Wednesday, February 1, 2017

The Future Of Transportation - Elio Motors

Let me say up front that I'm an enthusiastic fan of the Elio vehicle. Having built something similar, if nowhere near as good looking, I believe that Paul Elio has the right idea. He also has the right marketing approach, building what is essentially a fully enclosed 3-wheel motorcycle and calling it a commuter vehicle. Think about it. Small engine plus very light weight equals impressive gas mileage and reasonable performance at a modest price. Now here's the problem.

I've been following Scott Adams' blog for about a year now learning a bit more about marketing and business management, and today he put up a post that summarizes what's wrong with the Elio project.
There are two basic styles of management. One is the cautious style of Fortune 500 companies. The other is the rapid-iteration and A/B testing style of entrepreneurs. Trump is bringing the latter style to the office. The markers for this style of management include:
1. Rapid and decisive hiring and firing.
2. Bias toward action.
3. Rapid A/B testing. Release the early beta version and judge reactions. Adjust accordingly.
4. Emphasis on the psychology of success. Entrepreneurial management includes lots of persuasion and bullshit because entrepreneurs have to fake it until they make it. In other words, they have to create demand via persuasion.
Compare that management style to a large company style. Big companies move slowly in both hiring and firing. They get caught in “analysis paralysis” because no one wants to be seen as making a mistake. And they don’t do rapid testing and iteration with consumers. They try to get it right before any customers see the product.
Elio Motors started out with a very simple and austere vehicle made from available OTC parts that would have provided carpool lane access, all weather capability, modest price, and attractive styling. I saw this vehicle and got to sit in it although no one was allowed to drive it. Everyone liked it pretty much as it was and the question most often asked was "What's the Sport model going to be like?"

I don't remember how long ago this was, about 5 or 6 I think, but production was supposedly about a year out and about 20,000 deposits had been taken for the first ones. Note the steps listed above for successful entrepreneurial management, especially steps 3 and 4 which I was expecting would come next.

Instead the press releases were headlining the retired executives from behemoth auto makers who were being hired to oversee the operations of the company as though this was the next Ford Motor Company, emerging fully formed from the brow of the founder.  I don't know what other states have done, but the effort by Elio to get the vehicle removed from the mandatory helmet laws in a lot of states has also gotten it removed from the motorcycle exemption to the HOV lanes here in Colorado, removing a big reason for buying one in the first place. Wait long enough and the government will regulate you right out of business since if no one owns one, no one will be harmed by the regulation, right?

So here they are 5 or 6 years later, acting like a behemoth company, but with no product to sell, showing off the 6th iteration of the machine as though it were the Gen 6 release of the already best-selling 6000 SUX*. Compare this to the description of large company management style in the Adams piece and you now understand why the Elio vehicle will probably never see production, which is really too bad because I want one. A Sport model, since I don't commute to work any more and don't worry if it gets less than 80 mpg.

*Obscure movie reference to a fancy car that gets terrible gas milage.


jon spencer said...

Elio is looking more and more like "vaporware".
Still would want one, especially if it came with a Hayabusa engine.

Billll said...

The original Elio was built much like a quad runner off road vehicle with a tube frame and plastic "snap-on" body parts. Quick and dirty and ready to go. It has evolved (Gen 6 I think) and is now a monocoque body with all the manufacturing bells and whistles of a modern vehicle. Swell, but all there is to show is a dozen (maybe) prototypes. There is a story out there that they are building 50 pre-production units for a fleet to use as evaluation vehicles. I have not heard how that's coming along.

As to motors I was planning to pick one up and install a Ford Eco-boost 1L engine which comes with a 5 or 6 speed manual tranny and can be easily tweaked to 150+ hp. This setup is already used for FWD vehicles so there's less fiddling to get it in, and just like the stocker, it's a 1 liter 3 cyl engine.