Next STEP for mobility startups after CASE
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Coronavirus Coverage
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • COVID-19 vaccines reaching auto plants, but challenges remain
      Working online to book COVID shots, office manager Billie Jean Pellet “typed so fast smoke came off the keyboard,” said dealer Earl Stewart.
      Dealership team hunts for vaccine
      Hope stalls for rebound in European auto sales
      Dana net income falls 53% in Q4
    • Chinese tech companies are turning their sights on EVs
      Telecom firm ZTE preparing electric vehicle product line
      Changan
      Huawei, battered by U.S. sanctions, plans foray into EVs, report says
      VW China
      Top VW China exec said to eye joining Renault as local CEO
      Geely to create separate EV business unit
    • Food is becoming a main dish on the AV menu
      Udelv CEO offers a historical perspective on high-tech goods delivery
      Q&A with BrightDrop CEO Travis Katz
      Automakers optimize manufacturing, customize products through digitization
    • The Cruise AV autonomous vehicle, based on the Chevy Bolt
      GM-backed Cruise is in talks to buy startup Voyage, report says
      Fisker's next wave: A premium people's car
      A worker fixes a power line in Austin, Texas, last month.
      Bidirectional EVs could lend a hand in power crisis
      Toyota banks on plug-ins as rivals push BEVs
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • COVID-19 vaccines reaching auto plants, but challenges remain
      In SPACs, dealers see viable option to go public
      New-school solution for recruiting auto techs
      Is your dealership a great place to work?
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • Stellantis
      • Alfa Romeo
      • Citroen
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Lancia
      • Maserati
      • Opel
      • Peugeot
      • Ram
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • MITSUBISHI: 2022 Outlander
      • NISSAN: 2022 Pathfinder and 2022 Frontier
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • The new Stellantis pickup: Schrödinger's Dakota
      Fisker gets a rare second chance to build his own car company
      Gerry McGovern is right man to steer Jaguar reinvention
      Forget the Ford GT; Moray Callum's biggest hit is the aluminum F-150
    • Jaguar is about to undergo its fourth reinvention in five decades as owner Tata Group takes a second crack at shaking up a brand whose glorious past has rarely translated into a profitable present or sustainable future.
      Jaguar Redo, Part IV
      view gallery
      1 photos
      Chip Shortage
      Jaguar is about to undergo its fourth reinvention in five decades as owner Tata Group takes a second crack at shaking up a brand whose glorious past has rarely translated into a profitable present or sustainable future.
      view gallery
      9 photos
      Leo Michael Cartoons - Q1 2021
      Dealers hiring from hospitality sector
      view gallery
      1 photos
      Hospitality Hires
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • March 2, 2021 | Will EV bets pay off?
      February 23, 2021 | Reliability continues to soar
      February 16, 2021 | Apple looks to take bite out of automotive
      February 9, 2021 | ‘Super’ opportunity for automakers
    • Reinvention of Jaguar is a tall task for McGovern
      Jamie Butters
      EV plans and some damn lies
      Mark Paul
      What dealers can do if D.C. power shift affects recalls
      Are we in the midst of a fourth industrial revolution?
    • Shanghai hints at how Chinese cities will pursue electrification
      How Tesla, GM transformed EV market in 2020
      Is sales recovery nearing an end?
      Beijing's uphill battle to boost EV sales
    • U.S. Dealership lot
      Lean lots won't last without new dealer discipline
      Taiwan Semicon microchips BB web.jpg
      Chip shortage shows need for new thinking
      Digital demands squeeze smaller auto retailers
      President Joe Biden’s move to electrify all government vehicles could push forward charging infrastructure development.
      Dealers aren't wrong to be wary of EV hype
    • Embrace EV ideas at our doorstep
      New look at Nissan a positive sign
      Buying EV without dealer is just easier
      Dealers are right to worry about EVs
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Toyota, Mazda, Subaru, Hyundai, Kia slide in Feb.; Volvo, Genesis rise
      AutoNews Now: Toyota RAV4 probed for fire risk
      AutoNews Now: Nissan 'breakthrough' could lower emissions
      AutoNews Now: Most buyers still undecided on EVs, J.D. Power finds
    • First Shift: Stellantis aims for higher profit margins in 2021
      First Shift: Volvo's electric push includes online-only sales
      First Shift: U.S. dealership profits surge 48% to record high
      First Shift: Tesla output in Calif. resumes after 2-day shutdown
    • Bert Ogden Auto Group
      Back to basics: How a Texas group is cutting costs, saving millions 
      COVID, chips and checks: Sales headwinds and tailwinds for 2021
      N.J. dealer helps position peers for ‘electric revolution’
      DCH Millburn Audi
      'Finding the diamond in the rough': How 2020's No. 1 dealership retains talent
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Leading Women Conference
    • Fixed Ops Journal Forum
    • ANE Shift
    • Shift: Mobility at a Crossroads
    • Shift: The Future of Mobility (CES)
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • Gentex
    • Reputation.com
    • Ricardo
    • Ricardo
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
    • IHS Markit: COVID-19: The future mobility delusion
    • Level5: 2020 Automotive E-Commerce Report
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Wells Fargo Auto: Switching gears from LIBOR to SOFR
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. Commentary
March 02, 2020 12:00 AM

Next STEP for mobility startups

Dennis Clark
Dennis Clark
Managing director of strategic partnerships at Honda Innovations
Michael Nehmad
Michael Nehmad
Former program manager at Honda Innovations
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    After years of seemingly limitless investment in mobility startups seeking to disrupt the $7 trillion transportation industry, our promised future utopian vision of connected, autonomous, shared, electric — CASE — technologies seems to get further away each day. As a result, investment in early-stage startups focused on CASE technologies is plateauing. We shouldn't really be surprised — this is simply the hype cycle running its course as it has done with nearly every technological breakthrough of the past decades. Welcome to the trough of disillusionment.

    We've seen this play out firsthand running the Honda Xcelerator since before "mobility startups" or the CASE acronym ever existed. We've had more than 1,000 startups walk through our doors, and we're still quite confident many of these startups will, in fact, change our world. But we've also realized it will happen differently than they, and we, had originally envisioned.

    With that in mind, we're proposing a new way to think about the next wave of startups that will emerge to help CASE attain its full potential. It's a series of innovations and attributes arising from CASE's past and future that we call STEP — seamless, tangential, enabling, profitable.

    Overpromised and underdelivered

    The mobility revolution of the past decade was built on the promise of CASE technologies. Expectations of broad disruption in the transportation sector have been sky high, as reflected in never-before-seen valuations.

    Despite these outsized efforts from many now household names, the revolution remains unfinished: On-demand services struggle to keep up with increasing consumer expectations, while ride-hailing companies see their growth slowing dramatically; EVs still account for fewer than 2 percent of new vehicles purchased. A lack of profitability across all of these sectors isn't helping matters, either.

    This does not mean the investment in the mobility revolution has been a waste. Rather, the visions were so grand and the stakes so high that many players tried to run before they could walk.

    Regardless of these shortcomings, CASE companies ultimately will drive a major transformation of the automotive and transportation industries. The benefits of this transformation for our planet, the people who live on it and those who've taken part directly and financially are too great to not achieve. But time is money, and the industry desperately needs a new breed of innovation to bring about the biggest change in industry history. STEP will raise the mobility revolution out of the trough of disillusionment and up through the slope of enlightenment.

    STEP overview

    Seamless: On-demand is so last year. We live in an impatient world demanding ever-faster and more convenient everything. Despite the technological advances of the last decade that have dramatically improved our lives and freed up our time, it's against human nature to stagnate at "good enough." The value of saving hours, minutes and seconds will only continue to increase as we get closer to instant gratification.

    The on-demand era was built on smartphone connectivity and logistical prowess. But it required user input, creating an implicit lag between input and gratification. The seamless economy of the future will abstract away actions and effort, seamlessly integrating with the user's life and preferences through machine learning and connected sensors. This combination will sense what we want and feel before we feel or want it. It will not only decrease the time until gratification, but it will further simplify and personalize the interfaces we interact with on a daily basis.

    Tangential: Monumental innovations beget tangential opportunities. Think of tangential innovations as second-order effects — they are a consequence of the original innovation and have the potential to transform existing industries through a re-evaluation of their first principles, and even to spawn new industries not feasible under today's assumptions.

    As the current class of CASE technologies steadily mature, entrepreneurs and investors need to consider the ripple effects of CASE on other economic sectors — energy, e-commerce, real estate, governance and infrastructure, to name a few.

    Tangential innovations hold the potential to create structural changes across the globe. Investors and entrepreneurs need to be thinking in decades, not years, but the potential reward for their patience is tantalizing.

    Enabling: "Middleware" startups will emerge to supercharge the CASE future. While they may never achieve the household recognition of the CASE heavyweights, there will be significant investor appetite for startup solutions that act as the middleware enabling CASE companies to expedite the process of, or survive the financial rigors of, CASE r&d. The space has simply become too large and interconnected, and the tasks at hand too challenging, for any single CASE juggernaut to go it alone.

    Pieces deeper in the stack can be turned over to specialized players who can execute on their niche more nimbly than larger players and spread their r&d costs across multiple customers, making them attractive investments. By supporting CASE heavyweights, these enabling middleware companies will be able to offer investors more predictable and consistent returns in the shorter term as they wait for the CASE home runs to be realized.

    Profitable: Long-term growth at any cost is no longer a sustainable mantra. While a few global investors may still have an appetite for this investment approach, most investors are beginning to shift mindset, rewarding startups with efficient operations and a clear-eyed focus on profitability.

    Startups focusing on profitability can take one of two approaches. The first is to help CASE leaders improve their financials immediately. CASE players are under pressure to rein in costs or find partnerships to increase revenue without risking the loss of investor appetite to fund their ambitious, world-changing goals.

    The second is to develop a unique niche such that profitability becomes the motivating factor, rather than stratospheric growth. Moonshots will also be sought after, but expect venture investment to shift toward rewarding what is possible today.

    Mobility's next STEPs

    A cadre of ambitious mobility startups jump-started the CASE revolution a decade back, laying the groundwork for a complete transformation of transportation as we know it. Over the next decade STEP startups will attract a lion's share of investment in the industry and prove vital in bringing our mobility dreams to fruition. We should remind ourselves to steer clear of irrational exuberance, but our CASE future is still clearly visible on the road ahead.

    RECOMMENDED FOR YOU
    EV plans and some damn lies
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    EV plans and some damn lies
    EV plans and some damn lies
    What dealers can do if D.C. power shift affects recalls
    What dealers can do if D.C. power shift affects recalls
    Reinvention of Jaguar is a tall task for McGovern
    Want more from your F&I?
    Sponsored Content: Want more from your F&I?
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 3-1-21
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 2-8-21
    Read the issue
    See our archive
    AUTOMOTIVE VIEWS NEWSLETTER: Sign up for our weekly showcase of opinions, insights, ideas and thought leadership from the Automotive News team plus readers and contributors from around the industry.
    FIRST SHIFT WITH JENNIFER VUONG: Sign up for our morning newscast and get the news you need to start your day in a quick 4-minute video.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • Stellantis
          • Alfa Romeo
          • Citroen
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Lancia
          • Maserati
          • Opel
          • Peugeot
          • Ram
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • MITSUBISHI: 2022 Outlander
          • NISSAN: 2022 Pathfinder and 2022 Frontier
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Coronavirus Coverage
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Leading Women Conference
        • Fixed Ops Journal Forum
        • ANE Shift
        • Shift: Mobility at a Crossroads
        • Shift: The Future of Mobility (CES)
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • Gentex
        • Reputation.com
        • Ricardo
        • Ricardo
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
        • IHS Markit: COVID-19: The future mobility delusion
        • Level5: 2020 Automotive E-Commerce Report
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds