Industry behemoths and their extinction

I’m driving Chevy Volt now. I’ve always been on the forefront of the industrial revolutions so it was impossible to miss this one. I’m glad that I didn’t buy my Chevy Volt. Just 3 years lease. The car is nice, drives and accelerates well and delivers on all “promises” about electric range and gas economy. However a look under the hood tells me that it is too complex to be reliable and one can expect high maintenance cost and trouble down the road. It has two main electric motors of different size and purpose. It also has 3 clutches, gas engine and over half a dozen modes of operation that are combination of engagements and roles of different motors and clutches.

I do have a serious problem with that. The problem is not technical. It is philosophical. Each revolution has to be for good. I do not see anything good in Chevy Volt’s design. The invention of high capacity batteries made it possible to use the highly desirable features of the electric motor in cars such as high torque, good weight to power ratio, simplicity, efficiency, reliability, low maintenance cost etc. While Tesla set itself up to take advantage of all of that GM created a monster by piling up a full blown conventional car and an electric car on top of each other.

Here is the root of the philosophical problem in my opinion. GM is too entrenched in the mechanical technologies and couldn’t make the turn and embrace the new electric approach. Instead of replacing 80% of the mechanical engineers with electrical engineers (for this EV project), they took very little electrical talent in my opinion, resulting in a mechanical approach to an electrical problem. Tesla did much better starting from a clean slate without the burden of history and traditions, they have created a true technology marvel by maximizing the potential, elegance and simplicity of an all electric design mated to electronics and the Internet.

In this regard GM is no exception and no different than the other Industrial Behemoths that failed to embrace the new realities. My friend Dr. Geoff Forster analyzed the subject scientifically in his book “Half Life”. Most interesting findings there are that this is inevitable, it keeps repeating and the cycles are getting shorter. One of the most impressive statements by Mr. Jeff Bezos (founder of Amazon) in his TV interview with “60 minutes” was not about the drone delivery. For me it was his statement that Amazon will not last very long and it will be kicked out by the next “disruptive technology”. It takes a lot of wisdom and humble to say that.

Here at the end I have a little quiz for you my friends. Can you put the pairs below in order – old behemoth vs. new disruptive entity. If you do it right than I did my job with this blog. Thanks.

GM                  SanDisk
Blockbuster     Tesla
Costco            Apple
Kodak             Qualcomm
Marriott            Netflix
Motorola          AirBNB
Intel                 Amazon