4 ms·

My entrepreneurial mind immediately thinks: Let's create a better solution to revolutionize this industry and make the old, expensive incumbents obsolete. We ca

My entrepreneurial mind immediately thinks: Let's create a better solution to revolutionize this industry and make the old, expensive incumbents obsolete. We can drive to the affected car dealers and migrate them one by one. Of course, I'm not going to do it and it's probably extremely hard :)

ortusdux 2y ago
I'd rather we remove laws that ban direct sales. https://www.justice.gov/atr/economic-effects-state-bans-direct-manufacturer-sales-car-buyers https://www.justice.gov/atr/economic-effects-state-bans-dire...
tmpz22 2y ago
Enterprise vendors have gotten better at locking in customers on multi-year contracts which takes away some of the biggest upside to chipping away at the market. Often a challenger will come in and snag a few smaller deals but the Monopoly has a plethora of options to swat it away - rev up their larger more experienced product team to compete, lobby for regulation, poach from the challenger, acquire the challenger, tank prices in the one area the challenger has traction, and much more.
- lainga 2y ago
  I read a particularly disgusting book called "Competitive Strategy" by Michael E. Porter, that plainly explains how and when to carry out each of the monopoly-preserving actions you have listed
  - HeyLaughingBoy 2y ago
    From what (little) I know, Porter's generally considered to be the expert on Strategy. What did you find disgusting about the book?
    - lainga 2y ago
      I guess we are coming from different worldviews. These were IIRC collectively referred to as "retaliation" by the incumbent firm and none of them sat very well with me as conducive to innovation. - lobby for regulation - poach from the challenger - tank prices in the one area the challenger has traction I believe Porter also mentioned trying to secure vendor lock-in.
    - n4r9 2y ago
      Not familiar with Porter, but being an expert doesn't necessarily make you ethically untouchable. Warren Buffett for example is well known for investing in companies with aggressively anti-competitive behaviours.
- amne 2y ago
  wait.. why is "rev up their larger more experienced product team to compete" bad?
  - djbusby 2y ago
    It's not "bad" it's just a factor to consider when planning market entry, like a start-up trying to get these dealers on their platform.
dboreham 2y ago
At least it's not the healthcare industry...
jballanc 2y ago
It is extremely hard! Dealerships don't make most of their money (or any money, really) selling cars. They make their money from service, and selling info to 3rd parties (ever notice when you buy a new car, you will receive mail from SirusXM for a year after). In order for this to work, their systems are all tightly integrated. When you buy a new car, the dealer will know when you're due for service. When you have your current car serviced more than a certain amount, the dealer will know you're in the market for a new car. So, it's not possible to swap out only the service management piece of CDK or only the sales piece, or only the CRM piece. They all have to work together. The reason I know is I happened to contract with the IT department of a very large dealer network at the time they were undergoing a migration from Reynolds to CDK. A year into the migration process...they pulled the plug. Moving even from one large incumbent to another was too much work. Good luck breaking in on that as a brand new baby startup! I think you'd probably have better luck completely disrupting the car sales process from the ground up.
- olyjohn 2y ago
  CDK didn't just run the DMS. They operated the physical networks at the dealerships, managed the the PCs, the phone system, even leased the dealers their printers. CDK was DEEPLY integrated into the dealerships.
rootusrootus 2y ago
People try all the time. The usual problems are 1) CDK doesn't just do the DMS, they have a whole bunch of connected software that interoperates with it, and so you can't just spin up a DMS to compete. And 2) A bunch of the value CDK brings to the table is supporting the business with things like compliance (laws relating to car dealers change constantly, there are teams at CDK which keep up with all of this regulatory stuff as their full time job). That's my perspective, as someone who has worked at CDK. If you want something corroborating that, go look at r/serviceadvisors and see why people say they can't switch to anyone from CDK. The tiny dealers are the best candidates for moving, everyone that's reasonably big has too many needs the other DMS providers do not address (yet).

ortusdux 2y ago

I'd rather we remove laws that ban direct sales. https://www.justice.gov/atr/economic-effects-state-bans-direct-manufacturer-sales-car-buyers https://www.justice.gov/atr/economic-effects-state-bans-dire...

tmpz22 2y ago

Enterprise vendors have gotten better at locking in customers on multi-year contracts which takes away some of the biggest upside to chipping away at the market. Often a challenger will come in and snag a few smaller deals but the Monopoly has a plethora of options to swat it away - rev up their larger more experienced product team to compete, lobby for regulation, poach from the challenger, acquire the challenger, tank prices in the one area the challenger has traction, and much more.

lainga 2y ago
I read a particularly disgusting book called "Competitive Strategy" by Michael E. Porter, that plainly explains how and when to carry out each of the monopoly-preserving actions you have listed
- HeyLaughingBoy 2y ago
  From what (little) I know, Porter's generally considered to be the expert on Strategy. What did you find disgusting about the book?
  - lainga 2y ago
    I guess we are coming from different worldviews. These were IIRC collectively referred to as "retaliation" by the incumbent firm and none of them sat very well with me as conducive to innovation. - lobby for regulation - poach from the challenger - tank prices in the one area the challenger has traction I believe Porter also mentioned trying to secure vendor lock-in.
  - n4r9 2y ago
    Not familiar with Porter, but being an expert doesn't necessarily make you ethically untouchable. Warren Buffett for example is well known for investing in companies with aggressively anti-competitive behaviours.
amne 2y ago
wait.. why is "rev up their larger more experienced product team to compete" bad?
- djbusby 2y ago
  It's not "bad" it's just a factor to consider when planning market entry, like a start-up trying to get these dealers on their platform.

dboreham 2y ago

At least it's not the healthcare industry...

jballanc 2y ago

It is extremely hard! Dealerships don't make most of their money (or any money, really) selling cars. They make their money from service, and selling info to 3rd parties (ever notice when you buy a new car, you will receive mail from SirusXM for a year after). In order for this to work, their systems are all tightly integrated. When you buy a new car, the dealer will know when you're due for service. When you have your current car serviced more than a certain amount, the dealer will know you're in the market for a new car. So, it's not possible to swap out only the service management piece of CDK or only the sales piece, or only the CRM piece. They all have to work together. The reason I know is I happened to contract with the IT department of a very large dealer network at the time they were undergoing a migration from Reynolds to CDK. A year into the migration process...they pulled the plug. Moving even from one large incumbent to another was too much work. Good luck breaking in on that as a brand new baby startup! I think you'd probably have better luck completely disrupting the car sales process from the ground up.

olyjohn 2y ago
CDK didn't just run the DMS. They operated the physical networks at the dealerships, managed the the PCs, the phone system, even leased the dealers their printers. CDK was DEEPLY integrated into the dealerships.

rootusrootus 2y ago

People try all the time. The usual problems are 1) CDK doesn't just do the DMS, they have a whole bunch of connected software that interoperates with it, and so you can't just spin up a DMS to compete. And 2) A bunch of the value CDK brings to the table is supporting the business with things like compliance (laws relating to car dealers change constantly, there are teams at CDK which keep up with all of this regulatory stuff as their full time job). That's my perspective, as someone who has worked at CDK. If you want something corroborating that, go look at r/serviceadvisors and see why people say they can't switch to anyone from CDK. The tiny dealers are the best candidates for moving, everyone that's reasonably big has too many needs the other DMS providers do not address (yet).