Andy Grove: We Need Electric Cars Now

[TEG]

We Need Electric Cars Now - Forbes.com

 

[chimpanzee]

I recently spoke with Dr. Ed Davidson (UIUC EE prof, who became U. of Michigan EE Dept Head), who Martin plugged in UIUC Resonance newsletter. When I mentioned my idea for an R&D infrastructure initiative for Alternative Energy (NCEA/Nat'l Center for Energy Applications), which is exactly in line with Judy Estrin's call for Innovation Ecosystem, Ed pointed out that Andy Grove was making a similar call for Infrastructure. Walmart -> Health System & GE -> Electric car:

Innovation At Big Companies - Portfolio.com

Memo to Andy Grove: General Electric and Wal-Mart Aren't Game Changers - Bill Taylor

There's an interesting observation about XBD = Cross Boundary Disruption:

In looking at various companies that have been hindered by their own success, we found that under certain conditions a firm can create a new growth spurt for itself by entering an entirely different industry. The target industry must be stagnant and populated with companies that cling to doing business the way they always have. The corporation that enters this environment with an innovative product or service can shake up the status quo and reap big profits. Burgelman and I call this phenomenon cross-boundary disruption, or XBD for short.

The defining example of this kind of move is Apple’s incursion into the sluggish music business with the introduction of the iPod in 2001 and then the iTunes music store in 2003. At the time, Apple faced market saturation in its niche. (Its relatively high-end computers were stuck with a single-digit market share.) It had all the resources of an established, well-run corporation: highly skilled employees, brand appeal, and access to capital. And it was hungry for growth. Since Apple entered the music business, the company’s profit has increased more than 3,000 percent, from $57 million in 2003 to nearly $2 billion in 2006.

The XBD phenomenon is something separate from the more familiar pattern of startups forging industry change in steps. Clayton Christensen described that process in his book The Innovator's Dilemma. In Christensen’s scenario, a small company penetrates an industry by first establishing a position in the least demanding portion of it and then progressing into more-demanding segments. Christensen shows how minimills entered the U.S. steel industry in the 1970s by concentrating on the low-margin area of the market that the established players had largely given up on. The new companies grew until they were strong enough to attack larger and larger market segments. By 2000, these minimills had increased their production to almost 50 percent of the raw-steel market.

Cross-boundary disruption is different. I’m talking about established giants seeking to transform markets other than their own. It's Apple jumping into music. It’s Wal-Mart entering health care. Or as my email to Immelt urged, it could be G.E. building an electric car and taking on the energy industry. These are companies big and powerful enough to solve intractable, industrywide problems and produce lasting change.

AG is advocating a "giant" moving into another market, where it doesn't have the risk of a startup. The recent TM history seems to indicate issues with "inertia" in a startup, complicated by the recent Economic crisis.


(example) Scaled Composites, Burt Ruttan

Very similar to Martin E. & Tesla, they were looking for an Alternative Method for a new idea/product. The industry giant wasn't getting it done. BR is heavily anti- NASA (giant bureacracy who lost its direction):

"NASA is screwing us [ Americans ] for manned space travel"
-- Burt Ruttan

They were a small company, found a sugar-daddy (Paul Allen, Microsoft co-founder), developed a successful prototype Spaceship One. Then, they are turning to corporate giants like Virgin to take it to the market (Virgin Galactic).


Note that Paul Allen (principal investor) didn't let his ego become disruptive ("sometimes Ego is bigger than the man"), & didn't meddle in Scaled Composites operation. This is where TM is running into issues (ego-tist outta control), which created last year's crisis (Stealth Bloodbath, Martin & company being ousted) & has similar overtones in the recent CEO change. Using the above as a model, then history dictates TM would be absorbed by a giant (resources for mass mfg) to take EV to the market. A variation of what Andy Grove was saying.

 

[malcolm]

Previously on Tesla Motors Club...

http://www.teslamotorsclub.com/electric-cars/759-electric-cars-general.html

Good to see this subject is still bubbling under.

 

[vfx]

We Need Electric Cars Now - Forbes.com

Nice to have Forbes (small) counter to the Old Guy.

 

[graham]

Andy Grove pushing Intel to manufacture electric car batteries - Engadget

Former Intel chairman, Andy Grove, has been a prominent supporter of plug-in hybrid automobiles ever since he left his post at Intel. Now, in his role as Intel advisor, Grove is pushing CEO, Paul Otellini, to diversify Intel by manufacturing advanced batteries for plug-in electric vehicles. His argument is two fold: 1) the market is potentially huge (read: big profits!) as the world seems to be at an eVehicle tipping point, 2) with such little manufacturing capacity left in the US (and US automakers in deep trouble), if someone like Intel doesn't take on the challenge then the market will left be to Chinese and Japanese interests like BYD motors and the soon-to-merge Panasonic and Sanyo -- all of whom are positioning themselves to dominate the emerging battery market.