Thursday, January 31, 2008

Start Your Digital Engines!!!

Influenced by the founder of Tesla's story here:
I wrote this short piece about why the digital car
and not the electric or gasoline or diesel is what matters:

RE About Tesla's Founder
This is a beautiful story in progress, but I would like to politely disagree with one thing.

There have been many theories about why the electric car failed. But did it?

Through the period of the car's invention and growth, the electric and steam hybrids dominated the analogue market. Kind of like AOL dominating the .com boom over copper wires.

What happened?

The internet went digital (broadband) just like record became CDs quickly replaced by the digital iPod that really took off when Jobs lowered the price of flash memory for the world in one deal (nano).

Now imagine if some startup halved the price of Lithium or nano-Lithium or crystal Lithium batteries with one order.

Why would they be making that order?

Because the car went digital, not electric!

Why did it take 10 years from CD to iPod or dial-up to broadband or Walkman to Zune or Tube to Flat Screen or book to Kindle?

Because in between the industrial age (analogue) and the information age (digital), there has to be a analogue to digital converter for the masses.

A dial-up compatible website to plug into your Kindle or TV Guide to run your device or a free cable box for broad band or free iTunes software compatible with any computer OR a hybrid compatible with any gas station.

There has to be an analogue bridge for what I estimate a 10 year period followed by a swift takeover of the analogue industry, it's players and technologies.

The electric car was never killed or came back to life!!! The analogue cars, ie steam hybrids, jet powered, hover crafts, air hybrids, fuel and tube powered electrics have been dying for 110 years.

The analogue car is dying a long awaited slow death and the digital car is accelerating out of the information revolution's garage.

The digital conversion requires a critical mass as well as followers than can safely have one foot in the analogue world and one foot in the digital world.

With 1,000,000,000 million hybrid-electrics (each of these has 300-650 digital patents involved) owners having paid extra to straddle this digital divide, the time is now for several digital organizations to fight to become the standard (like Apple and iPod) as well as many analogue giants to fall (like Zenith at worst or Pixar owning Disney at best).

Start your digital engines!!!

Wednesday, January 30, 2008

Kaizen = Change to Good

The founder of Tesla wrote a piece on his blog at
that really got my creative juices flowing after playing to my
Japanese and Caucasian heart strings in love the automobile.

Reading Martin's post suddenly made me realize why I respect
Toyota and Ford, although, I've never been excited by actually
driving or using their products. It's because those founders
have actually pioneered processes and not flashy products!!!

Toyota founded, "kaizen" and Ford invented the "assembly line."

Those two management science principles power almost everything
in the digital world and challenge what's left in the industrial
world of industry and business everyday.

First of all, I'll borrow two quotes, "better late than never," and "failure is the opportunity to begin again, more intelligently." This comment is a month too late, I'm sorry for your experience Martin, only time will heal, and as far as Ford, it's not about what kind of product a Ford car or truck is, but about the man that invented the assembly line.

He also failed twice because shareholders wanted an expensive car, he just wanted to race and build another one for the masses. One of his failures became Cadillac, who's focus was the highest profit margins.

Compare that to Toyota's first entry, an ugly underpowered car, that couldn't get on the freeway. Almost identical to the Prius released 50 years later that has gone on to sell one million units at $20,000,000,000 or more along with saving hundreds of thousand of gallons of gasoline.

So if Ford invented the assembly line and Mr. Toyoda studied it, were they engineers or management scientists? Well, one might argue, just as two Stanford professors do in Built to Last, that a company's true value is it's organization, grounded in permanent DNA that never goes away, but any innovative technology that goes through the system can be innovative. Building a clock vs. telling time.

The time is now for building the digital automobile and Toyota started with the Prius foreshadowed by decades of experience in processes grown from looms grounded in Kaizen.

I asked my Japanese wife to simply define this, and she has no automotive or engineering or business background.

She said, "just a moment..." then drew on a scratch piece of paper, some Kanji (Chinese characters imported by a Buddhist monk who achieved enlightenment by walking around Japan's smallest island for months on a trek people still follow today called something like 88 temples) that she thinks reads...

Searching for Kaizen
"aratameru" for the first one and
and she wasn't sure of the reading when standing alone but very clear on the meaning, "yoi."

So what does Kai from China or aratemeru in Japanese really mean? According to a quick internet search, "change, alter, improve, remodel." I would think that change and alter are Eastern and improve and remodel are modern.

Basically, we're talking about change, NOT make better, or run lean... Now take a look at every Toyota or Toyoda product from cars to houses to controllers. The Prius came from 1,000 engineers THROWING out 80 designs to get to 650 patents replaced by the 2nd generation that Hollywood bought to be made obsolete by plug-ins.

I'm not sure about better, but change is 100% correct.

So what about "zen" and not this is not the zen you are thinking about, remember, the Japanese language is the 2nd most difficult language in the world because of three alphabets and multiple meanings. My wife says that in the Kaizen combination, "zen" means yoi.

Well even I know this word. It's good, but it's a very rare way to say good. Normally, one would say, ii. For example, I'm good (full) or good job. Yoi is a different good.

It seems to carry more respect, as if something difficult or important was achieved, almost as if it's more used in the past tense as opposed to have a good day, maybe, "Wow, that was a good effort" no matter what the result was.

There's no question that you made a "yoi" effort at Tesla Martin, and the only constant in the world's biggest business is change.

So putting the two together, I come up with "change good."

NOTICE THAT THIS KAIZEN HAS NOTHING TO DO WITH LEAN or the Western definition, "continuous improvement" which was taught in my MBA coursework.

This has to do with a different perspective. Whereas the East looks at the process, the West looks at the result. Japanese doctor's don't tell patients that they have cancer and focus on the process of what got there and beyond. We want to cut it out, like firing someone who makes a mistake.

But what if mistakes are part of the "kaizen" process, or change to good as opposed to good change. What if Toyota stopped at the 2nd, 5th, 52nd or 79th G21 (Prius) failure?

We might not have a digital benchmark to beat today...

So as you build your next company, I encourage you to focus half of your early efforts on DNA that relates to the process, not the technology. DNA that make an organization, "lean" not matter what kind of transmission or controller goes through the assembly line. And maybe most important, DNA that applauds failure as another chance to start again more good!

Innovation Hacker Stanford Golfers?

I couldn't help but praise the gifted
Gary Hamel
on his piece at Harvard Business titled
Innovation Hacker

A few days later, I walked into my office and discovered an elongated box propped up in one corner. “Oh crap,” were the first words out of my mouth when a shiny set of Wilson irons tumbled out of the package. Nevertheless, within a few days I was down at the Stanford University driving range with a bucket of balls at my feet and a 7-iron in my hand. My first swing slammed into the ground a foot behind the ball, sending an electric shock up my arms. Another hideous spasm and the golf ball was whizzing sideways, provoking startled stares from my fellow range rats. “Dear-mother-of-all-things-absurdly-difficult,” I thought, “this is hard.” And then, ten, or twenty, or fifty lunges later, I connected—and with a whizzing sound sweeter than the air intake on a Ferrari F430, that little white orb started to soar. Up it went, suspended in the sparkling autumn sky. And then, 160-yards downrange, it returned to earth, bouncing softly on the grass...

You are an amazing gifted and entertaining while enriching writer! The business community is lucky to have you and American is unfortunate to have lost you... Keep up the great work and maybe I'll see on the Stanford links. If I get into a PhD program I applied for, you've inspired me to get my grandfather's golf bag out of the closet and hit up the driving range a 9 iron away from CarLab the center of innovation in the world's largest business that I hope will jump start the automotive industry's struggle to transform from an analogue based to digital industry.

Tuesday, January 29, 2008

Digital Doom and 0 Days Inventory

In reponse to

Backseat Driver
Riders Of The Storm
Jerry Flint 01.29.08, 6:00 AM ET

In this industry, preparing for bad times means reducing inventories of unsold cars and trucks and cutting production. If manufacturers are not overstocked, they can ride out the bad months without losing as much money in sales incentives to lower those stocks. Having fewer cars and trucks to sell when business falls is that "ounce of prevention" mother used to talk about.

Overall stocks are lower for some automakers, and not in bad shape for a few others.

The days’ supply number is the inventory divided by the daily sales rate from the previous month. When things are worrisome, lower is better. As a rule, manufacturers don't fret too much about inventories if the supply on a vehicle is 60 days or lower.

I left the following post at

Comments for Comments 1-2 of 2
Riders Of The Storm
Jerry Flint
When a hurricane comes, we board up the windows and batten down the hatches. The same goes for Detroit.

Posted by johnmba | 01/29/08 11:16 PM EST

Excellent metric to focus in on Flint! In fact, most digital industries have thrown out inventory all together. Think of oil LPs vs. plastic CDs vs. bits on an iPod with a waiting list and no inventory. As the auto industry struggles just like every other industry (consumer electronics, TVs, radios, media, music, etc.) facing a digital transformation, inventory will continue to go away as JIT or the Dell or should we say Prius or Tesla pre-order model takes place. How much profits are earned from 0 days of inventory?

I've read that Dell has its supplier's trucks backed up to it's warehouse and almost through the door and then sells you a computer and finally puts things like the CPU into inventory for only during the assembly process. Now if the auto industry can narrow things down to a commuter car and light truck platform just like a desktop and laptop plastic case with everything inside customized for the end user, the digital transformation will finally turn pain into profits.

The bottom line is, "did Hollywood save music and movies with an iPod?" Nope, a hi-tech company from a related industry...

In other words, "will the digital iPod for the auto industry come out of Detroit's hurricane?" Probably not... I imagine after many startups and failures, we might see the digital car with the new interface come out of the West and/or Asia.

Detroit might want to study the demise of companies like Zenith in TVs and the slew of bankruptcy in Hollywood as music and movies went digital...


Wednesday, January 23, 2008

Fired: Analogue Algae to Digital Lithium Crystals

In response to
Separating the Vaporous from the Real in Electric Cars
By Marty Jerome

I left the following comment...

According to Forbes, 9 of the Top 10 Global 500 were oil or car companies last year. None of the oil companies are in the electricity business and only one of the car companies had ever put an EV in a showroom. Each of these companies ALONE brings in more money than half the world's countries.

Now imagine that you ran an operation that was 100,000,000 times larger than your paycheck. Would you shut the whole thing down and give away your paychecks for life for a new technology that displaces everything from the multi billion dollar oil businessES to the many auto and transportation industrieS?

Do you have any idea how many jobs, houses and bank account you're talking about?

An estimated 2 in 10 households rely on oil to survive and 5 of 6 people on the planet have never bought a car.

Do you think 9 of the 10 biggest companies in the world and 5 billion first time car buyers can afford anything on this list?

Posted by: John Acheson | Sep 29, 2007 2:41:50 AM

...received the following feedback...

John Acheson: the loss of jobs is no reason not to change what kinds of cars one makes. That's called disruption... that's what happened when car makers started building their cars with robots, and the factories did not even need lighting because robots don't need to see, the car companies didn't have to spend as much on labor, lighting, insurance and other stuff... people lost their jobs, but they did not stay unemployed for the rest of their lives. They got new jobs, they moved on, and society was better for it.

Wherever there is a cheaper way to make something, or to use less material, or use fewer laborers, that's the smart thing to do, that reduces the overall cost of living, and society is better for it.

Posted by: Bill Dale | Oct 2, 2007 2:39:17 PM

...and closed with:

RE: Bill Dale
Have you visited an auto factory? Have you seen the robots? The ones I saw at the NUMMI tour of the only plant in the West were hidden in one small area on the line. We're talking about the joint venture between Toyota and GM, the two largest and innovative companies. Robots only do a small part of the work.

I agree that thousands of auto industry jobs will be lost to the analogue (ICE, oil, gas, diesel, hybrid) to digital (EV) conversion.

BUT, you can't ignore a pool of first-time buyers coming online that is 3 TIMES LARGER than all the people in the world that currently have cars.

So let's say we need 3 TIMES MORE oil or 3 TIMES MORE electricity AND we'll (all the drivers in the world) produce 3 TIMES MORE SMOG (three million people each year get injured or die early because of cars and trucks), what main technologies (such as the LP dying for the CD dying for the iPod) can answer this crisis?

I'm thinking analogue algae diesel in recycling loops powering ICEs on the low end and perpetual Lithium crystal energy storage devices on the high end...

How about you?

Posted by: John Acheson | Jan 23, 2008 2:10:17 AM

It's DIGITAL Product, Smart Guys!

In response to It Is The Product, Smart Guys!
by Jerry Flint at Forbes

I wrote the following comment that parallels
today's auto industry struggle to the music
industry as it went from LP to CD to iPod.

In other words, a analogue to digital conversion
that kills SEVERAL companies, creates mergers,
and only the BEST digital leaders rule!!!

Posted by johnmba | 01/23/08 04:39 AM EST
Jerry, another brutally honest article backed by behind the scenes people problems! Great work aiming the problems at management, you're right! More head will probably roll and there might not be enough heads that make sense to take the last of the Big 3 to the digital frontier. Every car company is facing the same thing the movie and music companies faced when Napster and the iPod came along. Analogue Vinyl records (made from oil) might foreshadow today's Hemi V-8s. Analogue diesels and analogue-electric hybrids might be yesterday's CDs and CD players. The question is who's gonna make the digital iPod for the world's largest business? Remember that Apple failed years ago with the digital Newton and even after Napster gathered more customers than have bought the world's #1 selling car and truck, it went belly up! Do you see any cheap MP3 players (ie Chinese electric cars from Dr. Seuss) on the market? On the other hand, is Fisker and Tesla working on the iPod? It's gonna take a lot of failed products and something really special (a digital car with new interface) to create that iPod for the auto industry. And who was responsible for the iPod? One of the greatest digital leaders and managers of all time. In fact, he pulled off a digital over analgoue conversion by becoming the largest shareholder of the holy grail of music and media (Disney) in a $7.5B so called merger and suddenly the manager is the most hallowed media company's largest stockholder. This would be similar to a great digital automobile manager and technology firm merging with GM, Ford or Chrysler to become the majority shareholder. Now which manager could pull that off? Tiny profitable Porsche will be the first to try as it takes over VW, that company that invented the 45 record.
Tags: digital automobile

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