A Fascinating Model for the Auto Industry
by Vyoma Kapur
When you hear the word 'crowdsourcing', what comes to mind? Most people list ideas, tee-shirts, logos and advertisements. If you are familiar with InnoCentive, the world's largest open innovation platform, you would know product development, design projects and campaigns can be crowdsourced too.
It was at the Business Innovation Factory conference earlier this week I first heard of a 'crowdsourced' car. Jay Rogers, the founder of Local Motors, amazed the audience with his story of launching a unique automotive business that taps into a community to design and develop cars through regular competitions.
Running Colspark LLC, a company that crowdsources for ideas and solutions, I certainly found this concept bizarre. A few questions sprung up. What is the community made of? How are the winners selected and rewarded? In what way are Local Motors cars different from regular cars?
Rogers explained that the Local Motors community consists of over 3,000 designers, engineers and car enthusiasts. Local Motors organizes monthly competitions focusing on making car designs 'local'. These competitions can focus on either the exterior or the interior of a vehicle. Community members pick up competition briefs along with engineering guidelines to create their designs. Submitted designs are critiqued and selected by the community, which keeps in mind which designs will fit best in which region.
Once a design gains enough popularity, Local Motors, after determining that it is 'manufacturable' and takes them to the next phase of development. The community is kept involved in every step of the developmental process.
Local Motors is, hence, dedicated to COOL - Community, Open, Ownership and Local. Its cars are built in regional micro-factories which are also picked by the community. Once design and engineering has been completed, members of the community are able to go to a micro-factory of their choice to build their own vehicle. With the possibility of such customization, Local Motors customers are able to develop cars with higher horsepower, greater fuel efficiency and have other advantages over regular cars.
The open innovation model has numerous benefits for companies that adopt it. The most apparent one is the output it helps create, in terms of both quality and quantity. In just a few years, Local Motors has built a repository of thousands of original car designs.
Another less apparent benefit pertains to marketing. By leveraging car enthusiasts, Local Motors effectively addresses the disconnectedness there tends to be between the automotive manufacturing industry and their consumers. In this day and age of consumer sovereignty, it is important to involve consumers in decisions that have a direct impact on them. The power of a community lies in its dedication to a brand, a concept or a company. Local Motors has benefited vastly from the word-of-mouth awareness generated by its community.
Being a huge believer and practitioner of crowdsourcing, I definitely see Local Motors going far. It has revolutionized the age-old car manufacturing process and sets an example of others in the industry.
A marketing professional turned entrepreneur, Vyoma avidly supports and practices open innovation. Earlier this year, she founded Colspark LLC (www.colspark.com), a crowdsourcing platform to help companies tap into student talent for ideas and solutions.
It was at the Business Innovation Factory conference earlier this week I first heard of a 'crowdsourced' car. Jay Rogers, the founder of Local Motors, amazed the audience with his story of launching a unique automotive business that taps into a community to design and develop cars through regular competitions.
Running Colspark LLC, a company that crowdsources for ideas and solutions, I certainly found this concept bizarre. A few questions sprung up. What is the community made of? How are the winners selected and rewarded? In what way are Local Motors cars different from regular cars?
Rogers explained that the Local Motors community consists of over 3,000 designers, engineers and car enthusiasts. Local Motors organizes monthly competitions focusing on making car designs 'local'. These competitions can focus on either the exterior or the interior of a vehicle. Community members pick up competition briefs along with engineering guidelines to create their designs. Submitted designs are critiqued and selected by the community, which keeps in mind which designs will fit best in which region.
Once a design gains enough popularity, Local Motors, after determining that it is 'manufacturable' and takes them to the next phase of development. The community is kept involved in every step of the developmental process.
The open innovation model has numerous benefits for companies that adopt it. The most apparent one is the output it helps create, in terms of both quality and quantity. In just a few years, Local Motors has built a repository of thousands of original car designs.
Another less apparent benefit pertains to marketing. By leveraging car enthusiasts, Local Motors effectively addresses the disconnectedness there tends to be between the automotive manufacturing industry and their consumers. In this day and age of consumer sovereignty, it is important to involve consumers in decisions that have a direct impact on them. The power of a community lies in its dedication to a brand, a concept or a company. Local Motors has benefited vastly from the word-of-mouth awareness generated by its community.
Being a huge believer and practitioner of crowdsourcing, I definitely see Local Motors going far. It has revolutionized the age-old car manufacturing process and sets an example of others in the industry.
A marketing professional turned entrepreneur, Vyoma avidly supports and practices open innovation. Earlier this year, she founded Colspark LLC (www.colspark.com), a crowdsourcing platform to help companies tap into student talent for ideas and solutions.Labels: Automobile Industry, Business Innovation Factory (BiF-5), crowdsourcing, Design, Local, Open Innovation, Vyoma Kapur
posted by Blogging Innovation at 4:00 AM
5 Comments:
Interesting. But I'm afraid that the people that would contribute to the 'crowdsourced' car are... car fanatics. I mean, they are most probably not interested in the future of transportation -- cars as we know them will most probably disappear; the foreseen changes are way more dramatic than cleaner engines; rather rethink the transport infrastructure/energy usage/societal implications -- but rather in the design of cool/concept cars. In other words, I am not sure (this) crowdsourcing is progressing the industry beyond today's paradigm...
@cdn
Car design, development, and manufacture is a complicated and expensive endeavor. Who is putting up the capital to build these vehicles - a crowd? The number of vehicles that have to get smashed up to verify compliance with federal regulations is enormous on its own.
Starting with a stock mass-produced vehicle and crowd-sourcing trim and color combinations could be successful. Though there still is the risk that existing companies, following output from 'focus groups' that are effectively a 'crowd', end up with bland me-too cars that are the lowest common denominator. It's difficult to create a true break-through product with a crowd.
A similar concept is being worked on here http://www.theoscarproject.org/
Hi Vyoma,
Interesting post. Great to see you are watching these events unfold.
I just wanted to point you in the direction of our company, seeing as how it is relevant to your interests.
Please check us out:
www.hypios.com
http://hello.hypios.com
Best,
-hypios
Vyoma - thank you for this encouraging post! Apologies for joining the conversation quite late.
@Christian De Neef: Small changes to our auto industry will have huge effects. For instance, if everyone drove clean diesel cars, as opposed to combustion gasoline, we would no longer have need for foreign oil - and particulate emissions would be substantially reduced.
That alone would be a paradigm shift - would it not?
While it is important for our country to invest in new technology for cars it is absolutely necessary for us to find a sustainable means to utilize EXISTING technology - and NOW.
Local Motors development cycle is only 18 months. We are decentralized and agile, and able to implement new proven technology as it emerges. Another paradigm shift, yes?
Local Motors will bring cars to market in a new way - we have found a way to break down the barriers to market forced by big automotive companies. And we do it with community - with the help of people that CARE about cars, and have talent to contribute.
The participants on Local-Motors.com are definitely car nuts - but they come from every walk of life. Lawyers, doctors, plumbers, engineers, designers and marketeers. This community is not a one-trick pony, but rather an aggregation of global talent utilized to design and build COOL cars for under-served niche markets.
@anonymous, Local Motors is privately funded. As we are utilizing existing components which have already met FMVSS standards in all 50 states and perform our own rigorous testing, we are meeting all necessary regulations with a lower cost-to-market than traditional auto companies. For instance, the Volt cost over $1B in development, the Rally Fighter, $2M.
If you incorporate the desires of a general "crowd" at large, you will inevitably end up with vanilla design - you are right. This is why most cars on the road today are boring, because they were created for the masses. Local Motors seeks to satisfy specific under-served markets, one at a time. The first market is off-road desert racers.
Hope this helps! And if you guys like cars, I hope you will jion us.
More q's, feel free to email me aferreira@local-motors.com.
I'll check back here later!
Ariel
Community Evangelist
989-600-0534
Hmmm, I am afraid the authors intentions are good, but the understanding of the complexity of the auto industry is lacking. The biggest factor in auto production is politics. Democracy by nature is messy and empowers many forces to co-exist and influence the outcome. There are many businesses that are part of the supply/service chain that will be uprooted if this hypothetical business model was somehow agreed upon in the first place. These forces will not go down without a fight and the end result will be perhaps a business model not originally envisioned by the author. For the "crowdsource" business model, I suggest we look towards less complex sectors and industries. By local, state, and federal regulations there are several road blocks here.
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