Tuesday, March 24, 2009

If I were CEO of a Big-Three Car Company

Fast Company, April 2009, published 25 Ways to Jump-Start the Auto Industry. Here is what I sent them, found alongside the other ways.

"Let's assume the bailout solves the immediate cash crisis. Now what? First, I'm going to ask Congress to raise the price of gasoline. I need to be assured that there will be enough demand out there to merit an investment in more fuel-efficient cars. If our gas prices are in line with those of other countries we like to sell cars to (perhaps starting in 2011 when my new cars will be coming off the line), I'll be confident that consumers will embrace these new cars.

Next, I'm going to start experimenting with new product and service models. We recently passed the tipping point of 50% of the world's population living in urban areas. 'One adult, one car' doesn't work in congested and parking-scarce urban environments. Let's expand beyond manufacturing and selling cars to selling transportation as a service.

I'd take 10% of my current R&D budget and put it into a venture fund. I'd finance startups, experimenting in areas where I lack core competency: truly alternative vehicles; services that relate to car maintenance and in-car experience; services that conceive of the car as one node in the larger transportation network; and ideas that leverage my cars and my consumers as a means of collecting data or marketing other in-car services. This is a smart use of my money because I would be investing alongside others instead of financing all the R&D in-house. In the process, I'd gain firsthand insight into a whole realm of business models that might be my future.

Third, I'd definitely stop fiddling with closed, proprietary wireless technology inside my cars and immediately introduce a generic wireless platform into every new car. A standard feature of this platform is the ability for owners to access critical car information remotely. I'd send owners text and email updates telling them about their fuel and battery levels, when it's time to change the oil, and when the car received an unusual bump while parked. This would tie car owners to my company, provide dealers an ongoing revenue stream for maintenance and repair, and give me insight into exactly how consumers use (and abuse) my vehicles. I'd also develop a device that could be easily installed into cars already on the road so I'd have more owners participating.

This wireless platform lets me farm for ideas. As an open system, it would attract the minds, money, and efforts of thousands of innovators to think up desirable applications that a person with a screen in a car might find useful. This platform would be like my PC: Car owners could download any apps they find useful. I'd let the loser applications or those with no revenue model muddle along, and I'd buy up the winners.

By mitigating our investment risk and placing lots of low-cost and low-risk bets, we'd bring the Big Three into the future."


Overmatter said...

I was thinking today that maybe after the White House made the head of GM step down, it would replace him with you!

Marshall said...

Good thoughts Robin, but I'm surprised; there's a lot of "my car" in your posting. What about design features that promote sharing? ..not to mention making cars easier to recycle or upgrade to reduce waste, improve efficiency and provide a longer usable life. Ultimately we want fewer cars sold and fewer cars on the road. How to we make that attractive for a company? -- reducing the volume of their product sold.

CEO said...

I wouldn't miss reading your future articles this subject. You deserve praise.