Episode 18

The following is Episode 18 from @oliverbruce.  Thanks, man!


 

SPK05

Asymcar 18. I read a few interesting auto industry items recently one of them was maybe wonder if we’ve reached peak names and that was Mercedes announcing that fourth here here on their S. U. V.’s without being named with three letters rather than one so the M. class will become G. L. E. G. L. X. all these things so they’re going from twenty six to nine hundred ninety nine possibilities along with the metadata around that of course the engine displacement all that and at the same time we had news that that at an animal was greatly underwhelming I think the national sales were twenty one thousand in the past year maybe a little more and the capacity is around that much per month. So right you know so so would are we seeing the paradox of choice happening in the car business it it’s it’s sort of astonishing and

SPK05

But it’s it’s it’s it’s these symptoms I mean on one hand I think the the the the explosion in in in product categories is is a symptom of oh sort of lack of room to to really innovate a on what matters having sixteen different very versions of S. U. V. when they were non there one on hours at least is one from missing is the G. vulcan a which I think they’re they’re keeping. you’re

SPK00

kidding right but it’s it’s hard to find it

SPK05

Um the the you know the same thing with the funny thing is a you know a likely likes to say that you know companies all feeling unison it’s hard to imagine there that they’re colluding to fail. But in this case the fact they’re all or makers feel like they need two hundred different car products which all or almost indistinguishable from each other is a symptom of something something else. I think the so so so for example I I know I how many versions of O. B. M. W. S. U. V.’s there right now we know even Portia has has to in its lineup. And that’s a sports car pure that so supposedly was yeah you’re pure company that develops only very a unix sports cars and know what’s next for our is gonna have an S. U. V. and and then they’re gonna have fifty S. U. V.’s so what’s going on I mean the the problem is in my opinion that the they’re not positioned on the job to be done their positioning and finding the or carving the market up into all these little subcategories exactly what Nokia did prior its the mine right right they they would say well the there are research shows and they had exhaustive research by the way our research shows that buyers are categorised by age by place so of residents by income by by gender and all these wonderful little remark numbers that they could produce to demonstrate the the this

SPK00

is for this product explosion

SPK05

what they would do is they would say that but this is simply the the here’s the way that happens is you send you go out send out your researchers who then ask people bunch of questions and the end up with the survey that shows and so the ass people what’s your age what your income the things that they measure and the beginning what is being counted what is being the categorised. So so you we see even today and I’m I’m finding it extremely frustrating when you say oh I saw somebody probably survey the elements in mobile phones. And what they say well you know that the age groups you how many times have you seen the survey that’s that’s saw stars to show what what’s the difference between Andrew denial as as a by gender what’s the difference between a hundred and I’ll ask by age group what’s the difference between Andrew then I’ll ask but income level and oh of these are meaningful all they’re saying is that we are able to capture that information easily and therefore we’re gonna plot that into rap and imply that there’s a causation behind the the age and and gender in their purchase decision. And that’s simply nonsense there’s no the the you cannot say that more women than men prefer product extra why because it it it simply that is the data you were able to capture the that when you ask why do they actually by that you find probably that they have a different job to be done than men and if at some point men were to acquire that job than they would buy that product. And so this is this is the and and I you know I’m generalising here and in the in some cases only women have the job but in some cases they don’t so you you you if you force yourself to then equate well we will build a product for when when the features you put into that product and say well you know the first appeal to women will make it pink and so will say that women therefore are gonna provide product X. because it’s pink and that you know bill for that that’s exactly the wrong thing and it it’s it yeah I I you know I I almost find it offencive to think about the the the S. U. V. and and the proliferation of different if U. S. U. V.’s is a symptom of that what they’re probably done is is determined that one C. don’t wanna C. D. they found some people bodice and they start to measure that population and they begin to divide it up in card it up and say well you know some people actually asking for a smaller version and some people asking for bigger version in some people are asking for one that

SPK00

no seven seats a minivan replacement yeah

SPK05

and so you know it’s it’s natural but it also the because this school the the the conspiracy extends to the people of manufacturing because once the marketing people show them the data the manufacturing people it resonates with the animals they’ll all we have to do to support that new product line is we’re gonna have to tweak our production run we’re building on a platform anyway so we’re gonna extend the for the the floor plan we’re gonna extend the the you know the the the machinery that that manufactures this equipment can tweak lots and yeah on the same production line we can generate that so it’s not gonna cost us much to improve to increase the product range and so the in engineering people the manufacturing people and the marketing people conspired together to build a product and nobody needs. And that’s that that’s the fundamental and just still something but they’re not going to actually grow that pie tremendously there and then of course the B. and O. B. M. W. guys will point to the Mercedes guys in use that as justification of the more I think we’ll have to have so I and and and that’s why. I think fundamentally in the meantime so that that’s one that what one question well do the brought up and at the same time yes just

SPK00

lastly to me because you know there was a lot of discussion with maybe a decade ago about than an O. and the Renault Logan you know this sort of new low cost somewhat traditional view

SPK05

that’s a problem cars just hasn’t happened yeah well so there I slightly different but temperamental tut tut and then oh is predicated on the lower the super land. And that’s a very disruptive idea in a way that you send going say that we’re gonna drop the cost of a car down to three thousand dollars is an order of magnitude lower than the average cost let’s say the united states. Now what that the implication being that people or less wealthy will wanna drive that car that that would have been a great idea in the nineteen forties and it was actually put it to use the nineteen forties by many many factors not only Volkswagen which of course had the beagle but basic training with the artist he was like yeah

SPK00

no one of our for five hundred years

SPK05

the remote the remote for the the British with the mini. And the japanese what they’re chi hours and okay sorry “‘kay” cars. And and so all these companies in that time frame between nineteen forty nineteen sixty we’re saying that we’re competing with non consumption therefore we need to get people in cars we need to get them as quickly as possible and that only way to do that is to lower the price “’cause” cars were too expensive not if you launch that concept into India today it might sound like the right thing because consumption is low but here’s the problem used cars used cars in in in the in the our agent particular are good enough. So the competition for the than oh was not a new car the cost too much it was a used car that cost just as much but was better. And then used car today is the low and brought a used car in the united states is dirt cheap in fact this is what you can launch in the united states is super you know remember the you go with lost in America it was it was in nineteen eighties for those lists there’s that don’t know what we want later alright it was launched in nineteen eighties as a and you is nothing more than a read that yeah if yet I don’t know which one but it was a very old Fiat from the seventies that was manufactured in yugoslavia. And that car lodged in the U. S. is a super low and disrupt are kind of like gonna be the new beetle well again by the nineteen eighties cars lasted a certain time they’re not they they they lasting longer back then they would’ve lasted maybe ten years today I think you get the car on the road in you know maintain the can go twenty years. Um and that meant that the car was competing against you know five year old equivalent that had appreciated like a rock because there’s there’s it was oversupply the market was over supplied so the the that that you go what’s the value of a new car that’s a marginal quality versus a a used car that also has its problems but it’s from a brand that you trust what you know about that you’re not gonna get left that when you drive around “’cause” it’s a commonly visible car in into that market of course the japanese at plenty of low end product as well not as cheap as a you go but you could trust that on that you could trust into your grand forever yeah and those if anything if any scholar student more to say O. G. G. I need to I need a little incarnated cheap car they’re gonna go for use coral and today it’s the same situation and in fact there’s there’s even the car lasting longer and if if you’re poor poor college student you can actually afford a pretty decent car for about ten thousand dollars ten thousand dollars which I think after inflation would be starting you know would be in the the price of when you go. So so if you think about what can you get for ten thousand dollars well maybe the local dealer one offer you much but if you go any day if you go on on online you can do a little shopping and and pick up a nice car. Um apparently and I personally don’t like this is all by herself in a and that personhood rust fifty thousand dollars on the car fact that drop thirty thousand Miles on the car and I feel like I’m rather well served with cars I found was that it I mean I I was you know I thought E. five hundred which is a very nice colour so that’s yeah it’s a it’s a it’s a it’s a over serving me it’s it’s it better card and I need it’s only bad thing about it is uses too much gas. But you know I I treated as a as a not like a commute recorded rather car pleasure just like people treat their horses you know their own the they’re not beasts of burden their their things which they use it for recreation. So so in that sense I think that the national failed because it was up against good enough japanese for and maybe even local brands probably local brands which are essentially. Um not copies necessarily but maybe variance of the models that were made in remote and older models in fact the the the this highly recommended series you ought to watch highly recommends I cannot recommended anymore if you’re every

SPK00

other automatic fabulous. So

SPK05

it’s it’s called it’s James may cars of the people that people’s cars no it’s cars of the people it’s they they subtitled the top your special though. It’s only James main it there’s no none of the other character opera

SPK00

what’ll you go when you mentioned that to me I I see this little refine apple here and I had a hard time finding it and you had to search the precise term in I. tunes for example the actually get the thing so yeah

SPK05

maybe maybe we get James may in there you might get it but it really basically so explicit on on I. tunes in H. D. I don’t know three bucks an episode or something like that there’s three episodes all should be well watched the what it what the great thing about it is not always agree history lesson not only does it have gratuitous amounts of course you can look at I and in in the great locations there’s a few stupid that’s with some violence and then silly military applications yes. I understand silliness in there just for the for the for the juvenile audience but it’s it’s it’s more it’s also that they actually dig deeper into the question of what is a people’s car and then what the cars mean to people and all that so the there’s a there’s a there’s a little bit of a twist that you can look forward to what what what it it told the story although is exactly this notion that how the mobility come to the masses and and I in it it’s a story of a time it isn’t something you can replicate and that’s the failure or the error in talk to it was the that they wanted to replicate what had happened in America in the nineteen twenties with the model T. what had happened in Europe during the fifties and sixties with the with the beetle and and others and in Russia happen in the seventies with looks lotta this is about mobilising it a population of not consumers the difference being though that in those in those markets at those times there was no excess inventory of used cars that weird no are those nowhere reliable so if you want to disrupt the market today you dealing with the highly saturated market in most areas even thinking emerging economies if they don’t have local used cars they’re gonna find a way to import used cars “’cause” the economic incentives are there so for example if you’re in the in you know context are if you’re in the wrong if you were to Africa you have access through the global supply network to container you know to to to to change clothes of used cars if you if you if there’s a local market you can get yourself a you know a thousand the so you’re a pickup trucks that are indestructible but they are offload it out of out of a Japan because the the government in Japan essentially poses a very onerous inspection regime of cars so they end up being a sold first almost scratch

SPK00

or their economic life is over in Japan after

SPK05

four years or five years when we the for with that vehicles mechanical wife was we acolytes is over exactly. So so what what because of the way things have been evolving over the last few centuries or that lead at least things are we in the difference like with the or market so low in the structure is very difficult what you need to do is create new market disruption and that means we define a job to be done and this is what we’ve been talking a lot about for so long on this on this show it’s how you redefine transportation how you redefine what people are willing to pay for and a lot of the electric market I think is gonna end up as redefining the the you know the notion of a card that does everything to a card that does a limited subset of things. Well enough with with a caviar being better in the the mention that matters to me which could be actually a psychological dimension and not a physical dimension for example feeling good about the environment or feeling feeling you know the meeting congestion one thing I should say would change made his credit the the emphasis in one of the shows was like none of these cars are congestion problems once you get the saturation again you get the problem other lessons

SPK00

right and I should also plug

SPK05

another book here which is the big roads I forgot the author was recommended to me by by James grant and I think we mentioned earlier we have can still Reading through it and it’s a absolutely great story because of the way explains how hand in hand the auto industry in the around the road building industries have to work together and government as well. And the the idea of how important nobody knows the story the story how roads are built is actually fascinating one frustration I’ll give you an example one frustration I have like come back to the united states is that the roads are actually pretty bad shape meaning there’s potholes there’s rough patches the I would seem to be on the construction all the time. There’s there’s a lot of disruption because of of a road construction not to mention that they’re actually builds willow work standard of quality. They don’t have water colours yeah but they don’t have for example they don’t have well design flows especially new England which is an older part of the country the things going are we weird ways that the the roads are like one of the worst things from lot of that these you get to the intersection it’s not a regular just section at ninety degrees services section where two roads actually emerge like the angle between the two roads is almost like

SPK00

Vera next yeah we have we have any was actually twenty

SPK05

degrees between that and you facing a stop sign. And so you’re supposed to start and usually when there’s traffic there’s a look a line of cars in front of you as well. So you’re supposed to stop and then ignore this proceeding need to look behind you know they really need to look behind you to see if someone’s coming that’s the stop sign right. And so you you you’re looking behind you and then be seen the the coast is clear and you you accelerate in you the guy in front of you. Because he has a moved out of the intersection yeah because he’s you just look behind him said okay now was time for me to go he starts off and then you think well that was not my turn you on the you you clear the S. and a fast enough and so you end up getting their reasons have

SPK00

to be done for your new three letter as you Mercedes S. U. V. or

SPK05

I can push that don’t know I have seen

SPK00

that I there’s a land Rover it settle audio one time that and anyway I digress but yes

SPK05

yeah I think I think the point is that the reason this happens is because these cars is rose I mean or ancient they were designed at a time when you know horses were on them so either in in modern traffic analysis model traffic our road design you get away from that what happens in Europe because the roles that I you drive on typically are built much more recently I would even say it will not last few decades seventies even they were built according to norms that more much more recently set and the best practise is for real design and building were were were were modern in our in our in in in that sense of the word and so you actually started on roll building the for Europe it it’s you know is because of Henry ford in the model T. have huge demand for road building in the nineteen twenties and so commissions in and the the government set out to design what roads well as we know them today that they have to invent everything that invent road signs yet invent merges yet invent shoulders getting then guard rails yet then side edge they had to invent you you know things like the the notion of a superhighway although initially they they didn’t realise for example how billboards will affect things they didn’t know how roadside this this is what affect things. And this really learned through trial and error but the the that that process is still ongoing because you know once they establish something you retrofitting all the time we have to fix all that stuff and in the U. S. as you pointed some political reasons there’s always and then you know there’s always a reluctance to really dig things up and change dramatically what’s what’s new people become converted all the utterance very little yeah they build something which there’s a great them and for months it’s matt they don’t want it to ever change again so anyway I I the the the

SPK00

I I thought that made it a wonderful job in that series of well the history was great but I thought the the relationship between the evolution of certain cars and governments plus politics was

SPK05

yeah it is very well studied this problem that that it to the courage yeah great insight in there I mean the this goes beyond I mean you can say you can enjoy it if you were twelve year old and you wanna look at cars and have them do funny things with them but but you also enjoy it does pretty well actually I think I think very few people quite will grass the rights of all the inside here well

SPK00

the writing was fantastic and and then the social aspects of you know the people in the thirties I thought the I’ve the the one of those islands are couples islands in the politics where you know they they set up those sort of rest cancer vacation spots where you were supposed to go you know with your your beetle in your coupons but of course the whole deal fell apart

SPK05

that sounds amazing story that’s just it’s history lessons there and itself but I think the the the the that that that that continues today yeah that

SPK00

really that’s sort of what I wanted to drift into next a bit was so given all these things are happening amongst the legacy auto makers and and you know you mention a twelve year old but someone smart one said recently that driving is for all people or so I don’t know how many twelve year old really pay attention you know I

SPK05

started coming in I I hearing this from from for many people that I you know I talked to my nephew was in college is a twenty two years old now I think and he yeah I asked this question you know you you and your friends really look forward all in cars are you are you are you into cars and disasters like you said like everybody that in that age group they’re basically don’t care at all about cars right and you know I pushed on that a little bit you know what are you gonna do if you need to go someplace and you know I think they think that it you know it’s an it’s a necessary evil that we need to sort it out at some point and get a car. Um and so it’s confirmation in that sense but I you know there’s also data showing that a lot of people are now getting cars because they have to but it’s not because a lot too but there’s gonna be spending the money because the the the need has not gone away. So so in a way the the opportunity might be that the cars for the latest generation will be would need to be positioned on a fundamental utility that they need but also if you gonna get “’em” excited to pay extra be on the commodity price you need to have them solve jobs that that the young people have to do and that means not horsepower and and and pinstripes big rather L.

SPK00

T. and the car it’s amazing how much data hyped in the states now I’m just shocked. They they must assume that people are gonna be charitable anyway you know obviously if you have a smart phone if you go for the smart phone the need for an L. T. for another bill another charging like monthly charge in the car would seem to be

SPK05

is it’s it’s I guess. It’s like marketing people you know certainly get get the get the memo and and and and and and maybe ten years later you know people are into telephones just like the idea of a three’s and maybe they need to swap out the cassette player and and they they get these these ideas and then they go all souls hardly go overboard on it and and it’s not solving the job they’re doing is they’re essentially checking out things awfully checklist and then the same thing with mapping remember that was all this in car navigation stuff

SPK00

thousand dollars two thousand exactly is now I

SPK05

I I I have a car. That’s two thousand six model year that has a map system in it and it’s of awful compared to my phone and my phone is just gonna get better I know it because it’s more it you down you know it is tolerated sell computer could do things yeah it does all kinds of things the screen isn’t on the screen isn’t that big in the car either but it it gets it it’s gonna get better in that regard as well as you we just saw with with the new I phones. And and so well and of course you have I pads as well and my concern with this car is where the white stick my I found that’s really become my obsession over which suction cup device ice slash they’ll so I was like but

SPK00

this this car has a has cup holders are you are you

SPK05

I know but they’re they’re a bit tricky to use in and out of the way but I do that so there there lot of the glove box first but

SPK00

interesting concession the someone on the way they I only bring this up because a a good friend of ours wife. They had five series B. M. W. for a while I think this was mid two thousand really to thousands and it did not have couplers and she was just very unhappy about this of course the car was traded for I think a japanese luxury car some sort that they have these things so it’s interesting to your point about

SPK05

yeah it’s a cup holders it that’s that’s one of the things I guess it’s a low hanging fruit in a retard but my point is about the the the the screen and intelligence of the device it they normally even this car also I’m ashamed to say it doesn’t even have auxiliary input on the radio so I or or sound system so I can listen to my I don’t know it little in and so it it it someone

SPK00

use to make a cassette a dad

SPK05

doesn’t that this I have a cassette over all possible yeah it’s C. D. but now but that’s it so needs is I need to get that every oh no no no

SPK00

it’s better right yeah yeah those are those are all those are adequate more they’re

SPK05

adequate and yeah but very very clumsy anyways

SPK00

anyway I but I I think so so we have all this going on in the legacy auto manufacturers and distribution and the game and all that and meanwhile this last week the there’s news that you know musk as cut a deal with the state of Nevada to build a gig a factory. And yeah

SPK05

you also said this stock is is overpriced right right well like ninety percent

SPK00

so we’ve mentioned this in the past that you know that in fact are the legacy people asleep at the switch well he’s just coming adam had on with this new capacity and you know it’s gonna be a few years but so where where is that how’s that gonna play outdoors I you know I

SPK05

he’s making these kind of bold moves that are there are there are you know the one looking far into the future. But sometimes you know so even the greatest visionaries who are right about their vision feel on their in their approach. So let me give you another example one on my greatest industrialist of all time whatever one of might be one of the greatest and one of my favourites is Henry Kaiser ocean and Henry Kaiser who is and sort of a these are sort of kind of industrialist genius low I by any other measure it was not a genius seems not we was not what well educated he was not particularly take the gifted in any kind of technical sense. But he built massive industries horrible study he he was a part of the building of the roads or on the west coast almost all the road systems from the from the pacific northwest to California had he had a hand in in building he built the road system or Cuba back before it was you know communist he built. Now that’s just getting started then he he was part of a six six companies I think that built the hoover dam. So he was involved in that message industrial project and that was during the depression and that during the war he then built the industry that build the liberty ships these are the the the ships that and and you know carried everything I wrote Fargo around whatever yeah something X. seventeen hundred ships in a couple years were built and he had to build the shipyards to build the ships and these should yours were built on on on marshall and that was not on using that includes self of separates us north actually in the northern part of San Francisco bay yeah right up near Emery villanova. Um and and so so he built shipyards that built ships in record time any record volume. He builds now in order for them to have the logistics. And supply and and supply chain for building ships at that rate he had to work out how to get steel and steal in the shapes and and forms needed to be assembled into shapes in those locations because at the time and he was building the shipyards most of California was not industrialised in California was agrarian. And didn’t have manufacturing capacity of any any significant certainly not enough steel around and so he have to build steel Mills he have to build steel Mills but then you have to have war for his deal also what we do keep the result mines to makes to get the for to get the steel Mills to get the ships yards to get the make the ships. And and and therefore you get the build railroads to connect all these things together but this is this is some amazing scale right he he was able to orchestrate in a vertical fashion something far grander I think than Henry ford it in the shorter amount of time of course we have a lot to learn from Henry ford yeah he leverage a lot of the knowledge that was built in the last you know in the decades prior to to doing that. But for personal such humble means he he he did an amazing job now mountains right literally literally move mountains and that’s eagle mountain in the in in California which is now ghost town but that that’s that was the or that was the mail that they sorry not the not the the mind that they used for for sourcing the steel door the behind or so anyway point is this that’s all that after the war what does Henry Kaiser do well in the meantime by the way in the meantime before I get to that in the meantime. He built the first H. M. O. and and the Kaiser permanently which

SPK00

remains today S. you wish to

SPK05

today remains it is also very innovative institution at the time was the first of its kind he need help care for is workers we created a health maintenance organisations that was widely copied still there’s his name now. That’s what he’d it created all that roads the railroads to damage to shipyards to mines and and and and so on everything in between and what a single after the war I mean after the war he he he gets is in they said to make cards yes Henry Kaiser gets into the car business now this is fascinating because this is this is a parallel to to test all because of the way. Here’s another man who’s a a great industrialist and that’s the old sense of the word he created in industries we created pay pal it creates many great things and he makes a car company because he really thinks he can change the world with cars not what he because the thought is that he would take over a excess capacity clad in fact he took over the willow run plant from Missouri force right right so they maybe twenty four seven that the time is probably the largest manufacturing site in the world. And they built they have built during the war something like I don’t know twelve thousand bombers us a ridiculous number maybe twenty thousand I don’t remember. But they they built this plan specifically in all the manufacturer for engine heavy bombers in the mass production fashion which was not possible for war can even make small aeroplanes and I can understand why and they’re making the biggest aeroplanes an assembly line. And it was an enormous plan with the runway in fact the whole airport adjacent to what the fly these things out of there. And and so you know he they have to have hotels for the pilots. But in the hotel their dormitories for the pilots that would be waiting in line trying to you know to fly to fly the planes out. So you know they have bunk beds laid out for for you know eight years all these pilots were essentially standing by to pick up the plane to be very out there not to mention the the the quarters for all the workers “’cause” this was built in the middle of nowhere anyway the war and he takes over this plucky buys it for for for peanuts “’cause” it was worth nothing there was excess that’s

SPK00

right we’re not building B. twenty fours anymore yeah so

SPK05

he decides to use the plan to make cars and he you launches of low and car you launches eight what we would call today disrupted idea. But again because he so he thinks at the end of the war the the car the industry to sort of the U. S. needs will need a lot more cars because consumers are are are have the in the star

SPK00

those are the supply right

SPK05

yeah and and and they’re they’re and and actually the problem was that’s but the big three had the same idea and so the big three are generating wrote gorgeous products while he’s try to do a low end product and again it didn’t work at that time the idea I had was a lotta Henry ford’s ideas about that adam now no idea and it didn’t fly. So it this is the this is the warning from history graded there’s no one could it would have bet against characterised for in nineteen forty eight fact known would have that as a guest and so forth because he came out at all industry to make yes alone over the bat against was that the lorry and when he locked the car company. But they all fail. They all feel the Kaiser this this was a flop check it out on on wiki P. D. A. Um you try to then replicate that in in Brazil that worked there either it you know it still didn’t work and Gloria didn’t work although they all feel for different reasons again it’s a question that they you know when you see a pattern is it is it because of a common cost fundamentally. So I I get a I. I’m not convinced not the giggle factory is again is about supplying yeah it’s applying a quirk core component so like it like I said I had before needed to build ships you didn’t have enough steel. So he built a steel plant and have all or for it. So you build an well mine and then he needed to connect them some people to railroad. That’s what he could do at the time so in the sense of mister. Um mask easy saying normal I’d love to make more of these cars I can’t because I know that batteries on the billboard that a battery plant. But it it the reason it worked in one context which was the war effort where government was was writing checks and there was the demand was essentially infinite them or the than the only the no matter how much you could produce the U. S. government would buy if there’s a war on but most of the war ended the literally the all the men disappeared it was zero them and so one from infinity to zero literally like two weeks between you know the end of the war and somehow the funny thing is that E. everybody was building stuff back then you know that it was gone and at some point you know you know you didn’t count on the war and lasting forever no no what no one the the the only question was when so sorry I was Reading as Reading allow you get this stuff now popular mechanics in popular science all these types amount to consumer magazines published in nineteen forties right in the war and it’s interesting to read the stories in the ads for for for you know training you know you know become become and you know become an electrician or an electrical their will or so well they’re all these things in that we’re saying yes you have a good job now these are the the ads right you have a great job now but what are you gonna do after the war ends and these were written in like nineteen forty three this is two years before the war ended. So we already two years before before the conflict and the people were like saying yeah I mean the project that was gonna happen that one when the when this is over it is of course the folks were back home that the ones in the in the in the far online yeah

SPK00

so so as we think about the gig a factory and some other topics we’ve discussed one of them jumped out at me recently this topic of inefficiency we’ve talked about that and a couple different contexts and I ran across a paper maybe a month or so ago by guy at the university of Texas and also want the you time they they have store one B. M. w.’s. S. A. V. acronym and re purposed it. So B. M. W. of course like Mercedes likes to use all these letters and things and so B. M. W. there S. A. B. is sports activity vehicle that these guys caller shared automated vehicle. So they interesting. So that they they concluded that if such a sure automated vehicle would emerge that we could remove nine of every ten cars from American roads

SPK05

she whatever and they call it Fred or G. M. or something yeah our tail

SPK00

yeah you know Henry is

SPK05

that we did in works two mean or to the japanese and the germans but more the japanese have very complicated names for their aeroplanes. I mean they would have a manufacturing name and then like that’s a Mitsubishi and then they would have a bunch of letters and numbers designating the the model. So you would have been the you know the Mitsubishi you know you know body three and five something like that. And the trouble was the americans had to identify these enemy aircraft and decide what to do with them obviously you know if you wanna fight that a fighter you wanna fight with them with another fighter you don’t want to tangle with them if you’re a number longer. So so so they have these ways of identifying the every pilot and and and airmen have to be trained on on on spotting aircraft and ships. So you look at a silhouette from above or from the side. And it was just just the as you know black shape on a white background and you were asked okay this was like a quiz like with cards a name what that what that is well if they found out that they couldn’t get the pilots to remember these complex designations of the americans came up with the technical giving them names. So it was the Java one guy to come up with these names. And he’s he he he created a nomenclature or way of naming things so that all the bombers got female names but in order yeah and all the all the all the all the fighters got mail name so the American like the American aim for the for the zero it’s actually that wasn’t it’s official males officially was seek. And and the the the nickname that the ploughs usable zero because it also had a a zero and it’s original designation but that you know so the the the biggest mobiles produced bomber was the battery the the the bomber that was used in pearl harbour to do the dive bombing with Nate and and so on and the funny thing is the funny stories that all these names when you read them they’re actually all southern America names because the guy was name. “’cause” job it was was from the south. So you could pick all these really your colloquial names. And and and you know that from the thing is that yeah for them on X. right for for the for the ability to remember you’re much better off with the name them with the number and in fact or specially a combination of crap the combination of numbers and inland digits. And this is why to this day cars you especially japanese and American cars and are named you know core role of they they’re not named you know the X. twenty five or something like that the Europeans stuck to the name. So they’re more complicated convention but but the the the the is so so I would be I would encourage anybody to when you decide on the product name to try to come up with something easy to remember another that not an acronym. And that’s just common sense but it’s interesting how how history conference but anyway so back to the S. U. V. right

SPK00

so the S. T. V. so I was thinking about your your comment your conversation with your nephew about interest and then them and so you know this paper this analysis is taking a look at the utility aspect of cars. And as I said they conclude that a fully implemented shared automated vehicle would reduce demand for the would eliminate nine to ten cars on the road I think about this every now and then when I’m driving around or travelling you just see all these cars just sitting there right I mean most the time they just set. So yeah and then I also read this week that California has approved Audi Mercedes in Google to do some some testing on their core try real cars in in that state but apparently goes done testing on private roads to avoid some of these issues so you know is is this confluence let’s say of of consumer change societal change and then some level technology is that we’re going to see

SPK05

I let only just play devil’s advocate for a minute because I think the the the the issue is that okay oh sharing is wonderful but why is it that more people won’t buy used cars. Um and and I brought to the was one issue is that you don’t wanna write in some yeah this is not my personal problem. But I’ve heard this from several places that people don’t like the idea of being in someone else’s space if you well that the list in it and was in the in the in fact that it somehow with with their prices and this is this is like a touch alerted the printer copier that the thing where they they they did a test between multiple used cars and part of the test or part of the challenges that they were they got some forensic expert to go through that and find all the types of bodily secretions of bodily degree from from from previous owners and of course if you look hard enough you’ll find almost anything and they used car. And then so the the joking that afterwards you know they have to wear has met seats to sit in their own cars causing knew what had been there the and another friend am I said I I R. as a friend of mine once why is it that you don’t want to buy a used car because there’s so much cheaper he said in that you know is nice away he he said he didn’t want to have a car in which other people have sex and had or had had sex in a so so job to be done there’s a job to do that and you know and I was like gee I never thought of it that way and that still doesn’t bother me but but the the this is the thing with share the there are people who you know are are are are not comfortable with public transport for because of that reason because it’s treated airspace and I I find that by the way very perplexing because the same people define writing in a in a in a in a boring or an airbus. And S. C. you’d like to guarantee files if you have a clean white snow a thousand people S. that on that C. and you can on that tray which didn’t get cleaned afterwards so so I I you know I I I don’t understand that so that’s why I love it playing devil’s advocate but there is a question in my mind and every how many people really think of the car as personal space and when you transition into being a shared a conveyance then you start to think of it as public and you don’t take care of it and you you you you don’t respected as much. And so it that then becomes a a vicious cycle because as a story circulate about what people do in these shared things than people want to use them anymore and so then then those who do use them are are likely to abuse them and and and songs it’s on your goals and I I I worry about that because in uni ideally do wanna have a shared vehicle. But the the thing to do is to make it feel like an aeroplane and not like a bus you have to make the the the make that job in in take that job to be done in mind. And the reason we’re maybe more tolerant of an aeroplane is because the crew comes through after each time you sit in that seat and then tied easy it up a bit not deeply but you know they clean it out and and they turn over the plane remarkably quickly by the way I mean they’re in there through that aeroplane like twenty minutes without even ten minutes sometimes that rose yeah sometimes it shows but it it you know you you you can’t you see and the you know in the better airlines you know you see that the seatbelt has been properly adjusted so it looks like it’s you know it crossed

SPK00

so rarity anymore yeah

SPK05

I I maybe that’s more your but you know that all the magazines that are supposed to be in the right back pocket are there that there’s no trash anywhere and it looks reasonably clean about what would happen with the car if there’s no attended that’s gonna come through people are gonna use it you know there’s there they’ll dull stuff in there but was thing but axes I mean at least during during a taxi right there’s a person there who you’re a wary of but if there’s no drive the driver you know how we gonna treat that space. So anyway there is this question of intimacy this question of space and how falls vehicle is to to something that that you use emotional right yeah it’s personal in that that’s where I wonder again maybe the shared model just will not appeal to I don’t know what’s what what is it twenty percent of the population that squeamish about that idea of sharing I I was met a guy this is bull I’m right and then again you your present life but he there are new Yorkers that lived in new York their whole lives. And there and you know just like new Yorkers are they’re they’re very careful or local but they’re they’re very good I think that they’re cosmopolitan that there’s more more used to their to the idea of urban life. Well he said this a this K. so he doesn’t he’s not listening I set my my mother has never been on the subway right right and I I think I think to me one of the greatest advantages all living in new York is that you have a subway to get on

SPK00

no that’s what a drivers for that

SPK05

well apparently and you know or taxis I suppose you know if you have the option you you know and you have the means you always hop into a taxi and and so this is the the puzzle is like new Yorkers word like standing in the rain trying to get a tax it of course you can never get it actually the rain and and in the sort of low exasperated you can never get attacked are able to get some with that what’s wrong with you about this or lost but apparently the they won’t do that and and I don’t know why I guess it’s it’s maybe they they they have some childhood trauma of it I don’t know so also

SPK00

a like wait a bit the their way where was but I saw discussion recently of if with these things changing eventually and cars if perhaps some of them will referred to the the Volkswagen bus model where indeed it’s transport but it’s also housing and you you could sort of envision that you know it so so I guess that’s what I’m saying one sort of speculating is will the jobs to be done change

SPK05

yeah it was that there was another story in B. B. C. where the about the fact that some guy had lived on Google campus for something like eighty days I saw

SPK00

that yeah right and right yeah

SPK05

yeah he basically bought a camper parked in the parking lot slept the there was a guy actually with the name above the camping actually slept in a station wagon. And and he had of although I think and you parted indoors I mean like an underground parking so they wasn’t even when there wasn’t. But the guy with the way the the the camper van you know put a little like astroturf in front of it had a little chair for that. And they had is a little fortune minimal picket fence and so he you made it into a whole scene but the the the the station wagon guy more more or less with surreptitiously. But the idea was that they would you know obviously showers and and the showers at the gym and all the fleeing from all right right. So in many ways they could get away with that but but there are many stories of people living in their cars and maybe that is a job to be done I think that it it it’s kind of scene in a in a very bad way that that’s the worst most desperate thing to do but at the same time campers can be very luxurious things. But there might be some job to be done where you could compete with a low level motel by having a and the C. D. or of station wagon or even the pickup truck with some extension to it turn into a you know a good have read. And and and and the clay questions is talking about this years ago about why is a where trucks and vans they’re commercially when you orient oriented towards contractors and and yeah you know people work on the door on the go and and these guys are literally that’s their office. So the they’re filled with other filled with scraps of paper and two Miles

SPK00

and all these rules and close

SPK05

and and so that there’s this there’s this this job to be done this like we’ll look at the mention just redesigning the interior little bit so you you you know you could turn to seek sideways. So it would only work when it’s parked right you turn a six sideways and instead of having next to you the bench seat or the you know the passenger seat which is never occupied right or very rarely ever right and then you turn that into little desk we decided which used or you have a filing cabinet you have a a a computer station you gotta plug in there for one twenty which is a simple inverter you attach that is off the shelf you you you plug in your computer you you get your your phone running on coverage right exactly and use you park at the site the job site where you park at that a parking lot somewhere and you take care all the paperwork you take care all the next job in the next thing you have to do. So that would be fantastic I think for a lot of a lot of this type of a worker but not all these instead they you know they they pack them in with entertainment options and entertainment is that what you know it’s not that were just that it’s a good thing to have but it’s not job number one that’s the thing that strikes me about that at the auto industry not having a job to be done mentality. They they they are they’re superficial and they’re thinking about what their customers are actually doing with the product and just shocked by discussing the and all they have to do is observed they don’t have to run massive of data gathering campaigns they just need to watch what people do

SPK00

indeed indeed and and I wonder again if if we see some of the the seeds of these things and we were left and and these other services that are starting to what a two more P. peer to peer maybe is too strong but more you leveraging existing assets you know the existing car fleet the drivers to share back in my undergrad days and perhaps yours you know you had a right board right and so maybe with the communications then this was kind of the just of the Texas and Utah professors that there’s enough communications enough tools now that you know eventually we’re gonna start eating away at the car population because we’re gonna dramatically reduce the jobs to be done

SPK05

or or at risk of increased resistance that that that we’re gonna be able to do a design cars for what people really me just on this notion of sort of living in your car and and I know that sounds like an extreme it I think it would be sufficient just simply do the office in the car. But my thought is just let’s take for example if you had a shared resource you rented the vehicle by by the hour or by the just either remote aversion miles. But the thing about it let’s say you are a college student and you’re you’re strapped for time or you read in the business person like in Japan and one of the jobs to be done for business men is that they have to go out of like and as a result I think have to they have to drink and then they don’t have transportation right right and and usually the trains don’t run almighty that so what they do they have these capsule hotels see you kind of its little idea space tie space to spend an I. Think it up you at john and and some shaving kit like everything you need and it’s a wonderful little job to be done I’ve got a you know take a few hours between three and an eight A. M. to try to get myself ready for the ready for because I mean I can make it home that imagine if it’s that you know you have these vehicles that that you call up in you know they’re like taxis but you get them all to yourself and you’ve been out all night and you say you know sort of this thing driving me all the way home which is really far away and I’m gonna pay for those Miles I’m just gonna rent that static. And I’m just gonna crash in the car for you know overnight. And and yeah you you know maybe you have to work out a way to price this thing so that doesn’t happen but I guarantee that people will use the vehicle as a space not as a transport transport and the space what if you want to just have a meeting you figure out well you know for the for me to have a meeting and we could have it in the in in the in and starbucks but I want I needed private. I can’t have anybody here and so what you do what do you what your option go rent a hotels a meeting facility no there’s no other place you don’t have an office your individual you are in the middle of the city get a car get one of these cars things. And then just market and and and have your meeting in there you know that would be that would be really twisting the the logic there because the job to be done is I wanna rent it stays and it so happens that that cars Macon spaces there whether prove their air conditioned recently right sure reasonably quiet private. They they you can move into a place that’s more appropriate if you want to so so that’s why I think the the this stays in the car is far underrated in fact the the car companies knowledge which is why they spend so much and interiors because you know people respond to that and we’ll pay extra if you have a great interior they say they’re the old adage goes that people are attracted to the car bites locks on the outside. But decide to buy it bites look something inside that that that once you sit in it is that takes you over the edge in terms of making a purchase decision this is why they get a get such a lavish interior but big but also this is a sales job it’s not E. the problem is to get the sales the or the purchase decision of the transaction done of course but if you can you need to convince somebody if you if you sound utilitarian product need to convince somebody of its utility and you gotta say you know the sales process of a train and all that to say well this also is your office but again once you get the shared model people are gonna read these things for their their their space value that’s really probably very likely

SPK00

well we’ve cover the a good “’em” ground from Mercedes maybe even abusing their letter system to the failure I guess you’d say of that I don’t know and revisiting jobs to be done which is been sort of a common thread through is sim car so thanks or so it’s it’s always good to catch up and we’ll look forward to nineteen

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Episode 18

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