FUTURE OF TRANSPORT: How every mainstream analyst was wrong and how a mobility startup is aligning to the future of transport
Today lets discover how the grand strategy of a future-focussed startup is aligning with a future that every mainstream analyst keeps getting wrong.
Firstly, hello to all of our new subscribers (we’re getting close to 300) from literally all sectors of the economy (property, media & publishing, startups, education, banking, M&A, scale ups, venture capital, marketing, healthcare, circular economy, the list goes on.. ) welcome all.
Much of what I have written about has been the Three Strikes that take small and large companies down, the market changes that could be a single strike for any business, as well as the Thee Strokes of good luck that have made companies win.
To put ourselves and our companies “in luck’s way” we need to form a view of the future and align our business with that future, lest we get disrupted. I have been doing this for around a decade, on a constant search and study of what I call “Finding the Future”. For me, Finding the Future is all about understanding technology, demographic and geo-political trends that intersect to mean something…and using this point of view to position ventures to win in that future. My aim is to predict what might win in 10 years for a future that doesn’t yet exist, and to use out-of-the-box thinking that comes with being an entrepreneur and start-up investor, a mindset that most investment analysts don’t have. This is how I make my startup investment decisions, and how I choose to work with founders on what typically becomes a long, intimate relationship to help them invent the future for their own startups.
Along this journey I discovered Tony Seba who has already done a lot of that work for me. Tony and his team at ReThinkX, an independent think tank, specialises in technology-driven disruption forecasts. Their work has proved every mainstream analyst wrong, with many bold predictions about the future of transportation, which have since come true. That’s the kind of thinking I’m looking for.
Two weeks ago I wrote about The Future. Today, I’m going to shine a spotlight on a a mobility company and discuss how it is positioning itself to win in the future world of transport that Tony Seba describes.
I was the very first investor in KERB and the first non-founder to join the Board, so I have witnessed their successes and their setbacks almost from day one.
Since then, KERB has been on quite a journey across the world, and today has a growing presence on four continents. In July 2021, KERB won Toyota’s global Smart City challenge, ahead of 90+ transportation-and-mobility start-ups and university research departments from all over the world. This impressive short video describes their winning solution, which is being promoted and adopted by the City of Kuala Lumpur. Impressive.
But let’s hear from the Founder:
“KERB is well positioned to change the way 2 billion+ vehicle owners across the world think about a mundane everyday task: Parking.
Why should drivers only seek parking in commercial car parks and garages? What if there was a way to unlock the tens of thousands of parking spaces which sit empty Mon-Fri in your city - behind that hotel, in front of that church or next to your favourite sports stadium? What if there was an app which showed real-time availability of where there were parking spaces available, and based on that information I could choose to drive or take public transport?
This is the problem that KERB solves for drivers: how to find, access and pay for parking – anywhere! In so doing, it helps commercial landlords and property managers make significant CAPEX and OPEX savings.
Transport-focused technologies like KERB (and Uber!) are forcing public and private organisations to re-think all aspects of transportation (“Do we really need to invest fifty thousand dollars into a tin box which spits a piece of dead tree at every vehicle that enters our car park?”; “Why does our city still need taxi ranks, and why can’t every vehicle that wants to become a private taxi become precisely that?”)”
- Rob Brown, CEO, KERB
What all that means is that KERB offers a technology solution for airports, commercial buildings and eventually communities to manage their parking spaces without the need for expensive legacy hardware and software from the old world incumbents, while gathering data on - and enriching the experience of - drivers instead of vehicles.
Parking is still a an old-world experience, much like the taxi industry was before UBER, and KERB is transforming parking into a new-world experience. But that is just the beginning - a starting point - to unlock emerging smart city opportunities in mobility and data.. and perhaps surprisingly, also in energy.
This is one of my favourite slides from their pitch deck, which outlines the ROI for car park operators, commercial landlords (and airports), drivers and municipalities. This is exactly what the mandates of “smart cities” across the world demand.
You can probably start to see why I’m excited about KERB’s future.. but let’s get back to Tony Seba and his predictions of the future:
The Future of Transportation: Insights from the RethinkX Report
Their report, "Rethinking Transportation 2020-2030" predicts a seismic shift in how we move from point A to point B, primarily driven by the advent of electric vehicles (EVs) that will become autonomous. EVs open up a world of disruption (for automotive and oil and gas industries) as well as monumental opportunities (for startups). When Tony Seba made these predictions EVs cost $200k.
Tony Seba’s views on the future of transportation are both confronting, and compelling. He draws parallels between the switch in America from horses to cars. It took just ten years for 80% of horses to disappear from the streets of America’s biggest cities, to be replaced by cars. (“The car wasn’t just a faster horse. It created an entirely new system. The car market was drastically bigger than the horse market.”) Seba predicts a USD5,000 mainstream electric vehicle by 2030. China’s BYD – which has recently passed Tesla as the biggest EV producer in the world – last month launched its ‘Seagull’ model, which is retailing at just USD$9,700 and could quickly become the world’s most popular EV.
Admittedly, a global rollout of electric vehicles, which requires not just the vehicles but also the electric charging points is fraught with complexity and may take longer in certain parts of the world. But the future of transport is unfolding before our eyes. Future-focused companies like KERB, with its ‘A-B-C vision’ to win cities – and juggernauts such as Tesla, Uber, Waze and Grab - are changing the way we think about getting from A to B.
Here are some predictions:
The cost of a 200+ mile EV will drop along a predicted cost decline curve which he published
He predicted that by 2024 a 200+ mile EV would cost $10k
Years later in 2024, exactly as predicted, Geely Geometry announced the EX3 SUV for USD$9,200
In the major markets today 14%+ of all car sales are EVs. This means that every mainstream analyst was wrong.
Here are some facts:
EVs last 3-7x longer vs ICE (Internal Combustion Engine) Cars
People drive around 10k miles per year, BUT:
Fleet vehicle drive over 100k miles per year, SO:
Over 5 years, a fleet car drives 500k miles which means that over 5 years they would need 1xEV or 3xICE cars
Therefore:
Fleets MUST go EV, for purely economic reasons (Amazon and many others already have)
Businesses will buy EVs
But what about when EVs become autonomous? (Autonomous vehicles are already 9x safer than human drivers by the way)
We will see the emergence of TaaS (Transport-as-a-Service)
TaaS will cost 10% of the cost of any type of private vehicle ownership
The cost per mile of gasoline is going to be higher than the total cost per mile of transport-as-a-service (vehicle, maintenance, energy etc)
Consumers will subscribe to or pay on demand for most if not all types of transport
When Mobility intersects with Energy
These technology trends in mobility intersect with technology trends in energy - which we will cover separately - but for the purposes of this article we are assuming the predicted growth in these areas:
Distributed energy generation (rooftop solar)
Distributed energy storage (home/community batteries)
The reality of a dynamic, distributed network of batteries that are mobile (EVs)
Ie the ability for those same EVs to charge at home, and discharge when parked in the city or other neighbourhoods
The ability for EVs to power the average home for 2+ days if required (anyone’s home, not just yours)
This won’t all happen overnight, but how is KERB positioning itself to win throughout these disruptions? Well..
If:
Every single vehicle, of any type will need to park somewhere, at some point
Every single city is full of off street parking that KERB can unlock and monetise
Every single parking space can be used to charge/discharge energy
Every single vehicle can be used for parcel pickup/drop-off
Then:
All of the above needs a technology system to enable it, integrate with other parts of the ecosystem, and enhance it with data. Not just data on the spaces and vehicles and what those vehicles are transporting (ie energy, parcels, people) but data on the people themselves driving or being driven in those vehicles for demand planning and much else
So:
KERB will have the data and infrastructure to support the transition to, and monetisation of, a distributed energy generation grid and a distributed network of mobile batteries which move people, parcels, meals and things around the worlds smart cities, charging and discharging energy as they go.
And:
It all starts today with turning dumb parking into smart parking, unlocking and monetising parking spaces, gathering data, and powering an ecosystem.
How does the ‘Three Strikes’ theory apply to KERB?
KERB, like so many technology start-ups launched in the past decade, has already suffered three strikes of misfortune – COVID being one of them; the investment drought of the past two years being another. Fortunately, those strikes did not converge to prove fatal, and the company is now growing at a healthy rate. Indeed, it has enough opportunities across the world to become a future case-study in ‘Three Strokes of Good Luck’ – potentially even turning it into a unicorn. (Fingers crossed!)
In a previous post I cited an example of Three Strokes of Good Strategy that built a $400M business, I believe that KERB’s first Stroke of good strategy was an inspired idea with a truly grand vision (a vision so big that the company’s total addressable market is even larger than Uber’s). The second Stroke was securing a strategic investment from a major Canadian airport, which not only validated the technology and the opportunity but which is opening up the opportunity with airports all over the world. The third Stroke is yet to materialise, but when it does it could propel KERB to global prominence. Whatever that third Stroke becomes, and when it happens, is still unclear. But what is clear from my 10+ years of investing in start-ups is that strokes of good fortune rarely come knocking on a start-up’s door. Hustle, tenacity and the sheer willpower to put a company “in luck’s way” are invariably required. Uber’s co-founder and former CEO, Travis Kalanick, was willing to run through walls to put his start-up in luck’s way. So too for KERB’s founder/CEO Rob Brown and his talented team.
I wish them the best of luck!
SK
A really excellent article - extremely enlightening and succinctly describes a vision for a complex city ecosystem which includes the potential for car batteries to form a critical piece of the energy infrastructure.
Thinking about it, with a mobile ecosystem of batteries in EV's being utilised to store and distribute surplus generated power as and where required, the entire potential of the energy supply system could be released - with energy supply boundaries potentially being redefined.
I'd expect to achieve this vision, a sophisticated software management interface between energy companies and vehicles/ owners would be required.
The possibile contribution of Kerb's software to provide this solution and to contribute to this potential future is quite definitely immense.
A truely remarkable vision - here's hoping it one day becomes a reality!
👏👏