GM says it is reinventing itself. And what makes them or the government think they can do that on top of old infrastructure and old ways even with our billions? Good fucking luck.
Last week, I met the man who is really reinventing the car industry, Jay Rogers, founder of Local Motors. He is creating the platform and API for new cars that are designed collaboratively by communities and built in microfactories across the country by staffs of only 41 using almost entirely off-the-shelf parts. He says he will be profitable selling only 500 cars. He plans to build 3-5,000 of each model and he’s months away from delivering his first.
When I first looked at Local-Motors, I didn’t think it was for me. Its first model is a muscle car being built in and for the Arizona market. In a video, Rogers talks about being able to come into the microfactory to help build your own car. I try everything I can to avoid ever opening a hood or picking up a wrench. That’s why I buy Toyota.
But over lunch, Rogers made clear that he is building a company and cars in harmony with the vision for a new car company I suggested in What Would Google Do?.
It’s collaborative. Rogers set the broad goal for the first car but then the community designed and voted on designs for it. What’s fascinating is that (as I predicted could happen) they make economic decisions and trade-offs. Some really wanted an incredible taillight and Rogers said, fine, that’d cost a fortune to tool up to make and would raise the price of every car by $1,000. Nevermind, the community said; they took a $99 Honda lens and designed around it so you’d never know where it came from. This also means that Local Motors does what it does best and links to the rest, a key precept of WWGD?
The community takes ownership. And the company hands much – but not all – control to them. I wondered how the community defines itself and manages to settle its disputes. The company has to get involved and listen. Rogers said the most important hire a company can make today is a CCO, chief community officer. This isn’t anarchy or democracy. Rogers coins a rather high-fallutin’ phrase for what he advocated: bimodal intelligence. That is, everyone has a voice but at the end of the day, the company has a role to guide the process and product; that is the value the company adds but that works only if the company listens well.
It’s small. And small is the new big. That is precisely why GM and Chrysler are at a disadvantage against him, like newspapers against online entrepreneurs: The incumbents are saddled with huge infrastructure costs and have to do everything in big ways, including fail. And this means…
The mass market is dead, replaced by the mass of niches. I don’t want the same care you want. I want choice. Hundreds of microfactories can give it to me.
It’s a platform. I saw this more than Rogers did, but it’s clear that because Local Motors publishes its design data openly, I could start a company to provide parts and products for its cars. It enables others to build business on top of its platform. This means that…
Business is public. The more openly and collaboratively Local Motors does its business, the better it is for its products, customers, and relationships.
It’s local. I also didn’t understand this at first. But seeing the car being made for Arizona drivers, I get it. A car for New Yorkers will surely be different.
Middlemen are doomed. Local Motors has no dealers. The factory is the showroom. The customers are the salesmen.
And on and on….
I plan to visit Local Motors’ Boston headquarters to learn more. No, I’m not suggesting that this small company with its microfactory will replace GM, not yet. But this car company can innovate and invent and listen to customers far better than GM can. This car company can become profitable far faster.