative example of the pitfalls of overlooking broader sustainability is TOMS Shoes. TOMS implemented a "buy one, give one" model, donating a pair of shoes for every pair sold. While the model appeared to promote social good, it inadvertently caused harm in the regions receiving donations. The influx of free shoes disrupted local markets, reducing demand for locally produced footwear and leading to economic challenges for small businesses. Additionally, the donated shoes often failed to align with cultural or practical needs, limiting their usefulness and acceptance (Kochhar, 2019). This example highlights the importance of considering social and economic factors alongside environmental sustainability.
Applying This to IoT Products
IoT designers can take inspiration from this lesson by thinking beyond environmental impact. Products should consider their role in supporting local economies, respecting cultural contexts, and fostering economic accessibility. Designers must also evaluate their product’s lifecycle holistically, considering how their materials, production processes, and usability contribute to long-term sustainability. Addressing these broader dimensions can help IoT products succeed not only in reducing environmental harm but also in creating value for communities and promoting ethical business practices.
In summary, sustainability beyond the environment challenges designers to address all aspects of a product’s impact, ensuring that it supports social and economic well-being alongside environmental goals. By adopting a broader perspective, IoT products can align with consumer expectations for responsible design while fostering trust and long-term success in the market.
3.4. Respecting Consumer Behavior
In designing consumer IoT products, respecting consumer behavior is paramount. This means understanding how users interact with technology and ensuring that these interactions are not manipulated for profit at the expense of trust and well-being. IoT products often leverage algorithms and design techniques to engage users, but failing to respect consumer behavior—by exploiting vulnerabilities or using manipulative practices—can have ethical, legal, and reputational consequences.
Understanding Consumer Behavior in IoT Design
Respecting consumer behavior involves designing products that align with user needs, preferences, and values, without coercing or misleading them. This requires transparency, user control, and ethical use of algorithms. Failure to respect these principles can result in significant backlash, as seen in the case of TikTok. Research shows that TikTok’s recommendation algorithm rapidly personalizes content feeds to maximize user engagement, often leading users, particularly adolescents, into harmful "rabbit holes" of content related to eating disorders and self-harm. A study by Amnesty International and findings reported in the American Journal of Law & Medicine revealed that these algorithms often amplify harmful behaviors, exploiting user vulnerabilities to increase time spent on the platform (Amnesty International, 2023; Cambridge University, 2023). These examples highlight the dangers of designing IoT platforms that prioritize engagement over user well-being.
The Importance of Transparency and Avoiding Manipulation
Algorithms in IoT products must prioritize ethical engagement over manipulation. Designers should avoid “dark patterns”—interface design tactics that intentionally deceive users into performing unintended actions, such as oversharing data or extending usage time. A notable critique of platforms like TikTok is the lack of transparency in how its algorithm decides what content is shown. Research indicates that such opaque practices undermine user trust and can lead to regulatory scrutiny or reputational harm (Center for Countering Digital Hate, 2022).
Designing for Trust and Ethical Engagement
To foster trust, designers should aim for clear communication, transparent algorithmic decision-making, and user autonomy. This includes:
Providing users with control over their data.
Implementing measures to prevent harmful content from being promoted disproportionately.
Aligning design practices with user values and avoiding coercive engagement tactics.
By respecting consumer behavior, IoT designers can build products that not only meet user needs but also maintain ethical standards and foster long-term trust. The case of TikTok serves as a cautionary example, highlighting the risks of prioritizing profit over user well-being. Designers should commit to ethical practices, ensuring that their products align with both business goals and the principles of respectful engagement.
3.5. Privacy-conscious development
Privacy is a critical factor in designing consumer IoT products. With the proliferation of IoT devices collecting, transmitting, and storing vast amounts of sensitive data, ensuring privacy is both a legal requirement and a key to fostering consumer trust. A privacy-conscious development approach is vital to addressing these challenges, ensuring that privacy is considered at every stage of the design process.
Why Privacy Matters in Consumer IoT
Consumer IoT products, such as smart home devices and wearables, often handle sensitive personal information, including health data, location history, and activity logs. If mishandled, this data could lead to significant consequences for users, including identity theft or breaches of confidentiality. Designers must proactively address these risks by implementing robust privacy measures from the outset. The Privacy by Design (PbD) framework developed by Ann Cavoukian outlines principles such as embedding privacy into the design process, ensuring privacy as a default setting, and achieving full functionality while maintaining privacy protections. These principles provide a robust foundation for addressing privacy challenges in IoT development (Cavoukian, 2010).
Lessons from Past Failures
Failures to prioritize privacy in IoT products have often resulted in regulatory and reputational consequences. For instance, the IoT-enabled toy My Friend Cayla was banned in Germany for recording and transmitting children’s conversations without proper consent. This example underscores the importance of compliance with data protection laws and the need to design products that prioritize privacy from the start (Almuhimedi and Ray, 2018).
Guidelines for Privacy-Conscious Development
To build privacy-conscious IoT products, designers should:
Minimize data collection to only what is essential for functionality.
Provide clear, transparent explanations of how user data is collected, stored, and used.
Integrate strong security protocols, such as data encryption and multi-factor authentication, to prevent unauthorized access.
Ensure compliance with relevant privacy regulations, such as GDPR or COPPA, especially for products targeting vulnerable populations like children.
By embedding privacy considerations early in the design process, IoT products can earn consumer trust, enhance user satisfaction, and ensure long-term success. Privacy-conscious development is essential for the ethical and successful design of consumer IoT products. The integration of frameworks like Privacy by Design provides a structured approach to proactively addressing privacy concerns. By prioritizing user trust and data protection, designers can create IoT products that align with ethical standards and meet regulatory requirements while achieving market success.
Learn to Pivot
As seen in previous examples such as TOMS Shoes, companies and designers often encounter unforeseen challenges or mistakes during the product design process. Therefore, designers must remain open to pivoting or modifying their approach when necessary to address issues and improve the product. This approach emphasizes the importance of continuous evaluation and adaptation, rather than rigidly adhering to the original plan.
Pivoting can involve changes to various aspects of a product, including its design, target audience, marketing strategy, or even core functionality. This iterative process ensures that the final product aligns with market needs, user expectations, and ethical considerations. For example, TOMS Shoes adjusted its business model after criticism of its “buy one, give one” initiative, shifting its focus toward empowering local economies and making a more sustainable impact. In this way, the company demonstrated the importance of being flexible and responsive to feedback.
In the IoT space, the Amazon Echo is another example of a product that benefited from a strategic pivot. When first released in 2014, the Echo struggled to gain traction due to limited consumer awareness and the lack of a robust ecosystem for smart home devices. However, by collaborating with other IoT manufacturers and emphasizing interoperability, Amazon transformed the Echo into a central hub for smart home technology. This shift not only revived the product but positioned it as a market leader.
According to a study by CB Insights, 42% of startups fail due to a lack of market need, while 29% fail due to running out of cash. These statistics highlight the importance of pivoting as a strategy for addressing potential gaps and ensuring the product meets genuine consumer demand. Designers must incorporate this mindset into their processes, constantly reassessing their assumptions and adapting when necessary.
By being open to change, designers can turn challenges into opportunities, ensuring that their products are better aligned with both consumer needs and long-term market trends.
Conclusion
In conclusion, the PIE framework provides a comprehensive approach to designing ethical, impactful, and profitable consumer IoT products with an entrepreneurial mindset. By addressing key considerations through its five guidelines—Holistic User-Centered Design, Readiness of the Market and Consumer Demand, Sustainability Beyond the Environment, Respecting Consumer Behavior, and Privacy-Conscious Development—this framework ensures that designers and innovators are equipped to create products that balance business objectives with societal and ethical responsibilities.
Each of the guidelines serves as a critical component of product development. Holistic User-Centered Design ensures that all users involved in a product's lifecycle are considered, fostering inclusivity and usability. Readiness of the Market and Consumer Demand addresses the importance of timing and genuine need, minimizing the risk of premature launches or irrelevant solutions. Sustainability Beyond the Environment encourages a multidimensional approach to sustainability that considers environmental, social, and economic impacts. Respecting Consumer Behavior safeguards trust and well-being by avoiding manipulative practices, while Privacy-Conscious Development proactively addresses concerns about data protection and user security, critical in the data-driven IoT ecosystem.
The PIE framework also highlights the need for adaptability through iterative processes, such as learning to pivot, as demonstrated by the successes and failures of products like Amazon Echo, Google Glass, and TOMS Shoes. This adaptability ensures that products can evolve in response to user feedback, market dynamics, and ethical considerations.
It is important to note that while the PIE framework provides a robust foundation, it is not exhaustive. Designers and innovators should complement it with other methodologies, such as Lean Startup, Design Thinking, and Privacy by Design, tailoring their approach to the unique nature of each project. The integration of diverse frameworks can strengthen the development process, ensuring that products are not only profitable but also meaningful and responsible.
As the IoT industry continues to expand, the principles outlined in the PIE framework are more critical than ever. By adopting this structured, multidisciplinary approach, designers can create consumer IoT products that not only thrive in the marketplace but also contribute positively to society and the environment.
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