Episode 6

The following is Episode 6 from @oliverbruce.  Thanks, man!


 

SPK05

It’s Asymcar 6 today and Horace and I have a guest Steve Crandell. Steve joined just from central new jersey in Steve maybe you can give us a brief introduction of how you came to a simpler.

SPK05

Yeah G. M. I. actually about a year ago a friend of mine started telling me these stories about this league I or is on the same co and started me listening to the broadcast in following the blog unit branched off into the same car. Um yeah and I I have a natural interest in in transportation and have been following that and doing some kind of systems analysis work on transportation systems and there were so many of the subjects over things a a real interest to me that I I started sending emails to horace. And he responded in a email conversation started up so here I am

SPK00

Well just to just to make sure the audience is fully aware of who who’s T. V. what where you’re coming from can you tell us a bit more about right where what what you’ve done besides listen to to or five

SPK02

I sorry okay here is okay here’s the two minute version so yeah I am I I I grew up in Montana and I was fascinated by physics and ended up with the P. G. in particle physics and down that gee you cannot really survive on post sin being married at the same time so I I went to bell labs that except for a for a long time and in the nineties we started getting interested in physics calm down there we started getting interested in other problems and it became clear to me that in a day oh yeah

SPK00

sorry to interrupt the key for years you were at bell labs well

SPK02

I I was there from about nineteen eighty two and I it decision to became immediately research in about ninety five and I left eighteen T. research in two thousand two so so in the nineties we became it became clear to me that social problems were really hard really interesting so I started hanging around the some of the they have some really good outstrip little apology and sociology in human computer interface groups and I started learning from them. And I this that and the sort of the six was always interesting but there was this new class of problems and these technical social problems in transportation is one of them and you know the merging internet was one of interest eighteen T. and eighteen T. research got rid of the area I was in in two thousand two so fewest for the small consultancy and ever since I’ve been very interested in in systems problems and transportation problems is is a subset of that whether it’s cars or bicycles or combinations of everything or you know whatever mode of transportation and things that use energy you know the standard sort of a physics saying anything that happens requires use of energy so that’s interesting right

SPK00

frame or know you know can’t economists or this analysis as is user centred around the the the notion of conservation of of my it what’s not quite correct it’s a you know one value can be created so it’s not a zero sum game but typically if you if you if you follow the money you can get quite a bit of knowledge. I think the energy the the the the energy is the framework is actually very powerful method to look at other systems including ultimately even business but it’s something that of that you I I increasingly became so I began to think about what I was looking at at that these larger problems anyway I’m I’m sorry to interrupt So

SPK02

we will see one thing that you mentioned in our brief show email propose that you don’t go shopping that often right you only provide would and and I the sorrow maybe conclude you know is has the doom already set in for the auto because system because of all these other whether it’s energy or information factors of social factors you know what what your take on that well

SPK05

well in in my case we we made an effort to reduce our our car used to a very little figure that I mean I was very interested to know if you look at how much energy people use around the world and I wanted to use Denmark for whatever reason is kind of a reference that I just for curiosity if we could get down to that level which turns out to be extremely difficult. But we reduced our car used to about five thousand Miles you’re just by being careful and combining trips and this that and the other thing. But what we also noticed was along the shockingly we’re doing could convert online shopping and it’s shopping was fun and essential and and necessary so that kind of continued a lot of that is disclosed that can be done with so called active transportation you know active transportation is walking and biking and those kind of things where you’re using your muscles. Um but and some stores you it with ours and unnecessary commuting trips for the type of regular shopping we we’re doing it went to almost zero there’s still a big energy component because U. P. S. trucks corrected from Amazon can yeah right the Amazon prime is probably what pushes over the cliff

SPK00

so so what is the tables that then already I mean of these trends well underway that that you think that we will as a western society approach the danger is as other other factors at play

SPK05

I in getting down to the sort of levels are extremely a difficult we’ve got a lot of embedded use it’s it’s really interesting a really interesting way of looking at her she uses people a friend of mine pointed out to me that we don’t think in terms of energy we think more in terms of power empowers just the rate at which energy issues. So you you’d about twenty about two thousand calories a two today and that works out to about two point four kilowatt hours. So if you divide by the time you get average however person is about a hundred Watts that’s what you’re that’s what your metabolism requires. And so in in those terms the average American uses for you know all of your embedded use keep your house for running your car running what part of the government you have it’s about fifteen until kilowatts and so you know hot plate is about fifteen hundred Watts to think of ten hot plates turned on that’s average American dean is about six to seven thousand and so that’s an enormous difference a anyway but that that gets that gets far field but when you think in those terms you try do you find out where all of the inefficiencies are and and it’s it’s hard to change a lot of these structural inefficiencies

SPK00

right I one of the things that you brought up an hour also one are are pretty conversations was that when you think about vehicles and we we you know we we we call this a same car but the fact is that that’s a small part of the puzzle as you point out there’s there’s there’s a different ways to approach the the the question of energy and transportation. But one of the things I think that’s messed is the discussion about the network that cars depend on which is the road network one always just to synthesise the argument is that you know and matures talk about cars professionals talk about the roads. I think the the sort of the paraphrase the the old the story about you know armchair generals focusing on tactics whereas the real generals focus on logistics. Um the so my question is to what extent you pointed out this this dependence on the on the motor vehicle in the united states. But comparing to Denmark is not quite fair because the united states has been architect it in the sense that it has the the the land use and the the the the housing units are so widely distributed because it is such a young nation and and most of the settlement of land has happened in the last century during the time of the automobile whereas Europe was settled and and housing was established a a few centuries earlier so is isn’t there a problem with if you going to read are we think on transportation that you have to rethink housing you have to rethink even the question of of land use

SPK02

oh I I think you’re absolutely right in the there’s there’s there’s this great book the that are recommend by a guy named girls with called the big roads which looks at how the highway system developed in the united states here here we tend to think well you know Eisenhower solve that with interstate highway system but it turns out of is a very long and and rich process and that force the creation of a lot of communities enforced recreational suburbs and we really made America much different from from other countries and now we have countries trying to emulators and other countries still trying to maybe not make our mistakes and make their own

SPK00

it that’s one thing that strikes as as a still someone who’s lived in in several places in travelled many others is that how different cities are and architecture of cities and the course for example I live in helsinki. But I’ve also lived in many of the cities in the U. S. as well and the the once that I I had a friend who I’ve visited a Dallas fort worth I was actually that was but I you know I actually into D. F. W. and and I had to go to the airport to fly back out and that was sort of remarking at the distances I had to travel to the airport and my my my my host my my friend who told me about it said oh by the way this area is so big that it’s a hundred Miles on the ring ring the diameter of the ring road the round around the whole city wall and that and then I said all really nice and not only that but the D. F. W. airport is as big as Manhattan a interesting so that what I did was I what I went home and I took a Google maps picture that notice certain scale of the the D. F. W. area which is again the ring road around it. And then I I took and you know I I I I I I that was a a screen grab then and I I change the transparency so I could overlaid on top of it the same scale of helsinki. And it turns out that the Helsinki the whole city fits inside you thought the airport and and the whole southern Finland fits inside the F. W. metro area. And and so I you know here people are get very upset about the idea of having to to to commute or or travel across the city from one end to the other which we are sort of have to do because our son’s school happens to be quote unquote and I’m using quotes here because it’s across the city but that’s a twenty minute journey for us without traffic thirty maybe with traffic. And that would be nothing in in in many areas of the united states Los Angeles certainly you know Texas but even in in in them in in the northeast. Um and I think Europeans and I was visiting a friend another friend in in in the Netherlands and they pointed out yes of course maybe look take bikes to to every location everywhere they need to go they go by bike but the distances are quite short and yes the roads are great for it but there’s this question about how land is it how how spread things out are and by the way there’s there mega cities like do by sell all makes certainly yeah china you know shanghai which are enormous and and I you can’t imagine how someone might commute in those areas on bicycle especially because you know it’s also the the the climate. So but anyway just the thought of of you have to look at the the fact that some systems are not transplant a ball they just don’t work elsewhere right you you know so I don’t know how to think through this thing and we we see evidence of this with the with the with the fact that in the U. S. you can’t seem to get economics working for public transport or for for the the the rail network is for example which is I think a no brainer since there used to be one but somehow it’s still hard

SPK02

well you the thing I’ve been wondering about the that’s an excellent point the horse. This will the the change in our own experience roller technology revive maybe commutes because I I think certainly the the discussion has been the growth in the big cities around the world the top fifty cities you know we’ll have some huge portion of the population the next fifty two hundred years. Um but I wonder and that’s just pure speculation if in the next ten years if we do see tribal the cars become more prevalent that that will change the nature people’s behaviour and the economics of the more rural areas might become appealing based on changing the way people move around the least in the states Steve you have thoughts on that well you know this is just get bigger and the role areas will just

SPK05

because you know this is a this is a we we’ve kind of established or suburbs and you know it’s it’s difficult to think in terms of of flight from say suburbs to cities for example or vice versa because the cities are big enough to hold you know it’s a significant portion of the suburbs if that if that happens and then we have this huge embedded infrastructure a number that you can calculate and in several ways if you look at the percentage of the united states area including all fifty states including the water area about one point five to one point seven percent is strange. Um for for cars or for parking which is you know a a fair amount of land in that I was just an extraordinary amount of money changes change to that becomes hard oh formally what what you mentioned right prevalence cars making other other users interesting. I I I I think there’s a lot there getting from here to the dry rollers carnage you mentioned before in your last sure I think insurance issues and and getting the appropriate number of nines of reliability and it in all weather use it’s probably gonna be quite a bit more than ten years maybe we’ll we’ll we’ll see features of driver list cards come out number for the but that’s one of those technologies that may be a bit more delay than Google but maybe like to think but if it happened I I you can imagine all kinds of differences coming suddenly your commute is maybe not as boring you can handle traffic jams a lot a lot of possibilities there

SPK00

there was an article on rotors this weekend about the vietnam’s development I was there six years ago and they were talking about how the roads. And rail have failed to develop and again this is a a narrow country. And therefore the airlines are growing quickly because the city the city transport network just as bad and hasn’t developed and I’m wondering you know if if we’ll see that my sister spent some time in Germany and was talking about was much cheaper to fly from Berlin to Copenhagen you know it was to take the train. And yet again so as you think about these ecosystems will will other technologies arrive that change

SPK05

yeah I just wanna try monotonous “’cause” it’s interesting probably european perspective what the the real the perception and in in in in the U. S. is that that Europe has an amazing rail network and that’s of a very attractive form of transport and although it’s true it’s much much more developed in in the U. S. it is not a panacea the the costs for for travel on radio has have gone up tremendously right in the last few years and people are bitterly complaining about not just the the the the prices going up but the quality coming down. Um and that means delays and and and equipment breaking and so on. And I was shocked by this “’cause” I always thought it was utopia here in Europe that you know where people or or have all this convenience of public transport but it turns out that the cover the expenses are are escalating all the time these are infrastructure. And and labour issues that cannot be dealt with seen any disruptive way and so they tend to build up and build up and pressure. So in fact it with the the the peer pressure relief comes from air travel. So even in in Europe we we see no one really seriously considering a journey by rail for for any long distances anymore. And that’s wasn’t maybe the case if you knew twenty years ago

SPK02

yeah people if people in the northeast corridor at least talk about a great even around three hundred Miles if you’re within anything over three hundred Miles it’s probably reasonable flying the I unfortunately the line rates our instructors can be extraordinarily expensive depending on competition here. But for for flights and so sometimes that forces some long real rights I had to take a trip about a year ago to Rochester new York which isn’t that for maybe by road it’s well three hundred Miles the round trip airfare would’ve gone over a thousand dollars this three hundred mile trip and so I I took the train for a hundred dollars but that that the need to my journey through it right

SPK00

right right I mean here is the thing is that you have this this rise of discount airlines that that are both hated and and load Ryan air being kind of the the the poster child of that but there’s there’s many others and it really has changed I think the perception of value of of flights in in within your let’s not get too far down that road that whole I think the the what I wanted to to kind of and get get your take on the dusty was that on on some of these questions we’ve been tackling on a whether the the the current business model related to let’s say test la whether the the you electric or is it with a you wear each trash on drivers cars but the idea of electric cars. And different power train to being sustaining or disruptive and I’m of the opinion that what S. line bodies is is it is exciting but it is a potentially destructive unless the incumbents are really so incompetent and so powerless that they cannot respond I think it’s an actual it would be natural and then you know the industry for someone to say okay I see how it’s done this this test concept that’s just run with it. And I would imagine if it isn’t the the American auto makers that surfing the German or the japanese would have the resources and willpower to duplicate the effort and and essentially the the competitive what S. la what’s your take on that yeah

SPK02

I I I would agree with that I I mean test lose the the nice cars certainly to know a lot of work on it since the first one came out the first one was just a load a stroller that the the put electric motor factories and then and the the the forced to really allow them to do it was that laptop computers that made lithium I am batteries relatively inexpensive and I that kind of it it it made kind of a practical enough do you recall if you can spend approximately a hundred thousand dollars on it you can just get away with it. Um those prices are coming down the the battery prices the or a car or improving in the fairly slow array so seen this cool mass market it’s difficult to imagine that the what’s more interesting is looking at the manufacturers the card itself which although you know it’s been done in the state of the state of our robots and and all of these good things it’s a fairly conventional factory and the manufacturing techniques are fairly conventional there’s nothing really new there. Um the that nothing groundbreaking that’s going to really change the rule where where I think you might say test was doing some innovation they’re trying to break out of the concept of the dealer network and sell directly to people. Um and they’re fighting a lot of state and local laws doing that so that might be an uphill battle but the the alignments certainly very tenacious some person might yeah

SPK00

we we noted that it is well I think that that that is the a a an innovation if you well a a an asymmetry that is powerful but again if they succeeded breaking the the just value change yeah the the distribution monopoly exactly then why shouldn’t any other car maker follow and once I don T.

SPK02

yeah absolutely there’s no no they they don’t have anything that they they we don’t in in in a in electric cars probably in the next ten years efficiency improvements in that some of that will come from electrified cars. So you know like hybrids where you have a regenerative braking and and oh stop start and and I’m really running the turbo charger supercharger with an electric motor these sort of things. Um we use up a much higher percentage what’s considered an electric vehicles than I’m up your electric or a picture like tricks have a lot of desirable features could they’re not quite to the point where it’s it’s mass market and the to current approaches are really pretty much regular cars we just electric motors in them

SPK00

so what the natural gas you know you you would send us a note. Maybe a few weeks ago about I think one of our shows mentioned the pecans and then you know horse was wondering why the fleet Byers haven’t adapted gas power plants in in any serious way and I think you talked about the scale and the reliability and just change

SPK05

let’s talk almost some of them are but typically these guys have to timekeeper vehicle for a long time. And they look at the historical trends of natural gas pricing which is been extremely volatile I mean there are signs that it might be less audible in the future but you you don’t know in right

SPK00

it’s and expensive times yeah

SPK05

and so you need a specially purposed because this point you have to convert well now I guess for it should be will make you if you’re a large enough to require that make a a dedicated vehicle but the conversion cost for small flea or individual can be quite high in particular if you want reliability. Um it just didn’t make sense in in the in the I in the sense that we know pretty much how are their vehicles goals so it turns out the energy density of the compressed natural gas is is low compared to gasoline. And so you can have a pretty big tank like half of the back of your pickup yeah hundred hundred fifty Miles range there might be just fine for delivery vehicle the same can be said about electrics you know in in certain cases they know very much they have a range changes I use that something they worry about this oh

SPK00

yeah it’s “’cause” they they know exactly the weather

SPK02

gonna be doing linguist they’re kind of an ideal case and a few large places and decided to go with that I think eighteen T. which is headquartered you know write down a natural gas country yeah there there I I think they’re covering a large amount of their slowly. Um the time remains to right now the low price people treating that maybe use artificial and this whole the there is another point that I I made this user really actually managers are very very conservative and so I using

SPK00

is it’s just a matter of time and yeah that they’re not really the early adopters just

SPK02

the prices you if the economics are there absolutely is the prices continue low for four or five years you’ll start seeing a lot of people doing it

SPK00

yeah you I wonder about the the you know stepping back a bit to the jobs to be done question with cars as I travel and then I’m curious about your observations as well Steven horses I I see more and more food delivery trucks. And obviously as you you mentioned Amazon prime U. P. S. and all that so I wonder if some of the things we saw really dot com euphoria with web and if somebody’s delivery services you know reflect getting again another level of reduced usage of personal cars because more more services are bringing things to us whether at the office or home. And and if that only implications for that on the auto ecosystem and

SPK05

and and not to mention working from home and then and and a lot of reduction and in commuting for work yeah I think that’s

SPK02

yeah I I I think these are all all making changes and you know you’re seen less I guess the price of either price of gas in some in that the person get useful is news to display this model problems and all it’s a and mouth. And but but I there’s much less joy Riding then when I was a kid you know just idea of going out and driving in the countryside. And there’s this very complex phenomena is kind of the generation X. driving less and getting fewer licenses and it when you look at the literature people studied it seriously it’s very complex there a lot of reasons. And but clearly the joy ride in is is out people not having much money boys not because I mean is interested in cars as they used to be but when when I was a kid you know they’re the thing was to take apart your dad’s car engine like you my my dad wasn’t like that that one of other kids were and and people regularly modified cars and when end up with complete disasters sometimes it works but the cost was low and a lot of it is a natural way to learn about kind of mechanical engineering in car mechanics class become so complicated that’s removed. So the natural interest of a lot of a lot of boys and the girls who were mechanically inclined is shifted to other things so so you combine a lot of things. And see you I

SPK00

do think we have pick peaks with cars in terms of dry dry dry hundred Miles or or whatever the metric you want to you

SPK02

if you go country by country in the european countries and now the north American countries there appears to be a moment maybe about five years ago it was was probably peak are for the united states and pick mileage for five years ago maybe a little bit earlier in some parts if you’re a little bit later but right in that period now where where Miles driven seems to be dropping off

SPK00

and one that topic we you know we we should look at history I think a bit about how we actually we transition from different forms of transport and one thing that that we noted in a previous episode was how actually the the road network we we the conventions related to with the the even the the dimensions of roads and and a lot of the the legacies came because we had former four types of transport we had a horse why have horse drawn you mentioned that actually we didn’t go straight from horse to car that we went through a a he’s when when actually had a different machine can you

SPK02

yeah I think it’s really interesting I mean the horses are very expensive on things you need them around that are but to have one in the city is just an enormous expense. Um and so you hasn’t brought wagons and things like this but in the late eighteen hundreds maybe rowdy genie safe bicycle was developed to refer to them as a safety bikes which looked pretty much like a conventional by today. And from the world it’s torn through you’re gonna storm down through even even Japan and the united states and so you had cities that you write these days you’ll hear about Amsterdam and someone will say well fifty percent of the trips are taken a bicycle was much higher back at the turn of the century. Um so I I I they were easy to make thousands of small manufacturers started out the specially parts might be made by you some even started mass production rollie and in the in the U. K. starting to figure out how to mass produce some so it they they were cheap enough that people can use and and in the united states by the I made eighteen nineties several hundred thousand people would form an association to force rows in the united it’s road improvement just to just to move bicycles along. But it was difficult the raw he’s

SPK00

actually the bicycles were were usable only on paved roads typically although you could go of you know sort of a on a on a dirt track but it wasn’t actually save there it’s

SPK02

nothing like this so called mountain bikes of today by bicycle tires were rarely more than about an inch and a half white. So so they just wanted hold up on these sloppy olds plus some courses love surprises and there are any number of problems some european cities did come up with three small pavement and and breaks and cobblestones and and things like that and we’re able to sustain them for longer amounts of time but it it we created a a real desire and and early cars if you and Henry for was work on bicycles before we worked on the cars for you know in in so I don’t think he did it as a business but a lot of the small car manufacturers to start it up when this Cambrian explosion of carmakers female

SPK00

not to mention the the wright brothers were budget what we can yeah

SPK02

it it type people in the the mechanical engineering was very similar you just they made these some choir cycles and they they lash the two horsepower motor to it and and put on slides and some scenes in the way well not

SPK00

it. It’s funny because I it it reminds me so much of the way the computing industry when I see it the way I think of it so you have mechanical engineering for many decades a century even that was really but the the industrial revolution. But it was a large enterprise technology you you you you weren’t able to tinker much on your on your own with the steam engine they were massive things very very dangerous and and the people who who we’re able to make steam engines work where where essentially highly capitalised people the the the the interesting thing with the bicycle is that it brought it down to the average person who could not only old but could actually build or or or fixed or or improve on and that is very similar pattern emerged with computers because computers from nineteen forty till about nineteen seventy where instruments of of large business there were instrumental of the special radio yeah all the all of those all these stereotypes of of sort of centralised computing but in the D. that really boils down to having the money to to run a computer. And and so the microprocessor allowed computing to be done by individuals that electronics or I should say most circuit type of of I think we could’ve been done you know have radios and many things in nineteen fifties and sixties or a lot a lot of people who are doing their own electronics but the the the thing is with computing is that once you have the microprocessor then you actually had the first microcomputers being mostly hobbyist. And and so people were playing with these things. They were interesting for yeah

SPK02

it’s yeah it’s really amazing someone all of a sudden sees. Um see something and they’re able to jump scales in for a jump on the nature scale like I was thinking oh earlier we were talk you know about Henry for and he came up with this model T. which was kind of the Everyman score one of the beauties of that was that you know it was still very difficult to move them around in cities and and so you had all these people getting cars and wanting to have roads bill but at the same time. Um for recognise and a lot of these would be used to early so he made sure there was a power take off there was that you could hear the pulley on a shelf thinking about an inch and then so you could run various farm implements that what’s interesting if you roll the clock back to about the eighteen seventies farms we’re starting to grow in the united states and particularly on things like we for for ploughing it requires an enormous amount of area. And so you had to have these teams of forces are stories about teens of twenty twenty five courses. And the solution was to take a small steam engine miniaturised the steam engine as much as you got these things were still big we ten twenty times with big steel tires on them. And this would be a pharmacy mention and you could you could run a big pile with it but you also it was also a portable power source. And only the very big farms can afford it was an actual need but it could be scale. And stored in addition to making the the Everyman score managed to bring that feature. And make it desirable for for world Farmers and all the other Farmers who were always suspicious of city people in Texas for making roads and all this all of a sudden they wanted approach to sure

SPK00

so seeing this to repeat example but I have a good friend who’s in them like business around the world and you have talked over the years about the emergence of electric bikes the elderly and some of the countries in Europe and so it would be sort of see all these things chipping away at the traditional jobs to be done for you know others you know I I play taking a further distance faster and

SPK05

I don’t think so I think oh lot electric bikes are are are very interesting it’s interesting if you compare Denmark and the Netherlands in Denmark people you by some very short trips the the use them a lot but the average tripped solution kilometres more or less in in the Netherlands to use some for longer trips and the there’s kind of a competition between the two countries holland at the start of the balance for a long time is how these so called like super highways Denmark starting to put in their first in Denmark it’s more you use makes transportation you know you trying to your your bike into a bus or the train and or either that or you read a bike at the other end of the journey have a but in in the Netherlands there are people who are interested in what what happens is the distance becomes you know ten to fifteen kilometres that how do you handle that and so electric bikes are a good way to do it without sweat another thing that a merged although it’s more complex to take care of this the the streamlined by bicycle which is available Beal which can be electrified too and and so you can almost think of that as a very lightweight electric car that a human can assist in the in the movement of that and they’re they’re they’re still very rare but they’re extraordinarily efficient

SPK00

problems they’ve run to at least according to my friend is the the behaviour changes required right especially in cooler areas where no battery size is limited on these devices and then of course you have to keep them charge somehow so if you forget the charger well there are all these things so hopefully it’ll be working. B. D. I. phone or the smart phones will help with it’s

SPK05

not work you know and it’s funny you mention that I found in this ah there are four five by designs are sort of themselves inside bikes there so or from from particular revolutionary what exactly the

SPK00

actually thing so is like just go hopping back at history little bit is how the bicycle was actually a catalyst for the car and arguably even potentially for the prettier aircraft a and whether were seen that the catalyst between in the all will be laws we see today and whatever it emerges next might be the smart personal technology or might be the fact that all could it be something more that people can make their own things or could we be looking at the the the tinkering of oh people with with with you know you know this may sound a bit here brain but the the the printing all of your own cards or the ability to manufacture things modular the more easily that that would allow people I mean people can build their own cars interior I mean it’s not technology that that today you know if you use if you use I was just browsing and I found that of course I could go by any number of kit cars online a problem you know cobra replica too many other kinds of sports cars but I I think see the question in my mind is do are we seeing the potential for that we had this this at a changing period during the late nineteenth century when right with the safety bicycle came the new industries of automobiles and and their craft and the the late twentieth century with the microprocessor we had the emergence of the personal computer and later the mobile computer which all started as as essentially garage in the industries. But anymore you know became global powerhouses just like you know cars being the car company became the largest company in the world general motors right in the middle of the twentieth century and the largest company in but market cap is now apple presumably and so the the the the the history of the emergent industry being enabled by by essentially hobbyists are we gonna see that again with respect to transportation is it going to go through another transition where the the do it yourself or others are actually going to be it’s it it does it sound crazy

SPK02

ah well for if you’re talking about something which takes the place of what people consider a car. I don’t think it would happen here because they’re so tightly regulated. But if it’s I you know safety regulations and and things like that. So you can build like a car or you can build a very small volume manufacture car. Um and and get away with that you can get around the the safety requirements. Um but if you’re going to do anything which then tries to scale it might be more difficult if it’s something that’s transportation but is not quite in that area and and this might be you know just the bicycle plus cluster size and you know or

SPK00

exactly something isometric something that that story that’s

SPK02

very doable and and you know it’s it’s interest you know bicycles the there are several thousand custom bicycle makers in the country who can make two frames a lot of them now specialising carbon fibre which is extraordinarily expensive but like like way. Um but a lot of them are going back to to steal and some of them are are going to titanium which is light and and is is very serious. And but we’re seen is the versions of the extremely technically sophisticated classes people who can build things with frames and their brushes. And so if you have an idea and you don’t have these skills yourself you can go to your local bicycle maker and if you’re in a town of a hundred thousand or more there are gonna be one or two and you can have this thing framed a and you know if you need custom wheels made there or or tires I should say there are places in Ohio and which will do it for you. Um so yeah you could put together interesting vehicles could emerge to pieces and I think but

SPK00

the the the the court with the clock or question though is that the there’s something that capitalises this in the question in my mind is that it it is it information technology that it’s not just the the with the you might say the the the nostalgia of all building your own things but actually what you are building or you’re able to build is actually asymmetric it’s better in some ways worse in many others but it’s better in some crucial ways. And it allows the the the the paradigm to shift one I by the way I mean I I I we often are critical of all that stuff but this actually proves somewhat order is consistent with the point that here is a do it yourself type of person although heavily capitalise highly highly you know billions of dollars involved but nevertheless we had the emergence we have proof of existence hero of the emergence of a new car company from from which was impossible for it was and as you pointed out it was made possible by innovations that happen in the computer industry and then wasn’t in computers per se but rather in the batteries. So you know there’s something potentially happening here maybe maybe the size of the the model of course and we had many filled business models in the beginning of the can of the of the car century. And and so I still wonder how we’re gonna go through this transition I think it’s mysterious it’s something that will be imperceptible as it has it happens about the obvious one it when it’s finished there

SPK02

is actually an interesting emerging class of vehicles in the U. S. in other countries that now become quite regulated user off road a T. V. three four Wheelers even Danny on the wall street journal reviewed one I think it was a player Sir john deer. And these things go up to seventy five Miles an hour the four Wheelers they’re thirteen eighteen thousand dollars but they have become quite regulate it so I I think you see the challenges of approaching. This justice to the current market at least in terms of using the publicly available road so maybe we’ll see innovation in the service chain in horse you when I’ve talked about this before as the information later versions. And we see perhaps the the P. car five years ago so maybe the auto companies or somebody and there’s interloper might step in with more of a service model

SPK05

and everyone more thing that the it started just I just remembered that this this this phrase the human the car took thirty years before the model T. right we had the the the the the the bands happened bargain which was I think eighteen eighty six where and the model T. nineteen well yeah teens it’s not twenties then the the sort of hit its stride and and in between we had the the bicycle and what interesting actually I think you pointed out this deep to me as well is that actually cars sorry forces which are the predominant there so we have we have a emerging cars we have a boom around bicycles and we have horses them around for a long long time and certainly you see these new technologies are people get really excited but they’re very very low penetration and forces in the meantime continue to grow and in fact he course occurred in the twentieth century occurred actually I found the data in the in the book which we should we should refer to other to to to our note it’s the rise and fall of infrastructure is by Arnold Google or who D. he shows a lot of data and I I solid chart in there would show the P. course in the united states occurred in nineteen ten yeah

SPK02

so and that’s the other thing about forces there was this need to replace them because they’re just so expensive to to keep up and it’s interesting that the railroads were always seen as you know they’re going to do away with horses and when we’re rose came. Um courses actually increased because they didn’t solve the same problem that they didn’t all the last mile problem there were there were train stations in front of the kind of all houses. And it increase the amount the dump arms could put out so you needed more courses to where the farms so trains actually I actually it into that rising force curved. Um but it’s it’s so we we you

SPK00

just just to recap we had the invention of your movie or in the eighteen eighty six and the the the really a ramp up you know we think that everything just split but it took thirty years you know a little for for for truly the the the manliness treated the yeah the Mormon mass market lane that sort of early stage of the of the the fusion curve or whatever you want to call it to really take off with cars that of course the world is very different today. But it’s in the speech of things are are probably faster especially take along the technology adoptions but the but the world is also much much bigger than it used to be and and and the the ceiling of the adoption what a hundred percent represents is much much bigger than it used to be right. So so yeah so I’m just wondering if it’s a time issue whether this transition although we’re we’re we’re finding it hard to put our finger on is it happening or not but are we giving it enough time

SPK02

to like what is a rising I think you’re I think that’s a really interesting point because you know we look at know some people look at the explosion of cell phones are smart phones but you know if you’re if you’re being honest you really have to trace it back to a portable radio telephony which goes back to the fifties and so there was this extremely long just learning curve and a lot of experiments and then it was eighteen or nineteen eighties before people sorted out how to do cellular networks and even in the late he’s eighteen T. internally decided that you don’t know more than a million people in the world whatever you somewhat let’s a off our assets in so these these things timing

SPK00

is everything vision I I like to say this all the vision is worth exactly nothing without time things. Uh it’s it’s unbelievable and it’s extremely frustrating to someone who’s actually analytically minded because you can see things easily in advance that things will go a certain way I mean I I I remember because I was I was you know and they nineteen ninety nine I was I was convinced that that computing would be something that would fit in your pocket it didn’t you know it didn’t help either

SPK02

oh event or I go I what you mention

SPK05

should go on my tombstone I’m just

SPK00

a I were like it was actually doctor warlock the founder of but adobe to the first first I heard him say that although I I don’t think he invented it either so these said something along those lines that you can foretell the future with a hundred percent accuracy it just as an awareness yes

SPK02

absolutely right but you know I when we think of the future we tend to think of these self driving cars insured vehicles and I and in the there are all kinds of obstacles I have to think of what what about a third world place where people are starting to become communicative Leah right a friend of our young friend of ours losing cameron. And something like ninety percent of the of the people under thirty and this is a terribly or country have access to cell phones on the spider phone penetration is that much but somehow. She’s running a low and then tried smart phone. And you know so she’s she’s very used to these sort of things. I have to wonder if people start there and right now they’re kind of the stage where they’re moving in the there of course tracks for businesses and things like this but no one can afford anything with them over on it if you get a lot of money you get a motorbike but that’s about it. I have to wonder if this new notion of timeshare vehicles which we’re starting to see and you know stage yeah if that scheduling technology in a more efficient and usable should

SPK00

always pulling as we talk yeah I

SPK05

have the ability to make miracles inexpensively locally of all of those things start to come together we might see the members and really unlikely places like like Africa or you know hold a reasonable and statistics like that first

SPK00

well but we just saw last week that talk to announce the perhaps a rethinking of them national so maybe it is timing I mean you can

SPK05

what they say I didn’t I missed out what really posted

SPK02

on the river the sales are bad and and cars are selling for maybe four five times as much so much better than the and you know maybe it is a network problem or but

SPK05

you know that that’s interesting is I I what I heard about the thought that again I I felt it wasn’t going to be disruptive and then the idea behind it an interesting I think I don’t know how much it had to do a questions and by the way because I think he he is or was on the board of data but it I think it was on the board of talk to consulting but maybe that that’s irrelevant or or very relevant I don’t know but the point is that I think what they were trying to do with the no no it was very much following the rule book on disruption. But it didn’t work and this is this is where I I struggle with how much the theory actually is being applied or whether the series showing an anomaly here the the problem with the than all and I I I again there’s a video you can watch somewhere I think that national geographic did on how the national production line is set up the the the the they’re probably a several the documentaries that they have been down to about them and also you can find out quite a bit the interesting thing was that again they used exact same production system for for and then they simply squeeze this much costly could out of it but it was still very much a same process same same tooling same you know whether you make the oh I’d like to put it this way whether you make an at all or a portion or Ferrari unless it’s carbon fibre but more or less they’re all done the same way and and and that’s why I felt that unless you address production in a disruptive way you’re not going to get a disruptive product at the end of the process well

SPK02

they Steve jobs according to to maybe think a bit differently about those I don’t know what the topic was a few years ago but it was something about usability or behaviour and he said the mortality rate will take care of this and perhaps when you think about thirty year cycles you know whether it’s steam power or the or or transition some of it is simply anthropological right it’s people’s behaviour expectations changing and maybe the young people getting fewer drivers licenses and being more comfortable with social interaction via network

SPK05

I I don’t know because I think one of the proposal let that the that’s this this to go quick critic of non animal firstly because you’re using a she sheet metal process you’re going to have to cut corners to such a degree to get this thing economical at that price point. But it’s going to come out as a very boring car and so you end up not just boring but it’s a it it it for for a performance and and it just not sexy you mean you’re not hitting the buttons all the buyer in a way that that they they they did some analysis for I remember this is a one of these of these anecdotes around them and was that they thought why not make it a three wheeled vehicle because it could you can squeeze more cost out of it and the answer they got back was that no one would buy it and they couldn’t get the the the answers out of these buyers why couldn’t would should buy three will cut just said no and it turned out that they they they did some jobs to be done analysis then you realise that many men would buy a car in order to to get married in order to attract a woman somewhat and that a three wheeled vehicle fill in the category a scooter and that was a working vehicle about a family vehicle only just is not socially acceptable but taking that further than that old doesn’t become socially acceptable one put next to a proper and you know regular looking car that had that has all of the aspiration all aspects of of you know four doors and and and and and whatever attractive styling you get with the with the with the regular car the point I so I’m not gonna be little the the the design but the the the the point is that because of the process they couldn’t push on the audible all style. And and I think if I had they re architect at the production system around the modular architecture that would allow them to style the vehicle more in reaction to what the market was telling them the point wasn’t that well sorry we’ve got a dog in terms of style the point is can you make a car but you can adjust after you figure out what this what the market wants and and that could not be Donna with a sheet metal stamp process yeah you have to investing billions of dollars in order to to get it set up and run think

SPK02

that’s an excellent point I when you’re making nearest standard sheet metal car used are worrying about getting your design finalising including the dice ready about three years before production so the production cycle in the united states for new models is about six years something like that to five would be really pushing the and Audi likes to talk about eight years ten years between models it it it’s extremely expire

SPK00

this a platform to and of course the way they do it is they they create a platform which is usually the the the floor plan with the with the front and the back of the car maybe with slight adjustment and we’ll we’ll base that you can you can you can do after you’ve set it up but these are platform concepts and then you do certain styling on the sheet metal on top but the fundamentally you cannot really change a pickup truck into an economy car you know you maybe change a pickup truck into an S. U. V. or actually pick up is the wrong wrong example they’re usually frame based but let’s say you know an S. U. V. sort of many S. U. V. into a the crossover or whatever these are possible during an eight year cycle the problem is when you really when the market like especially in the me in you when you’re trying to go for this type of a non consumer and you’re try to figure out in Asia or in Africa working out all these details because you can’t ahead of time yeah oh all these top to be done is I mean logical job it may turn out and I think you know a lot of brands in the U. S. or or Europe went through this we need to know the Mustang didn’t know it would be a hit product and and the creating a whole new you know category of car around this sort of only car concept or the muscle cars are are in Europe that the super manes and and the the the some of the category surprises that created icons that that nobody knew ahead of time when you when you read these biographies of these people who created these great brands whether they be the he had five hundred or the or the mini or or the volkswagen. So they were completely caught by surprise in terms of success they never engineered these cars because they thought they would become mass market icons famously Volkswagen was almost killed by by the British who took over administration of the buildings which which of what books bargained then you know it was only serendipity that allow the whole thing to keep going some some some officer in the British army sort of you know was exasperated and then decided just like what we gotta do something with this. So there’s a lot of these funny anecdotes and I think the the point is that if you if you you if that’s the way the world works that it’s mostly that you discover something by chance. You’ve got to have the flexibility in your designed to allow for that zoom generation emerge yeah oh yeah I

SPK02

yeah I think that’s so so if you look back to the Cambrian explosion one when cars for a meeting you know stays there was a point where there were more than a thousand car manufacturers. And I mean that was you know the average car manufacturer would fail that was kind of like the average Da bomb on the internet company would fail I have ever

SPK00

ab software cup. So so you guys that failure. So experiment he

SPK05

was a lot of that level but once very company and establish can experimentation is more difficult unless you have the platform I I think one interesting thing about the the top and then at all the that someone pointed out to me in India if you’re if you’re kind of in the area where you kind of for one year aspiration on your probably here probably rising I yeah hopefully rising you’d like to think you are and horses pointing that you know you might do it trying to get married or something like this. Um you’re you’re trying to project a rising every so somehow they completely cheap and it down and they they made maybe if they made but it motor scooter would have sold I

SPK00

but it it was the right idea let’s make a really low in car and change the change of the the the way cars are made that’s a great noble goal the problem is that because you’re stuck with the production system yeah you not able to adjust once you go down this path by way another questions and man tries that you need to have a plan to learn that’s how he calls it or you you did this the the the the idea is that as you shouldn’t arrow he has this great diagram is let’s say you set a target and you should an arrow but but during the arrows travel you have these powerful magnets and imagine arrows sort of has some iron in it really powerful magnets and end up pulling the our remote left or right away from the target and this that’s the market giving you information as as you as you go on your journey and and all the data proves that every startup that succeeds is probably diaper did dramatically from its initial plans it was only lucky or server what what was it was able to succeed only because he was able to to to survive changing itself over that period. So the the idea is for for his a is a device would be too large companies is is to somehow be magically flexible. But if yeah if it doesn’t work right we know that the problem the problem though is when you when you are setting a goal to be disruptive then you saying okay we’re gonna make a super low cost vehicle it might work in India maybe it’ll work somewhere else we don’t know but let’s get going on this path the the I. The the the the way you should do that I think I believe is that you actually redesigned you manufacturing process not to say let’s just make the actual cheap car in existing factory model we have and because then not only can you not change the design after we young you know you you you you you green lighted but also you can’t change the volume in case you’ve actually screwed up or you realise that you don’t have enough capacity or you have too much capacity. So that there’s the problem of scaling is well that that the current production system does allow it’s either on or off and and you you have to have market you success with the how certain number of units otherwise the whole thing is pointless what what if you know you you you have double the them and you have to build two factories or have to them and then and then you’d actually shut it down because it doesn’t make sense to operate at fifty percent capacity so that’s the problem and and the thing about tats are is that I I think this is another cause to the or or issue with with the with with that with the product was top that was actually an incumbent they wear a manufacture of course one of the largest and India and therefore they look at the problem and they said that we shall apply existing techniques to it and not they were not an entrant in that sense and that’s the trouble also with the chinese when you see the efforts of chinese auto makers they are not disrupted essentially are copy pasting quote unquote best practise is from the west but the building it locally and and to the point where you’ve of course they actually mimic the cars well or or about right copy the designs. That’s not the disruptive approaching life anyway that’s my around you know no. So somewhat sounds

SPK02

we we see many things changing around the auto ecosystem from cultural changes societal changes you young people getting their driver’s licenses too many things that Steve pointed out which are energy changes and and Dave urging use cases for transportation. So we don’t know that we don’t know the timeframe but it seems as if procedure there for for big change and perhaps we are just five years past the peak are as you said Steve

SPK05

yeah yeah we all have to be botanists and the other looking to identify these scenes

SPK00

exactly exactly well it’s been a pleasure to chat today and Steve thanks for joining us for is in I

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Episode 6

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