Monday, January 1, 2018

The New Automotive Challenger Brands--Are They Doing It All Wrong?

As the automotive industry nears a huge inflection point, there is no shortage of startups looking to 'reinvent personal mobility'. According to the dictionary, to reinvent is 'to change someone or something so much that the person or thing seems completely new'. So why is it that virtually every startup is building an organization that looks exactly like a traditional automotive company? 



Likely because they are mostly automotive people doing what they know best, what they've always done, engineer and build a car--albeit an electric one with semi to fully autonomous capabilities. But guess what? Traditional automotive companies are doing the same thing and they have a 100 year head start in that department. And the reality is that no one is clamoring for a new car brand that goes a little faster, or has a slightly longer battery range. It is doubtful that any of these startups is going to engineer a car that is so much better that it will 'reinvent personal mobility'. So instead of poaching the best automotive talent who know how to engineer and build a brand new car, perhaps they should be looking beyond automotive for talent who can help them to package and architect a new brand of mobility experiences.

What does this mean? It means to start from day one by preparing for future brand differentiation. In a future autonomous world, cars are going to be more like mobile devices and less like horse and carriages. In that world, the hardware, aka the car is likely to become commoditized. Accepting this as a starting point creates an opportunity to truly reinvent mobility to focus on what will really matter to customers.

So why not source the commoditized underpinnings from other car makers? Why not outsource production? This is exactly what Apple does. It sources many components from direct competitors who excel in a specific expertise. Outsourcing components and production allows Apple to focus its resources on it's brand strength--developing and marketing beautiful designs that facilitate ease of use. They leave everything else to third parties. 

To ensure success, new car brands should likewise focus on what sets them apart. At the very beginning, they should clearly define their brand ambition--what they will bring to the market better than anyone else selling 'personal mobility' . Then they should go all out to poach talent from the appropriate category, and invest their resources on excelling in that area. Some thought starters:
  • Be the brand that offers the best in-car user experiences possible. Concentrate solely on passenger experiences because in the not too distant future, all users will be passengers. Poach airplane interior designers and leading user Interface designers. Build your products and brand around them.
  • Establish industry infrastructure standards and force others to follow. Poach experts in urban planning, autonomous technology  and traffic engineering to work with municipalities and regulators to pave the way for your technology dominate. Think VHS vs Beta, and knock those who only offer better performance and range out of the game.
  • Focus on personal service and pampering. Invest in developing the ground breaking  CRM technology and poach heavily from the hospitality, luxury goods categories. Then assemble hardware that will facilitate this experience.
  • Superior fleet management will be key, as autonomous adoption accelerates car sharing adoption. Brands looking to dominate should poach the best logistics specialists from commercial trucking and transportation enterprises, and assemble a fleet of vehicles that will best serve those needs.
Of course there will be a need for some car experts who know how to put the vehicle hardware together. But this requires a fraction of the resources that engineering and building a car from scratch requires. So in the end, the car may be the easiest part and most inconsequential part. On the other hand, redefining mobility will require brands to set their sights on excelling in future focused areas of expertise that will truly bring ground breaking experiences to customers.