Primo Capital | Meet the Portfolio - Servitly - creating value through connected services

25 ott 2023 Meet the Portfolio, Servitly

Meet the Portfolio is a Primo Ventures format to discover the game-changing companies we support.

In the interview below, Servitly tell us about its unique journey.

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How was Servitly born?

Servitly was born from the founders’ own frustrations. When we started working on IoT projects (the same ones that are now managed by Servitly) we used to manage them with a custom approach, developing a new application for each new client. However, as we attracted significant manufacturing clients, a pattern emerged. Their needs were often similar: collecting and analyzing data coming from their connected products, transforming them into valuable information, presenting such data and information to all the stakeholders involved in the product life cycle. It became evident that we were developing apps that were very similar to each other and it did not make sense in terms of resource optimization.

The custom approach did not make sense anymore. We saw the opportunity to develop a cloud-base software as a service, tailored for this type of client.

We also had to find a smart way to allow for personalizations of the platform while maintaining a common base. Clients were in fact selling different products but the logics of data usage were similar. We needed the same base but with the option of effective customization.

This is the idea that birthed Servitly and that was later on reinforced by another encounter.

When the business was born there was not yet a name for it. The latter arose when I met professor Tim Baines, the first to introduce the word “servitization” in Italy in 2016.

This encounter brought a secondary realization: everything we were doing (IoT for our clients) had a peculiar purpose and we had found its name: servitization. We were using data to give our clients better services so that they could design products as a service - there we found our business model.

2. Where do you see Servitly in 10 years?

In 10 years I envision a world in which every product and piece of machinery will be interconnected. Today, we already have a small degree of connectivity, but in ten years we expect that more than 90% of the machinery and equipment that surround us will be networked.

This evolution will give rise to an entirely new category of software tailored to support these connected products. Just as we have softwares for CRM, marketing, and management, the next decade will see applications designed to manage connected services. Servitly will be among the leaders of this new market.

To accomplish this, we are also steadily working on our Academy: a knowledge base with the objective of equipping those interested in servitization with effective approaches and tools to face more independently any servitization project.

Distinct from our core product, the Academy aims at democratizing our sector while bringing transparency to it. It is a tool for increasing awareness around our realm of operation.

3. What was the biggest challenge?

Creating a product without having someone telling us exactly how to do it with the objective of making it simultaneously useful and farsighted.

The challenge for Servitly derived from the fact that we are anticipating a future transformative trend, which is servitization, an evolution that is not yet fully realized. Our clients are in fact the so-called early adopters. On the one hand, this is an advantage because it pushes us to continuously innovate, on the other it demands a lot to be created from scratch together with a lot of imagination exercises and validation efforts to undertake on the field.

The biggest challenge is therefore to harmonize a vision of the future that is not perfectly delineated yet and the actual reality of our clients, who have different levels of digital maturity. We constantly live in this dichotomy between a digital dream and the traditional manufacturing industry.

Our aspiration lies not only in digitalizing products and services but also in embracing the path towards sustainability. The latter is not a challenge that we face alone, but is one we feel part of. We firmly believe that we can support our manufacturing clients in embarking on a new path towards more sustainable models. Servitization goes along with sustainability, increasing the life of machines, reducing waste, and recycling machinery at the end of their life, thereby contributing to a greener industry.

4. When will these transformative trends truly come to fruition?

Servitization is already here and many have acknowledged its presence. But its complete maturation takes time.

The stretch of time needed is long because there are often several structural changes required. It’s not just a matter of adjusting a procedure or restructuring a team; rather, it demands the adoption of a completely new service logic coupled with the mastery of approaching processes through a data-driven lens. These two huge challenges often require a significant cultural shift.

Being data driven, which entails making decisions grounded in the insights gleaned from interconnected products and their data, is not easy in itself. We might need new professional figures to enter the team or other structural changes, all evolutions that require a significant amount of time to be implemented.

Furthermore, servitization requires a change in the market, and again, this requires time. There might be accelerations along the way, but the overall trajectory will still require a long stretch. Customers must transition from seeking products to demanding services, a transformation that requires a change in consumer behavior. In some market niches there is already demand for products as a service, but the broader market has yet to fully embrace this paradigm shift. We need the physiological time for demand and supply to adapt to this new phenomenon.

Another contributing factor to the gradual pace of change is the manufacturing industry's historically slower rate of transformation. And at the moment this industry comprises our primary clientele.

Anyhow, the pool of early adopters is still wide. The challenge that we rather face is to understand where they are. To overcome this, we decided to attend environments where we could find companies and people already familiar with the concept of servitization. For instance, in Italy we are part of the ASAP community, that gathers around interest on service evolutions and servitization, or the IoT observatory of Politecnico di Milano.

Lastly, our products are also functional for those who are not as close to servitization yet. We effectively bridge the gap, guiding them towards a solution and aligning them with this emerging trend. We are somehow evangelists and precursors of this trend, striving to extend its reach beyond the realm of early adopters.

5. What prevailing trends define your sector?

We are guided by two different phenomena: servitization, which we have already explored in the previous question, and the IOT vertical.

IOT is an inflated trend nowadays and we are now on the descending phase of this technology.

This does not mean that it is not useful anymore, but rather that we exited from the peak of disillusion and we are now on the actual utility line. The current phase can be described as one of concretization. Despite its familiarity, the IoT technology has not expressed its full potential yet, particularly in the context of connected machinery manufacturers.

Since it is a poorly-exploited technology, we jumped on this trend, exploiting the maturation of IoT to address the specific needs of machinery producers.

6. Who is the ideal investor?

Our ideal investor is one that shares our vision. Not someone interested just in economic returns, but rather someone who truly embraces our vision, and ideally also has a background in manufacturing. Our ideal investor understands the trends that we are surfing, the potential ones lying ahead, and shares with us the objective of becoming the leader of this new market that is opening thanks to the proliferation of connected services.

We look for investors that believe in our vision and in the belief that the future is going in the direction we envisioned.

This means that we would like our investors to support us not only financially but also on a strategic level, especially in certain sectors of the manufacturing industry that have peculiar dynamics, dimensions, competition rules, etc.

We were born as a software company therefore our grasp of the manufacturing world is an ongoing journey. We continuously seek investors who can enrich our understanding of this domain.

Contacts are never despised either. Advisors or mentors with expertise in specific sectors or geographical expansion plans (often, in new countries, modalities and processes differ from the one we know best) can be strategically helpful.

7. What makes Servitly unique?

Servitly is unique for its way of reasoning. Our secret, what allows us to be where we are today, is our forma mentis as founders (and later on team) through which we manage to successfully connect a vision of the future together with software development.

We conjugate a software equal for everyone with the option of configurability, through an agile process. This agility allows us to transform a vision into reality within a few short months. The mission of Servitly remains to anticipate market needs through experimentation (leveraging marketing, advisors…), swiftly delivering the software to clients with an agile approach and a very robust structure.

This is what makes us unique: an approach to the discovery of what clients will want that is conjugated with an unparalleled software development approach that is swift, adaptable, and tailored so as to bring visions to life.

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