Are transformational business changes poised to disrupt the automotive industry for the long term? Here are several changes you might have missed, but your competitors haven’t! The future isn’t what it used to be. Successful automotive entrepreneurs should leverage these changes to build stronger organizations today!
On Wednesday our discussion started with Are Automotive Entrepreneurs Transforming Transportation? where we talked about what it takes to be successful automotive entrepreneurs. Today we talk about how the automotive industry is being transformed by changes outside their market boundaries. How this can provide savvy automotive leaders an edge in critical areas of their business.
Tomorrow’s automotive entrepreneurs must take advantage of several major opportunities in how they run their organizations if they hope to take their organizations to the next level. They are redefining the transportation markets. Traditional automotive business models are evolving very quickly.
Automotive entrepreneurs must think design as well as function. Future vehicles are going to have many advanced technologies onboard. How the entrepreneur uses them helps decide how successful they are moving forward. This future includes new business models and partnerships that focus on providing a wide range of solutions that may not be supported by today’s automotive ecosystems.
Many millennial designers can’t wait to create an interior that is not cluttered with traditional cockpit features, including the steering wheel! Many are combining the humanities with sciences for a holistic message that incorporates breathtaking forms into higher end vehicle design.
Steve Jobs credited much of his early products’ success with the fact that he believed in the power of design to get people to want Apple’s new products. He understood the power of great design. He helped Apple make computers and smart phones cool! He used design to separate his products from many of his larger competitors. His ability to simplify ideas is unmatched. Developing this capability emerges as an automotive trend towards simple high tech, high touch, spacious interiors. Now that’s a mouthful.
Automotive entrepreneurs have mastered the power of the both/and paradigm. It’s changing how options are made available in the vehicle. They are capable of products of tremendous versatility in how they can be used by different levels of customers.
Tesla, for example, can make your car better while it’s sitting in your drive. Think about how that changes the whole transportation eco system. What happens when all you do when there is a problem in your vehicle is to download a software solution? Several large dealerships were openly discussing what they might do with all the space they have in their repair bays. What happens when most automotive repairs can be done in your driveway?
Even the most ardent cybersecurity people agree real time patching and upgrades are critical to having advanced connected and autonomous vehicles. Many problems and recalls can be eliminated for customers by providing more flexibility in the operating system and the hardware. We will return to vehicle cybersecurity in a future blog.
Finally, automotive entrepreneurs are learning about financial agility and capital raising through early rounds of investment. Many of the founders I talked with said just the capability to crowdsource early stages of product development has helped them get better funding from later round investors. They’re discovering they can get a much better deal using different sources of funding than what was available in the past.
I would add that there are many ways to finance early products and services, including many large OEMs who have their own venture funding capabilities. This allows them to invest in many technologies before they come to market. As an early investor you have many more options than are available after a product is fully developed and funded through a venture capitalist.
The benefit to these early stage organizational investments is that it can ensure that many good ideas are vetted before they come to market, for a very small amount of capital.
In the past automotive entrepreneurs had to hope you have financing set up with banks and early stage investors. Initial investment by OEMs have helped create new business models that could transform revenue models in very conservative automotive organizations.
Business model transformation is a side benefit through these changes. Digital transformation is going to change how we live and work in the future. Here’s a closing thought for today. How might you apply what I shared to your business? Stick around, we will be getting into the details over the next several weeks.
See you next week.