On July 24, 2003, a special funeral was held in Hollywood. A large number of film and television stars got together to bid farewell to a car!
What car has such a large row? Could it be Master Wayne's Batmobile?
No longer selling off, they are sending away the world's first mass-produced pure electric car, GM EV1.
That's right, the originator of pure electric cars is not Tesla, nor Toyota and BYD, but GM. In 1996, the EV1 was delivered off the assembly line, when Musk was still making software for The New York Times.
Why did GM become the originator of pure electric vehicles? And why did it change from the originator to a pure electroelectric student? Here's the secret.
In the 90s of the last century, the world was blowing the wind of environmental protection, in order to reduce air pollution, California set a goal, starting from 1998, California car factories to ensure that the sales of pure electric vehicles reached at least 2% of the total sales, otherwise, not allowed to sell cars in California.
As a local brother, GM has to exert force. And he was still the global sales king at that time, and he had enough financial resources to engage in research and development.
GM waved his hand, $1 billion fell out of his fingers, and the EV1 made its debut: the shape is cool enough, and the range is also up to 10 kilometers. It not only conquered environmentalists, but also entered Hollywood, such as actor Tom Hanks and "Braveheart" director Mel Gibson passionately ordered it, and even promoted it for free.
But such a product that was enough to subvert the industry was killed by GM himself. In 2003, GM recalled all EV1s and destroyed them uniformly, which was the special funeral that opened the chapter.
Why did GM give up so quickly? On the surface, it's simple, and it's not profitable. $1 billion in research and development, only in exchange for 1,200 units of sales, no matter how rich you are, you can't afford to burn so much. And California's restrictions on the percentage of electric vehicles have since been lifted.
But jumping out of the general case, you will find that history is always similar, Kodak invented the digital camera, but abandoned it; Nokia used to be the king of mobile phones, but it was as slow as an old lady in the face of smartphones.
These embarrassing cases can be explained by "disruptive innovation".
The author of this theory is Harvard Business School professor Christensen. I have also listened to his lectures live, and he has noticed that many large enterprises are often overtaken by latecomers when they encounter market changes or technological changes. But it's not because they don't want to make progress or ignore their customers, on the contrary, they value customer needs very much and are willing to invest in new technologies, but they end up failing.
Why is this happening? Because large enterprises pay attention to "continuous innovation", that is, to improve the performance of mature products according to the needs of mainstream customers. For example, fuel vehicles, mainstream customers in the 90s valued battery life, speed, and safety, so large companies naturally also value these.
"Disruptive innovation" is disruptive, and the value it creates is not shared by mainstream customers. Moreover, in the early stage of development, the performance of "disruptive innovation" is often lower than that of existing technologies, and the target market is small, and there is not much market prospect in sight. At the same time, it is necessary to maintain a huge investment, and losses are almost inevitable.
Looking back at GM's situation at that time, the main indicators of pure electric vehicles lagged behind those of fuel vehicles, and mainstream customers could not pay for them. The only people willing to buy pure electric cars are a small group of environmentalists and forward-thinking celebrities, and the market is too small. Instead of investing in this, it is better to develop a few more awesome fuel vehicles.
Therefore, it is very economical and wise for leading companies to ignore "disruptive innovation" and invest in "continuous innovation" in the short term. But in the long run, this is also the root cause of their fall from the altar.
"Continuous innovation" can also improve the performance of a product, but over time, the rate at which this innovation improves performance becomes slower or even overloaded. For example, theoretically, the speed of the car can be continuously improved, but to a certain extent, it will exceed the needs of customers, because the speed limit on the highway is high, who can keep racing cars?
"Disruptive innovation" usually has a simpler product structure and more room for price reduction, and as long as the direction of innovation is correct, it will one day surpass "continuous innovation" and take away the needs of mainstream customers.
With "disruptive innovation" understood, it becomes much clearer when we look at the automotive industry. Why even in 2008, Tesla's supercar has attracted fans around the world, and the fuel giants are still slow. Even today, there are still car companies that are skeptical about pure electric vehicles. Because in their value evaluation system, it is not economical to make pure electric cars.
However, with the rapid development of power batteries, intelligent driving and other technologies, pure electric vehicles have surpassed fuel vehicles in various performances, which is close at hand.
Sister Ting leaves you a question, is there any "disruptive innovation" in your industry? Is there a threat to your business? Is it possible for you to be a "disruptive innovator"? Let's talk in the comments section.
Author |Wu Ting.
References: 1] Clayton Christensen. The Innovator's DilemmaCITIC Press. In 2015.
2] Bob Lutz. Performance-Dead: The Revelations of General Motors' BankruptcyCITIC Press. In 2013.
3] Investment**. General Motors: A Century of Prosperity and Decline. Sohu.com. In 2018.