… including my constantly reviving that saying! But it is so very true: virtually everything we see in automotive we have seen before, whether it is a gizmo or a style or a method, etc. In some ways the best “car movie” is Groundhog Day. For example, if I think of how many times we have gone around the vertical-integration carousel I get dizzy1.
But for a lighter Weekend Edition of Car Charts I’ll skip a chart in favor of two pictures that make the point.
First, the novel concept of the Car as Phone on Wheels. This picked up steam in and around 2010: see “Nvidia: turning cars into 'smartphones on wheels'“ in The Guardian on March 25, 2014, for example. And this time around it is really working, as we’ve evolved from Calling while in the car, to Bluetooth integration of the phone into the car’s AV system, to Apple CarPlay et al., to Over-the-air updates, to the Software-Defined Vehicle (whatever that turns out to be). But a long, long time ago, in a galaxy an America far, far away, there was this:
A mere seventy-five years ago. I believe this was implemented on a trial basis by Illinois Bell on Motorola equipment. Not sure what happened to Mallory… and I hope the kid is okay! I chose this picture because I liked the illustration, but if you want the real scoop on who did what when, see here. And for a great video, see Peter Gunn, here, at about 10 minutes in.
And second, how about ridehail? I don’t mean ridehail generally: we’ve probably had taxis or cabs since the 1600s at least. I mean the concept that “Ridehail (aka taxis) will replace personal vehicle ownership!” Remember Travis of Uber?
“Uber CEO Kalanick says car ownership is becoming passé: ‘Millennials aren't buying cars anymore. They don't want to drive. They don't want to own cars. They don't want that inconvenience.’“ – 2017 (Newsweek)
What a novel idea, to use taxis instead of owning a car! Sounded cool… even as far back as the 1950s (I don’t have the exact date)!
Since in the 1950s to advocate for the complete end of car ownership would probably get you called in front of the House Un-American Activities Committee, Yellow Taxi doesn’t advise getting rid of all your family’s cars: just the second one. (And I guess the Coupon Book is a rough analog approximation of the Uber digital app!)
Again, I am not weighing in here as to whether this could actually happen: the progress being made in the self-driving taxi world (notably by Waymo in the US and a variety of firms in China) may eventually chip away at the privately-owned fleet in America. And the car-as-phone is definitely in process.
I only bring up these two “throwbacks” to make the point I started out with: in automotive at least, everything old is new again. And while that amounts to nothing more than a vaguely humorous observation, there may be a useful implication: before you raise that next $50 mill in VC money for your shiny-new product or process, send your eager HBS intern into the Mercury News2 archives and see if some wisdom can be extracted from the first or second… or tenth… earlier swings at the concept.
Early 1900s: OEMs outsource coachwork, frames, etc. Mid-20th century: GM shows the value of bringing key components in house. Ford becomes obsessive about this, attempting to launch its own Brazilian plantation for rubber for tires and other parts. Late 20th century: Toyota shows a way to do both in- and out-sourcing at the same time: keiretsu mania! Early 21st century: OEMs are advised to reduce VI, and become just “brand integrators.” A few years later Tesla shows how its high level of VI is actually a strength (so much for Silicon Valley’s “asset light” mantra). Today: the Chinese show how contract manufacture of cars by car OEMs for tech companies makes sense… or doesn’t..
Mercer cleverly selects the paper that comes closest to being the Silicon Valley paper of record!