With the departure of General Motors CEO Rick Wagoner, and all the circus surrounding the Obama administration bailing out American car makers, it reminded me back to an open letter on Techcrunch, written by Todd Dagres. In his open letter, Todd contends that a new, innovative leadership needs to be installed, someone with the vision of a Steve Jobs. It is readily apparent to everyone that the U.S. auto industry needs an extreme makeover, and is not sustainable, long-term.
In his post, the comments thread went crazy saying everything from the fact that the article was ridiculous, Silicon Valley can’t fix everything and knows nothing, and that Todd has no concept of the macro-economic forces affecting the industry. The more I think about it, the more I realize that everyone is missing the point. Apple did not create the digital music player, they leveraged their strengths, created an ecosystem, and marketed the heck out of why it was superior, and continues to do so to this day. They made the digital music player sexy, and what’s lacking with U.S. autos? Being sexy. Does Apple have the cheapest phone or digital music player? Not even close. But they did create a more price inelastic product, in a space that is highly commoditized.
Doing my basic SWOT analysis, it appears that the U.S. has several strengths that has made itself a powerhouse: innovation, risk-taking culture, limitless access to capital (until recently), the American Dream, and every-present hype. Why shouldn’t the U.S. have sexy cars that the world demands? Let alone something that the American citizens want. Much of what’s being discussed to make the auto industry viable long-term is green this, green that, which is important. I’m afraid we don’t have that long to wait to perfect the system. We need to act now on short-term wins, while concurrently pursuing the long-term energy independence agenda.
Admittedly, I have a BMW, something I was attracted to because of the performance, prestige, and feature set. But more and more, I have come to realize how much better of an experience I could, and should have. In a post by Kristen Nicole, formerly of Mashable, now of AllFacebook, was able to experience Microsoft Sync in a test drive of the Ford Flex. In that experience, she noticed the deep integration between the car, the cell phone, and some compatibility with the Internet. In speaking with her about her experience, the car became just that, an experience. Some of the major barriers for having more Internet in your car include the potential distractions (public safety) and maintaining a consistent, strong signal while driving.
This is that opportunity for the auto industry to reinvent itself. Instead of minor attempts to integrate cars and social media, let’s open up the Apple development platform, allow the ecosystem of developers to create value, and let’s finally make the American car sexy again. Some of my current pet peeves is that if I am talking on the phone, enter the car, it doesn’t automatically shift to the bluetooth. If I look up something on Yelp, the directions don’t automatically pop up on my navigation system. I can’t assign addresses and locations on my car to specific people, and overall, there’s this big disjoint between the two systems. I need a more seamless experience.
Let’s integrate these platforms:the web, the car, the developer ecosystem, the home, and the mobile phone. Let’s have the developer community contribute to a framework to create value for these cars as a platform that we use far more than we think. I don’t think that when the iPhone was about to be released, Apple had any idea of the magnitude of clever applications for so many different use cases. Imagine if we did that for the U.S. auto industry. Here, we’ve been talking about the connected home and the phone as the one platform that will be more important than the computer. Let’s connect them all. I think that with more access to capital for American consumers for American cars with a developmental platform, the American car may have a killer app to drive adoption and consumption in the near-term.
In many industries, new leadership that hasn’t had any experience in a particular space is brought in to shake things up, and lead the company in a new direction. With the auto industry against the ropes, in my opinion, this is the last chance. I think we need to give up on the idea of being one of the lowest cost providers. It doesn’t appear to be possible with our capital structure. Instead, let’s be the highest value provider.