Category Archives: Commentary-Consumer

Is Mark Zuckerberg the Achilles’ heel of Facebook?


Facebook CEO Mark Zuckerberg. Mariene Awaad/Bloomberg

 

Commentary
By Bill Owen – TechNewsBlog.net – April 4, 2019

I would like to preface this commentary by saying that I would like nothing more that to be able to say to Mark Zuckerberg: “Way to go. Keep up the great work.” But I can’t, at least right now, and holding out for that day is probably a useless exercise, unfortunately. Many others feel the same way and this commentary will address some of the reasons why. Each section will address a key issue, with additional links to articles that documents questionable activities. Comments and links have been distilled down through quite a bit of material, which should bring a lot of varied information into focus.

Note: Other companies will be discussed in an upcoming commentary soon. We will start off with the long-standing and ever-present circus that is Facebook.

Introduction

The premise and essential purpose of Facebook was somewhat novel and had a lot of potential. Mark Zuckerberg ran with his concept/vision. Once the momentum started to build, Facebook became a runaway freight train, and successful in many ways. However, it was never presented as a company that had any concern for your privacy. Quite the opposite. Mark Zuckerberg (referenced as MZ for the remainder of this commentary) DISDAINS privacy. A little too arrogant and intrusive of an approach, to be sure. He does not have a very becoming history of integrity, which is why the Facebook ship may eventually run onto rocky shores at some point, as impossible as that seems right now, of course. A lot of smoke and mirrors from the fearless leader, from the early days right up to today, and no doubt continuing into the future. The following sections of the commentary discusses and documents various areas of importance and concern.

[For details and a chronology of Facebook from the beginning, see the following link]: Facebook

Integrity


Chip Somodevilla/Getty Images

There will be quite a few compelling examples of the impact that Facebook has had over time, what it has gone through legally, and where it is headed. It may be fair to say that a lot of the drama that Facebook has gone through to date was unnecessary and did not have to happen. There is one main reason why it did, and something is going to give eventually. As stated in a previous posting recently, MZ is without a doubt a loose cannon of a leader. Irresponsible in many areas, where responsibility is revered and expected from a leader. This expectation comes from other executives and employees in the company, investors/stakeholders, peers at other technology companies and companies in general. It doesn’t seem to come up much, but there are many embarrassed Chairpersons, CEO’s and Presidents of other corporations around the world, and especially in the U.S., when one of their own, no matter what age or generation, is conducting the loose cannon approach to business. What most people recognize is that Facebook took off and went viral despite Mark Zuckerberg at a certain point. Credit needs to go to all of the dedicated staff/employees, and last, but not least, the general public and businesses that buy in to the platform. If it was not for them, there would not be a Facebook.

Despite the fact that you are buying into the program by joining and clicking on “I Accept” without reading the entire, if any, of the legal details/disclaimers on what you are signing up for, Facebook needs to be responsible in how it conducts its business. Sure, it’s covered by its legal clauses, but are they conducting their business with the member’s best interests in mind, or only their own interests? That’s the ethical question we need to ask ourselves. Many large corporations have been brought to their knees due to mismanagement. That result was due to people that were, or were not, in a management position, let alone at the lofty Chairman, CEO or President level.

Accountability


AP Photo/Pablo Martinez Monsivais

Where has all of the accountability gone? If the people that carry out activities that could eventually land them in hot water have an overwhelming sense that they can’t be touched, what then? We are unfortunately, for the time being, experiencing that right now. Our legal system has become a shell of what it once was, and was designed to be. Stiff fines and a slap on the wrist is status quo. For some corporations, it’s a mosquito bite. In an unrelated example,right now, I’m putting this together and shaking my head, as a well known person who completely fabricated an incident at the felony-level was let go on all 16 counts. Literally no explanation, just let go. A two-tiered judicial system. What happened to “If you do the crime, you do the time”? The legal system plays favorites and is corrupt on a lot of levels. They are influenced further by certain “behind the scenes” entities to bring about judicial/legal outcomes that are pretty outrageous. Just a bigger picture of accountability that is expected by all of us, not to mention business. If you or I had done the same thing, you know the outcome.

Facebook could eventually be in peril, despite its current success, valuation, etc., much to the dismay of hard working employees who may have a vision themselves. They may be “all in” and absorbed in the current Facebook culture, but just what is that culture? Is the vision espoused by MZ the best for Facebook, its employees and its followers?  Accountability is one of the most admired qualities of a leader. So is integrity. MZ seems to lack both. That should be a red flag for all involved. Documented quotes throughout Facebook’s history reveals a “leader” that thinks a little too highly of himself. The following link is also at the end of this posting with other select links: WikiQuotes – Mark Zuckerberg (link to “Dumb F***s” quote, etc. at top of his WikiQuotes page). Many say that one particular quote will haunt him for a long time. I would say that it is etched-in stone and not going away. That is one of many examples of MZ’s arrogance and lack of leadership attitude that he displays on a regular basis. Whether he is before Congress or talking with the press over allegations of any sort, MZ talks from both sides of his mouth. He would like us to believe that he will changes things. He always says that he will, but never does.

Even as this commentary is released, MZ is hard at work saying all the right things to the media about changes to come, etc. Based on his past comments and a consistent lack of results on promises made, none of us should believe anything he says at this point. He will have to put his money where his mouth is and prove it.

Governance/Company Policy

MZ is riding the gravy train and momentum of Facebook with impunity. Even the mighty Facebook has an Achilles’ Heel, maybe multiple Achilles’ Heels. It does not help that the most prominent risk is running the company. In an ideal world, the Board at Facebook would seriously look at their leader and make sure that there is an understanding between them and him. Unless that Board and group of executives signed their lives away to Mark Zuckerberg, they would be able to leverage a sane and responsible approach to their business. As a group of executive leaders, and as a company in general, they could be so much more, but they are not. Can MZ be booted from Facebook? Most corporations have a provision built into the company rules of corporate governance that allows for the forced exiting of a leading executive should the current circumstances warrant it. Was MZ able to insert some kind of clause to prevent that? He sure acts like he did. Here is a link that explains that very topic and why MZ cannot be touched internally right now, while others can get the swift axe from him at any time: No matter how bad things get at Facebook, Mark Zuckerberg will be Chairman for as long as he wants, experts agree . The arrangement has just added more arrogance to someone that was never short on arrogance.   

Leadership style and some cleaning up of the internal culture need to happen. But, of course, as explained in the link above, arrangements were made where MZ has complete control, even to the point that if any executive even hints of a focus on needed change and working with MZ on it, or a potential coup, he can kick them out immediately, and they know it. Their hands are tied. “My way or the highway”. That is one of the main reasons why corporate Boards are set up: to prevent unwise and/or impulsive decisions that may impact the company in a negative way. Things are discussed, viewpoints are laid out on the table, and any agreed-upon changes are made, understanding the implications of any unwise moves. Could that policy change at Facebook? Maybe. Changes that occur will more than likely come from outside of the company looking in, and those institutions will have every legal right to address specific issues with MZ and others, when the time comes. And it is rapidly approaching. There have been a few warning shots fired over MZ’s bow fairly recently, the Congressional Hearings in April 2018 and others. Details of those encounters will be provided in the following links below. MZ will no doubt have to “Face” the music in the future many times.

MZ should not be exempt from the typical company rules of corporate governance that help keep companies moving along responsibly. Just because he and his lawyers are legally allowed to add wording that completely keeps him safe, does that make it right to do so? As mentioned, corporate executives and the Boards at other companies are holding themselves to a much higher level of responsibility and integrity. What makes MZ so special?  That internal provision designed to protect MZ completely needs to be changed, and no one, no matter who they think they are, should be above it. Certain areas of corporate law need to be reexamined and updated, and put in place to protect those very corporations, their executive staff, all employees and members of the public joining up on the platforms.

Based on what we have seen so far, there is no way that MZ plans to relinquish his iron grip on Facebook and his vision of No Privacy For All. In the early days of Facebook, MZ alluded that our days of privacy are over, and that could be true, especially for those that have opted in to Facebook. When you consider that there are over 2.2 billion monthly active users on Facebook, that represents approximately one third of the population of the globe. Even if you take into account multiple personal and business accounts, it is very near 2 billion people. If you are reading this now, there is a very high probability that you have an account.

Privacy

The company has a policy, like many social media platforms, of having default account settings that have all sorts of implications. Unbeknownst to people signing up for the first time, it is very easy for someone signing up to bypass their “security” settings before they get rolling on the site. “I’ll take care of it later”. Especially when you are staring at the obligatory provisions of use/disclaimers of the site that goes on in tiny print for the equivalent of 4-5 pages. Most of the time, “later” never happens. Despite all the money-making reasons that Facebook has behind all of this, it would be refreshing to see these companies incorporate an “opt-in” policy vs. “opt-out”, which is the default setting now for many companies. You have to opt out of analytical functionalities within the platform: advantage company. Also, advantage for any of the third parties that are receiving loads of analytics data on your input, buying preferences, specific location, etc, through Facebook and other social sites. We have been given updates on what our specific personal information is being used for and by whom. But you can be sure that not all of that will be known. So it is a choice you need to make. Chances are very good that your personal data may not be going where you want or expect. Facebook is basically a digital diary of your life. What once used to be a diary or private notebook hidden or locked away somewhere to be pulled-out and written in for inspirational notations and posterity, is now open to the world. We have been so socially engineered that we do not give it a second thought.

Future of Facebook and corporate policy in general/Conclusion

The future of Facebook, as it stands now, is in the hands of Mark Zuckerberg. Don’t expect any significant changes to come through him personally, based on his past activities and overall attitude. There is a much better chance that it will stay the same or get much more interesting.

Regarding corporate policy rulings: It is not happening right away, but I feel confident that a number of far-reaching corporate internal policy rulings will be made on accountability issues and privacy issues for business. Hopefully rulings that will stick.
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Note on upcoming related future commentary

Commentary on other technology companies will be coming soon that reveals some similarities to how Facebook is run, regarding privacy issues primarily, but having overall responsible management at the same time. Most, if not all, of the other example companies hold themselves accountable in the boardroom, for starters. Working together as a truly cohesive executive Team is the glue that keeps it all together.

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Following are key links and references for your review. Links are in chronological order by date published, per category:

From last commentary – Related links (“Hundreds of millions of Facebook passwords exposed internally”, published on March 27, 2019)

Published April 11, 2018
Facebook’s Arrogance Crisis: Can Mark Zuckerberg Claw Back Control? | Opinion (Submitted on April 11, 2018 by Alex Pentland and David Shrier on the last of two days (April 10th – 11th) of the Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing about Facebook on Capitol Hill). Newsweek.com.

Published  February 18, 2019
Yes, Mark Zuckerberg Is a “Digital Gangster” Who Violates Your Privacy, but Here’s Why You Still Won’t Quit Facebook (By Ben Brown for CCN, a part of Hawkfish AS. CCN is an unbiased financial news site reporting on US Markets and Cryptocurrencies, based in Norway).

Accountability/Integrity related links

Published September 11, 2018
Mark Zuckerberg’s Truth Problem  Fortune.com  Commentary on Facebook. Includes 5 minute video of portions of question-grilling by key Congressionals. Fortune.com.

WikiQuotes – Mark Zuckerberg  Some choice quotes over the years. See his “Dumb F***s” quote from the early years, at the top of his WikiQuotes page. That quote also referenced in the Fortune.com link directly above.

Wikipedia – Mark Zuckerberg  Everything you want to know, or do not want to know, about the fearless leader of Facebook.

Governance/Company Policy related links

Published April 9, 2018
Investor groups call for Mark Zuckerberg to resign  TheVerge.com

Published October 18, 2018
A Push to Remove Facebook CEO Mark Zuckerberg as Chairman Has New Backers  BARRON’S

Published October 18, 2018
Tech Founders’ Absolute Power Is Destroying Company Culture  Wired.com

Published  December 5, 2018
No matter how bad things get at Facebook, Mark Zuckerberg will be Chairman for as long as he wants, experts agree  CNBC.com (Markets)

Privacy related links

Published September 25, 2018
Is Mark Zuckerberg Going to Ruin Instagram, the Last Fun Social Network?  Instagram’s co-founders quit yesterday amid reports of tension with Facebook.  Esquire.com.

Published March 27, 2019
Opinion: Big Tech, after years of watching us, is now being watched  (Good rundown on Amazon, Alphabet (Google) , Apple and Facebook). A number of the companies that will be discussed in the upcoming follow-up commentary on corporate responsibility and privacy. MarketWatch.com

Published April 3, 2019
Millions of Facebook Records Found on Amazon Cloud Servers  Latest news. Seriously, sketchy news about Facebook is so common, you have to be picky about which article links to share. Bloomberg.com

MISC (General background)

Published April 5, 2018
How to Prevent a Faltering CEO from Damaging Your Company  This link offers some insight into internal dealings with questionable leadership abilities and activities/attitudes by CEO’s. This article is largely focused on companies that did not act in time, but could have. As mentioned previously in this commentary and within links on this posting, Facebook’s situation is a bit different in that other executives and the Board’s hands are tied. A good overview of a typical scenario, however.  Strategy+Business.com

Behold the IoT Invasion: Eight Reasons to Plug In (Slideshow)


John McDonald, CEO, ClearObject | Mar 12, 2019 for IndustryWeek

An IoT integrator shares what big trends to capitalize on in the next few years

 

By 2021 consumer spending on digital products and services is predicted to double, and the Internet of Things (IoT) space grew just as fast in 2018. Every industry is looking for new, advanced ways to meet production and consumer demands in a world of instant gratification. These trends are some of the things we see as an IoT systems integrator that will continue in the forefront of 2019 and beyond.

IoT and data are critical for today’s operations in any industry. It’s no longer feasible to ignore the benefits for efficiency, productivity and customer satisfaction that are results of using advancements in IoT and data. Each and every industry must adopt new and inventive methods like IoT and machine learning to analyze transactions and data in any form whether it’s a car that can detect driver fatigue, preventive maintenance sensors, or nanotechnology to monitor food sources.

Click on Start Slideshow for eight areas that should see serious growth in the next few years:

Start Slideshow

John McDonald is the CEO of Fishers-based ClearObject and chair of the Indiana Technology and Innovation Policy Committee.

When Digital Transformation Does Not Happen: Big Box Retailers That Closed Their Doors In 2018


DANIEL LEAL-OLIVAS/AFP/Getty Images Getty

Jan 22, 2019  02:42pm

By Blake Morgan, Contributor – CMO Network (Forbes), Customer Experience Futurist, Author, Keynote Speaker

 

When it comes to retail, the only constant is change. Today news broke that Starbucks will be trying delivery to customers, as the in-store experience has lost some traffic. As you will find out below, not everything that Starbucks touches turns to gold, such as Teavana. Those who compete on customer experience today are doing so by competing on logistics. A digital transformation that includes logistics and supply chain prove to be the power of companies that remain relevant to customers. Target is an example of a company that struggled to get a hold on the digital aspect of its business, and outsourced its digital side and website to Amazon from 2003 – 2011. They saw digital as ancillary but eventually woke up. They focused on supply chain combining digital and in-store inventories enabling them to get customer’s their orders faster. Target became a company that used technology to improve its supply chain and offer curbside pick-up for customers. Not to mention the success of its many Target-only brands. Target has triumphed seeing a twenty nine percent growth in online sales in 2018 and a growth in retail sales as well (almost six percent). But for those who refuse to go through a digital transformation fast enough, the risk is real.

In 2018 when some iconic retailers shuttered their doors by either completely going out of business or closing a portion of their stores. Retail is incredibly competitive, and specialty stores or brands that can’t innovate and compete often fall by the wayside. Thanks to Amazon and an explosion of direct to consumer companies like Casper, Dollar Shave Club and Away, more big box retailers are closing their doors.

Here are the top 9 biggest retail closures of 2018:

1. Toys R Us

Iconic toy store Toys R Us closed the doors of all of its 735 stores in June after months of liquidation sales. It marked the end of an era for brick-and-mortar shopping in standalone toy stores. Even with a loyal customer base and strong rewards program, Toys R Us had problems keeping up with online toy retailers and big box stores.

2. Sears Holdings

Sears has been battling to survive since it filed for bankruptcy in October. As a result, the company is restructuring and focusing on a smaller core of profitable stores. Sears Holdings announced in late 2018 that it will close more than 140 Sears and Kmart stores. Sears used to be a prominent retail store, but both Sears and Kmart have faced difficulties in recent years with increased competition and the growth of e-commerce. When given the choice to shop more modern brands online or go to an older Kmart store, customers are choosing the former.

3. Lowe’s

Home improvement store Lowe’s closed 51 stores across the U.S. and Canada. Nearly half of the under-performing stores are within 10 miles of another Lowe’s store, which has allowed employees to transfer to new locations. Closing less profitable stores will allow the company to focus on stores with big earnings.

4. Mattress Firm

Also on the list of retailers that filed for Chapter 11 bankruptcy is Mattress Firm. As a result, the company closed 700 of its more than 3,300 stores. Stores closed quickly after the announcement, some within a few days and others within a few weeks. Most of the stores that closed were in markets that already had numerous other Mattress Firm locations. In recent years, many customers have moved to ordering mattresses online.

5. Brookstone

Mall and airport staple Brookstone filed for bankruptcy in August after a long period of slumping sales. Brookstone closed or is in the process of closing all 102 of its mall stores. However, it is adding 35 new stores in airports to help meet revenue goals. Airport stores tend to be smaller but gain lots of traffic from tired travelers wanting to test the famous massage chairs. Brookstone’s mall locations simply couldn’t compete with online retailers, and most consumers found it easier and more enjoyable to find their quirky gadgets online.

6. GNC

Vitamin store GNC closed 200 stores across the U.S. and Canada after slumping sales. The company said it was trying to renegotiate leases to lower the number of stores it closed, but that didn’t turn out. There are still more than 9,000 GNC stores around the world, but more locations could close if the company can’t turn things around. With its specialty products, GNC is in competition with other vitamin retailers and online stores.

7. Foot Locker

A fixture of many malls, Foot Locker closed 110 stores in 2018, mostly in malls that the company said were “starting to deteriorate.” As it closed underperforming stores, Foot Locker starting putting a bigger emphasis online. However, brick and mortar isn’t completely dead for Foot Locker: it also opened 40 new stores in 2018, including a Champs Sports flagship store in Times Square.

8. Teavana

Starbucks shut the door on its retail tea chain, Teavana. Most of the stores hadn’t been performing well, and Starbucks wanted to move the company in a different direction. In recent years Starbucks tried to spice things up with improved store designs and creative packaging, but it wasn’t enough. All 379 Teavana stores closed in 2018.

9. Claire’s

Home to tween girl accessories, Claire’s filed for Chapter 11 bankruptcy in March 2018 and announced it was closing more than 90 stores. It’s the perfect storm for Claire’s: aging customers, dying malls with slowing foot traffic and a move to online shopping. The store has also faced more competition from big box chains like Target and Walmart.

Nothing in retail is ever certain, especially as e-commerce continues to boom. Stores need to find ways to adapt or they might follow in the doomed footsteps of these retail stores.

Blake Morgan is a keynote speaker, futurist and author of “More Is More.” Sign up for her weekly customer experience newsletter here

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Note: The following link is not part of this article from Blake Morgan, but provides further details on additional bankruptcies experienced from 2015 through early 2019. It is quite extensive, but a very good review (Infographic with commentary) of the “Retail Apocalypse” and the impact of big-box retailers falling behind the technology curve and not shifting to e-commerce and establishing an online presence early enough:  Here’s A List Of 68 Bankruptcies In The Retail Apocalypse And Why They Failed from CBInsights (March 12, 2019).

The World Wide Web Turns 30. Where Does It Go From Here?

Sir Tim Berners-Lee invented the World Wide Web in 1989.- Tristan Gregory/Redux

By Tim Berners-Lee, Inventor of the World Wide Web – Opinion – 03.11.19  05:00 PM for Wired

 

Today, 30 years on from my original proposal for an information management system, half the world is online. It’s a moment to celebrate how far we’ve come, but also an opportunity to reflect on how far we have yet to go.

The web has become a public square, a library, a doctor’s office, a shop, a school, a design studio, an office, a cinema, a bank, and so much more. Of course with every new feature, every new website, the divide between those who are online and those who are not increases, making it all the more imperative to make the web available for everyone.

And while the web has created opportunity, given marginalized groups a voice, and made our daily lives easier, it has also created opportunity for scammers, given a voice to those who spread hatred, and made all kinds of crime easier to commit.

Against the backdrop of news stories about how the web is misused, it’s understandable that many people feel afraid and unsure if the web is really a force for good. But given how much the web has changed in the past 30 years, it would be defeatist and unimaginative to assume that the web as we know it can’t be changed for the better in the next 30. If we give up on building a better web now, then the web will not have failed us. We will have failed the web.

To tackle any problem, we must clearly outline and understand it. I broadly see three sources of dysfunction affecting today’s web:

  • Deliberate, malicious intent, such as state-sponsored hacking and attacks, criminal behavior, and online harassment.
  • System design that creates perverse incentives where user value is sacrificed, such as ad-based revenue models that commercially reward clickbait and the viral spread of misinformation.
  • Unintended negative consequences of benevolent design, such as the outraged and polarized tone and quality of online discourse.

While the first category is impossible to eradicate completely, we can create both laws and code to minimize this behavior, just as we have always done offline. The second category requires us to redesign systems in a way that changes incentives. And the final category calls for research to understand existing systems and model possible new ones or tweak those we already have.

You can’t just blame one government, one social network, or the human spirit. Simplistic narratives risk exhausting our energy as we chase the symptoms of these problems instead of focusing on their root causes. To get this right, we will need to come together as a global web community.

At pivotal moments, generations before us have stepped up to work together for a better future. With the Universal Declaration of Human Rights, diverse groups of people have been able to agree on essential principles. With the Law of Sea and the Outer Space Treaty, we have preserved new frontiers for the common good. Now too, as the web reshapes our world, we have a responsibility to make sure it is recognized as a human right and built for the public good. This is why the Web Foundation is working with governments, companies, and citizens to build a new Contract for the Web.

This contract was launched in Lisbon at Web Summit, bringing together a group of people who agree we need to establish clear norms, laws, and standards that underpin the web. Those who support it endorse its starting principles and together are working out the specific commitments in each area. No one group should do this alone, and all input will be appreciated. Governments, companies, and citizens are all contributing, and we aim to have a result later this year.

Governments must translate laws and regulations for the digital age. They must ensure markets remain competitive, innovative, and open. And they have a responsibility to protect people’s rights and freedoms online. We need open web champions within government—civil servants and elected officials who will take action when private sector interests threaten the public good and who will stand up to protect the open web.

Companies must do more to ensure that their pursuit of short-term profit is not at the expense of human rights, democracy, scientific fact, or public safety. Platforms and products must be designed with privacy, diversity, and security in mind. This year, we’ve seen a number of tech employees stand up and demand better business practices. We need to encourage that spirit.

And most important of all, citizens must hold companies and governments accountable for the commitments they make, and demand that both respect the web as a global community with citizens at its heart. If we don’t elect politicians who defend a free and open web, if we don’t do our part to foster constructive, healthy conversations online, if we continue to click consent without demanding our data rights be respected, we walk away from our responsibility to put these issues on the priority agenda of our governments.

The fight for the web is one of the most important causes of our time. Today, half of the world is online. It is more urgent than ever to ensure that the other half is not left behind offline, and that everyone contributes to a web that drives equality, opportunity, and creativity.

The Contract for the Web must be not a list of quick fixes but a process that signals a shift in how we understand our relationship with our online community. It must be clear enough to act as a guiding star for the way forward but flexible enough to adapt to the rapid pace of change in technology. It’s our journey from digital adolescence to a more mature, responsible, and inclusive future.

The web is for everyone, and collectively we hold the power to change it. It won’t be easy. But if we dream a little and work a lot, we can get the web we want.

This story was co-published with the World Wide Web Foundation.

The power of “and”

Former GM executive Larry Burns discusses how Detroit and Silicon Valley both look to have critical roles in the future of mobility

By Dennis Pankratz, Research Manager, Center for Integrated Research, Deloitte Services LP for Deloitte Insights

Auto executive and adviser Larry Burns sees the future of mobility filled with driverless cars, with a wide range of customers, uses, and market segments—and plenty of room for innovation in both Detroit and Silicon Valley.

Few people are as deeply familiar with both the automotive industry and the technology community as Larry Burns, who spent more than three decades at General Motors, ultimately serving as corporate vice president for research, development, and planning. He is also an academic and a longtime adviser to Waymo, Alphabet’s self-driving car program. Burns’ recent book, Autonomy, offers an inside account of the efforts to develop self-driving vehicles.1 In a wide-ranging discussion, he shared his views about the future of mobility.

Derek Pankratz: You’ve been thinking about changes in transportation for a long time. Looking back at what you believed or expected 10 or 15 years ago, what has surprised you?

Larry Burns: There were a couple of really big surprises. When we finished the [Defense Advanced Research Projects Agency, or DARPA] Urban Challenge in 2007,2 we asked the head of DARPA, “What’s next?” And he said, “Well, you’ve proven this is viable. It’s really up to the commercial sector to run with it.” So all of us expected that everyone would be knocking on the doors of these young engineers to go make driverless cars happen—and quite honestly, except for Google launching its self-driving car program in 2009, very little happened. I was really surprised that the commercial sector didn’t jump at it. So I’d say my biggest surprise was how long it took for a lot of people to accept that this was real and was possible, especially the auto industry, which is so significantly impacted by what’s going on. And now there’s this stampede. Suddenly everybody’s an expert.

One other thing in terms of my own journey. When I left GM, I went to Columbia University and led a program for sustainable mobility. We looked at what you could do with a driverless, electric, shared vehicle model, and the results were pretty remarkable in terms of the number of vehicles required and the cost per mile.3 But the reality is there are almost 200 million cars and trucks in the United States,4 and a lot of people who want to have their own. So I’ve given thought to the idea of an autonomous vehicle that can be personal-use as well as shared-use, because I think the future is going to be both of those.

DP: It’s an interesting challenge. I know Deloitte’s surveys suggest that the biggest reservation people have about shared mobility is exactly that: It’s the issue of personal space and not wanting to share a confined area with somebody else.5

LB: I don’t think people will be owning their car like we do today—I expect it will be more like a lease or subscription. If you have an autonomous vehicle for your own personal use, you’ll likely want to be picked up at your door and dropped off at your door. And you won’t want to be hassled with parking your vehicle—you’ll want that vehicle to be smart enough to go somewhere and refuel or recharge and wait for you. I think that vehicle would get a lot more usage than my personal car now: When I arrive at work, it drops me off at the door, and then I could dispatch it in the middle of the day to go pick up my dry cleaning, and I could dispatch it again to go get takeout dinner and then go pick up my kids and then pick me up at work and take me back home. This whole world of a robotic personal valet is very intriguing to me; I think it’s going to eliminate the need for owning a second and third car initially and, ultimately, owning a car altogether.

Some worry that additional road miles from both shared and personal usage will cause more congestion, but for those people who are taking trips they couldn’t before—due to their age or a disability, for example—and are now able to participate more in society and the economy, that’s a good thing. We should be celebrating those miles. It’s also worth keeping in mind that if vehicles are operated as a fleet, you’re going to be optimizing the use of that fleet. Ride-hailing providers don’t operate like a fleet—they are a bunch of individual agents trying to get matched up with a ride. Our work at Columbia showed that you want to simultaneously have very high fleet utilization and very low empty miles—miles with no passengers in the car. The business reality of fleet management will help us on the congestion front.

DP: I think about that personal-valet model a lot. I live in a fairly rural area in Colorado where a shared fleet model doesn’t seem to make sense. There are all of these small and medium towns where it’s hard to see how you get the utilization to make it worthwhile, so the dedicated-use approach seems natural.

LB: Fifty-three percent of Americans say they live in suburbs, and 21 percent in those rural towns that you’re talking about, which is a nontrivial slice of the population. And that’s what’s so exciting about the future autonomous electric vehicle market. There are going to be a lot of market segments, and that provides great opportunities for innovative companies to define their brands, find their niches, and deliver real value tailored to those opportunities.

DP: You briefly mentioned electric vehicles. When you were working on the AUTOnomy concept car at GM in the early 2000s, you built around hydrogen fuel cells.6 My impression today is that there is a lot more activity around battery electric vehicles. Any thoughts on the pros and cons of those two different types of power sources and their future prospects?

LB: If I could change one thing in my public rhetoric in my role at GM, I probably would never have uttered the words fuel cell. I would have called it a hydrogen battery instead, because to be honest, they’re very similar. And progress on hydrogen storage, production, and distribution and fuel cells has been very impressive. Germany just announced that it’s going to have trains operating on hydrogen fuel cells,7 and there are over-the-road trucks being developed that use hydrogen fuel cells.8 So I think this is not battery or fuel cell. I think it’s an and. You’re going to have a lot of synergy in the propulsion system around that and; depending on which market you’re dealing with, hydrogen and fuel cells are going to find their role.

DP: That and point is really interesting, because it’s always presented as one versus the other.

LB: One of my biggest lessons is the power of and. A lot of business leaders get trapped thinking they have to select between A or B. And they forget to ask the question, “What about A and B?” What I have found over the years is that “A and B” often beats A or B by themselves. I think it’s hugely important to find the power of and.

DP: Another topic that’s often posed as a dichotomy: the role of vehicle-to-vehicle [V2V], vehicle-to-infrastructure [V2I], and vehicle-to-everything [V2X] communication. Some people say it’s critical and we’ve got to have it in some form. Others say it’s actually superfluous, or that it would be nice to have but is too expensive and takes too long to build out, so we’re going to keep everything onboard the vehicle.

LB: It’s another beautiful example of the power of and. For two cars to talk to each other, both need to have enabling hardware and communications technology. For V2I, the infrastructure is pretty expensive to deploy. But in time, as we get to Gen-2, Gen-3 autonomous systems, I think you’re going to see V2V and V2I become a way to reduce cost and perhaps even improve performance. I’ve learned to never rule out any technology. I dedicated my book Autonomy to engineers. Engineers make what’s possible real; that’s what we do.

DP: Let’s talk about yet another apparent binary choice between developing advanced driver assist features like automatic emergency braking or lane departure correction, and aiming for “fully” autonomous systems that don’t anticipate a human taking control. How do you see Level 2 and 3 automation playing into this whole picture?9

LB: I’ve been an adviser to Waymo, Google’s self-driving car project, since January 2011, and they made a really important decision that they were going to develop autonomous systems for only where there’s no human involved at all. If our goal is to eliminate over 90 percent of crashes, we really need to go for Level 4 and Level 5, full autonomous. I believe the right thing to do is to get the driver out of the loop altogether: The situational-awareness challenge of asking someone to reengage in the driving task when they’ve been sitting there not driving for 20 or 30 minutes is a tougher problem to solve than getting the system to autonomously handle 99.99 … percent of the stuff that happens in the world. With that said, I think it’s useful to be developing emergency braking systems, full-speed adaptive cruise control, lane keeping, stability control. That’s been good for safety purposes. But at the end of the day, I believe the objective should be to get to Level 4, starting in a geo-fenced area that’s big enough to have commercial value.10

DP: It seems safe to say that you’re a believer in the opportunities around autonomous vehicles. What do you see as the biggest hurdles to widespread adoption? Is it technological, social, regulatory, or something else?

LB: My biggest fear is that people will make premature judgments about what we’re doing, whether out of fear or just not knowing. Have you had a chance to ride in a driverless car?

DP: I have.

LB: So you have a different experience than someone who hasn’t. My first ride on public roads was in late 2010. I engaged the system. My hands were shaking over the steering wheel. My feet were nervous over the pedals. But within five minutes, I was relaxed; I realized this car was doing everything I would do as a driver and even better. And I suddenly realized I had no desire to change lanes and try to get ahead of somebody in front of me because I had my time to myself. I think this is all about people understanding what’s possible in their lives and what’s possible with the technology. I worry about people coming to a premature judgment and therefore resisting. And I very much worry about players who have a strong vested interest in the existing roadway transportation system.

I’m not worrying about the technology—I have not seen anything come up yet that says we’ve hit the wall and that we can’t keep finding solutions to those driving challenges that are the most difficult that we face today as humans.

DP: It’s another and moment, although maybe one that could slow progress. You can imagine hesitance or uncertainty by the public combined with a variety of vested interests that are able to capitalize on a moment where there’s no broad popular support.

LB: It’s going to play out with a tipping point. There’s this tendency to want to look into the future to know how big it’s going to be and when, to predict market shares and penetrations. That’s impossible. I focus more on that magical moment when market value exceeds price and price exceeds cost. The technology is proven, the customer value is proven, the business opportunity is proven, the regulatory barriers are not there, and it becomes clear this is now just a question of scaling through a series of generational deployments. That magical moment is within a three-to-five-year window, unless these vested interests push back so hard that they slow things down.

DP: Related to the hurdles, I’m personally very interested in the psychology or sociology of car ownership, particularly in the United States. Car culture is deeply embedded in a lot of places. The car is more than just a way to get around—it’s a longstanding symbol of who we are and who we want to be.11 Is that a significant barrier?

LB: Another very good question. I think about it through the lens of my two daughters, who are 30 and 27. My coming of age was when I got my driver’s license and my first car. Their coming of age was their first cellphone, not their first car. Over the last 10 or 15 years, I’ve asked them what would you give up first—your cellphone or your car? And they say they’d give up the car before they’d give up their handheld device. Younger generations are expressing themselves in a much different way than just through car ownership.12

DP: What about some of the nightmare scenarios or unintended consequences of these new mobility innovations? Many cities are already dealing with an influx of ride-hailing vehicles, and you mentioned sending your self-driving car to pick up your dry cleaning. You’ve done detailed modeling on a number of cities looking at what shared autonomous vehicle adoption could look like. Any insights?

LB: At Columbia, we asked the question: “To make all the one- or two-person trips that automobiles currently make, how many tailored-design driverless electric vehicles would you need?” In city after city that we studied, you could replace all of the cars with a fleet that’s 15 percent the size and still make all the trips that are being made. In simulations, those vehicles were picking people up in two to three minutes. We had empty miles on the order of 5 percent of loaded miles. How? It has to do with population density. In cities like Ann Arbor, the probability that somebody is requesting a trip nearby just as I am being dropped off is pretty high. So a properly managed, optimized fleet would take a lot of cars out of the system.

Now, not everybody’s going to want to share a car. I accept that. Let’s say I’m at home cooking dinner for friends, and I realize I forgot to buy wine. I dispatch my personal robotic valet to the wine store to pick up the wine and come back. Would you call that an empty mile? I still would have made that trip driving my own vehicle. Today we have a system that is not optimized for fleet utilization. It just isn’t. But if you’re in the fleet business providing transportation services, a penny per mile really matters.

DP: We’ve largely been focused on the movement of people, but there are big changes happening with the movement of goods as well.

LB: There are really two big opportunities with goods movement, and we may see commercially viable businesses at meaningful scale sooner with goods movement than people movement. The first opportunity is in long-haul trucking. The most recent numbers from the American Trucking Association indicate that an average driver makes about 73 cents a mile, wages and benefits.13 That’s 47 percent of the cost per mile for over-the-road trucking. But not only would self-driving trucks save the 73 cents a mile—you have the opportunity to expand your daily service area because you don’t have driver work rules; an autonomous tractor could conceivably go 24/7 or 23.5/7 based on maintenance. That’s really important for e-commerce. And when you think about all of the parts on a tractor that are there because there’s a driver—the windshield, doors, side windows, seats, air-conditioning, heating, driving controls—it’s easy to convince yourself that the pile of parts you no longer need will cost more than the parts you’re going to add to make the tractor autonomous.

On the other side is package delivery, and it becomes even more interesting when the vehicles doing local package delivery can be the same vehicles you’re using for moving people around, and they can have different temporal patterns throughout the day. Maybe more of the packages are getting delivered at night. That might improve fleet utilization and congestion in urban areas.

DP: Speaking of urban mobility, we talked about autonomous vehicles and changes to the car. We’re also seeing other kinds of micro-mobility popping up: bikesharing, e-scooters, micro-transit vans. How do you see those fitting into a world of shared autonomous fleets?

LB: Well I think it’s that key word again: and. This isn’t about picking one winner to replace the more than one billion cars in the world. I’m very excited by all of those modes that are cropping up, and I think they’re going to be enhanced by the ability to seamlessly interface with them via apps. My long-term vision is for one totally integrated transportation system where you’re able to coordinate the movement of people and goods using these different modes in a seamless way. Deloitte is doing some important work on that, and I think that’s where this is headed.

DP: We’re pretty bullish on the idea of digital mobility platforms for cities.

LB: I think you should be.

DP: We’ve talked here about some pretty momentous changes unfolding. What does all of this mean for players in various industries? You’re in a somewhat unique position in that you’re a longtime veteran of the automotive industry and also been closely involved with one of Silicon Valley’s most prominent projects in this area.

LB: The original subtitle for the book Autonomy was “The race to build the driverless car and how it will reshape our world.” Our editor suggested we change the word race to quest. It seems like a simple change, but we kicked off the book with a sense of Silicon Valley versus Detroit, and by the end of the book it’s Silicon Valley and Detroit. The tech community has brought enormous insight and value; they have been the catalysts to bring this change about. But in those early days, those tech players were not fully appreciating how hard it is to design, engineer, validate, and manufacture a car at the scale at which the auto industry operates. What’s reassuring to me now is that the auto industry is working with Silicon Valley on their autonomous R&D. And Silicon Valley has turned to the auto industry for the kinds of vehicles they need to keep learning. So I think you’re seeing it as an and.

People ask me a lot, “Who’s going to win?” I think you’re going to see an ecosystem emerge not unlike the one that emerged with the internet. I’m not at all convinced that there’s going to be a single vertically integrated player that emerges from this that can do the driving system, the vehicle, the transportation system operations, the brand building, and all of that. I think you’re going to see quite a bit of codependency emerge. But those who become dominant in certain parts of that ecosystem could do really well.

DP: And does seem to be the theme of a lot of things happening in mobility. Let’s focus in on the automotive industry. If you were in an automaker’s shoes today, what do you think they should be doing to be ready for the future to best position themselves?

LB: They’re in a tough position because they have to continue to keep their legacy business viable while trying to pivot to these new businesses where they don’t have the core competencies and they don’t have infinitely deep pockets. That’s a really, really tough puzzle to solve.

With all of that said, autonomous vehicles won’t work without the vehicle, and the vehicles are hard to do. I think the big concern for the industry is that those vehicles are going to become more commodity-like. The engineering of the vehicle becomes much simpler down the road when it’s electrically driven, doesn’t require a human driver, and you get most of the crashes out of the system. And I don’t think the differentiator in the market is going to be chrome and fenders and fascia and the shape and the color. It’s going to be very much the overall experience that customers have, and that experience is going to be determined more by software and data and analytics than the traditional basis of competition in the auto industry. There are going to be some really tough portfolio decisions. Which parts of the traditional business do I want to hang with? Where is the profit? How do I pivot to this future of mobility that we’re talking about today? Can we attract the best talent to play in that race? Bottom line: The traditional players in the century-old roadway transportation system, including auto, energy, insurance, and finance companies, must get in front of the inevitable and make hard choices on “where to play” and “how to win” in the future.

DP: You’ve neatly framed the challenges of balancing today’s business with tomorrow’s needs. When you think about the future of mobility, what’s your greatest hope?

LB: My greatest hope is that we realize what I call the age of automobility—a convergence of autonomous electric vehicles deployed in transportation services—as fast and as soon as we possibly can with appropriate risk management. We shouldn’t lose sight of the fact that this is a once-in-a-century opportunity to simultaneously deal with 1.3 million fatalities worldwide per year on roadways, to deal with congestion, to deal with dependence on oil in transportation, to deal with the land use that comes with three parking spots per car in the United States, and to deal with equality of access. The deaths and injuries from crashes alone—it’s epidemic in scale. If I just created a cure for cancer and it held promise to save a lot of people with cancer but some could still die from the treatment, I think we’d get on with it; we’d find a way to manage that. We ought to look at autonomous vehicles as a cure for the roadway transportation epidemic and think about their deployment the way we test and deploy vaccines.

So I have this fixation: I want to get to the anticipated benefits. This convergence of technology and business models really can have a significant, meaningful impact and bring more transportation services at lower cost to more people. There’s an opportunity to have radically better services at radically lower consumer and societal costs.

Endnotes
  1. Lawrence D. Burns with Christopher Shulgan, Autonomy: The Quest to Build the Driverless Car—and How It Will Reshape Our World (HarperCollins, 2018). View in article
  2. The Urban Challenge was a 2007 competition sponsored by the Defense Advanced Research Projects Agency in which teams had to construct an autonomous vehicle able to navigate an urban environment, including merging, passing, parking, and crossing intersections. DARPA, “Urban challenge,” accessed October 15, 2018.  View in article
  3. For instance, see Benjamin Zhang, “This study revealed the staggering potential of self-driving cars,” Business Insider, June 2, 2014. View in article
  4. Bureau of Transportation Statistics, “Number of U.S. aircraft, vehicles, vessels, and other conveyances,” accessed December 10, 2018. Number cited is for light-duty vehicles, short wheel-base, 2016. View in article
  5. Deloitte Global Automotive Consumer Study 2019, forthcoming. View in article
  6. “AUTOnomy” was a GM 2002 concept vehicle built around hydrogen fuel cell motors, drive-by-wire technology, and a skateboard-like chassis. See Burns and Shulgan, Autonomy. View in article
  7. AFP, “Germany rolls out world’s first hydrogen train,” France 24, September 17, 2018. View in article
  8. Kristin Lee, “Toyota’s new hydrogen fuel cell truck has a 300-mile range,” Jalopnik, August 1, 2018. View in article
  9. The Society of Automotive Engineers has identified five levels of vehicle automation, which the National Highway Traffic Safety Administration (NHTSA) subsequently adopted. See the NHTSA, “Automated vehicles for safety,” accessed December 12, 2018. View in article
  10. David Roberts, “Here’s how self-driving cars could catch on,” Vox, May 9, 2018. View in article
  11. Robert Moor, “What happens to American myth when you take the driver out of it?,” New York Magazine, October 17, 2016; Brandon Tensley, “How will pop music adapt to autonomous cars?,” Slate, March 15, 2018. View in article
  12. Millennials may be only delaying car purchases rather than eschewing them, but their attitudes toward driving do seem distinct from those of previous generations. See Henry Miller, “How traveling by car is changing under millennials,” Matador Network, January 22, 2018; Mary Wisniewski, “Why Americans, particularly millennials, have fallen out of love with cars,” Chicago Tribune, November 12, 2018; and Kevin Drum, “Raw data: Kids and their cars,” Mother Jones, May 12, 2018. View in article
  13. American Transportation Research Institute, “An analysis of the operational costs of trucking: 2018 update,” October 2018. View in article
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