Purveyors of plush mattresses are quick to point out that since you spend 8 hours per day on their product, their eye watering prices are fully justified. Rarely mentioned is the fact that you’re unconscious for most of those 8 hours.
Less well known is that the typical US commuter spends 1.5 hours per day in their car, which is about 3x the average time spent on the internet. Multiplied across 600 million vehicles, that’s a huge chunk of “dead time” that folks are wasting stuck behind the wheel.
In parsing the market opportunities for tech startups building consumer products/services for the automobile, I find it helpful to think of the car simply as a very big consumer mobile device, with many parallels in particular to the mobile phone. The usage scenarios are similar – location based services (navigation, local search, traffic, tracking/SOS), entertainment (audio, video, games) and communications (diagnostics, maintenance alerts). Both even have a similar bugbear with distribution – while mobile startups have the wireless carriers, auto startups have to contend with the auto manufacturers.
Of course, there are important differences between the car and other mobile devices – in particular, the user is always multitasking & has restricted freedom of motion. While it will be foolhardy to speculate on what the next auto-based killer app will be, I believe there are a handful of factors that will increase the probability of an auto startup’s success.
First, user interactions with the service should primarily be auditory – perhaps you could talk to your car and ask it to play a time-shifted radio program. While I’ve come across intriguing systems that can project various images onto the windshield, I personally believe that visually distracting interfaces can be fatal for the driver.
Second, the ability to execute with zero help from auto manufacturers. This does not mean ignoring them – they are a crucial part of the value chain that will need to be engaged at some point – but rather that the business should not pivot entirely on “winning that big distribution deal with GM”. So perhaps making some sort of device sold through retail channels, or maybe software that allows existing devices (e.g. mobile phones) to perform something useful with respect to a car, such as enabling the user to pipe music from a virtual jukebox in the cloud through a car’s audio systems.
Finally, an effective method for in-car advertising that can sustain the business. The reality is that most auto startups’ products will fall in the “vitamins” rather than the “antibiotics” category, and charging a subscription can really crimp adoption. All that excitement around satellite radio seems to have petered out of late, and anecdotal evidence suggest that ONSTAR’s renewal rate is rather dismal.
