The Transportationist, David Levinson (@trnsprttnst) joins us to discuss the technical, human, environmental and economic factors driving change to the auto-ecosystem.
David helps us smartly survey the landscape via:
1. Human behavior
2. Technology lifecycles
3. Urban transportation evolution
4. Network capitalization
5. Congestion
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From The Rise & Fall of Infrastructures by Arnulf Grübler:
Steve Crandall brings a new perspective as a guest. Steve’s analysis of complex systems has given him a huge pool of wisdom into which we dip our dainty spoons.
We survey the interlopers seeking to replace many jobs that cars have traditionally done, from horses to bicycles, planes, trains and buses.
We dive deeper into a few earlier Asymcar topics including energy, regulation, infrastructure, power train evolution, societal changes, distribution networks, urbanization and consider the promise of electric bicycles.
Several innovation timing lessons temper our expectations for immediate improvements.
Finally, we revisit the emerging transportation information layer and how such services may change public behavior and the auto-ecosystem.
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Notes:
National Geographic Tata Nano Factory Documentary
Why the world’s cheapest car flopped.
Of Phaetons, Coupés, Shooting Brakes, Broughams, Hackneys, Cabriolets, Landaus and Limousines. Horace and Jim step back in time to revisit the raison d’être for carriages and the emerging “horseless” carriage. We explore how evolution rather than revolution of networks influenced the technologies of transportation.
The question of foothold markets comes up and we explore which jobs-to-be-done affected early car design. The leap from these early jobs to the modern segmentation of the market is observed through Henry Ford’s approach to the then agrarian market compared with Alfred Sloan’s portfolio strategy at General Motors.
The discussion morphs into a brief infrastructure review where the development of roads is compared to today’s telco operator business and regulatory models.
Finally, Horace and Jim drift into insurance and discuss the risk pooling implications of driverless cars.
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Notes:
Are cars sold or purchased? Horace Dediu and Jim Zellmer discuss automotive “ecosystems” vis-à-vis Apple and Tesla’s direct sales model. We further dive into the rigidity and risk of such value chains and divert a bit into automakers’ attempts at aviation. Finally, we consider the potential monetization of automotive metadata and what that might mean for new, perhaps “over the top” style entrants. [31MB 63 minute mp3]
Also history lessons: Ford Trimotor, Ford production system, The Kaiser people’s car.
Show notes:
Ford to Buy Up Dealerships in Test Program (1997).
Why Texas Banned Tesla Motors.
Horace Dediu and Jim Zellmer discuss the pleasures of traversing continents by road. This leads to a grand tour of powertrains, composites, fuel efficiency, regulation and Tesla’s luxury market entry. Which naturally leads to a conversation on emerging auto modularization, apps and ecosystems and where value will accrue. [32MB 67 minute mp3]
Show notes: Museum of the US Air Force, Strategic Air Command Museum, Mini Clubman D, GTI, Tesla, Google + VW Smile app, GPS HD app, diesel engine and diesel fuel.
Horace Dediu and Jim Zellmer discuss the odds of disrupting the present automotive club via Tesla. We further dive into the regulatory and cultural environment that sustains the current players, while reflecting a bit on Segway, Toyota’s Winglet, organ donors and the Fiat “multiair” engine. Finally, we preview a larger discussion on apps in and around the car. [24MB 57 minute mp3]
Horace Dediu and Jim Zellmer discuss how to think about cars in this 57 minute podcast. [32MB 57 minute mp3]
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Excerpt:
Horace: That is, indeed, probably the most exciting way because an outsider will come in, look at the problem as an information problem not a transportation problem. They’ll look at it and say…This would be my dream.
Someone would say, “You know, I see the job to be done here. The job is people don’t want [to own] cars. Ownership of cars is not just expensive but it’s actually adding a lot of waiting into your life. Waiting in traffic, waiting to park. Waiting at line in the DMV, whatever. You’ve got all these hassles associated with cars… So we’re going to solve your problem of transportation by providing you with less waiting.”
And then they say, “That’s an information problem because knowing where the cars are and so on and allocating the car.” The car at that moment is ‘off-the-shelf’ and you say, “OK, but we’ll just pick whatever cars are available. Oh, if it’s electric it’s even better because our economics are going to be better with electric cars. It won’t break as much and so on.”
The innovator in this case looks at it as an information problem, attacks a job to be done that’s on that, uses off the shelf technology which is just a city car with electric drive, and then goes back to the manufacturer and tells them, ‘You know what would make them better is if we had this, that, or the other thing.'”
And then the manufacturer would say, “Thanks, we’ll get back to you in five years.”
You don’t have that time. So you say, “No, I want to have it done in the next six months.”
Then you start to think, “You know what? Maybe I can make the car myself.”
That is really the spark of a potential story…And that’s the cool thing is it’s the same thing that happened with smartphones where Apple said, “In order for us to get a better phone we need to solve these problems and that may involve getting into new businesses.”
You get into apps. You get into services. You get into Siri. You get into…Suddenly you’re solving a whole set of different problems.
Jim: Owning and leasing capital equipment.
Horace: Yeah. But the fuel was the huge profit you got because you solved a job. The fuel to get you into the new industries is supplied in ample quantities, beyond what you can absorb. And so suddenly, this guy was making a business selling information, really, to consumers about where to get a car at a time when they need it and not to get a car when they don’t need it. That simple shift makes them, hopefully, wealthy beyond their wildest dreams. They say, “You know what? I have so much capital now I can buy a car company.” And they’re actually quite cheap to buy because, as you know, they don’t make much money. And so, they’re usually wasting assets.
You go in and they could go and grab Saab, for example. Boom, just pick up Saab for peanuts or pick up a brand out of the UK or something and the Indians did. They bought Jaguar. They bought Land Rover. BMW bought Mini, which was essentially a defunct brand in the UK, as well.
You can get that and you get the brand and you get some tooling, some facilities, some distribution network, whatever. Throw most of it away and rebuild the business along the lines that serve this need. And so, they would then create a niche for themselves in electric vehicles optimized around the job to be done of not being owned.