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Experience and Education Set the Foundation for Leadership.
This is a detailed breakout from our recent report on the Corporate Innovation Imperative, over the coming months, more will be revealed about how large companies are behaving like startups –while using their unique capabilities as a large organization.
Attracting the right talent for innovation is a challenge for corporations competing with shiny, agile startups, as is long-term employee retention. Innovative corporations are building innovation talent pools by offering interesting programs, intrapreneur growth, and worthwhile incentives. Because, without a focus on attracting and maintaining innovation leaders, corporations are left seeking a hero to guide their journey toward change.
(Above graphic, from the recent report The Corporate Innovation Imperative, download the partial version as full version is for Crowd Company members.)
In the report, we analyzed more than 140 LinkedIn profiles of individuals responsible for corporate innovation in varied industries and countries in order to create a persona of the average corporate innovation leader. Use these characteristics to guide your hiring and talent acquisition process, as well as
In the report, we analyzed more than 140 LinkedIn profiles of individuals responsible for corporate innovation in varied industries and countries in order to create a persona of the average corporate innovation leader. Use these characteristics to guide your hiring and talent acquisition process, as well as gauge when leaders may be seeking opportunities for advancement or new challenges.
In the report, we analyzed more than 140 LinkedIn profiles of individuals responsible for corporate innovation in varied industries and countries in order to create a persona of the average corporate innovation leader. Use these characteristics to guide your hiring and talent acquisition process, as well as gauge when leaders may be seeking opportunities for advancement or new challenges.
The term “Tundra” emerged as a common theme among corporate innovation leaders, as they described company culture, and specifically, middle management as the “frozen middle layer” or “Tundra” or other similar metaphors of a dense, rigid, cold layer. A more biological metaphor included “antibodies” that are designed to raise barriers to corporate risk. These are very creative, passionate, and motivated professionals.
Key Stats of the Corporate Innovator Persona:
- Time spent in current role: 3.2 years. This shows that innovators need to know the business, as well as internal stakeholders, before generating new ideas. They must have credibility to sell up to executives. Many were recently hired from the outside, to shake up the inside, some have entrepreneurial backgrounds.
- Duration of career: 18.6 years. Corporate innovation leaders aren’t fresh out of college. Rather, they have the experience and know-how to align minds and departments around change. Corporate innovation programs often rock the boat, and change agents need to have direct experience steadying the mast and pushing forward. Much of the success of innovation teams depends on internal alignment among tangential departments, like legal and marketing, to move from ideation through implementation.
- Number of industries in career: 3. With experience comes a desire for variety. Our research uncovered that throughout their careers, corporate innovation leaders will apply their learning to further multiple areas of the business ecosystem.
- Percentage with “innovation” in title: 61%. Not only do the majority of leaders have “innovation” in their current title, but 40% also had it in their previous role. This indicates that innovation requires a groundswell before reaching a level where resources are allocated toward dedicated leadership. This slow growth trend of innovation leaders reaching senior levels is also reflected in the fact that only 4% have the title of “Chief Innovation Officer.”
- A highly educated cohort: 46% have an advanced degree. With age and experience often comes higher educational degrees, as is reflected in our finding that nearly half of corporate innovation leaders tout at least a master’s degree.
Mature corporations understand that an innovation program is only as good as the employees behind it. Follow in the footsteps of corporations like Verizon, which has multiple innovation teams in various business units, each with talented members dedicated to both ideation and execution. This helps them move efficiently to prototype and launch new innovations.
Also focus on talent retention, as there’s a commonplace and ever-present threat that your best and brightest will be poached (or, at the very least, approached) by competing corporations or startups. Leaders at mature organizations consistently ask themselves, “Are we doing enough to keep our most innovative employees happy?” The most effective incentives tie employee progress on innovation KPIs directly to pay structure.
I’ve even heard from these innovation leaders, that they’re willing to risk their jobs at their companies to make significant changes, despite butting up against the culture of non-change. One leader commented “I’m backing on my employability –not my employment” when I take risks. This entrepreneurial mindset is a key one to properly manage, and clear internal roadblocks for if an employer wants to retain these go-getters.
If you want to connect with fellow corporate innovation leaders, we, at Catalyst Companies have hundreds of members that have this specific role, in our peer to peer council, who meet at our events, online, and beyond.
Our latest research report is now available, which was focused on how large companies are internally getting ready for the many waves of technology disruption that are here now, and coming. Companies need to be ready, with a dedicated innovation program –not just knee-jerk reacting to each new set of technologies that emerges. We asked a number of companies on how they defined innovation, and heard this common pattern:
“Corporate Innovation Defined: Doing something new that solves customers needs –even if it may be in conflict with your existing business”
We’ve made a high-level partial version available to the public on slideshare, but the full report is limited to our members at Catalyst Companies. Over the coming months, we will publish other insights around corporate innovation.
- Download the report on Slideshare (or see embedded below)
- Join me on a Webinar to discuss the findings
The Corporate Innovation Imperative: How Large Companies Avoid Disruption by Strengthening Their Ecosystem from Jeremiah Owyang
- The top challenges companies face in corporate innovation include: fostering an internal culture of experimentation and innovation (57%); juggling competing internal agendas and goals (56%); overcoming the middle management “permafrost” layer (45%); and moving forward despite deferred commitment and delayed action (33%).
- Though 61% of innovation leaders have “innovation” in their title, only 4% have the title of “Chief Innovation Officer.”
- Corporate innovation leaders aren’t fresh out of college. Rather, they have an average experience of 18.6 years, culminating in the know-how to align minds and departments around change.
- There are 10 types of corporate innovation programs that companies pursue: corporate innovation team; innovation center of excellence; intrapreneur program; open innovation; innovation excursion; innovation outpost; technology education; external accelerator partnership; startup investment; and startup acquisition.
- The most commonly deployed corporate innovation programs include corporate innovation teams (78.9%); innovation centers of excellence (61.4%); and technology education (54.4%). This shows that companies are first focusing internally on building the right teams, getting governance and processes in place, and educating current and new employees on emerging technologies before spending resources on rolling out external programs or investing in the startup scene.
- The most common metric attached to innovation program success is increased revenue (66%), though that can be a fallacy metric if weighed too heavily too soon, before innovation programs have the chance to prove real ROI. Other top measures of success include greater customer satisfaction (54.5%) and faster time to market for new products or improvements (45.1%).
Who we Interviewed:
In addition to surveying large companies, we interviewed over 44 leaders at large companies, or at companies that closely partner with them on innovation initiatives.
- 500 Startups || Khailee Ng, Managing Partner
- Accenture || Jitendra Kavathekar, Managing Director of Open Innovation
- Achmea || Ilse Harmelink, Marketing Partners and Digital Marketing
- Adobe || Cindy Springsteel, Vice President of Global People Resources Business Partners
- ADT || Robert Beaver, VP Technology and Innovation
- AXA || Guillaume Cabrere, CEO AXA Lab in Silicon Valley
- Cisco || Alex Goryachev, Director of Corporate Strategic Innovation Group
- Colgate-Palmolive || Jenny Gomez, Marketing Director of Innovation
- Comcast || Danielle Cohn, Director of Entrepreneurial Engagement
- Electrolux || Heather Hanson, Global Head of Marketing Technology
- European Institute of Technology || Patrick Consorti, EU-US Industry Partnerships
- Fujitsu || Kevin Krejci, Business Development and Alliance Manager
- Fujitsu || Mohi Ahmed, Senior Director of Open Innovation Program
- Galvanize || Ryan Nadeau, Director of Special Projects
- GE || Alex Tepper, Managing Director of GE Ventures
- HP || Vincent Brissot, Head of Channel Marketing and Operations
- Ideation || Charles Lee, Founder and CEO
- Johnson & Johnson || Melinda Richter, Head of JLABS
- Leroy Merlin || Stephanie Hajjar, Head of Innovation and Entrepreneurship
- Mastercard || John Sheldon, SVP, Group Head of Innovation Management
- Nestle || Mark Brodeur, VP Digital Innovation
- Nexxworks || Peter Hinssen, Founder
- Nexxworks || Laurence van Elegem, Marketing and Communications
- Nexxworks || Steven van Belleghem, Founder
- Pilot44 Labs || Andrew Backs, Founder and Chief Innovation Strategist
- PostNL || Michel Bagli, Team Lead of Growth Strategy
- Protiviti || Jay Thompson, Managing Director
- Protiviti || Steven Massengill, Technology Consultant
- Rocketspace || Canice Wu, Director of Corporate Innovation
- Savvy Millennial || Savannah Peterson, Founder
- Sparks & Honey || Annalie Killian, Director Human Networks
- Stanford University || Reilly P. Brennan, Executive Director of REVS
- Swisscom || Gregory Leproux, Managing Director and VP Business Development
- Swisscom || Stefan Petzov, Principal Architect Swisscom Cloud Lab
- Swiss Post || Lorenz Wyss, Head of Ideation and Idea Management
- Swiss Post || Theirry Golliard, Head of Open Innovation and Venturing
- TD Ameritrade || Sunayna Tuteja, Lead Digital Strategy, Experience, and Innovation
- The Intrapreneur Lab || Milan Samani, Founder
- Visa || Shiv Singh, SVP Digital and Marketing Transformation
- Walt Disney Co. || Duncan Wardle, VP Creative Inc. (former)
- WDHB Strategic Learning || Sam Mueller, COO
- Wells Fargo || Darius Miranda, VP Innovation Group
- Wells Fargo || Nathan Bricklin, SVP Head of R&D Strategy and Experience
- WL Gore || Linda Elkins, Leader of WL Gore Silicon Valley Innovation Center
We will continue to publish research on disruptive trends, our next report will be on the Business Models of Blockchain, and more insights from the Corporate Innovation imperative will be shared, be sure to subscribe to this blog.
This may come as a shocker to many, but in the next few years, the peer-based sharing/collaborative economy will shift to automation.
I’ve studied this market closely and want to make some clear predictions on where things will head. Four years ago, I mapped out the Collaborative Economy, which is the phase where humans get what they need from each other (peer-to-peer commerce). In the next phase, the Autonomous World, robots will augment and replace humans, and they will serve humans. In some cases, robots will serve other robots as we advance further.
The transition from traditional business models to the Collaborative Economy and ultimately to the Autonomous World is already creating ripples throughout the world. We are in the midst of global disruption due to widespread mobile Internet and cloud technology, vastly improved processing power and Big Data, and the rise of the sharing economy and crowdsourcing, according to the World Economic Forum. These changes have prompted new waves of geopolitical volatility and the creation of a new middle class in emerging markets.
These innovations are now spawning new energy supplies and technology, the Internet of Things, advanced manufacturing and 3D printing, and societies that live longer — all of which are quickly altering expectations about the future.
The next turn is likely to produce robots and autonomous transport, AI, and breakthroughs in advanced materials and biotechnology. These represent a new frontier that may only be a few years on the horizon. WEF posits that the world could look fundamentally different by 2020.
Let’s indicate how timely this is, and how it lines up with what we see.
How the Collaborative Economy will shift to Automation
| Category | Automation Phase | Examples | Impact |
| Ride Sharing (Uber, Lyft, Didi, Ola) | Self-driving cars are quickly emerging, most by 2021, from many car manufacturers | Uber has experimented with cars, Lyft’s bold pronouncement, and Didi | Professional drivers will need to upskill and find a new career |
| Delivery (Postmates, Instacart) | Wheeled and flying drones will deliver packages, beyond humans | Starship, based in my area, is delivering food, and Amazon’s patents are inspiring | Postmates, Instacart and other couriers will be displaced by robots |
| Home Sharing (Airbnb, VRBO, HomeAway) | Home automation will enable hosts to offer hospitality without being present | Airbnb could offer digital locks, Wi-Fi management, digitized home appliances, and more | Hosts can manage more properties, and guests get a personalized experience |
| Online Service Marketplaces (Upwork/Freelancer) | Simple AI bots will complete rote tasks currently performed by online service providers | While a plethora of early-stage bots have emerged from M, Alex, and Watson, advanced AI to conduct intermediate tasks hasn’t emerged | Online workers will need to specialize their skills for project or robot management, human-based design, community skills, and humanities |
| What’s next? | Anywhere repetitive tasks exist but could be automated | Simple machines will replicate human behaviors | Jobs will be lost, so humans must upskill or specialize in humanities |
The implications of these coming changes will likely have a profound effect on the people of the world. Here are some concrete observations:
- Only some, not all, humans will be able to upskill, unlike other social economic revolutions. Humans could grasp industrial revolution roles as we shifted out of agriculture because they were taught single repetitive jobs. The challenge now is that robots will always learn faster than humans, as they are networked and can process faster and work at an accelerated pace.
- The world will need solutions to unemployment. From a nonpartisan standpoint, the next threat to Western employment isn’t offshore workers but the rise of automation. Predictions from the former White House administration predict that automation could replace 83% percent of lower paying human jobs. The impact to other nations that will develop these automated technologies are also at hand, they must prepare for changes in society and their economy. Humans will need to redefine what purpose means, for those where human labor is the primary driver.
- The impetus to push for universal basic income is at hand. The experiments are happening in Finland, Oakland and more, proposing such a policy would provide every human — regardless of age, gender, educational attainment, or intelligence — with a guaranteed living wage to cover basic needs: food, shelter, and clothes. For anything else they want, they will have to earn it. The companies that own and/or profit from these technologies should be taxed to cover this societal benefit. The robots should not only provide more resources to the planet for cheaper, but they should also fund a quality life for others.
- Who will maintain employment: Those who manage robots, humanities, nonlinear roles. While we actively try to teach our children coding, technology is quickly advancing that robots will be able to self-code. This means that understanding how to manage systems of robots towards solving problems will be key. Secondly, arts, humanities, entertainment, sports, psychology and other softer skills will rise to the forefront as skills that are needed. It’s assumed that robots will replace many repetitive and rote jobs, humans that can solve complex tasks that are constantly unique, will thrive.
In summary, Uber, Lyft are ushering in self-driving cars and a wave of automation that will cascade across the broader ecosystem as humans are augmented then often replaced by robotic systems.
Welcome, this industry newsletter shares key market changes, in a twice-monthly publication, curated by Jeremiah Owyang, Founder of Catalyst Companies™, you can subscribe to the email newsletter on the footer of the homepage.
Delivery Drones Hitch a Ride
Innovative technologies are bringing drone delivery closer to reality — by offering drones a ride. In a 2014 patent just recently unearthed, Amazon has plans for a 45,000-foot-high drone mothership that would enable individual deliveries to save energy by gliding down to their destination, then flying to a smaller airship for the return trip. Read more about it on CNET. Meanwhile, Mercedes-Benz has developed a futuristic delivery van that can automate onboard package selection and pairing with a drone through a roof hatch. The mobile drone base would boost last-mile delivery productivity by an estimated 50%. Read much more about plans for the Mercedes-Benz drone-equipped delivery van on Dezeen.
Western Union Connects People’s Emotions Too
There’s more to Western Union than connecting people financially, and it has become the core strategy of the legacy brand’s social media. New VP of Global Social Media, Brand and Engagement Karen O’Brien has discovered a powerful connection with customers around their feelings of being torn between two worlds — and the affinity they hold for the brand that bridges the vast span of miles. Read more about O’Brien’s road to Western Union and her social media epiphany on Forbes.
BMW Joins the Self-Driving Race to Market
Catalyst Companies member BMW is joining both the self-driving and ride-sharing frays with plans for autonomous vehicle tests in Munich this year. The initiative will begin with 40 test driver-controlled cars offering ride-sharing services in inner-city Munich. The upscale car manufacturer sees the opportunity in autonomous ride hailing and has tested the waters in Seattle with its pay-by-the-minute ReachNow service. With self-driving cars, BMW aims to leverage its premium reputation and expertise in managing fleets. Read more about BMW’s plans on Reuters.
Share Your Blockchain Experience With Us
Contribute to Catalyst Companies’ cutting-edge research on blockchain and its coming opportunities across the entire spectrum of the business world by sharing your insights. Catalyst Companies is seeking qualified interview subjects to inform our next report on the implications of blockchain in and beyond its Bitcoin-based role in financial services — think smart contracts, electronic medical records, secure transactions, digital asset management, Internet of Things and more — as well as the obstacles to its implementation. Read more about what we’re looking for and how to submit your name on our founder’s blog.
We want to hear from you! What are the market impacts of this week’s news stories? Email Catalyst Companies™ Founder Jeremiah Owyang directly to share your thoughts.
Image from Pexels used under Creative Commons license.
The future of Airbnb lies in creating memorable guest experiences, and brands will benefit by complementing these experiences in relevant, valuable ways.
Since attending Airbnb Open in Los Angeles a few weeks ago, I’ve been contemplating what Airbnb’s announcements around shifting toward experiential hosting mean for both guests and corporations. Guests will find authentic travel experiences that complement their hospitality choices, while corporations will find opportunities to partner with Airbnb and sponsor these entertainment and cultural adventures.
During the event, executives from Airbnb revealed a few interesting data points:
- The average business traveler stays at an Airbnb for six nights
- The average Airbnb host makes $7,530 per year
- Travel spending is nearly 10% of global GDP ($7.2B)
- Airbnb had 40M guest stays in 2015 (see graph below), in 34K cities in 191 countries
With guests staying for nearly a week at their hosts’ abodes, many are looking for immersive experiences in the local scene––activities and sights that can’t be booked through a travel agent or seen from a tour bus. There are already more than 600 experiences available to travelers through Airbnb! The company is also experimenting with on-demand car delivery for off-the-beaten-path travel, as well as prepared food delivery.
What does this mean to you? Corporations have the opportunity to connect directly with tastemakers around the world, inserting their brands and products into diverse experiences with lasting impact. Let’s explore a few of the potential industry opportunities:
- Consumer Goods: Airbnb is the world’s largest showroom, with the goods in hosts’ homes used to influence buyers as the level of trust between guest and host are high.
- Retailers: These new “experiences” mean that local retailers will be visited in cities, led by the hosts and tour guides.
- Hospitality and Travel: For hotels, this new offering is about the entire trip, and they’ll soon offer flight deals and cars, in addition to experiences and homes.
- Food: Food will be delivered directly to Airbnb locations, and continued on-demand food models will become important.
- Finance: Hosts are generating a modest amount of income per year, but need money to upgrade their locations, an opportunity for small loans.
What does this mean for all companies? Today’s modern customer is seeking experiences, they show off using digital technologies, and access to physical goods is easy with on-demand models, rather than ownership of a house, car, electronics and more. Established companies need to revisit their strategy to provide customers with experiences that connect to the real meaning of why customers want platforms that enable new adventures and more.
Welcome, this industry newsletter shares key market changes, in a twice-monthly publication, curated by Jeremiah Owyang, Founder of Catalyst Companies™, you can subscribe to the email newsletter on the footer of the homepage.
Uber Picks Up Team for New AI Labs
A team of 15 artificial intelligence scientists and tech pioneers recently piled into the back seat of Uber to help the ride-sharing company accelerate its machine learning toward self-driving cars, aircraft, and robots. Uber’s acquisition of Geometric Intelligence officially launched its new AI Labs division, based in San Francisco. The new cutting-edge researchers will be led by Geometric Intelligence Founder and CEO Gary Marcus, with the goal of moving people “radically faster, safer and accessible to all.” Read more about the Uber acquisition.
Amazon Go Puts AI on Grocery Shelves
Swiping technology from self-driving cars, Amazon has created a self-calculating shopping experience where customers can simply check in on an app, grab what they need off the shelves and go. Being launched with an early 2017 rollout at 2131 7th Ave. in Seattle, Amazon Go puts together computer learning, deep learning algorithms, and sensor fusion to cut out the lines, checkouts and cash registers of the typical shopping trip. Order totals are automatically charged to customers’ Amazon accounts. Learn more from Amazon’s introduction video.
Tyson Foods Looking to Repackage the Future
On the brink of a CEO transition, Tyson Foods is looking to spice up its product lines with fresh and new offerings picked up on the startup market. Its all-new venture capital fund, Tyson New Ventures, is getting $150 million to sample startups in alternative proteins, food waste elimination, and innovative tech trends. Tyson New Ventures follows in the footsteps of General Mills, Kellogg, and Campbell Soup, which have taken similar routes, as well as Tyson’s own 5% ownership stake in Beyond Meat. The VC fund will be led from Chicago by former DuPont Ventures Managing Director Mary Kay James. Read more about Tyson New Ventures on Fortune.
We want to hear from you! What are the market impacts of this week’s news stories? Email Catalyst Companies™ Founder Jeremiah Owyang directly to share your thoughts.
Image from Flickr used under Creative Commons license.
Welcome, this industry newsletter shares key market changes, in a twice-monthly publication, curated by Jeremiah Owyang, Founder of Catalyst Companies™, you can subscribe to the email newsletter on the footer of the homepage.
A Trump Tax Cut Could Bolster IPOs
If President-Elect Donald Trump follows through on his campaign promise, the plan to slash the corporate tax rate from 35% to 15% could be a boon to unicorn startups. While the uncertainties of his other assertions certainly warrant due diligence, Trump’s tax break would likely lure billions back from overseas and flood balance sheets with critical cash flow. Analysts have specifically called out Snap, Uber, and Airbnb as likely beneficiaries, with many more to follow. Read more about how Trump’s tax policy would affect startups and future IPOs on Fortune.
Learn From Digital Transformers Who’ve Gone Before
Digital disruption is running rampant across the business world, but corporate leaders too eager to rush through a major transformation risk leaving their employees and company cultures behind — to the detriment of the entire organization. Learn how early pioneers of corporate transformation have navigated the frontier, whether they ramped up and plugged in savvy new digital divisions, retrained and reshaped their leadership around digital experimentation, or reimagined their customer experience in light of a new normal. In the end, they all relied on listening, learning and failing fast. Read all about the 12 lessons learned from GE, Domino’s, and Scotiabank from Hewlett Packard Enterprise insights.
Sharing Economy Challenged With Keeping Momentum
The novelty and excitement surrounding the sharing economy is already starting to wear off, and suddenly there are concerns about the road ahead. New research from the JPMorgan Chase Institute separates perceptions from real performance, and it shows that half of everyone who’s tried Uber, Airbnb, or other sharing economy platforms to make money has ultimately ditched their ride or closed the door on their rental opportunity. Whether the pay hasn’t materialized or they’ve given up their gigs for better jobs, there are obvious new roadblocks to success on the horizon. Read more about the data and its implications on Quartz.
We want to hear from you! What are the market impacts of this week’s news stories? Email Catalyst Companies™ Founder Jeremiah Owyang directly to share your thoughts.
Image from Pexels used under Creative Commons license.
At the 2016 Main Event, Catalyst Companies descended on Mastercard’s NYC Innovation Center, gathering to share best practices and collaborate around the topic of corporate innovation. The council also visited futurist agency Sparks & Honey and corporate education provider General Assembly as part of the two-day event.
Members in attendance included senior leaders from Verizon, PepsiCo, Wells Fargo, Philips, Colgate-Palmolive, and many more Fortune 500 companies from around the globe. The Catalyst Companies Main Event featured speakers from within the council and externally who focused on the “how” behind corporate innovation, sharing many case examples and program details to help guide council members.
Select speaker synopses are below:
John Sheldon, Mastercard, reviewed the company’s multiple innovation programs, both internal and external, that it uses to surface ideas efficiently and bring them to prototype and implementation. From its intensive, week-long Launch Pad program, to its IdeaBox adapted from Adobe Kickbox, the company encourages employees to innovate outside of their current roles.
Darius Miranda and Kelli Carlson, Wells Fargo, talked about the company’s dedicated innovation group of 100 employees that examines tech trends two to five years out to gauge their impact on consumer relationships. The team’s charter is “culture change,” guiding many teams to innovate (design and delivery; payment strategy; collaboration and social media; R&D; and more).
Robert Scoble, thought leader and futurist of UploadVR, shared his predictions for a 
future wherein virtual and augmented reality technologies will be part of our everyday lives. They will transform how we see each other, interact with the physical world around us, and perceive branded products. He shared many examples of startups and technologies that enable this transformation.
Catalyst Companies has many member-only events planned for 2017, kicking off the year with a private member dinner at CES in January. Also look out for new research on corporate innovation from Jeremiah Owyang and Jaimy Szymanski, coming later this month.
Welcome, this industry newsletter shares key market changes, in a twice-monthly publication, curated by Jeremiah Owyang, Founder of Catalyst Companies™, you can subscribe to the email newsletter on the footer of the homepage.
Cheers to Otto’s First Autonomous Truck Delivery: Beer
Uber’s self-driving truck division, Otto, recently completed the world’s first autonomous truck delivery, shipping 50,000 cans of Budweiser across Colorado from Fort Collins to Colorado Springs. The only caveat is that the fully Level 4 retrofit was only engaged while on the interstate. Otto’s self-driving strategy is to leave the local driving — the few miles to and from the interstate — to humans. While on the highway, Otto’s engineer was freed up for paperwork, exercise, or sleep. Otto’s six-truck fleet is still focused on smoothing out the ride and tweaking its software, but the technology is capable of being retrofitted onto any truck with an automatic transmission. Read more about the historic drive on Wired.
Conventional Banking Finally Tries Blockchain Trade
The financial technology that has driven efficient international bitcoin transactions since 2009 has finally been tried out by conventional bank leaders. Wells Fargo & Co. and Commonwealth Bank of Australia recently facilitated the first international blockchain transaction between banks for a shipment of cotton. The web-based technology that cuts out the need for third-party verification in order to process and settle transactions makes trades faster, more accurate, and more efficient, and the traditional transaction processing industry is “ripe for disruption.” Read more about the blockchain breakthrough from Reuters.
Airbnb Lightens Its Eco-Footprint With SolarCity Rebate
Environmentally friendly home sharing is headed for an ultra lightweight footprint through a partnership where Airbnb hosts and guests can get up to $1,000 off a SolarCity solar power generation system for their homes. On the flipside, all SolarCity customers can receive an $100 Airbnb travel credit. The partnership capitalizes on the growing move toward climate-friendly travel and aims to tap solar’s largely untouched millennial market segment, especially with SolarCity’s zero down financing. Read more about the innovative collaboration between Airbnb and SolarCity on TechCrunch.
We want to hear from you! What are the market impacts of this week’s news stories? Email Catalyst Companies™ Founder Jeremiah Owyang directly to share your thoughts.
Image from OTTO
Above: Mercedes Benz Autonomous Car
Two mega trends are coming together: The Collaborative Economy and the Autonomous World, which means shared mobility from self-driving cars.
Early this year, we published a research report on the Business Models of Self-Driving Cars, and we’ve presented our findings at a number of industry events. A commonly asked question is: “In the future, will we even own cars?” I want to share a few scenarios that are likely to emerge.
Today’s 3-year-old toddlers are unlikely to ever learn how to drive. With autonomous cars already making their debut now, and then en masse in 2021, per Ford and others, these toddlers are unlikely to require driving skills in the year 2031.
Here are four scenarios of car ownership that could play out:
- The on-demand model, a.k.a. “Uber/Lyft” model. In this model, autonomous cars would be like a “utility” where most don’t own them, certainly in cities; they are summoned on demand. John Zimmer, the CEO of Lyft, put forth a visionary piece where most city dwellers do not own cars in cities by the year 2025. Uber’s executives paint a future where mobility is like any other utility, where at a “twist of the tap,” mobility can flow out of a nozzle. In urban areas, home garages could be converted to living space (or Airbnb rentals), and large multi-story garages could be converted to green spaces.
- The shared car model, a.k.a. “Zipcar” model. A group of cars are available in a convenient regional area, where many can share and own these cars. For example, some progressive apartments now have shared vehicles in their garage for renters. In this model, a group of neighbors could invest in the commonly owned costs of these cars, and share insurance, car ownership, and maintenance costs. We’ve seen a growth in P2P insurance models, which could further enable this market.
- The wholly owned model, akin to current ownership. Just as we currently own most vehicles, we could continue to own vehicles in the future, but they will self-drive. This makes the most sense in rural areas and, to some degree, in suburban areas. Some people with families that have specific car seat or mobility needs (the elderly, those with wheelchairs, etc.) may require their own self-driving vehicles. Others we have spoken to suggest that human-driven cars will only be owned by the very rich — or very poor — similar to how horses are owned today.
- Autonomous cars own themselves. Also called a distributed autonomous organization (DAO), self-driving cars could become sentient creatures in the radical future that can not only self-drive and self-charge, but also then take themselves to be repaired at a local garage, and pay for it on their ownership. In this future, the excess profits generated from these self-driving cars would enable them to purchase an additional vehicle, expanding themselves from one car to eventually a fleet. All of this, in theory, could occur without human intervention and without human ownership.
In the end, there won’t be one single model. We’ll likely see a mixture occurring, just as we see this occurring now. Below, the models are broken out into a grid.
Matrix: Scenarios of Future Car Ownership
| Mobility Model | Who’s Likely to Adopt | Who Will Own | Business Model |
| On Demand | Urban areas will embrace | Uber, Lyft, car manufacturers | On-demand service |
| Shared Car | Urban areas, suburban | Enterprise, Avis, private owners offering cars on Getaround, Turo | Subscription, pro-rata |
| Wholly Owned Car | Wealthy, young families, special care | Individual owners | Ownership/lease |
| Autonomous Cars Own Themselves | An advanced artificial intelligence that can self-manage a fleet | Cars will own themselves | Computer-owned “corporation,” an undefined model, or a nonprofit akin to Wikipedia |
Above: Tesla’s Autonomous Car
Tesla showed its hand by prohibiting customers from sharing.
Recently, Tesla made an unusual mandate, that its own customers cannot enable their privately purchased self-driving Teslas to be listed on Uber or Lyft. This is a strange mandate considering the cars were purchased outright. It, of course, forebodes a few future business models that we’ll see from Tesla; it’ll likely offer a service model where the owners, or Tesla themsleves enable their autonomous cars to be made available to others as a service.
When would human-driven cars become obsolete?
While Elon Musk suggests that manually driving a car may someday be illegal due to human error and safety reasons, such vehicles won’t go away anytime soon. There would be a significant economic bottom if so many owned assets were quickly depreciated by a government decree. But looking decades forward, when autonomous cars become dominant and common, we will see a social and perhaps government cry for human drivers to be curbed. Perhaps if it’s not illegal, the insurance costs of manually driving would become too high.
To summarize, autonomous vehicles will not only significantly impact how we will be transported, but also the very business models in which our economy operates and how cities will change.
Above: BMW’s Autonomous Concept Car