Shift Magazine - Issue 2 2018 - 6

WITH
DIARMUID O'CONNELL

Why the partnership balance is the key to success

s vice president of business development for Tesla, Diarmuid O'Connell
led the automaker's state-by-state
battle to sell its vehicles through
factory-owned stores. Today, O'Connell hopes
to innovate another part of auto retail: vehicle
financing.
After leaving Tesla in 2017, O'Connell in
January became chief strategy officer at Fair, a
used-vehicle leasing subscription service led by
TrueCar founder Scott Painter.
"I'm not the guy you want running the machine, but I love fixing or creating the machine
of the future," O'Connell said. "Between autonomy, electromobility, connectivity, shared
services and new models of asset acquisition
and use, it's a super exciting time to be in this
industry."
He chatted with Shift reporter Hannah Lutz
about the value of partnerships, scale and
dealerships.

Q: WHAT IS THE VALUE OF
PARTNERSHIPS IN THIS EVOLVING
TRANSPORTATION LANDSCAPE?
A: One has to achieve the balance between the
value of strategic focus that a new entrant like
Fair has, the opportunity to look at a problem
from a clean-sheet perspective, versus the value

of tapping into existing industry knowledge and
existing industry value partners.
No one should be so religious around an
idea that they exclude incumbent knowledge,
nor should that new entrant be so craven as to
rely upon the existing business practices and
knowledge.
What we've tried to do at Fair is to identify the
best possible partners that meet the requirements that I just outlined. They recognize the
novelty and the value creation associated with
a new idea and they are very open-minded
to adapting their own business practices.
Exemplary in this is what we are doing with Ally
right now, which is we have an offering that is
complementary to Ally's offerings to its dealer
partners and other audiences.

Q: HOW IMPORTANT IS SCALE
FOR COMPANIES TRYING TO
BREAK INTO TRANSPORTATION
SERVICES?
A: The hazard in scaling is a growth-at-any-cost
ethos. It's important to get your business model
and your business operations refined, not to
perfection but to a level of execution that allows
you to scale responsibly. It's important to one's
investors and other customers that you can
demonstrate a commitment to scale and the
executional ability to scale, but it's important to
have the basic mechanics ironed out before you
blow it out.

Q: WHAT SHOULD DEALERSHIPS'
ROLE BE AS AUTOMOTIVE RETAIL
EVOLVES?
A: I've always believed that the dealers have a

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shift * july 2018

central role in the future mobility space.
Dealers historically enjoy intimacy with consumers. They have the geographic footprint
that's vital for all parties. The future is really
bright for automotive retail. I can see it from the
dealer perspective especially as I experienced
it with Tesla. There has to be some level of

insecurity with the pace of change.
But if I've learned anything about the dealer
body, it's that these are some of America's
finest entrepreneurs. They are looking at the
marketplace very creatively and looking for solutions much more than they are looking for ways
to defend their existing franchise. Their position
is vital and evolving.

Q: HOW WILL CONSUMERS PAY
FOR CARS IN THE FUTURE?
A: Who knows? Consumers increasingly have
an expectation that they can transact very fluidly
by whatever means they choose, whether it's
an investment tool like a loan or something new
to the world and frictionless like a Venmo, or
maybe even on the far end of the spectrum, a
crypto currency.
It's important as we move to the future to
make all options available to consumers.

Q: WHEN DO YOU SEE
AUTONOMOUS VEHICLES
COMING INTO THE PICTURE IN A
WIDESPREAD WAY?
A: I think the adoption will be faster than
anybody thinks, but it's gated by availability.
The Level 3 to Level 4 breakpoint is a significant
one. Within five years, 50 percent of new cars
could have Level 4 capability that might be
upgradable to Level 5.

Q: WHAT FUTURE OF
TRANSPORTATION TOPIC ARE YOU
TIRED OF HEARING ABOUT?
A: I'm tired of negative sematics. I am so
excited about the future that it's frustrating
for me to encounter the embedded "Go away
children; the adults have it covered" attitude
you often get not just from the industry but
from industry observers. If I could wave a magic
wand, I would somehow figure out a way to
reorient folks toward embracing change rather
than resisting it. ■

Table of Contents for the Digital Edition of Shift Magazine - Issue 2 2018