Carmakers need to let go of their musty business models and start thinking like 21st century companies—like Google -excerpt from

Detroit Should Get Cracking on its Googlemobile

Carmakers need to let go of their musty business models and start thinking like 21st century companies—like Google

By Jeff Jarvis

If Google (GOOG) ran a car company, what would it look like? What lessons of Google's singular success in the Internet age might apply to remaking this, among other failing industries? Would the Googlemobile be the product of stealth and secrecy or openness and collaboration? Could Detroit release cars in beta? Could cars be ad-supported and free? Is there any hope for an industry that traffics in atoms instead of digits? Would a Googley car company even make cars?

A few years ago, it might have been absurd to look to Google for ideas about the auto industry. But not now. American automakers are in crisis. General Motors (GM) and Chrysler needed a $13 billion bailout from the federal government in December to keep them out of bankruptcy, and, with a new Administration in Washington, the Big Three are likely to head back to the well for billions more. They're suffering from more than the economic crisis. The huge declines in sales reflect a fundamental disconnect between drivers and Detroit. It's time for a radical rethinking of the way U.S. automakers do business.

I sat in Detroit some time ago and suggested heresy: I urged the car people to open up their design process and make it both transparent and collaborative. Car companies have no good way to listen to customers' ideas. If they had opened up, years before, I would have been among the legions who'd have gladly told them to invest 39 cents for a plug-in car radio so we could connect our iPods. Every time I try to listen to my music or podcasts in the car via various kludges—FM transmitters that can't transmit to a radio an inch away and cassette-tape gizmos—I curse car companies and their suppliers. At least let us help design the radios you install, I urged.

THE BIG THREE DON'T WANT TO HEAR IT

My suggestion was sacrilegious because automakers have long been secretive about design. Design and surprise, they think, are their special sauce. That's why they cloak new models like classified weapons, setting off games of cat-and-car with photographers who try to scoop the secrets. Apart from the most fanatical car fan, do the rest of us still care? The excitement I remember about a new year's cars—like a new season's TV shows—is gone. Cars have lost their season. They rarely engender excitement or passion. An Oldsmobile is no Apple (AAPL) iPhone, after all. How could a car company again win our affection for its products and brands? By opening up, by making the process of producing cars transparent so it could involve customers, by turning out cars customers want because they had a chance to say what they want.

Google listens to us and trusts us when it releases unfinished products as "betas" so we can tell them what to do next. That's the approach behind Google News, Gmail, and the new Chrome browser. The company also lets us tailor searches so we turn up only images or book excerpts. And Google pays attention to us by using our clicks and links to determine rank in search results. The more people who connect to a blog post on the best recipe for lamb tagine, the more prominent Google will make that Web site when people hunt for dinner ideas.

Google wants us involved in the creative process; Detroit doesn't. On Peter Day's BBC program In Business, Richard Florida, author of Who's Your City?, said Detroit's car companies were "destroyed" by "a management mind set that said, 'We know it all, we don't need anyone other's ideas, and we can do anything we want with our companies.' "

Car companies have let customers make emblems for cars and create their own ads for certain models, as General Motors did with the Chevy Tahoe in 2006. GM Vice-Chairman Bob Lutz has blogged. Chrysler has solicited customers' ideas (in a closed forum that prevents them from commenting on each others' suggestions) and created a customer advisory board of 5,000 selected drivers. The problem with these efforts is that they don't allow customers to affect the product openly. An idea presented to Ford Motor via e-mail or to Mini in its popular online community might influence a decision that will come off the line in a few years. But we'd never know it. Indeed, these preliminary attempts at interactivity seem aimed at keeping the customer from doing harm. This is interactivity as defined by a children's museum: Here are the buttons you may push without breaking anything; knock yourself out, kids. But just as companies should hand over their brands to customers, so should they hand over their products. Let the customers make the cars.

SAMENESS IN AN AGE OF EXPRESSION

What if just one model from one brand were opened up to collaborative design? I don't suggest that design should be a democracy. But shouldn't design at least be a conversation? Designers can put their ideas on the Web. Customers can make suggestions and discuss them. Designers can take the best ideas and adapt them, giving credit where it is due. I don't imagine customers would collaborate on transmission design—though a few might have good suggestions if given a chance. But they would have a lot to contribute on the passenger compartment, the look of the car, the features, and the options. They could even get involved in economic decisions: Would you be willing to give up power windows if it got you a lower price or a nicer radio? This collaboration would invest customers in the product. It would build excitement. It would get the product talked about on the Web and linked to and boost its popularity in Google searches. The approach could change the relationship of customers to the brand and that would change the brand itself. Imagine that, the collaborative community car: our car.

A car company could take an existing brand and work with the community that already exists around it. Go to Facebook and you'll find communities of greater or lesser involvement and affection devoted to many car brands. I stopped counting the Facebook groups for BMW when I hit 500—including the "If the BMW M5 was a woman I would marry it" group, with more than 800 members. The online gatherings site Meetup has six clubs where people organize get-togethers for drives in their Beemers. BMW also has an official car club offering 75,000 members rebates on cars and discounts on Brooks Brothers clothes. (Do they see the demographic humor in that?) These are the company's best customers—its partners. BMW should solicit their help in designing cars, in giving advice to fellow customers (there's a little of that in the club forums), even in selling cars.

On Facebook, BMW invited customers to color pictures of its car. It's hard to imagine something more children's museum-like than a company enticing adults to color cars. But more than 9,000 people submitted their designs in only a few days. What that tells me is not just that they love their BMWs but that they would love BMWs that look different—BMWs that express their muses as well as their libidos.

What an opportunity the industry has to bring humanity and personality back to cars. If so many of us like to express ourselves in blogs, YouTube videos, Facebook, Bebo, MySpace, and Flickr—if, as Google understands, many of us want to have a strong identity online through self-expression—why wouldn't we want to express ourselves through our cars? Companies have turned their products into commodities by imposing such sameness on them. I know, it's about efficiency: four models built under four brands on the same body with the same parts, making them cheaper. But the joy of customizing our own cars was taken away by factory efficiencies and dealer economics: We buy off the lot, not out of the factory, and we buy cars that are often loaded, like cable subscriptions, with things we don't want. Sure, there's an aftermarket of options—piney scent strips, hubcaps that spin, mud flaps with mirrors in the shape of naked women—but, well, that's just not me.

Toyota's (TM) Scion moved toward personalization when it let drivers design crests for their cars. Now take the next step and imagine I could take an unpainted car to any of those designers on Facebook or my student the graffiti artist and have my car painted so that it looks like no other. It'll cost me. But I'll bond with that car and love it because it's mine, an expression of me. That unpainted car would be the beginning of an auto company thinking open-source. What if the company also produced a car onto which I could graft another company's dashboard or seats or grille or engine? I tell news organizations to do what they do best on the Web and link to the rest. A car company could do the same.

Google replaced its fleet of company cars with Toyota Prius hybrids modified so their extra batteries could be recharged at solar charging stations. There is the Googlemobile. Google treated the Prius as a platform. Toyota should be delighted. It should build in opportunities to modify its car in countless ways. I can hear the objections: It could complicate production, raise costs, raise prices, confuse brands. Maybe. But it also could give me the car I want. The car company of the future could be a platform on which drivers create the automobiles they want, instead of settling for what's available.

There are projects aimed at building the open-source car, among them OScar from Germany, the c,mm,n (or common) hydrogen car from universities in the Netherlands, and the Society for Sustainable Mobility. But it's damned difficult to get a car company operating at scale. Atoms are a drag.

"NAVIGATION AND ENTERTAINMENT"

That is why I think a car company that already operates at scale should go open-source and welcome these nascent efforts to build atop them. Imagine seeing a million Priuses, Saturns, Fords, Accords (HMC), or electric Apteras on the road and wondering what's inside each one, what makes them run, who painted them, where you can get that great grille: cars no longer as mass-market products but as the product of a mass of niches. Imagine being given the power to customize your car from the ground up. Cars would be exciting again. Such openness would give me control of my car so I will own that brand, make that brand, love that brand, and sell that brand because it is mine, not yours.

That will be the key to marketing Googlemobiles: passion, love, individuality, innovation, choice, excitement, newness. Drivers will not only help design cars but also sell them—better than any car salesman can. They'll start Facebook groups, blogs, and Meetup clubs extolling the wonders of the cars they choose—no, make. Outside product designers and manufacturers will accessorize and improve the open-source car—just like outside developers have created thousands of software applications for the iPhone—which will support new businesses and help sell more cars. There is the advantage to being a platform as Google is a platform.

Creating a platform is a key reason for Google's success and it can apply to many industries. Craigslist founder Craig Newmark is doing much the same thing with the classifieds business. He created an open, easy-to-use service, and then let users do pretty much whatever they wanted with it. They've taken Craigslist in directions Newmark could have never imagined. What if cable companies, banks, even universities let the people have that kind of control? In the Google age, when anyone can talk about you, your product becomes your ad and your customers your ad agency.

I discussed my rationale for the open-source car platform with Fred Wilson, a partner at the venture firm Union Square Ventures in New York, and asked him what a Googley car company would look like. After thinking a moment, he said it already exists. It's Zipcar, which provides 5,000 cars to 200,000 drivers. Customers join Zipcar for $50 a month, then make reservations online and pick up a car in any number of garages, paying $9 an hour or $65 a day in New York, including insurance, gas, and 180 miles. One can get similar rates from traditional rental companies but with less flexibility and convenience. Zipcar says each of its cars replaces 15 privately owned vehicles and 40% of its members decide to give up owning a car. I know what you're thinking (and can hear the peals of laughter from Detroit): The last thing a car company should want is fewer cars. Are you nuts, Jarvis? Are you a communist or some tree-hugging fanatic? No. I'm just turning the industry upside-down.

When I asked adman Rishad Tobaccowala, chief innovation officer of the ad giant Publicis, which works in the auto industry, what business car companies are really in, he said it's not making cars. He channeled the Googley car company and said: "I'm in the business of moving people from place A to place B. How can I do it in different ways? And as they are moving from place A to place B, how do I make them feel secure and connected?" He said that aside from sleep, we spend more time moving around than at home. And what is the automobile really about? "Navigation and entertainment," he said. Not necessarily manufacturing. Manufacturing is expensive, vulnerable to commodity pricing, labor-intensive, and competitive. There's the tyranny of atoms vs. digits.

What if a car company became the leader in getting people around and it used others' hardware: planes, trains, and automobiles? I tell your system where I need to go and you give me choices at various price points: Today, I can take the train for less. Tomorrow, I can drive because I'm running errands. The day after, I'll carpool to save money. This weekend, I get a nice Mercedes to take my wife to dinner. Next week, I get a chauffeur-driven car to impress the clients. Along the way, I can pay for options: my entertainment synced in the car, wireless connectivity on the train, alerts to my iPhone, a navigation concierge who directs me around traffic jams. This is the new personal transportation company, a platform built on the old car company model. Hop aboard the Googlemobile.