Part 3 cover image

The Innovation-Driven Disruption of the Automotive Value Chain (Part 3)

In a previous post I wrote about the disruptive innovations that have been introduced by Tesla Motors (Tesla) and Uber and presented the steps the automotive industry should be taking in order to address the startup-driven disruption.  In this post I want to make three points:

  1. It is hard for startups to break into and succeed in the automotive industry.  The industry requires high investment and ability to scale while maintaining low risk.  The Car Use value chain has lower barriers to entry but they result in many competitors that have difficulty differentiating their solutions.
  2. Startups must realize that they cannot disrupt the entire automotive industry.  Instead they must focus in the right areas, and collaborate with innovation-minded incumbents in order to become part of the appropriate supply and value chains as quickly as possible.
  3. The incumbents must structure their organizations, operations and culture in a way that enable startup-driven innovation to meaningfully impact their business.

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