Why Internet Tech Companies Should Be Building Cars

The fastest I have ever driven a car is 180 km/hr on the German Autobahn.  The slowest I have ever driven a car was in Shanghai in 2016 when it took me about 2 hours to travel 700 meters when a major overhead car lane was damaged. That’s the equivalent speed of a crawling baby! So although it seems the “killer app” of autonomous cars is that I can drink my latte while scrolling through some cat videos on Youku (Youtube equivalent in China), that’s not what I am waiting for. One of the real disruptions of self driving cars is their ability to remove traffic delays from my life (and having a latte while watching Youku is a nice bonus).

Sohu.com is a leading internet brand in China, providing online games and news to over 400 million people,.  In a recent conversation I had with Charles Zhang, the thoughtful and humble CEO/Founder of Sohu.com, he commented that internet companies will be eventually building cars.  Internet companies building cars? Although this does not seem obvious, the idea of Charles Zhang is to take the efficiency and power of information provided by the internet to understand what the Chinese consumer really wants in an automobile. This allows Sohu.com to build cars that are tailored specifically to the Chinese consumer.  Baidu’s CEO Robin Li says that “China has a lot more population and hence has more chance to uncover needs before US companies do”.  By aggregating search queries (in Baidu’s case) and looking at sales of used cars through online classifieds (in Sohu’s case), these companies are getting an unprecedented view into automobile consumer needs and wants.

Most traditional auto companies are also now pivoting their strategy and are now envisioning a future where selling a car is not about the car at all…its about how to give the consumer a better experience while traveling IN the car. Nissan’s CEO Carlos Ghosn commented recently in January 2014 that “we are moving from the car being a slave to becoming a partner”.  Toyota designers are pondering the question of how to make the time in the car the most valuable part of your day.  General Motor’s recently created a position of “Senior VP Customer Experience” with their philosophy being the product is not the car anymore, the car is the container of the experience.  Ford is focusing on Infotainment for the car and their tagline is to deliver cars that are “safe, green and smart”.  The pattern is clear and the auto industry is heading towards a future of the “conscious car”.

So will internet tech companies transform the automobile industry? Well if Google and Baidu is any indication the shift has already started. Google heavily invests in mapping technology through Google Maps, it’s a leader in autonomous vehicle technologies, has a mobile phone OS through Android and recently purchased a company called Waze (which does crowdsourced traffic updates). All this technology allows us to be more efficient with the modern day automobile. No longer do you need to buy a car… maybe you can use it less, share it or get one only when needed because you are a lot more efficient through the use of these technologies.   This is the “dematerializing” effect that technology will have on the auto industry…a lot less cars and we are a lot more efficient with them.  So maybe Sohu or Baidu will not build the cars, but they will certainly make the use of them a lot more efficient and customized.

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China App Hacks That Are as Addictive as Good Dumplings

In March 2016, the largest gathering of Buddhist Monks since the Qing Dynasty reigned over 2000 years ago took place in a small mountain town of WuTaiSha, China. With my family having roots in Sri Lankan Buddhism and my wife who was a newly minted “Master Administrator” of one of the many Buddhist temple groups in China, we took the long voyage to participate in this gathering. It was a live 3-day spectacular gathering of people and monks showing their devotion to the Buddhist way of life. As intensive and social as this event was, there also is a very heavy use by Chinese Buddhist Temples to spread their teachings through the online environment. Wechat groups which aggregate hundreds of followers and managed by volunteers help to keep the community vibrant and alive. What is surprising though is that it just maybe the subtle features of Wechat that keep the community alive rather than the actual teachings of Buddhism.

One such innovative feature on Wechat is called “Red Packets” which allows a member of a group to send any amount of money at any time to other members of the group. The brilliant (and habit forming) part of this feature is that people don’t know how much is actually being sent. A typical example is:  Bill sends a red packet of $10 to the group. The people on the group gets notified via the App that someone has sent a packet of money which is an unknown amount. People then have the option to accept and whoever accepts splits the money.   At one point, my wife had asked her Buddhist group to send in some information on how many times they had done something. No response from the group. She then decided to send $1 as a “red packet” to see if people were actually online. Virtually everyone responded and accepted the packet! The power of small monetary awards in China can go a long way!

Another China App that brilliantly tapped into their members motivation was Didi Dache, which is the largest taxi based App service in China. Because of the large demand for Taxi services during peak hours it can be very difficult to get a Taxi in any reasonable amount of time.  In this case, the taxi drivers had all the control and would be able to accept or deny rides at their discretion. Some clever passengers decided to use the “voice chat” feature to not only tell the taxi driver where they were located but to make the messages funny and enticing for the driver to choose them over others. The drivers actually benefitted the most, giving them some humour and power of their otherwise dreary driving day on the congested streets of China. By adding a little bit of mystery to every ride request, the Didi Dache App added some fun to their driving day.

Basketball is gaining a lot of traction in China as a sport. Michael Jordan to this day is still an icon in Chinese culture even after retiring 13 years go.  This is no more evident in the shoes that bear his name and that Nike sells as an exclusive product every couple of months.  These exclusive deals are typically sold out online in seconds.  People would literally by waiting online at the precise moment of the opening of the web page to get on the list. Because of the overwhelming demand, even if you get on the list there is still a random selection process that happens afterward.  The list is constantly being updated which causes consumers to continually monitor the Nike App to get the latest information.   By adding randomness, exclusivity and time pressure the Nike App cleverly retains the attention of those shoe addicts for the duration of the deal!

Thanks to the work of Nir Eyal (author of Hooked) and research at Harvard, habit forming tactics are now an integral part of the design of the best Apps in the world. China Apps have certainly embraced their own unique twist on it.

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