Analysis Of The Next-Generation Mobility Value Chain

In the previous post I described a new value chain that will connect companies providing on-demand mobility and three emerging models for the realization of this value chain. This value chain is the result of the consumer shift from a car ownership-centric transportation model to a hybrid model that blends car ownership with mobility services, and the stated intent by the providers of certain of these services to adopt of Autonomous Connected Electrified (ACE) vehicles. Various acquisitions, partnerships, and investments by automotive industry incumbents and by companies that already provide on-demand mobility services, or intend to do so, including the recently announced partnerships between Waymo and Avis, and Apple and Hertz, indicate that this value chain, which I call ACE mobility services value chain, is starting to quickly materialize. In this post I provide a deeper analysis of the emerging value chain in the process exploring investment opportunities in tomorrow’s leading businesses.

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A new value chain for next-generation mobility

This post first appeared on 4/27/17 in O’Reilly’s site.

In my book, The Big Data Opportunity in Our Driverless Future, I make two arguments: 1) that societal and urban challenges are accelerating the adoption of on-demand mobility, and 2) technology advances, including big data and machine intelligence, are making Autonomous Connected and Electrified (ACE) vehicles a reality. ACE vehicles and on-demand mobility will cause three major shifts that can lead to the disruption of the automotive and transportation industries: a consumer shift, an automotive industry shift, and a mobility services shift.

In this post, I examine what is causing these shifts, the value chain that is emerging as a result of these shifts, big data’s key role in the value chain, and the models being created around this value chain.

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Monetizing Personalized Transportation Experiences by Exploiting Big Data

The Consumer Electronics Show (CES) is starting later this week and will be followed by the Detroit Auto Show (DAS). Both shows will serve as venues for the automotive industry to showcase Autonomous Connected Electrified (ACE) vehicles and new Mobility Services. ACE vehicles combined with Mobility Services such as ridesharing, car sharing and multimodal transportation options will give rise to a new personal mobility model that combines car ownership with car access. These innovations and the emerging model are creating two challenges for the automotive industry.

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Automakers Must Partner Around Big Data

By extensively utilizing data, and paying attention to detail Tesla has changed the conversation on the type of personalized experience car owners (drivers and passengers) should expect from an automaker. In the process, it is building strong loyalty with the owners of its cars who appear willing to support it through thick and thin. Tesla has taken a lesson from Apple, Google, Facebook and Amazon, four companies that obsess about connecting pieces of data and using it to better understand their consumers and tailor their services to provide the right experience. It is this personalized experience that Tesla offers that has allowed it to build a brand that delights its customers. The exploitation of big data that is generated by vehicles, consumers and companies across the entire automotive value chain must become a key competence of all automakers. But as I discussed in previous posts of this series, with the possible exception of GM through its OnStar service, (and here) only recently have started to collect and utilize these types of big data (and here). As a result, they don’t capture data of sufficient scale and they are not best in class yet at exploiting big data. In this post I argue that automakers should accelerate their partnerships with companies that have strong data collection and exploitation DNA as Tesla has already demonstrated is possible. As mobility services are starting to play an increasingly important role in transportation solutions, companies that offer such services become ideal partners to automakers. By partnering with them, automakers will be able to better understand their customers in far greater detail than they do today, as well as mobility services, which threaten to disrupt them. Ridesharing and carsharing companies represent the best initial candidates for such partnerships because these companies a) are collecting and utilizing consumer big data with the same attention and rigor as Apple, Google, Facebook, and Amazon and b) have already collected impressive data sets due to the scale they have achieved. Apple’s just announced investment in Didi Chuxing (and here), in addition to the broad implications to Apple’s services in China, e.g., ApplePay, is a further indication that data partnerships even among companies that are some of the best in class, can be essential for developing next-generation transportation solutions, including autonomous vehicles.

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The Automotive Industry’s Big Data Challenge (Part 2)

In this first part of this two-part series, I discussed why the automotive industry, particularly the incumbent OEMs, is facing a big data challenge.  This challenge is becoming extremely acute as a result of the increasing adoption of EAC vehicles combined with Mobility Services (EAC+MS) and the torrent of data that will be generated as a result of this adoption.  

In this post, I present how the incumbent OEMs can address this challenge.  To do so, automakers must:

  1. Think strategically and own the big data strategy.  They must then drive the execution of this strategy instead of relying on their suppliers for partial solutions
  2. Revamp the vehicle’s computer system architecture to create a unified computing and big data architecture.
  3. Establish and enforce data ownership rights among the appropriate constituencies.
  4. Create a data-sharing culture.

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The Automotive Industry’s Big Data Challenge (Part 1)

In the not too distant future, automakers won’t be evaluated just on the physical, safety and performance characteristics of their vehicles.  Instead incumbent and next-generation automakers will be evaluated based on the completeness of their solution along five dimensions: Electric, Autonomous, Connected, Mobility Services (EAC+MS), and Information.  We read about the progress automakers and their suppliers are making along the first four dimensions.  There is much less conversation about the fifth dimension.  In this two-part series, we will discuss the big data challenge facing the automotive industry.  The pieces are the result of my work in the industry helping corporations with their innovation and big data strategies.  The first post provides the why and makes two points:

  1. Automakers must be in the information business.  To be effective in the information business, automakers must change their perspective and start thinking about an overall process for big data in and around the car.
  2. Information in EAC+MS implies big data and incumbents in the automotive ecosystem must become serious about big data.  Newcomers to the automotive industry such as Google, Tesla, Faraday Future, and likely Apple, but also Uber, and Lyft, realize this imperative.

The second piece will provide the how to try to address this challenge.

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Improving Corporate Planning through Insight Generation

I want to take a quick breather from writing about corporate innovation and return to another topic of this blog: big data and insight as a service. Host Analytics, one of my portfolio companies, recently completed a $25M financing round. Host Analytics offers a cloud-based Enterprise Performance Management (EPM) Suite that streamlines a corporation’s planning, close, consolidation and reporting processes. But it is what they are enabling for the enterprise that is important to write about. Host Analytics has moved from being an EPM company, to being an insight generation company.

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