Shift Magazine - Issue 1 2018 - 15

The path to success lies in deciding which strategies
to chase, and which to avoid
BY SHIRAZ AHMED

ometimes the key to success is not
what new trends your company
chases, but deciding which projects deserve to be nonstarters.
For executives, saying no to promising projects can take a lot of bravery. But
without such bravery, employees, financial
resources and leadership's time can be
stretched too thin.
Tony Cannestra, director of corporate
ventures for Denso International America,
said no to investing in Cruise Automation,
NuTonomy and Argus Cyber Security. All
were later acquired - Cruise by General
Motors, NuTonomy by Delphi and Argus by
Continental.
"You hope you don't miss too many companies that turn into big hits," Cannestra said.
But investing in those companies at that time
didn't make sense for Denso, he said. "We
don't have anything we regret."
A lot of money is flowing into self-driving
vehicles. Investment in autonomous technology surpassed $80 billion last year, according
to an analysis by the Brookings Institution.
For investors and tech scouts, discerning
when a company is the real deal can be challenging, made more difficult when the technology hasn't hit the market.
Here are some examples of brave souls
who have said no, or at least, not now.

SKIPPING AHEAD

iStock: Andrew_Rybalko

In its quest to offer commercially available
autonomous vehicles, Ford Motor Co. has
chosen not to invest in semi-autonomous
driver assist systems like Tesla's Autopilot or
GM's Super Cruise.
Instead, the automaker is focusing on
creating a Level 4 driverless car that will
enter the market in 2021. Executives have
said that approach is safer than developing
systems in which customers have to retake
control at a moment's notice, increasing the
risk of misuse and potential crashes.
"We abandoned the steppingstone
approach of driver-assist technologies and
decided we'd take the full leap to deliver a
fully autonomous Level 4-capable vehicle,"
Raj Nair, Ford's then-head of product development who has since left the company
over "inappropriate behavior," said in 2016.
"We believe we're taking a unique approach
in the industry."

Waymo, the Google spinoff that is developing driverless cars, has also said it will
bring only fully autonomous vehicles to the
market, for safety reasons.

VENTURE CAPITALISTS

Alexei Andreev, managing director at Autotech
Ventures, said he's staying away from lidar.
Lidar is the laser-based sensor that may be
critical to enabling self-driving cars to "see"
in darkness and adverse weather conditions.
While there's no official count of lidar startups,
investors interviewed for this article estimated
that more than 50 lidar sensor manufacturers
could be vying for investment globally.
"We decided to stay out of lidar space
for now," Andreev said. Autotech Ventures
wants to buy into a technology while it's still
young and help small companies grow and

The genie is
out of the bottle.
People are
expecting huge
valuations.
- Alexei Andreev

join the ecosystem before exiting at a profit.
For lidar, he said, the firm can't justify investing. "The genie is out of the bottle. People
are expecting huge valuations."
Another challenge with lidar companies
is the differentiation in approach and technology. There are too many startups offering
different ways of handling lidar.
"The technology hasn't matured," Denso's
Cannestra said of lidar. "We don't know what
our OEM customers really want in that space."

PICKING SPOTS

CDK Global Inc. is a dealer software powerhouse, but it knows it can't offer best-in-class
options for every dealership task. So it has
picked the spots where it wants to compete,
including its dealer website platform and CDK
Service, a suite of tools that lets consumers
set appointments online and enables service

managers to do walkarounds with tablets as
the customer looks on, said Ron Frey, chief
strategy officer, during an October interview.
Instead of trying to be an expert at everything, the company is opening its dealership
management system so other approved
companies can plug their apps into the CDK
platform. The basic idea is similar to that
of Apple's app store. The exchange is open
to any software developer, from giant automakers to startups.
The platform lets rivals, startups and even
employees within CDK use its platform to
"build, innovate and securely integrate solutions and workflows to transform business."

SPLITTING UP

As traditional auto suppliers stampede to
reposition themselves for the future, many
of them have realized it's best to split into
two corporations to focus on that new world.
Among them: Delphi, Autoliv and Johnson
Controls Inc.
JCI, one of the world's largest suppliers
with dominant market positions in batteries and seats, has divided into one company that focuses on seats, operating as
Adient, and another, still called JCI, that
focuses on batteries.
Adient has targeted the opportunities of
self-driving vehicles. The split gives Adient
the freedom to direct its financial resources
toward seating of the future without fighting
for research dollars with a corporation that
already derives ample profits from batteries.
The management and board of the original
JCI engineered the spinoff because they recognized the limitations of what JCI could be.
It could focus on batteries, or it could focus
on seats, with a new zeal to accommodate
passengers who do not need to sit with their
hands on a steering wheel. But it couldn't
thrive in both markets at the same time.
Adient, spun off from JCI in 2016, is already
opting out of some kinds of futuristic interior
tech: It won't be making biometric car seats
that seek to make occupants healthier.
"That's not what our customers are asking
us to help them with," Byron Foster, executive vice president of Adient, told Automotive
News shortly after the spinoff.
Vince Bond Jr., Lindsay Chappell and Michael
Martinez contributed to this report.

may 2018 * shift

Table of Contents for the Digital Edition of Shift Magazine - Issue 1 2018