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That makes no sense. Companies seek to be viable in the future. If Ford or GM feel that an electric car is on the horizon and that car will eat their (ICE) lunc

That makes no sense. Companies seek to be viable in the future. If Ford or GM feel that an electric car is on the horizon and that car will eat their (ICE) lunch, they will pivot. By your logic Tesla would have been locked out of the VC/investment market due to Big Oil. Money flows like water.

mikeash 10y ago
Individuals within a company seek to be viable in the future, which often leads them to reject innovation that might endanger their role. History is littered with companies that refused to pivot into new technology until far later than they should have, because they were too heavily invested in the old way. American car companies suffered from this in the 70s, where they got thrashed by competition from small imports for quite a while before they could be convinced to stop concentrating on land yachts.
- John23832 10y ago
  Bureaucracy goes out the window when you have an activist investor asking you why you're ignoring clear market trends.
  - mikeash 10y ago
    By the time the trends become that clear, you're often years behind.
    - John23832 10y ago
      We are behind, but a competent investor isn't.
      - mikeash 10y ago
        Then how did all these companies end up in this position in the past?
salmonfamine 10y ago
There are a lot of examples of companies which, even when directed to do so by their CEO, were unable to pivot to technologies rising up from smaller markets. The term has been overloaded to hell, but that's disruption. I would highly recommend the book "The Innovator's Dilemma." It provides case studies of disruptive innovations across many different industries -- from farm tech to disk drives.
mbesto 10y ago
> Companies seek to be viable in the future. If Ford or GM feel that an electric car is on the horizon and that car will eat their (ICE) lunch, they will pivot. I guess you could say the same for Kodak, Blockbuster, and Borders? “The reason is that good management itself was the root cause. Managers played the game the way it was supposed to be played. The very decision-making and resource-allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies: listening carefully to customers; tracking competitors’ actions carefully; and investing resources to design and build higher-performance, higher-quality products that will yield greater profit. These are the reasons why great firms stumbled or failed when confronted with disruptive technological change.”[0] [0] - https://www.goodreads.com/work/quotes/1468535-the-innovator-s-dilemma-the-revolutionary-book-that-will-change-the-way https://www.goodreads.com/work/quotes/1468535-the-innovator-...
- John23832 10y ago
  I've read the book. None of those companies would even acknowledge their competition. Ford/GM/all other ICE companies acknowledge both Tesla, and the fact that there is a clear runway on oil.
  - coredog64 10y ago
    IMO GM is doing a better job of it. While they do have a compliance car (Spark EV), they've also got the Volt and Bolt, and both will be 50 state cars. Ford has primarily focused on hybrids and there EV offerings are either fleet-only or compliance cars.
    - greglindahl 10y ago
      GM basically stopped selling the Spark EV already -- 11 were sold in the US in the first quarter. http://insideevs.com/march-2017-plug-electric-vehicle-sales-report-card/ http://insideevs.com/march-2017-plug-electric-vehicle-sales-...
  - adamnemecek 10y ago
    I wouldn't say they didn't acknowledge them, they just didn't know how to fight them.
cmahler7 10y ago
look up kodak and the digital camera. They had the tech in the 70s but didn't want it to cannibalize their film sales. They're bankrupt now.
awj 10y ago
> Companies seek to be viable in the future. Companies seek to outperform themselves relative to the last quarter and year. Long term strategy like this takes a backseat, if it gets attention at all. It certainly doesn't get the luxury of a whole company pivot that could tank short term value. Need proof? Look at all of the American companies that got caught with their pants down shipping nothing but bigger SUVs when the price of oil shot up back in 2008.
- zip1234 10y ago
  If you were running one of those companies, would you sell SUVs that make you 10k in profit each or an equal number of small cars that make 2k in profit each?
- mywittyname 10y ago
  Ford has much more private interests (the Ford family) than other car companies so tends to think more long-term. Remember they weathered 2008 without needing a bailout. They've also ditched the high-end SUV market right as that market exploded all over the world, thus missed out on massive profits because they no longer sold an Expedition. They openly admit to ceding the market to GM in their annual letters to shareholders specifically because they don't see gas-guzzling SUVs as long-term investments. They also lead the market in fleet and industry-oriented products. They offer both technology and core-products designed to keep the incredibly lucrative fleet buyers happy. In this regard, Ford is akin to Microsoft: their consumer products aren't mind blowing, but their corporate products are so well entrenched that they will be a practical ATM for the next decades. Ford sells six times as many F150s as Toyota sells Tundras and they own the entire small cargo van market.

mikeash 10y ago

Individuals within a company seek to be viable in the future, which often leads them to reject innovation that might endanger their role. History is littered with companies that refused to pivot into new technology until far later than they should have, because they were too heavily invested in the old way. American car companies suffered from this in the 70s, where they got thrashed by competition from small imports for quite a while before they could be convinced to stop concentrating on land yachts.

John23832 10y ago
Bureaucracy goes out the window when you have an activist investor asking you why you're ignoring clear market trends.
- mikeash 10y ago
  By the time the trends become that clear, you're often years behind.
  - John23832 10y ago
    We are behind, but a competent investor isn't.
    - mikeash 10y ago
      Then how did all these companies end up in this position in the past?

salmonfamine 10y ago

There are a lot of examples of companies which, even when directed to do so by their CEO, were unable to pivot to technologies rising up from smaller markets. The term has been overloaded to hell, but that's disruption. I would highly recommend the book "The Innovator's Dilemma." It provides case studies of disruptive innovations across many different industries -- from farm tech to disk drives.

mbesto 10y ago

> Companies seek to be viable in the future. If Ford or GM feel that an electric car is on the horizon and that car will eat their (ICE) lunch, they will pivot. I guess you could say the same for Kodak, Blockbuster, and Borders? “The reason is that good management itself was the root cause. Managers played the game the way it was supposed to be played. The very decision-making and resource-allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies: listening carefully to customers; tracking competitors’ actions carefully; and investing resources to design and build higher-performance, higher-quality products that will yield greater profit. These are the reasons why great firms stumbled or failed when confronted with disruptive technological change.”[0] [0] - https://www.goodreads.com/work/quotes/1468535-the-innovator-s-dilemma-the-revolutionary-book-that-will-change-the-way https://www.goodreads.com/work/quotes/1468535-the-innovator-...

John23832 10y ago
I've read the book. None of those companies would even acknowledge their competition. Ford/GM/all other ICE companies acknowledge both Tesla, and the fact that there is a clear runway on oil.
- coredog64 10y ago
  IMO GM is doing a better job of it. While they do have a compliance car (Spark EV), they've also got the Volt and Bolt, and both will be 50 state cars. Ford has primarily focused on hybrids and there EV offerings are either fleet-only or compliance cars.
  - greglindahl 10y ago
    GM basically stopped selling the Spark EV already -- 11 were sold in the US in the first quarter. http://insideevs.com/march-2017-plug-electric-vehicle-sales-report-card/ http://insideevs.com/march-2017-plug-electric-vehicle-sales-...
- adamnemecek 10y ago
  I wouldn't say they didn't acknowledge them, they just didn't know how to fight them.

cmahler7 10y ago

look up kodak and the digital camera. They had the tech in the 70s but didn't want it to cannibalize their film sales. They're bankrupt now.

awj 10y ago

> Companies seek to be viable in the future. Companies seek to outperform themselves relative to the last quarter and year. Long term strategy like this takes a backseat, if it gets attention at all. It certainly doesn't get the luxury of a whole company pivot that could tank short term value. Need proof? Look at all of the American companies that got caught with their pants down shipping nothing but bigger SUVs when the price of oil shot up back in 2008.

zip1234 10y ago
If you were running one of those companies, would you sell SUVs that make you 10k in profit each or an equal number of small cars that make 2k in profit each?
mywittyname 10y ago
Ford has much more private interests (the Ford family) than other car companies so tends to think more long-term. Remember they weathered 2008 without needing a bailout. They've also ditched the high-end SUV market right as that market exploded all over the world, thus missed out on massive profits because they no longer sold an Expedition. They openly admit to ceding the market to GM in their annual letters to shareholders specifically because they don't see gas-guzzling SUVs as long-term investments. They also lead the market in fleet and industry-oriented products. They offer both technology and core-products designed to keep the incredibly lucrative fleet buyers happy. In this regard, Ford is akin to Microsoft: their consumer products aren't mind blowing, but their corporate products are so well entrenched that they will be a practical ATM for the next decades. Ford sells six times as many F150s as Toyota sells Tundras and they own the entire small cargo van market.