The team at Upskill is reimagining the world for 46MM deskless employees in the US, for whom AR improves productivity by allowing daily tasks to be conducted truly hands free. Field service work and manufacturing assembly are being transformed as workers use AR to superimpose customer data and assembly instructions within their field of vision. Upskill creates value for 1) enterprises that rely on deskless labor, 2) these enterprise’s end-customers, and 3) smart glass hardware complementers.
By driving the cost of AR app development and the total cost of ownership of smart devices down, Upskill is poised to change the axis upon which their enterprise clients compete, away from a world of commoditization pressure to one of greater customization and value-add services. While Upskill’s SaaS revenue model allows it to continue to profit as client success grows, it’s unclear the extent to which hardware vendors will benefit as greater value is ultimately placed on software insights rather than hardware, increasing the pace of commoditization.
Amidst growing competition, Upskill must prove a clear ROI. This can be achieved through data-driven insights, which require honing operating model capabilities in comprehensive data collection and algorithmic power. This calls for open API’s to facilitate Upskill compatibility with a spectrum of data sources and perhaps even subsidization of hardware and new AR training content to promote Upskill software uptake.
With clients like Boeing and GE, Upskill’s ‘Skylight’ software can be deployed on a range of smart glass hardware for specific use cases. Specifically, these include 1) field service assistance with AR-superimposed Salesforce data, 2) superimposed manufacturing instructions with voice-free commands, and 3) referenceable inventory handling data on customer demand and inventory levels. Critical to this is Upskill’s integration of data from clients’ existing systems (ERP, CRM, etc) to provide a comprehensive view of the customer.
Via its operating model competencies of software expertise, Upskill creates value for enterprises, hardware vendors, and consumers.
- For enterprises, Upskill provides software outside typical core competencies to improve workforce efficiency, resulting in time savings, cost reduction, better quality, and higher utilization of labor that is now free to do other tasks. Its Boeing partnership allowed workers to view an instruction manual through the built-in viewfinder on their smart glasses, leading to productivity cost savings of 25%. In dollar terms, Upskill estimates a manufacturing plant will see a $25MM ROI annually upon implementing their software on smart glasses for 1000 of its workers.
- For smart glass vendors, Upskill reduces friction in customer uptake by providing software solutions for specific use cases. Their software ultimately collects valuable data on customer hardware interactions, and could eventual inform product development for these vendors.
- For consumers — enterprise’s end customers — Upskill creates value by improving quality and personalization in service.
Upskill captures value by charging clients for software usage.
Direct and indirect network effects:
The more enterprises use Upskill, the better the software gets, increasing value for enterprises and their customers. This is further bolstered by a limited incentive to multihome as enterprises stand to capture the greatest value by aggregating their data and derivative insights in one place.
From a hardware vendor’s perspective, however, the story is less straightforward. While supporting more hardware vendors allows Upskill to better meet the various preferences of enterprises, this value is not shared with the hardware vendors themselves. As Upskill creates more value through its software, greater priority is placed on the data and insights collected rather than the associated hardware, potentially accelerating hardware commoditization.
Upskill faces no shortage of competitors, from startups like Wearable Intelligence to large incumbents like Raytheon and Microsoft, though their focus has primarily been on military applications.  Upskill’s network effects endow it with an unfair advantage that will be deepened by a clear demonstration of ROI.
To differentiate, Upskill will need to offer quality insights on how to improve processes and labor. Key competencies will be needed with data collection and model-building. Success here looks less like broadening their set of use cases, and instead, securing a large enough data set to generate deep insights in existing applications. Doing so quickly and scalably requires opening up their APIs broadly to enable app development across an ecosystem of data sources (SAP, etc) and, ultimately, unlocking greater value. This value is shared here with these data sources, thus incentivizing development. Furthermore, imagine how this could be harnessed to create new worker training content in VR. Eventually, Upskill may even subsidize hardware costs to encourage customer conversion.
Key considerations going forward involve balancing how much this open API system cannibalizes Upskill’s business versus the alternative of building in-house. Prioritization of software maintenance by vendor and use case will also be an ongoing challenge.
Writ large, thanks to Upskill, manufacturing enterprises that have been adding less value to the world economy are now equipped to change their commoditized business models and unlock new value-added services.