Future Proof Your Mobility Startup
I recently had a conversation with a well-respected VC and he in laid out in fewer words than I can the future of mobility: “If you don’t believe the future of mobility is electrified and autonomous then you have your head in the sand.”
I agree, this is the future we have ahead of us, and it is one full of opportunities for aspiring founders. But it also means that entrepreneurs have to think ahead as they plan for the futures of their companies.
I firmly believe that in the mobility space, one of the most important things for young entrepreneurs to understand is that they need to “future proof” their startup. You need to be prepared for a world that will look drastically different in the next 5–10 years.
As mentioned above, mobility changes will be driven by two major trends: autonomy and electrification. Skeptics might say that this future is too far away to worry about now; don’t listen to them. All signs point to this future coming quickly. If you need proof, look at the UK[1], France[2], and Germany[3] banning internal combustion engines. Look at Tesla pre-selling 500,000 Model 3s. Look at the drop in car ownership[4], the rise of Uber and Lyft[5], and those companies’ subsequent bets on autonomy.
So what does this mean for the individual entrepreneur or mobility startup? It means that you need to make sure your company not only can solve today’s problems, but tomorrows as well. If you are building a solution for drivers, or ride-sharing drivers in particular, can you survive the switch to autonomy? If you are building a solution for internal combustion engine (ICE) cars, will you survive the switch to EVs?
If you are a startup taking venture funding your investors likely have a fund that runs for 10 years, meaning they are going to want you to exit at some point during that time (it could be as short as 5 years if you were one of the last investments of the fund). Can your idea survive the shifts we are going to see in the coming five to ten years? Are you going to be well positioned to be an attractive acquisition target?
As you build your startup, make sure your solution will be valuable in the next few years when it is time to exit.
Here are a few of the many disruptions I expect to see:
· No more ride-share drivers
· Short haul flights replaced AVs (we will be able to sleep/work in cars for a fraction of the price)
· Lower cost of rideshare disrupting public transport
· Lower shipping costs from electrified/AV trucks
· Changes in real estate values based on, amongst other things, removing parking infrastructure (we won’t need parking structures in the middle of cities when we can send our cars away to park on their own, freeing up valuable real estate)
So what technology do I like? I like companies that are building components for new autonomous vehicles, companies looking to build/take advantage of the charging infrastructure that will inevitably be required, and technology to improve the in-car experience once we no longer have to drive.
But these are just a few of the exciting opportunities available to current and aspiring founders. I don’t believe I have even scratched the surface of the new opportunities that abound in mobility. Large legacy automakers and their suppliers will struggle to move quickly and adapt to the shifting environment, so there is an opportunity here! Just make sure you keep your eyes looking far enough down the road.
[1] https://www.nytimes.com/2017/07/26/world/europe/uk-diesel-petrol-emissions.html?mcubz=3&_r=0
[2] https://www.theguardian.com/business/2017/jul/06/france-ban-petrol-diesel-cars-2040-emmanuel-macron-volvo
[3] https://www.forbes.com/sites/bertelschmitt/2016/10/08/germanys-bundesrat-resolves-end-of-internal-combustion-engine/#10727b2b60bd
[4] https://www.curbed.com/2017/5/4/15541840/parking-transportation-electric-cars-car-ownership
[5] https://venturebeat.com/2017/07/22/lyft-accelerates-into-self-driving-cars/
