Carrot Capitalism

| | Comments (7) | TrackBacks (1)

I've been driving around in my car a lot lately and have spent much time thinking about my iPod. Right now, the only way for me to listen to my iPod in the car is through an FM transmitter (which doesn't work at all in the Bay Area) or a cassette emulator (which works but doesn't sound that good). In other words, the future of music looks very much like either 1940's technology or 1960's technology.

Of course, the real problem is that the auto is still very much a closed system. A bunch of engineers in Detroit (or Japan, in my case) designed and integrated a big piece of machinery that accepts (best I can count) only three user inputs: gas, compact disks and audio cassettes. I can do anything I want with the car, as long as it only involves inserting one of those three objects into my car -- anything else and I'm forced to ship it off to experts.

But as the past has shown, closed systems want to be open. In the software world, the typical winner in a product category is one with an open plug-in architecture and a developer who gradually morphs the application into a platform. Open doesn't have to mean non-proprietary or open source or free. It just has to be extensible enough that users don't feel limits on how to use the application.

Hardware systems and networks have tended to follow a similar pattern although arguably at a slower pace. Clearly the Internet as an information service was the triumph of open protocols over closed. Wireless LAN went nowhere until wi-fi. And now with SIP, VOIP and wi-fi cell phones, the entire voice infrastructure is arguably about to blow open.

But as has been most recently apparent in the music industry, the vendors of closed systems see openness as a threat and do everything in their power to prevent it. Even though the macro story is one of moving from closed to open, each micro story is about an entrenched company defending its turf and entrenched industries locking the gates from new comers.

So how does my car become a more open system? Just ask Microsoft. In its need for growth beyond the computer industry, Microsoft is forced to go after whole industries as no single opportunity has sufficient scale to be meaningful. And the auto industry has many of the dynamics of a business in need of being opened: since the mid 1990's you've been buying more silicon than metal (in dollar value terms) when you purchase a new car. Cars have increasingly become a different kind of mobile computer, albeit one that looks more like a closed console game platform than an open and extensible modern PC.

Which brings me to the ultimate point of this post and the realization that I've come to while driving around in my car. Microsoft, Cisco and other dominant companies to emerge from the last 20 years of development are a bunch of 800 pound gorillas with sticks. When they enter new industries, they generally have no choice but to use that stick to battle the entrenched competition. Good for them. But start-up life in that world looks much more like building carrots. If Microsoft scares the auto industry enough, the auto industry will be increasingly willing to look to smaller start-ups to help defend their turf. My advice to entrepreneurs: watch where Microsoft goes with a stick, and follow close behind with a carrot.

Categories

, ,

1 TrackBacks

Listed below are links to blogs that reference this entry: Carrot Capitalism.

TrackBack URL for this entry: http://ventureblog.com/cgi-bin/mt/mt-tb.cgi/161

» Sunday, December 07, 2003 02:50 PM from Critical Section

Andrew Anker contemplates Carrot Capitalism. Gorillas use sticks, but startups can use carrots. And also, your car as an open system? Why not?... Read More

7 Comments

Con Tendem said:

Of course, another option is to get a newer car or a custom installed stereo. :)
Many new vehicles come with at least one auxilary input that is perfect for threading that 18ct gol-plated wire from the "out" of your iPod and into the AUX jack on your dashboard.
I do not mean to knock down your theory, I just know that for anything to show up in a generally available vehicle, at least a few years need to go by. Anything that you see a custom shop installing into a car will be available directly from the manufacturer within a year to three years. It happened with CD changers, VCR and DVD players, GPS, and AUX jacks on stereos.
just my $0.02

Jim Cook said:

Check out http://www.the-gadgeteer.com/itrip-review.html for the Griffin FM transmitter which you can select any frequency to transmit to instead of only 4 for the Belkin.

I've also seen this on Amazon. Should solve your problem in the car.

Al said:

From the point of view of the auto makers (I worked at Ford for a decade), they'd say the radio is not their domain (besides selling you the initial hardware). And the fact they get $0 income from radio content is perhaps one of the controversies that has slowed the development of telematics and information to the car. Next time their is information made available to the automaker's captive customer, they'll probably be looking for a piece of the action.

Keep in mind too.. engineers don't usually plan/design the car's features and scope.. the auto execs and planners do that according to what customers are willing to pay for and profit potential.

Andrew Anker said:

I actually tried to do a custom job on the car and have an 1/8" jack installed so I could plug straight in (a few high end Mercedes and BMWs are starting to offer this standard). But the Infiniti's stereo is heavily embedded in the dashboard and I was told they'd need to pull the entire dash to do it. The CD changer and everything is integrated, so there's nothing I can hack into in the back.

Which brings up a question I didn't ponder in this piece: at what point do you start buying a car based on its openess. What is the hacker's car? My friend Ed Anuff offers one at http://www.openbmw.org.

On the FM transmitter question, I've never seen them work. Too much frequency drift and the Bay Area is a very crowded market for frequency so there aren't that many good open spots. And most importantly, I just haven't found the quality to even be up to that of cassettes.

Max said:

I believe it is also benefitial to sometimes insert oil/lubricant and water/cleanser fluid into your auto. Even the Japanese ones need it, really.

Eric G. Harrison said:

Not only the expensive MB's have an Aux port. My C230 Kompressor Sports Coupe (with COMAND system) has an AUX jack in the glove box. I was quite excited to discover this as I was leaving on a long road trip. Plug in the iPod and away I go!

Terrordine said:

I am not a technophobe, actually I'm a real techie (not a fake paper one), I like gadgets and am generally rational, however I am very cautious of cell phones, for these reasons:

1. Recent research; cell phones can cause cell metabolism to malfunction, also men who carry a mobile in a front trouser pocket can have slower sperm!

2. When I use a mobile phone it can cause a disturbing feeling in my head, this is worrying especially since wired phones never do this.

3. All cell phone currently use potentially explosive lithium cells, mobiles cases are not that tough, so abuse or the wrong charge level can be hazardous.

About this Entry

This page contains a single entry by Andrew Anker published on December 2, 2003 3:49 PM.

Accelerating Acceleration was the previous entry in this blog.

Steve Case Makes A Career Of Vacationing is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

Find the best blogs at Blogs.com.

Archives

Creative Commons License
Powered by Movable Type 4.2rc2-en