Many sectors are fully digital: online shopping, streaming, 3D printing, to name a few. However, in other verticals, understanding how to use digital assets is just a small part of the innovation equation. More importantly, coming from a software company or growing up in digital business will completely change your mindset. What’s possible, what is on speed, on customer experience, on possible business models, monetization, and how one can connect the dots. You gain insight into virality, user experience, social media, and in general, the behaviour of users. If you come from a software company, on top of that, you gain experience in problem-solving and probably agility.
Why would this all be relevant to you? Digital people, especially software engineers, have a different mindset to problems. They are taught that everything is possible. Even if financially not feasible, they think in a wider range of technical possibilities. This can give you a superpower to keep pushing when looking for solutions or answers.
Also, your digital experience will give you a new lens to look into any innovation and business model. Talking to car industry experts, it’s shocking to see what they don’t see. It is so much outside their world that, to most experts, it is impossible even to grasp the magnitude of blindness they have.
Years ago, at a car HMI (ie, “Human-Machine-Interface”) conference, I thought I was in a stand-up comedy show. Even the title is quite telling: human-machine interface is called UX everywhere else.
The topic was the voice interface and how it will be the most important interface in any car. A small workshop with some of the most prominent players in the car industry was looking for use cases and how to improve the experience. I started chuckling and tried my best to participate and support the group. In the end, a few asked me why I was laughing. I honestly asked them: you really believe that this race isn’t over yet? The whole voice assistant thing is over already, and you have no chips at the table. You are just looking at a game that’s already over.
They had no idea what I was talking about. So I explained. Voice recognition requires a massive amount of data to work well. You need data to make your voice-recognition better. Let’s assume you are Toyota and sell 11 million cars a year. Let’s assume 10% have voice assistant feature installed, and let’s assume 2% of your customers use it (note: that already shows a flaw in the business model, as with the intention to monetise everything, you forfeit all usage data you could get by providing this service for free). Going on: these customers use it maybe 3 minutes a day. That is 1,100 hours of voice recording a year. For the biggest automaker in the world. That is nothing. Zero, nada, zilch. If you multiply this by 5 (10% uses it), or by 20 (10% uses it for 12 minutes a day), it is still just 22 000 hours of raw material.
Currently, some 500-600 million IOS devices are in circulation with the voice assistant feature. Using the same numbers as in the previous example, it collects 50 times more raw data.
As we all know from experience, screen time is not 3 minutes or 12 minutes. It is 3-4-5 hours a day.
I would estimate that Apple, Google, Amazon have a million times more voice data than any car manufacturer. And they had at least a five-year advantage on top of that. Not to mention that each year, they sell more devices which are used, so the gap is not closing, but widening.
And car makers still didn’t get it. I cannot blame them. It is so different from what they are used to, and it is different for every company. And of course for a few years or even a decade, they can defend their business model and market position to some degree - the danger does not look imminent.
I am no exception to being blind. I cannot see how others don’t see it, coming from software development and behavioral research background. My blindness is to other industries. Luckily for me, this is the industry that sets the standards for now.
This approach also applies to Tesla. I don’t believe in their superiority in the battery business as it is something that can be “out-innovated” with enough money. Where you cannot get ahead is AI and autonomous driving and other use cases where detailed driving data is useful. Tesla has sold 300k of Model 3. In each of the cars (rumors only), three datasets run parallel: current autopilot version (even if not engaged), data collection of the driver’s reactions, and the new autopilot version. 300,000 live test drivers are collecting miles and miles and petabytes of data. And live user behavior with consequences of each decision.
This game is over. It was over a year ago.
Just ask companies trying to compete with Google search. It is nearly impossible. With every search, it becomes better, and with every day, the gap between Google and any competitor becomes more significant due to the number of searches.
Next time you are building your innovation team, make sure to have digital business experts on board with behavioural and UX experts, preferably outside your industry. They will challenge your innovation team in ways you could never imagine. They are used to challenging the status quo and have a different mindset when it comes to serving customers. If you can mould it with your traditional expertise, it might become a successful innovation that can coexist with disruptors. They can help you identify the battles that can be won, and the battles that are already over.
To give you a few ideas about how we think of the car industry and where traditional players can challenge disruptors:
These are just a few examples of how you can think differently when coming from digital. And these are really from the top of my head, without thinking more than 5 minutes on this. Imagine what thousands of people can come up with when they invest hours into it.
Good luck and make digital experience a selection criteria for your innovation team.
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