Why petrol cars will not exist in 10 years

tesla charging

If you haven’t already realised, cars are no longer machines, but rolling computers. This also means that cars will move from being powered by fossil fuel engines to electric motors. It’s already started, and it is going to happen much more quickly than we anticipate. I’d go as far to predict that there will hardly be a petrol car on the road in 10 years. Here’s why:

When cars transition to rolling computers, the Law of Accelerating Returns applies. Innovation goes from incremental and factory-based to curve-jumping and technology-driven. You’ve probably heard of Moore’s Law – the maxim that states that computing power will double roughly every 18 months while prices halve. This maxim and many other accelerating technology laws will apply to the production of cars, laws which make the end product better and cheaper by significant degrees. The revolution which transformed smart phones, cameras, laptops, solar panels and flat screen TVs is about impact the auto industry.  Let’s take the pricing example of the Tesla Electric car range:

1st car – Tesla Roadster:  $109,000 (released 2006)

2nd car – Tesla Model S: $75,000 (released 2012)

3rd car – Tesla Model 3: $35,000 (projected – release due 2016)

Not only has each model been progressively cheaper, but also far better in terms of range (distance per battery charge), safety and features.

It’s the same pricing pattern we saw during the personal computing revolution. Here is where we get an entire curve jump. The Tesla model 3 is so cheap that an electric car is no longer a plaything for Silicon Valley types, but a viable new car option for everyone. This is because the switching costs get very close to zero. Why? Because the running costs of having a Tesla Electric car does not include the cost of petrol. (Tesla already have 453 free super charging stations and the cost to fully charge the battery at home is around $3). This means the average consumer can use their saved petrol money towards acquiring a brand new car without increasing their weekly expenditure. For example:

Model 3 Tesla

  • Cost to buy = $35,000
  • Avg petrol p.a. = $3,120
  • New funds available = 8.9% of purchase price.
  • Avg Cost new car finance = 6-7% unsecured interest rate.

When the Model 3 arrives, it only takes some creative financiers to change the landscape of the auto industry virtually overnight.

Want a new car at no cost?*

*Just give us your weekly petrol bill and drive away in a sexy new high tech Tesla!

It’s when this happens that we transition to an all-electric car world. The transition will be as swift as the smart phone – in a few short years, non-electric cars will be a lot like feature phones.

This is exactly how disruption happens. It’s not the product itself, but often the change in the business model around it which leaves industry incumbents blindsided. When there’s an opportunity for consumers to get into a superior product with low or no switching costs, they will always take it.

Buckle your seat belt.

The hidden asset base

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I was speaking with a friend about some of the great quotes from long gone captains of industry. J.D Rockefeller, Henry Ford, Andrew Carnegie, Benjamin Franklin and cohort. One quote that got me thinking was this:

“If I went broke, just give me my 5 best people, and we’ll be double the size in 5 years.”

I searched Google, Wikiquotes, Brainyquote and all sorts of places to find who it was with no luck. My buddy said it was JD Rockefeller, but I can’t confirm it is, or even find the quote. In the end it doesn’t even matter. What I do like about it is the layers it carries. Some of which are pertinent in an age of technology disruption.

  • The people around us are more important than ourselves.
  • The business is the people and the culture, not the infrastructure.
  • Business is ephemeral, skills are enduring.
  • It’s easier to grow with a fresh start, than with legacy constraints.

But above all it reminds us that our most valuable asset is what we know. Something which can’t be taken away from us, even when a business falls apart.

Yes, the robots will take your job, but…

Bison Hunter

…there are not that many bison hunters any more.

This is a very short way of saying that all jobs eventually get replaced by technology. Technology will take the role of many white collar jobs, just like machines have taken away many blue collar jobs, just like the plough took away many farming jobs. Technological Unemployment will always be a fixture in human existence – and always has been. It just so happens that it doesn’t sell newspapers (or provide click bait) to tell the truth that new jobs will be created. But it seems like a week doesn’t go past without a new report flagging the end of millions of jobs. So here’s a counter mind jam of some new jobs recently created that no one is writing economic reports on:

UX Designer, App developer, Drone Pilot, Crowd Funding Advisor, Smart Phone Game Developer, Blogger, Podcaster, Social Media Specialist, Wikipedia Moderator, Content Curator, Community Manager, Uber Driver, Airbnb Host, Web Videographer, Youtube Content Creator, Vine Artist, e-Book Publisher, Bitcoin Trader, Bitcoin Miner, E-Commerce Consultant, SEO Specialist, Genetics Counsellor, Sustainability Advisor, Citizen Journalist, MOOCs tutor, Big Data Analyst, Cloud Services Specialist…

And this list is just small sample set from my perspective. I’m sure your industry or worldview could make the list much larger. In fact, there are currently more than 500,000 app developers in the USA alone. A job that didn’t exist pre smart phone.

A simple economic fact is that if a person has $100 in their wallet, it still gets spent. In 1995 $10 of that $100 might have went into getting filmed developed. Now it goes elsewhere, maybe towards the cost of a smart phone monthly fee. The money always gets spent, saved or invested. The allocation just changes. And so do the jobs around those expenditure allocations. If you want to be future proof, I suggest you pay close attention to what your friends are spending their time and money on. It’s always where tomorrows jobs and startup opportunities lie.

The crazy thing about all those ‘new jobs’ above is this: They are all learnable, and mostly for free. All you need is these two assets: (1) The ability to read. (2) A connection to the internet (I’m guessing you have these). But yes, they all take effort. And no, the Government or your Boss won’t save you, or pay you to learn any of them. No one can do your push ups for you. But if you’ll make the effort, the rewards are there. The new jobs, and more importantly ‘business opportunities’ around them are ripe in these realms and they often pay more than job X did yesterday. Guess who earns more: A small screen UX Designer, or a Graphic Designer doing page layouts for a print magazine? Same realm, but a different iteration and attitude to learning. It’s really just a choice between taking advantage of the opportunities, or wishing the world was like yesterday.

Yes, the pace of change is scary. Yes, things are changing at a rapid pace, but it’s never been more possible to up-skill, re-skill or new-skill in the history of humanity. So next time you read a report on the impending doom of your industry, job or financial future, just remember that it is your decision on how it will affect you.

New Book – The Great Fragmentation – out now.

The leadership secret no one ever talks about

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And it is this simple maxim:

If you want to be leader of many, then you must first be faithful with few.

One of the most important sentences I learned from the late great Jim Rohn. And it matters in all walks of life and business regardless of our ambitions. The picture above is from an after dinner talk I did recently at a local Rotary Club. One of the things I have done a lot lately is deliver speeches on the technology revolution we are all living through. This is mostly the result of my book. Sometimes I get lucky and get paid to do it at a conference. But often I am also asked by local community groups who are interested in some of my stories. Which is what happened with Essendon North Rotary. It’s events of this size where I first got asked to share a few ideas and learn the craft of public speaking. In the startup community many times I’ve shared some lessons with new entrepreneurs. For more than 10 years I did unpaid speaking with tiny audiences… that is, the few people who had enough faith in me to give me their time so we could both have a valuable exchange. If it wasn’t for this, then I’d never be able to present in larger audiences like this. But on the flip side, we should never forget the few, even if we have the attention of the many.

It raises a few question of how we might behave in a startup:

Do you love the customers you do have? Are you faithful with those who gave you a try before you have any scale? And if you have many followers, do you still take the time to reply to the few who reach out? Do you still support the low profile few who made what you do possible, or just gravitate to the high profile few who you now have access to?

An easy way to test this is to tweet a famous person or brand and see if they respond. If they don’t, then they should be clear they won’t on their profile. I’m not saying every web tool can scale, I’m just saying we should be clear with our audience on what to expect. If you think it isn’t possible, I can tell you that Seth Godin still answers every email himself (he doesn’t tweet). I can also tell you that Cory Doctorow advises in his twitter profile of better ways to reach him. I can also tell you that Skype answers every tweet you send to them.

In the end leadership is about giving thanks and paying homage to the trust you’ve been granted by those prepared to take the journey with you, from the start. But it’s also about not be too ‘big’ to engage with those who helped you get there once you’ve arrived. It’s not easy, but the real job of leaders in the pre and post success era is to bethink both the few, and the many.

One thing in tech every business or entrepreneur with global ambitions should remember

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While only 39% of the global population currently have access to the internet, 73% of the global population (5.2b people) are already mobile phone users.

This means that the majority of the adult population will never use a desktop computer. They may never use a laptop. And that their world will inevitably be a small screen, wireless one. With the law of accelerating returns on our side, we must assume that within probably 2 years, all of these phones will become smart phones, and the number of people with them over 90% of the population. Already, many mobile subscribers are still yet to have access to running water, indoor plumbing and other technologies we’d falsely assume ought to come first. The order of things in the past, is not always the order of things in the future.

If there was ever a case for a business strategy which is So Lo Mo Me…

Social / Local / Mobile /  Me (as in the end user)

… then that time is now. Add to this the change of the Google search algorithm to mobile friendly and the pattern is clear. The small screen rules, even if it seems to be growing!

If the aim in business is to go global, it’s more important than ever to be mobile oriented, as the developing markets we seek to enter know of no alternative. Mobile is not only first, it is the only. If you want to see the state of the internet which includes these stats and more, I can’t recommend highly enough the annual state of the internet report by Mary Meeker – here.

New Book – The Great Fragmentation – out now.

This is still everyone’s favourite radio station

Ghetto Blaster

It’s not Rdio, Pandora, Spotify or iTunes – it’s still Wii-Fm.

What’s in it For Me?

I was reminded of this fact just the other week. I was talking to someone before I delivered a keynote speech. They told me they’d like to stay and listen as they needed a speaker for an upcoming event. We had a great chat, and exchanged details. After the talk I gave I never saw him, but to my surprise he sent me a text saying: ‘Great talk Steve, I’ll be in touch this week.’ A few weeks later I still haven’t heard from him. But because it was about me, it kept popping into my head every now and again. That’s cool, as we all know these type of conversations happen every day… we all have good intentions during such conversations but sometimes the day to day deadlines get in the way of opportunities.

I was clearly thinking about me. I was tuned into Wii-FM.

But just a few days ago, I was cleaning out my emails and I came across a number of things I’m yet to follow up on. Opportunities for others who are still waiting on me. So while I forget, I’m certain it pops into their mind and they’ll be saying – “Gee, Steve never got back to me on that. It’s a bit disappointing he has’t followed up.” It’s not that I don’t want to follow up, I just haven’t. And just like me, they’re also tuned into Wii-FM.

But have no doubt they are also are guilty of same thing. We all are. We all have our ‘oops forgot’ list. It’s no ones fault, we are all programmed to think about our world first, it’s a basic survival instinct.

For every opportunity we are waiting on, there’s probably more we can follow up on. We shouldn’t be ashamed if what seems like too much time has passed to actually do it. It’s better than never doing it. Maybe we can start the belated conversation with this little story, admit we are all human and start afresh.

New Book – The Great Fragmentation – out now.

Inverse goals & why you should set some

opposites

After about 15 years of doing work I liked in environments I didn’t like, I set myself some inverse goals. Inverse goals are the things we desire as a price of entry, as opposed to things we’ll acquire after the work is done. We might even call them unusual requirements for happiness regardless of monetary outcomes:

  • Not to have to shave everyday. (it really hurts my skin).
  • To be able to work when I feel like it, not 9-5 like the 200 year old industrial era said I should.
  • To wear whatever clothes I feel like, and not a uniform designed by someone else.
  • To be able to avoid peak hour traffic.
  • To be mobile and not stuck in the same location day in and day out.
  • To have my worked judged on its merits and not by my political performance.
  • To be able to actually read while working, without people judging this behaviour as flunking off.
  • To let the weather determine whether I work during the day or during the night.
  • To work in environments were I could be myself, and not a clone drone .

I literally tried to do work and be involved in businesses which would allow this kind of lifestyle. I feel like we often get things like this back to front. We aim for some kind of mythical economic success after which we’ll shape our lifestyle. But if we reverse the goals, we can have immediate success by first shaping our existence and then our economics around that. Life best lived, is life by design.

New Book – The Great Fragmentation – out now.