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| The new 'Big Three'? |
For in addition to Tesla, three of the strongest, most disruptive brands in the world, Apple, Google and Virgin have all set their sights on the automotive category. And if I were running a traditional car company, I'd be very, very afraid.
Automotive naysayers will argue that these brands will fail because the car business is like no other. That the margins are too slim. That it is too complex. That only 'car guys' understand the business. And there was a time when all this was true. But while they were sleeping, cars have evolved from mechanical machines to electronic devices. And that's why many of the old category rules just don't apply anymore.
And that's why if all three brands join Musk in the quest to change the automotive business, traditional car brands will become nothing more than objects of nostalgia.
These newcomers will transform the category from one that is steeped in 100 year old business practices to one that is on the cutting edge of thought leadership.
While all three brands will bring distinct points of view to automotive, they also have much in common. They all simplify, democratize and humanize categories that they decide to enter. All bets are that they will do the same to automotive.
The five things likely to change, faster than anyone thought possible:
1. Electric goes mainstream
These are not brands that will be associated with an industry fueled by dead dinosaurs. Why? Because they don't have a thriving internal combustion business to protect. Because they will consider electric as a mass market opportunity from the get go. And they won't shy away from developing better electric technology and the new infrastructure that supports it.
2. The dealer franchise system will crumble
These are not brands that will sign away the most crucial part of the customer experience to a third party. Why? Because they are masterful architects of holistic brand experiences. Because Elon Musk has already paved the way for alternatives. They will pioneer new retail innovations that are built on technology, empathy and transparency.
3. Service departments, as we know them, will cease to exist
These are not brands that will tolerate the customer inconvenience associated with most automotive maintenance. Why? Because as Tesla has already demonstrated, software upgrades can replace routine maintenance. Other trouble shooting will likely be done promptly over the phone, walking owners through 'fixes'. Only catastrophic failures will require physical intervention.
4. Brands who differentiate on sheet metal alone will be commoditized
These are not brands that will be satisfied by creating a pretty face. Why? Because they are used to eliminating every pain point in an experience, and putting a unique brand spin on it. Great aesthetics will be also be purposeful And in doing so, they will likely make traditional automotive design seem hollow and superficial.
5. Cars will have uses beyond going from point A to point B
These are not brands that will attack low interest in car ownership by stopping at car sharing experiments. Why? Because they are masterful multi takers who foster convergence. Just as Elon Musk opened the door for cars that power your home and Apple pioneered apps that made phone calls a tiny portion of smart phone functionality, your car will multitask in ways car companies never imagined. Cars will likely play a critical role in the internet of things.
And when this happens, traditional car companies will be scratching their heads, wondering how they joined the ranks of great brands like Polaroid, Blackberry, and Kodak. Brands who had every right to own the market forever, but for their own myopia.
