The Inversion Factor

The Inversion Factor

How to Thrive in the IoT Economy

By Linda Bernardi, Sanjay E. Sarma and Kenneth Traub

Why companies need to move away from a “product first” orientation to pursuing innovation based on customer need.





Why companies need to move away from a “product first” orientation to pursuing innovation based on customer need.

In the past, companies found success with a product-first orientation; they made a thing that did a thing. The Inversion Factor explains why the companies of today and tomorrow will have to abandon the product-first orientation. Rather than asking “How do the products we make meet customer needs?” companies should ask “How can technology help us reimagine and fill a need?” Zipcar, for example, instead of developing another vehicle for moving people from point A to point B, reimagined how people interacted with vehicles. Zipcar inverted the traditional car company mission.

The authors explain how the introduction of “smart” objects connected by the Internet of Things signals fundamental changes for business. The IoT, where real and digital coexist, is powering new ways to meet human needs. Companies that know this include giants like Amazon, Airbnb, Uber, Google, Tesla, and Apple, as well as less famous companies like Tile, Visenti, and Augury. The Inversion Factor offers a roadmap for businesses that want to follow in their footsteps.

The authors chart the evolution of three IoTs—the Internet of Things (devices connected to the Internet), the Intelligence of Things (devices that host software applications), and the Innovation of Things (devices that become experiences). Finally, they offer a blueprint for businesses making the transition to inversion and interviews with leaders of major companies and game-changing startups.


Out of Print ISBN: 9780262037273 240 pp. | 6 in x 9 in 1 figure


$17.95 T ISBN: 9780262535984 240 pp. | 6 in x 9 in 1 figure


  • "The Inversion Factor is part vision, part history and part narration of the present. Its premise is simple, yet powerful: a triangulation of technology, innovation and (business) culture is changing such that the world is moving away from business models that put products-first (let us produce a blender and market it accordingly) to one that puts needs-first (what issues do consumers have in the kitchen, and how can we service and solve their needs?)."

    Economic Record


  • A growth mindset and an obsession with customer needs are at the core of Microsoft's continuing transformation. The authors take us on an important and necessary exploration of this journey toward inversion, one that looks beyond narrow product strategies to breakthroughs built on innovation, technology, and culture.

    Satya Nadella

    CEO, Microsoft

  • The Inversion Factor presents a compelling vision for the evolution of IoT. The book greatly expands our imagination and analyzes the technological, architectural, business, and cultural considerations in order to invent an extraordinary world of products and services through a process the authors cleverly call the Innovation of Things.'

    Joi Ito

    Director, MIT Media Lab; author of Whiplash: How to Survive Our Faster Future?

  • Groundbreaking use of networked technology in service of the real north star—customer satisfaction and experience—is one of the reasons Zipcar succeeded. This book describes how the dynamic real-time digitization of our physical world can positively transform lives with the right people-centric focus.

    Robin Chase

    cofounder of Zipcar and Veniam; author of Peers Inc

  • The Inversion Factor is about the implications of hyper-connectivity, especially in the Internet of Things space. It offers a thought-provoking approach by arguing against the conventional wisdom of 'make products people want' in favor of developing better strategic planning. This book is essential for managers and technologists, as well as the general reader.

    David Hsu

    Richard A. Sapp Professor and a Professor of Management, Wharton School, University of Pennsylvania


  • Bronze winner in Business Theory from the 2018 Axiom Business Book Awards