Lesley Stahl did a report last night on 60 Minutes about the development of electric cars in Silicon Valley and by the American auto industry in Detroit. That was the cosmetic level of the story.
On the more meaningful, emotional and meta levels of communication, Stahl’s piece depicts a clash between two mighty cultures, and ultimately between two different ways of conducting one’s business. One of them is highly improvisational. The other is rigid, scripted, dogmatic. Over the past 30 years, Silicon Valley’s ability to improvise has enabled it to lead the world in the development of new technologies and the markets for them. The heavily-scripted and stage-managed Detroit performance has for the most part been a multi-car pile-up on the Interstate, like a series of scenes from Gone in Sixty Seconds.
Here are some of the ways Stahl’s story depicted, on emotional and meta levels, the clash between Silicon Valley and Detroit, and how the former improvises to good effect while the latter welds itself to a script that limits returns on its investment.
Detroit is characterized by Stahl as old (but not particularly wise). The main Detroit character is Bob Lutz, who’s ‘in charge of developing GM’s new products’ including GM’s electric car, the Volt. Lutz is a very tan, white haired gent with a gravelly voice. His claim to fame is that he’s the guy who championed the Hummer. The name ‘Bob Lutz’ sounds like an ice skating move Dorothy Hamill invented back in ‘76.
Silicon Valley is young (and growing). The main Silicon Valley character is Elon Musk, the founder of PayPal, who’s in his thirties, and looks like he’s having a lot of fun in his life, a software winner who’s doubling down on the electric car. Elon Musk is a name you don’t hear every day. It’s exotic. It sounds like the name of the fragrance all the club kids are wearing.
Silicon Valley is about entrepreneurship, and entrepreneurship means having some of your own skin in the game. Elon Musk tells Stahl he’s put $55 million of his own money into his Tesla electric car. Kleiner-Perkins, the legendary Silicon Valley VC, has invested in three electric car technologies.
Lutz’s mandate is to preserve what’s left of GM’s position and reputation in the auto industry. Do you think he’ll be putting his own money into GM’s electric car venture? I guarantee you it’s not in his script.
Furthermore, Lutz personally owns two helicopters and two planes. He probably has a fleet of gas-powered cars and other vehicles at his beck and call, and arrived at his 60 Minutes interview in a limo. His carbon footprint makes him a kind of hypocrite for championing electric vehicles.
Musk is shown driving his electric car. It’s cool. It’s expensive ($109K). George Clooney and Arnold Schwarzenegger have ordered theirs. I wish I could afford one of my own. Maybe someday I can. There is a kind of honest magnetism to his pitch that draws the audience into his brand’s narrative.
In Stahl’s story, she depicts Detroit as arrogant. Bob Lutz claims that Silicon Valley cannot do what Detroit does. He regards the upstarts like Tesla as naive. He calls man-made global warming bullshit.
Silicon Valley, by contrast, comes off as confident, and more realistic than naive about its chances of success in the car market. It is focused on what can be done with the electric car scene in the moment, and not getting hung up on expectations about where the scene might go. Tesla is hiring exiles from the auto industry. There is no shame, and a lot of wisdom, in recognizing what you don’t know (but need to) and going about acquiring that knowledge. Lutz, clearly one of those characters who’s ‘in it to win it,’ shows no curiosity or gives to credence to Silicon Valley.
Detroit buries its failures, as it did with the EV-1 electric cars manufactured by GM in the 1990s. Interestingly, Lutz views the junkyarding of all of GMs EV-1s more as a PR mistake thanas a symbol of a shortcoming in GM’s culture.
Silicon Valley, by comparison, honors its failures because it knows how much can be learned from them. Entrepreneurs who have failed nobly are given the capital to have another go at their dreams. “A good entrepreneur that fails, we will pick that person up, fund them again to do something new if it’s a good idea,” says Ray Lane of the Silicon Valley VC firm, Kleiner-Perkins.
In Detroit–where one bad move can wreck a career, a brand, maybe even an entire company–who can afford to make a move? A player need colossal consensus. In the time it takes to build the colossal consensus, not only will the essence of the original idea have been compromised like a bill that’s made it through Congress, the window of opportunity in the marketplace has probably closed.
The hierarchical, heavily scripted processes of Detroit’s automakers have not been keeping pace with the Networked World. This causes a radical gap between what is promised (i.e. advertising and communications) and what is delivered, creating lots of cognitive dissonance (i.e. customer uncertainty) in the marketplace.
Silicon Valley companies, less encumbered by the historical narratives that burden Detroit auto companies, can react more nimbly and quickly to the market. Their history is one of fast, agile development. Silicon Valley’s entrepreneurs were born with their hearts beating in tempo to Moore’s Law. There is no script for what they envision. They know that the future will be improvised.
Tags: 60 Minutes, Alternative Energy, Bob Lutz, Detroit, Electric Cars, Elon Musk, GM, Leslie Stahl, PR, Silicon Valley, Tesla, Volt
I got a chance to drive around L.A. in the EV1. It was fantastic, and I mourned its death watching “Who Killed the Electric Car”. Now I see its revival needing the improvisers to do something really radical — make it affordable. It isn’t a pipe dream — I bought an electric motor for my car when I started doing a conversion for a mere $2000. The rest of the parts for the conversion (charge controller, FET computer, batteries) would have cost me $5000, but I left the U.S. and had the motor shipped to Cairo then Germany where it sits waiting for me to find a new body and some cash (the old body was junked in L.A.). Now I know that better batteries (Li-ion as opposed to Pb-SO4) add a lot to the price — perhaps as much as $10,000? And let’s assume better components at double the price I paid for the conversion — so let’s say about $25,000 for the guts of the car. What’s the other 75 K for? The body? Can we get these Silicon Valley friends to improvise an electric car for under 35 grand? Otherwise, we need to improvise a do-it-yourself kit for the rest of us and simply repurpose old car bodies. Any investors?
[...] displayed than in the world of electric cars. To the EV enthusiast community he’s been both a villain of “Old Detroit”, railing against “the theory of man-made global warming” and the savior of the electric car, [...]