Today one of the LM community, a designer for whom I have great respect and with whom we have done some contract work, wrote me and my wife a personal note upon the birth of our new son.
I have never met this designer in person, but I can tell you that he is someone who is thinking beyond the borders of four wheels and a body. This is a part of our community...a man I would want to eat a meal with...have a beer with... And someone who would have the sensitivity to keep my child in mind when he designed a safety system into his car.
That is the start of a real community, and we are all watching it realtime.
Today I was honored to be part of a panel of founders who had started and have been running Web 2.0 companies. The panel was moderated by Professor Karim Lakhani, who opened by giving a brief introduction to his research and findings in the area of distributed innovation.
This is without a doubt my most favorite type of group to be amongst. Real open source gurus who are struggling with the same issues and experiencing the same elation that we do every day at LM. In a group like this you can move quickly past the general subject of distributed innovation and dig into some of the finer points regarding, IP protection, degrees of virality, motivations for community participation, and more. Each one of these people has experienced slightly different challenges which each of us could learn from.
The audience was primarily Harvard Business School students and many from the Tech Media Club. Again, I bemoan the fact that such businesses continue to have such a tech focus, because crowdsourcing and distributed innovation are as old and can be as low-tech as a 900BCE Greek Agora.
(Greek Agora or public meeting place, Wikipedia)
Nonetheless, tech focus or not, these businesses are talking about the most modern ways of building community and customer attachment that I have seen to date. From investing to language learning to fashion pathfinding, each of these ideas have explored various ways of connecting clouds of interested participants and turning their user generated content back around into the site for others to consume.
They are not all viral, they are not all software focused, they are not all expected, but they all share a common master: Look outside your team for the heart of your organization.
Above all the topics we discussed, one stood out in my mind: Passion. Many people think that distributed innovation is a tinderbox of users waiting to be struck, but that is more often not the case. Instead, these companies are built by the dedication and hard work of a small number of core users. Long before the community catches fire, the going is tough and the challenges often gray and nuanced. Only those mavens with extreme passion are able to stay the course and give birth to a new Web 2.0 darling.
Speaking of giving birth, in 7 hours we will be in the hospital where the stork is supposed to deliver our 4th boy. Wish us luck, it may be a long day! He will no doubt be a car lover :)
Something we can all share - at least those of us who spend our waking hours thinking about cool cars - is a fatal attraction to pouring over designs and deconstructing each of them into its finest details. Do you find yourself noting the difference in ride height on Ferrari 599 pictures, or staring into the tailpipes of a 911 Turbo to see where the cosmetic chrome ends and the real business begins. If this description fits you, then you will be able to relate to the subject of this night's post:
"When you see it, you know it is good."
Bad car design is abundant but roundly ignored. Solid car design is ubiquitous and hard to overlook. GREAT car design is rare and it hits you like a bolt out of the blue.
If I were to try to put a number on it, I would say that we see 1000 solid designs per week, and only a couple strike me as GREAT. Of course, my preference is probably different than another person's, but the ratio of Good/GREAT is probably the same in all of our minds.
The good news here is that when you see it, you know it right away. GREAT design is unmistakable, and you spend the next couple of days dreaming about it. It goes into a special place in your soul, and you will always remember it. It can be effected in a pen sketch, charcoal, photograph, model, rendering, prisma, gesture...doesn't matter, but when it is right it is right.
The bad news is that it can take a long time for that GREAT design to come along, and you cannot predict when it will land itself in front of your eyeballs. Often I find that I cannot rely on a great designer, who might have done it before, to bring the heat again. Repeat success is elusive.
After having seen the thousands of designs that have begun to collect in the Local Motors Community, no doubt you have chosen your favorites. (Soon we will deliver a way for you to begin to track them!) But if anything has become clear it is that greatness shows itself in the most unexpected places. Sometimes it hits you when you are tired; Sometimes you want a supercar and a microcar steals your heart; Sometimes you can't even bear to admit you love it but your can't take your eyes off it; and on and on and on.
We autodesignphiles suffer from the same delightful myopia: we only have eyes for the GREAT ones. Well, if that is you, take heart they are out there and capable of taking your breath away.
Grace Patricia Kelly - www.slamxhype.com
Mercedes 300 - www.bergoiata.org
Michangelo's David - http://faculty.evansville.edu
On Monday of last week, I profiled a profound article covering the upsurge of American Manufacturing Startups at the same time as a decrease in Manufacturing jobs.
As I have thought about this state of affairs knowing what we have learned in the last several years, it has occurred to me that there is an opportunity in the capital markets - an opportunity to provide capital in a market which is underserved.
Though anecdotal, think of a famous venture capital firm - any firm, and think of the type of investments they make....IT, medical, biotech, greentech, material science, IP, information mgmt, software, internet technology, etc. However one business type that does not EVER come to mind is Manufacturing. Often, people will glibly say this absence in the market is because these businesses need too much capital and therefore the IRR is too low and the risk is too high. If this were true, none of these business would get started, but then how do you explain the 67% upsurge in US manufacturing startups, and where is the capital coming from to fund them.
There are larger capital institutions, like investment banks, who are equipped to provide capital to the manufacturing industry, but they rarely if ever reach into the early stage capital business.
Perhaps it is the case that more informal networks of capital providing are beginning to pick up this slack in the market. Again it is anecdotal, but I can say with certainty that people within our network of capital providers at Local Motors take specific interest in those businesses with whom we do business. Together, we vet business ideas and teams, and it makes for an interesting counterpoint to your typical VC firm, as this review often spawns new investments for our investors
This month's Fast Company magazine is running a feature article on the subject and benefit of prize philanthropy called the Power of the Prize.
Were you aware....
www.thieletech.com
www.chronometer.net
www.bigoven.com
www.atpm.com
Scaled Composites LLC
...that each of these above items was created because of a prize.
It is humbling to think of the power and limitations of Prizes and the way in which the they are growing in popularuty.
One of Local Motors advisors, Karim Lakhani, is featured in the article. He explains that prizes cannot make up for everything, but that they are an excellent way of drawing out new talent from people. I agree. He also explains how they can energize people to participate from non-interested groups because the real contest is made to be accessible to a wider audience than just the experts.
All of this is music to our ears? After all the best ideas are already coming to competitions from the most unlikely partners
In the meantime, this subject of prize money is an interesting one and it is potentially great enough to allow us to consider deeply the $$ and prizes that we are offering. Stand by for more updates.
It is three weeks into the Southern California Off-road Competition and the community is off and running!
11 Complete Competition entries to date, thousands of images in checkup and portfolio uploads, and multi thousands of comments, critiques, and praise.
In a week we will award a prize to our first competition winner....who will it be, hard to say, but there will likely yet be other entrants who bring strong challenge to the front runners. $1,500 cash is at stake and fame and prizes.
And then WHAT IS NEXT????
Well, we have heard that question from a number of dedicated community enthusiasts, and we are so eager for everyone to know. We are bursting to let the cat out of the bag, but there is still work to be done on the competition summary and other assorted inspiration. I promise you that it will not disappoint, and though it could still change somewhat, I will give you a small hint.....
We have taken you off-road to the sands of SoCal, now get ready for a turbo-charged ride to the other side of the continent..... :)
Last week I opened Pandora for the first time.... www.pandora.com
In the last year, I have made special note of businesses which seem to have extraordinary services or products...true value added. This is certainly one of those businesses. Starting in 2000 with a project to categorize music by its elements known as the Music Genome Project, this company takes in information about the songs you listen to and regenerates a playlist with similar characteristics. You cannot chose individual songs, and therefore the royalty due to owners/artists is lower.
I am fascinated by the User Generated - almost subconscious - preference information that this company captures and how they apply it to solve people's question about what they will listen to next. Clever and simple.
When you have some free time and have a moment to poke around, I recommend the visit. They are essentially using the same theory as Local Motors whereby they stake their central product, music, around the preferences of their customers. It is a bold vision, and we wish them every success.
Until several years ago, the average price of diesel fuel was usually lower than the average price of gasoline. In some winters when the demand for distillate heating oil was high, the price of diesel fuel rose above the gasoline price. NOT ANYMORE!!!
Since September 2004, the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons. Worldwide demand for diesel fuel and other distillate fuel oils has been increasing steadily, with strong demand in China, Europe, and the U.S., putting more pressure on the tight global refining capacity. In the U.S., the transition to low-sulfur diesel fuel has affected diesel fuel production and distribution costs. Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline.
(2006 Retail Diesel Fuel Price Breakdown, Energy Information Association)
There is little magic to this issue, and though we expect prices on Diesel to retract partially, it is unclear where they will stay vis-a-vis those on gasoline.
Our opinion is that they will rationalize and pull back below the level of prices on gasoline. When?? If I knew that I would be in Vegas instead of at a car company.
(Thank our government and the Energy Information Association for this data.)
What a response to my post last night! In general, there appears to be agreement that $875K is a waste when you see it end up in a lawsuit. Everyone further agrees that there is a great talent in the vast pool of untapped trans designers. So we have some strong common ground.
Everyone does NOT agree on the value of the $857K being an appropriate rate.
Some think it is too little. Cheap. Some think it is just right. Fair. Some think it is too much. Rich.
I suppose that is the nature of any number, it creates a reaction which is divided across a distribution of returns. But where is the truth?
In truth, designers like Fisker offer much more than the raw inspiration and design. His shop offers total body design program, including, sketch, packaging, clay modeling in scale and full-size, and finally Catia data which can be used for production. He and his team think about visibility and crash and deliver a solution meant to address all. Naturally, such value added service is worth a lot of money, and I did not mean to denigrate that contribution. Especially in the car design world, you get what you pay for.
Nonetheless, the opacity and secretive nature of the automotive design world has built mile-high stovepipes (i.e. silos)through which it is difficult to display the truth. In order to create a new vision of crowdsourcing design style, we are going to have to break down numerous walls. My only purpose in posting this ("challenging") blog was to open up communication, and it appears to have been successful.
As you may have read by now Tesla Motors is suing Fisker for stealing its hybrid secrets and for provided "substandard" design as part of Henrik Fisker's design contract.
Regardless of who is right, this is a sad state of affairs. These are both startup companies who thrive on forward momentum (read: need it to survive) and lawsuits are hardly a definition of forward momentum.
Anyway, what I find more shocking is the disclosure that Tesla paid Fisker and his team $875,000 to provide a design for the WhiteStar sedan project Tesla has been working on.
$875 LARGE!!!!!! and it bought them nothing but a lawsuit. Truly this is an old way of doing business in the auto world. There are designers, great designers, out there today, waiting for a shot and looking for a job. They would thrive on 1/10th that amount of money. Some would start a whole business on 1/10th that contract amount.
This is embarrassing, and I am disgusted by this waste.
As a perfect counterpoint, I would like to introduce Aaron Park. Aaron is a 23 year old designer from Southern California who is about to graduate from Art Center. I first saw his work several months ago in the senior design studio under David Hackett's supervision. It was fresh and exciting.
In an interview with Aaron, he claims Fisker himself as one of his favorite designers. That is strong praise for Fisker because while Aaron may have grown up looking up to this man, what he has achieved before even graduating is status of his own in a fresh design project that is every bit as inspired and worthy of being built as the White Star Fisker design which will never see the light of day.
Local Motors is proud to have Aaron's "Any Terrain Imaginable" as part of its community. Look for him as a contributing member in the near future....better yet, look for young aspiring designers who come to LM's community wanting some day to design like Aaron. It is already happening!
(Aaron Park, Art Center student and Local Motors Community member)
(Aaron Park, Art Center student and Local Motors Community member)
A couple of days ago I previewed our announcement of the work we have done with Art Center College of Design to build some examples of competition entries.
And NOW.....the message is official.
On our website, you will already see the work of 6th term design student, Lili Melikian, and an interview about her work and love of design.
(Lili Melikian, Local Motors example competition submission)
In the next couple of days you will see us add another example submission and then a few more in the weeks to come.
These students are truly a best of the best and their work with Local Motors is the kind of energy we crave to push the community with a high and hard standard.
Thank you Art Center and Lili for your work on behalf of LM! I am sure there is already a silent crowd of future students, that can see and judge for themselves the true value of such a superlative education.
I wanted to highlight an article I ran across today that has me spinning (no pun intended) Feisty Factories, in Fortune Small Business. Written in May 2007, almost a year ago, this article has the kind of message that we have been crowing about at Local Motors.
-US Manufacturing employment has dropped over 20% in the last 10 years. While sales have grown by 20% in the last 5 years. Conclusion: Total productivity has increased dramatically in US manufacturing and a lot of it (read: most of it) is owed to small businesses. This relationship of small and successful can be inferred because 70% of all US manufacturers employ fewer than 20 people, AND the number of US manufacturing startups is up 67% over the last 5 years.
-Get productive and cede the commodity market to overseas players. Anything that can be made close to the customer and with a greater sensitivity to what he/she wants, can and does achieve a premium price.
-Quality in a small shop can be every bit as good as that in a large shop.
If this doesn't sound like Local Motors then you ain't been reading our stuff. We've written about Threadless, Cuusoo, Ponoko, Bonobos, and many small car companies, and now this is an article which sings the glory of small US manufacturing.
Are there pains of being small. NO DOUBT. But there are also joys, and the message is that if you celebrate the joys, they can outweigh the pain.
Last night, we stayed home and watched the movie detailing the efforts of Preston Tucker to launch his groundbreaking car, the Tucker Torpedo.
(Preston Tucker, commons.wikimedia.org)
(1946 Tucker Torpedo, info.detnews.com)
You might imagine that we are fans of the story at Local Motors.
(Tucker, The Man and His Dream, LucasFilm)
The interesting and indelible impression from the movie that I am left with is that somehow bad people were out to destroy Tucker and his dream.
Today people often ask us if there are individuals who would be "out for us". I feel the answer is "No." It is true, and you may have seen in some readers' comments responding to our press, that there are those individuals who are angry in their disbelief, but the vehemence of that disbelief should not be mistaken for evil intent.
What we would prefer to focus on is how a huge group of customers are looking for something different in their vehicle choice, and we intend to be a part of their desired solution. Certainly there is competitive business that would rather not see Local Motors succeed, IF it were at their expense, but the market is easily big enough to see many companies succeed in sharing this massive market.
Despite Francis Ford Coppola's excellent portrayal of Preston Tucker's story, I have a hard time believing that his situation was any different.
The recent efforts of our PR wizard, Ariel Ferreira, are paying off and we were covered/syndicated by 4 blogs today with more in the works.
The nasty part about this coverage game today is that one's continued coverage and access to ever bigger markets is based on the volume and velocity of clicks and votes on these stories.
(image courtesy of gravybread.files.wordpress.com)
The good part about this coverage game is that, every so often, these sites and blogs get the message of Local Motors pretty much dead on, and so the article is a pleasure for us to read.
Known to many designers, and aspiring designers, the Art Center College of Design is a mecca for talented artists. It is especially strong in the transportation design field, and its graduates have gone on to create some of the most exciting cars ever conceived.
A couple of months ago, I sat down with the Nate Young, Vice Chairman of ACCD, and Stewart Reed, Chair of the Transportation Design Department, to discuss the plans for Local Motors and its community.
They immediately saw the potential that many designers would come to know and love the discipline of transportation design through our community and they wanted Art Center to be on the forefront of this community's mind. We decided to promote a select number of students who would provide their take on what a standard Local Motors' competition entry would look like.
In the next couple of days, you will see an announcement of these results and you will also be able to view the work.
We are very proud of the work that our community has collectively created, and we think that Art Center is a fantastic learning environment, which many in our community have called home for at least a couple of years.
Here is a quote from a 17 year old rising star who is part of the Local Motors' Community:
About me:
My name is [edited for privacy]. I'm 17. I live in Canada. My passion for car design started since I was 6.
Education:
I'm still in high school. I learned everything by myself but I plan to study in car design later in a school like ACCD.
Career/Experience:
I don't have any professionnal experience yet. But I do a lot on my own.
Skills, Awards & Talents:
Speedanddesign.net competition editor's choice award. Sketching, Photoshop, Rhino 3D
Languages:
English, French, Chinese, Spanish( basic). and learning more...
Such a burning desire from a talented young self-taught designer is exactly why Art Center has realized the need to be seen in the advance guard of our community. If this young member spends just a short time on our site and sees the Art Center affiliation, his preference will likely be deeply impacted.
This is likely to be Part 1 of 1000 posts on this subject, but no time like the present to get it fired up.
When I say Auto Insurance, I am not talking about the Geico Gecko....I am talking about insurance for the automotive industry companies, such as yours truly (LM), and all the others, Ford, GM, Factory Five, etc.
(The Geico Gecko, Geico Insurance)
Today we got our first taste of the small mind of an underwriter and his limited imagination.
(Ned Ryerson, Groundhog Day, Columbia Pictures)
(excerpts, Groundhog Day, Columbia Pictures)
As we are getting rolling, we had asked to augment our insurance in a number of areas, and so we called a reputable broker to help us to get up the curve of solid quotes quickly.
A few quotes came back from a number of firms and many simply refused to write coverage.
Now, we have nothing to hide. You, our readers, have seen everything that we are about....
No ammunition factory. No chemical lab. No hazardous waste. No heavy machinery. Bright lights and safe workspace. Lots of desk time (a very dangerous place to work, I might add). ....you get the picture
And yet, 95% of the people who even looked at writing insurance for us simply declined it.
I dug hard and the basic answers to our problems in even securing a quote for coverage have been an amalgam of the following: that we are small, that we are in the same industry as Ford, that we are engaged in "dreaded" R&D work, and that we have contractors working for us.
"Small", "R&D", "Contractors"!?!? I ask you does this not describe 99% of all startups?
Now, as for the Ford factor, when I coyly asked, "How many cars does Ford make? and how many do we make?" all I got was was a blank moment on the telephone.
And then one underwriter had the guts to admit that his company would not insure us because we are starting a business that "they had not seen or heard of before." He further said, "If you were to start a business for which we had underwritten thousands of similar policies before, then it would be ideal." I immediately shot back, "what kind of competitive advantage is it to start something that 1000 other people have already done".....again, the blank sound of wind whistling in one ear of the underwriter and out of the other should have tipped me off.
Honestly, these insurance folks are some of the most capricious and narrow minded crowd-followers I have ever met. They charge you for insurance and gladly underwrite it when you have no need for it (because you have no risk), but when you have risk, they offer no policy options.
I suppose the only redeeming thing to say is that my disgust for this anti-business behavior is surpassed by my disgust for the trial lawyers whose greed dictates the market clearing price for insurance.
We have a problem in this country. People sue each other more than they ought be allowed. Judgments are horrendously large. And insurance companies are running scared. All of this makes America a worse place to do business.
I am optimistic that we can overcome such challenges, but I would prefer to call them to account first.
Tonight I listened to a small talk given by a fellow CEO and founder of a new consumer business, Andy Dunn, of Bonobos Pants.
I have been following Bonobos since they were founded as we share a mutual friend who is an investor in the business.
Andy, gracefully, tackled a room full of entrepreneurs in-waiting (and in-wishing) imparting his heartfelt lessons-learned and vignettes from the cutting room floor.
-don't go into the apparel business with just a better product, you better have a better business model -don't go into the apparel business at all -don't "get an MBA" if there is a choice to "make something and sell it", you'll be a better entrepreneur for doing the later -2 MBAs is 1 too many in a start-up -You can't do it without having at least a little money - you must eat and you must pay rent (oh! and you must pay loans) -the expected value of a private equity job with solid cash flow, cannot compare to experience and thrill of doing something about which you are passionate
I, admittedly, do not know much about the apparel business (though I have put shamdaisies on my birthday wishlist), but I do recognize a kindred spirit when I meet one.
Bonobos Pants is a Non-Conformist play in a market where customers (young male adults) are dying for great fashion that is moderately priced...I get it. Local Motors is a Non-Conformist play in a market where customers (car crazy adults) are dying for great auto fashion that is moderately priced...he got it. We are both in the Right Place.
See this complex scientific chart to help explain our positioning:
(courtesy of one of the founders of Benchmark Capital)
Bravo to Bonobos for all of your hard work. You are an inspiration, and I expect to see Bonobos-wearing, young, consumers sporting their new Local Motors car in about 2 years.
Last week, on April 1st we announced the ability to upload pictures within comments on the LM site. That tool, we call "Visual Compare", and it has quickly taken off as a valuable mode of expression for people wanting to make more value added comparisons for designers.
Then at the end of the week, a subtle but important change emerged on the Local Motors website. This change was the first example of what we call Visual Commenting. It is a function where a user uses Visual Compare + an editing program on their own computer (like Paint or Powerpoint) to scribble highlights on a design in order to cue their comment more effectively.
In the coming weeks watch for Visual Comments to grow. Car Design was tailor made for this function.
American Football Commentator, John Madden, who made this technique famous, would be proud!
(Design by Skukuzi, Local Motors Community Member, Visual Comment by tthomas)
For those of you that live in the Northeastern United States who also watch TV, you may have seen this very unusual Ford advertisement:
The simple question is "Do you believe it?" At first, I am all excited about a car made from the protoplasm of New England heritage and cobblestone, but then we I see that it is an F-150 with a chrome package and a tow-n'-go set up, I feel duped. I mean, are we missing something. At least the Patriots edition F-150 has a sticker that says so:
Local is local and Big OEM playing local is, well, .......uninspiring. I am sure it will sell, but isn't there a better alternative?
Earlier, we mentioned on the website and in our blog the help that we have received from the Economic Development team from the state of North Carolina, the Charlotte Regional Partnership, and Greenfield Development. They were and are some of the hardest working, business minded folks we have met. Similarly, we have also spent a great deal of time with the folks at Enterprise Florida, who also have built an extremely forward thinking and engaging plan to attract new businesses to the state.
Though we spend a lot of time working on this question of location, we have not talked about some of the bright points in a while so I thought I would just highlight one. This week from across the Country in the Valley of Central California, we were engaged by the EDC from the City of Gilroy.
What a refreshing contact! Larry Cope, the president of the EDC, found out about us through some of the press that we had received in the Boston Business Journal. He researched the company and then approached us to meet about our potential site selection in California.
Now for those of you who have not sited a business in a long time or ever, as a reminder, it is one of the most time-consuming and complicated decisions in the growth of a young business. Hidden costs and unknowns abound, and you dream of an honest and forward-thinking partner whom you can trust.
So far, especially in the few examples which I have listed above, I have been more than pleased in the hard-working, grassroots work that American EDCs are putting into action on our project. I am truly a believer that America is still busy bringing to bear its entrepreneurial strength by trying to attract new business to all corners of the country.
As the Gilroy EDC says:
[We] have all the right ingredients.....
For your Business... For your Family... For your Recreation... For your Life...
When it comes down to it, these are the arguments that are going to make the biggest difference in our decision of where to locate. These folks are all doing a great job, and we look forward to finding our perfect location with all such great partners. Bravo!
....and you'd think we - of all teams - would have known that. After spending the last 12 months creating a community dedicated to the celebration of transportation design, to NOT have thought about every way in which a picture can be useful, seems unlikely. However unlikely, you are supposed to learn something new everyday, and we are the first to admit that we are probably learning much more than just one thing per day.
And here is our latest lesson:
In the last several weeks it has been made clear to us through a repeated series of interactions that the comments that people were making in regards to other people's designs were growing longer and longer. This was a good thing in that people have had more things to say, but it was a negative thing at the same time because it seemed as if people had to say more just to explain the things that were on their minds.
We had provided a forum for commentary only to realize that transportation design was a subject far more deserving of more than just text to describe its limits.
So tonight we have added a new feature to assist in bringing more firepower to the commentary. We call it Visual Comparison. From now on, underneath the Comment box, there is included an option to upload a picture so that everyone can much better explain what it is they mean to say.
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