Understanding Industry Dynamics

I've been digging into the auto industry since I joined Simpler a few weeks ago and have come to appreciate the complexities of how consumers, dealers, manufacturers, regulators, and software vendors interact with each other. It's been a nice reminder of how important these relationships are in understanding the status quo and the future of the industry.

If you've ever wondered how the car buying experience came to be what it is today, for instance, it's important to understand that dealers, their employees, and manufacturers have a love/hate relationship with each other. This American Life does a great job of laying this out in 129 Cars, a great podcast about a dealership on Long Island trying to hit their monthly sales goal.

There are a lot of reasons why the car buying experience is less than ideal before a customer even shows up on the lot. Manufacturers and dealers squabble over issues like inventory allocation and CSI scores (Customer Service Index, not Crime Scene Investigation). Dealers and their employees game each other every step of the way to pad their paychecks. Monthly goals with huge financial incentives override improving processes and long term strategy. It's a mess.

At Simpler we're interested in data in the auto industry. As a result, we're mapping out the relationships both inside and outside the auto dealership to understand all the moving parts. There are quite a few. Software is moving from on-premise servers to the cloud, regulatory agencies are scrutinizing lending and data privacy practices, hackers are more and more active, and customers are armed with better information. We're excited because where there's change and uncertainty there's opportunity.

Before you start cranking out thousands of lines of code I'd recommend that you follow Mark Suster's words of wisdom to Skate Where the Puck is Going, not where it is today. Identify industry experts, trade organizations, regulators, investors, customers, and vendors to map out the industry landscape. Most importantly, dig into the details to understand all the intricacies. I'm reading everything I can get my hands on, writing on this blog to help organize my thoughts, and am talking, talking, talking to tons of people in the industry.

If you've got other ways to get acquainted with an industry, I'd love to hear about them in the comments!

Google Announces Android Auto

Android Auto was unveiled this morning at Google I/O, Google's annual developer conference, with the announcement providing several clues about the direction that auto manufacturers will be going with the technology. In-car technologies will never be the same.

The driver's Android device, typically a smartphone, will be the heart and soul of how Android Auto works. Once the device is connected the phone will "cast" to the vehicle's in-dash screen. Android Auto is designed to work seamlessly with the vehicle's dials, buttons, and touchscreen.

Making the driver's mobile device the brains of the system has several important implications for in-car technologies moving forward:

• The product development lifecycle for in-car software will no longer be tied to the product development lifecycle of the car itself, which can be as long as 5 years. In-car technologies will no longer be outdated as soon as cars roll off the lot.
• The in-car experience will be as personalized as the mobile experience, as Android Auto will have access to just about anything that is already on the driver's device.

The presentation was light on detail but a live demo showed off key features including music, communication, navigation, and voice recognition. The SDK, which allows the developer community to create Android Auto apps, will be available soon with functionality initially limited to music and communication. Expect to see Android Auto enabled vehicles to show up on dealership lots this year.

The Open Auto Alliance, formed earlier this year to collaboratively create Android Auto, has expanded significantly to include almost 30 auto manufacturers and a group of technology partners, including Google.

It's fair to say that many are seeing the connected car as a key component of the Internet of Things (it's no coincidence that Google sandwiched Android Auto between announcements for wearables and televisions). With Google's Android Auto and Apple's CarPlay both officially in the mix, I can't wait to see what happens.