Could someone explain what Google believes its core competency is? Do they really think that over the long term they can be a software company and a car company?
Also, cars are basically software at this point. Especially tesla.
Really? A lot of the value add is software, but there is still a ton of hardware that goes into a car.
People who immerse themselves in the software world too deeply gain a very distorted view of the world.
No, not at all. In the case of cars with ICE the biggest challenge is still mechanical -- mostly related to environmental protection standards. To keep a BMW M5 Euro5 compliant you have to go a _long_ way. If you mean that you use software to design these cars then well, yes, I can agree. But the onboard software is still a very-very small part of the challenge.
(Ask somebody who's actually in the car industry, especially if he's in the higher-end market, like someone from AMG, BMW M, etc.; just the cooling of these things is an art.)
In the case of Tesla, things are slightly different, but not that much. The big thing here is the reliable electric motor, which -- also according to Tesla marketing -- is simple compared to an ICE, but in reality it's a big challenge to manufacture because high-powered electric motors need to be manufactured with incredible precision, otherwise they break quickyl and often.
to all armchair engineers, you can try out how to create low pollution high power engines in this game: automationgame.com
For example, VW will predictably do really well in the next 10-15 years as they've invested tons of money into optimizing their manufacturing; they use the same basic modules for a large VW and a small Seat.
Why not go the Apple approach - provide a small number of models that satisfy a pareto-split percentage (80%+ including the more profitable markets) and leave the remaining percentage either to aftermarket partners or competitors?
That's the approach Tesla has taken, focusing primarily on the highest margin portion, and filtering down.
Tesla isn't planning to be a "big player in the automotive industry". They plan on creating new product market, which just so happens to be compatible with the existing infrastructure. The incompatibilities (i.e., no ICE/gas) is a feature.
For the same reason that car manufacturers offer different models for the same product (personal transportation): like the A, C, E, S class (in the case of Mercedes). These classes allow a producer to differentiate between consumers with different spending power. If you offer just one product at one price you can't capture the whole market (ie. you sell too little / too cheap to rich people and can't sell to poor people).
Apple recently started going this way as well with the introduction of the Apple watch. If you look at all the models and options they can cover a very broad price range. Differentiating between the watch sport, the watch and the watch edition. Add to this the different sizes (38MM and 42MM) and the different bands and you get a very nice price continuum between 349$ and 17000$.
Add in the fact that it's not millions of variations (really only a couple dozen now). Tim Cook famously said in some conference a while back that all of what Apple sells can be fit in on a table in front of him. I don't think that guiding vision has really changed.
Furthermore, it's not clear if the Apple watch will be successful. I wouldn't use it as a guideline for a successful product strategy - yet.
Usually that's what thing that differentiates >=premium cars from the rest. If you buy a Skoda, you get packages. If you buy an Audi (same conglomerate), you can customize everything as you like.
And work on more charging stations and battery life. Here at the office the guy with the Tesla is constantly mocked cause he couldn't even make it to the team building event, less than a 3 hr drive away (mainly by the guy who had to borrow his mom's Clio to buy some loudspeakers that didn't fit in his own sports car, but that's a different story ...)
Why on earth you'd spend a hundred grand on a car that can't drive more than a couple hours is beyond me, even if it has a big-ass iPad inside.
I've had my car in Austin for a year and a half now and never once been concerned about power, never once been to a charging station (and never been to a gas station). I would suggest that most people aren't regularly taking giant road trips.
The touch screen is not even that awesome (no tactile response), it's less than 1/100th of what makes the car great to own / drive.
Also, there are many people who take long road trips far more frequently and for whom range is a genuine issue (between my vehicles, I clock about 30k miles a year--mostly pleasure as I live only a mile from my job.) I don't begrudge those who can make an EV work for them, but it won't for me.
Yes, that is true. People will need different ways of commuting based on what their needs are.
> The problem I have with this argument is that is doesn't eliminate the problem, but merely removes it a step.
Also true, but what is the problem? Again, you need different ways of commuting based on what your needs are.
No one suggests taking cars everywhere. Some people like road trips, but many people fly when the distance is too far and their time too short.
Likewise people in New York take the subway, elsewhere people ride their bikes. No one suggests the fatal flaw with those is that you can't take them to the next state over. You just rent a car or take a bus, or do whatever, or, if you really need it, you pay a decent sum of money (in New York, at least) to keep a car in a parking space for when it is needed.
We're already in a no single size fits all situation, so it's not clear what the problem with that continuing is.
After depreciation and gas, might be cheaper to rent a car for them too.
An ICE vehicle has over 10,000 moving parts.
A Tesla has 20, or so.
Source: http://answers.google.com/answers/threadview?id=387514
So tell me again how "cars are basically software at this point." Other than Tesla, I mean.
This "20 moving parts in a Tesla" meme seems like a really tilted interpretation of the actual numbers. A Tesla certainly has more than 20 moving parts, and an ICE engine certainly has less than 10,000.
Add to that Seatbelts, Climate control, door/window/lock mechanism, headlight adjustment, etc.
Might not get to 10000, but it's certainly much more than 20.
Yes, the "20 moving parts" seems like quite a bit of an underestimate, now. Would love to know the actual figure. It is certainly FAR less than a typical ICE vehicle, which is a welcome reduction in complexity.
This. Google and other companies at its scale don't need to worry too much about focus. They can just use the excessive amount of revenues made via software to throw resources at solving global problems and turning scifi into reality.
There has never been an attempt at a television series depicting Star Trek outisde Starfleet, correct? I mean, something created by the makers of Star Trek.
Check out this video by Hugh Herr about bionics and watch how artificial limbs give people dignity and freedom and joy: https://www.ted.com/talks/hugh_herr_the_new_bionics_that_let...
Minority report's mistake is to assume we'll use old-fashioned police with new tech. But new technology allows us to change society in unimaginable ways.
That's a trade-off that a lot of people are uncomfortable with, because sometimes the technology gets it wrong. And innocent people end up on the no-fly list, arrested, tracked, etc. Or worse, the system confuses political activism with actual criminality, and ends up protecting the status quo instead of just enforcing the law.
I haven't seen Minority Report for a while, but I remember that being a big theme in that movie as well. Wasn't that the dilemma faced by Cruise's character? Go to jail to protect the system, or stand up and admit it is flawed.
Is it possible to build a new non-ad-supported software business that brings in $60 billion a year in revenue? Maybe. And I'm sure Google's trying.
But it could be that their best bet is to invest in areas where the potential rewards are enormous and few others have the resources and organizational will to invest in.
The strategy you outline, and that Google is taking, smacks of desperation, and sends two signals to investors 1) the ad business is declining and 2) the company is desperately trying to find something else that works. However this is based on a false premise. Advertising is not going away. I don't see other media companies making cars -- instead I see them trying to work out new business models in their core area of competence.
I suspect that much of this is founder driven. It's often the case that founders don't really like what their business has become. In Googles's case they want their legacy to be more than ads, so they are throwing money at vanity projects. These projects generate good press, and satisfy their ego, but in the real world they have little chance of success, and little hope of returning much to the company. For example, Google Glass.
2. Not sure how displaying notifications and having a camera with some basic voice recognition is that big of an advantage right now for a smartwatch. Maybe I'm missing something big, but it doesn't seem like Glass did anything that could translate to a smartwatch that smartwatches don't already do better than Glass. Also, they already have Android Wear.
I'm pretty sure they discovered/made things they could leverage with regards to integration with apps/smartphones and voice interaction. They did a lot of work with interactions involving very pared down and minimal visual information. Also, it doesn't have to stop with a smartwatch. What if they had an in-car HUD as well as a background service running on a smartphone that could leverage the HUD, the watch, or any enabled and linked display device? For example, what if he whole system could figure out I was in the living room, then enable a Glass-like interaction through the media PC+remote, with optional voice? (You'd have to activate the voice, of course.)
Re: camera -- I can see lots of potential for far more discrete devices and telepresence devices, especially in corporate and government environments.
Google's core area of competence is not advertising, advertising is just the means which, so far, has been most efficient to monetize their core competence, but its also a means which has limited range for continued growth.
> In Googles's case they want their legacy to be more than ads, so they are throwing money at vanity projects. These projects generate good press, and satisfy their ego, but in the real world they have little chance of success, and little hope of returning much to the company. For example, Google Glass.
Viewed a different way, there is a limit to how much money Google can pour into its established lines of business with a good return, and one of the things they use the surplus for is high-risk, long-term, high-potential (but low-probability) return projects. Which it can afford to miss on virtually all of, because if it hits even a couple, it'll provide more return than more sedate uses of that money would, and it can afford to throw money at enough projects that it is likely to hit some winners.
Which is why they tend to become incompetent at taking R&D and turning it into product.
search with ads is their core product, ages old. gdocs for enterprise makes some money.
wave, glass, car - pie in the sky, detached from any real product or monetization strategies.
once search tanks, and the trends in mobile are pointing in that direction, how will google finance their DARPA? PARC did not save Xerox, HP Classic is broken up and gone, MS R&D is another sinkhole with no output...
They can't even handle acquisitions. Android is slipping away, Nest is a disaster, etc.
Focus is really hard once you scale.
>>once search tanks, and the trends in mobile are pointing in that direction
That won't happen any time soon, not even in the foreseeable future.. The nearest competitor to Google is Bing, and that is joke.
>>They can't even handle acquisitions
Which ones? Youtube, Maps, Android ...
>>Android is slipping away
Android is going to put Google in the position Microsoft was in the 90's and early 2000's. Android is running away with the market in countries like China and India.
Google has a lot of time at their hands. Unless they start making very big mistakes over years consistently, they will do fine.
yup, China and India totally will save Google, AOSP is no issue at all.
Correct me if I'm wrong but isn't the only subdivision that makes any significant money for Google the Adwords business?
Although it isn't hard to come up with other ways for them to extract more money out of android, I can't imagine a lack of willing buyers for all sorts of information they could harvest from the billion or so deployed devices.
That may be the interesting bit of cars for you, but hardware is still a pretty important part of cars.
Example: I own a synthesizer and a motorbike from the same company.
http://en.wikipedia.org/wiki/GM_Financial
The old GM had sold a 51% stake of it's finance corp to Cerberus:
http://dealbook.nytimes.com/2012/08/21/profits-in-g-m-a-c-ba...
But the US Treasury took majority ownership in the bailout.
That entity is now Ally:
http://www.economist.com/news/business/21648681-announcing-c...
Being an AI company is what's pushing them toward the automobile industry. It's easier for Google to get into manufacturing cars than it is for the traditional automobile makers to develop a competency in AI on Google's level.
It's actually not that different than what's been happening with mobile. Google has gotten better at e.g., UI design faster than Apple has been able to replicate Google's competency with the cloud.
The things Google is good at are generally harder problems than the things that they're weaker in. AI is the most important of these.
http://www.businessinsider.com/the-new-york-times-now-gets-m...
Newspapers got the majority of revenue from print ads and classifieds instead of subscriptions. Nevertheless, newspapers were seen in the business of "delivering news". Advertising was the enabler but it wasn't the newspapers' "core competency".
Television networks get most of their revenue from commercials. Nevertheless, they are seen as being in the business of delivering tv shows and movies. Yes, they are also a conduit for advertising but "advertising" isn't what the employees of NBC/ABC/CBS are actually good at.
Yes, in both cases, advertising is the major "revenue" that enables the businesses, but it's not what they actually do. Likewise, saying McDonald's is a "real estate company" can sometimes be an interesting business conversation but on balance, it's still more useful to everyone to say that they're in the business of selling food. They flip burgers much more often than they flip properties.
I think it's best to view Google Inc as a data information company. They are among the top-10 entities in the world to apply algorithms to petabytes of data. At the moment, advertising is a huge enabler of that activity but that shouldn't divert us from understanding what Google thinks they are actually good at.
There's a critical distinction between an advertising agency like Omnicom Inc (that uses technology) vs a tech firm like Google Inc (that uses advertising). Lumping them both together with the meme that "Google is an ad company" doesn't make much sense.
I actually like the "McDonald's is a software company" lens– the idea being that they have miles of code describing how humans are to interact with one another, how to handle disagreements, how to make french fries– all with staggering precision in detail.
More realistically I guess they're in the business of selling convenient-familiar-cheap-ish-food. The "real estate" elements and "software" elements help to achieve winner-takes-all effects re: convenience and familiarity.
Most employees at Newspapers are writers working on stories (journalists), we don't say they are ad companies.
There's a difference between "doing tech" and what Google does that puts them in a whole other category like Microsoft, Apple, IBM, etc. Are you seriously trying to say that most companies "doing tech" are doing the equivalent of Chrome, Android, Gmail, Maps, YouTube, and Search?
This is the kind of negative, pointless comment that the new HN policy warned about. It's regurgitating a meme that has been posted hundreds of times, it's designed to demean and dismiss the good work of thousands of engineers and researchers working on hard problems.
Non-advertising projects get lots of attention, but below the surface is a hulking mass of engineers supporting new ad formats, new ad optimizations, accounting systems, analysis tools, ad targeters, advertiser support front-ends, etc.
Corollary: If you go to work for Google, the odds are that you will be writing code to support advertising.
(I could be wrong--maybe it's less than 50%. But it's a lot, and my guess is that your "vast majority" is a much less educated guess than mine is.)
If you're trying to say someone working on Bigtable, Spanner, or other infrastructure is "direct related to advertising", I disagree. That infrastructure benefits all Google products, not just ads.
If I add up FTEs for Cloud, Search, Maps, Android, Chrome, Apps, Photos, etc is a several times multiple of those reporting to Ads related VPs.
In the next decade computing will extend in both directions, to physical and virtual realms. I.e. people will enter computer world and computers will enter our world. Google is trying to be a forerunner in this change. These are the next big form-factors.
Obviously their core competency is giving away the stuff for free and put ads on it.