This week another smartphone maker, Xiaomi joins the EV club. How could we make a better sense of all such news? The easy way is to wait & see what actually “sticks”. If you don’t want to wait, you could connect the dots to their business models. Just remember to use the broadest possible definition: Business Model is how anyone creates, delivers & captures values when you charge into “a wild-west”.
Fortunate innovations are all alike; every unfortunate innovation is unfortunate in its own way.
The Motive
The business model is just like the motive of a business. Which enables you to see better even when actions seem arbitrary. For example, for those who rush into the self-driving car business, what do they wish to achieve? Just check what the business one is actually in. For examples:
- Carmakers want to sell more cars to drivers.
- Traditional HW/SW vendors want to sell components, SW, or professional services to carmakers.
- Transportation service providers or platforms want to reduce cost & increase service availability to passengers.
- Online service platforms want to expand their reach into cars.
Reframing Your Imagination
“I am enough of the artist to draw freely upon my imagination. Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.” — Albert Einstein, What Life Means to Einstein, 1924
Business models often define how companies approach the problems, and even how they frame the problem domain. Windows Vista stories may provide good lessons here. Around 2006, Microsoft was still very a “PC business company”. According to MS annual report 2006, the client/Windows accounted for 13B or 30% of its revenue. More impressively, it accounted for 10B or 62% of its operating income.
Vista glorious fiasco
Vista had at least 3 great ambitions: a great app development platform: C#, a modern app file system: WinFS, & a powerful 3D Graphical User Interface: Avalon. To know more insider views, What Really Happened with Vista is a good read. Vista fallen shot for many reasons, but one reason for sure: as a PC business company, MS was too caught up by solving the problems more for new & powerful PCs instead of rethinking brand new solutions for Internet users.
For example: what could be an Internet solution for WinFS? It’s easy to answer because File Hosting Services, e.g. Google Drive are popular substitutes now. Or even more broadly as Ben Fathi, a formal VP at MS points out: “In hindsight, it’s obvious that Google handily solved this problem, providing a seamless and fast indexing experience for unstructured and structured data.”
Such lessons may help you navigate news better. For example: most argue LiDAR is the best, while Tesla leans toward Camera. But why not both if affordability is not a concern 🤑. Which seems reasonable for “rich kids”, but not if one’s mission is to build even more affordable cars. Anyway until Self-Driving is massively adopted, your guess is as good as mine. But one thing for sure: whoever is still thinking Self-Driving cars as a “PC business”, likely misses out on the next big wave 😉.
To the Crazy Ones
“Here’s to the crazy ones!
The misfits, the rebels, the troublemakers, the round pegs in the square holes.
The ones who see things differently.
They’re not fond of rules, and they have no respect for the status quo.
You can quote them, disagree with them, glorify or vilify them.
But the only thing you can’t do is ignore them, because they change things.
They push the human race forward, and while some may see them as the crazy ones, we see genius.
Because the people who are crazy enough to think that they can change the world, are the ones who do.”
Apple’s “Think Different” campaign, 1997
Luckily, there is crazy one, Tesla leading this game. It does not respect the status quo nor the business boundaries. Yes, its business model may still look like a carmaker: to build a sports car, to build an affordable car & to build an even more affordable car as its Master Plan. Nevertheless, it’s also on a mission to transform the current mine-and-burn hydrocarbon economy toward a solar electric economy by building more affordable cars & providing zero-emission electric power generation options. No wonder there were Tesla fans who bailed them out of “Delivery Logistics Hell”. Sure, you can sell luxury & desire to high-end customers. But wining the hearts of fans takes something bigger.
So What?
Charles F. Kettering, a legendary head of research for GM said: “a problem well-stated is half-solved”. Hoping by rethinking business models, we can frame the problems better.
But this mindset should not be “a secret for the business”. Instead, reframing a business model for anything can be useful for-profit or non-profit, individuals or groups, and organized formally or casually to create, deliver & capture more value, hopefully with less resource & time. So we may have more viable “spare time”. For me life should be “wasted” on beautiful things ⛱️. Therefore why not 4DWW 🙏🏻 if we can create more value than 5DWW now .
Full Disclosure
The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor an EV expert.
