In every new market, tech executives step into unknown territory. We’re watching the automotive IoT market with interest because it’s a wide-open business model. There’s a lot at stake in the automotive market, as safety is a key factor, and dealers, insurance carriers, mobile operators, automotive OEMs, fleet managers, and drivers are all involved. Every one of these groups needs something, and most of them are willing to pay for it.
The market has been slow to develop because most of the players are large companies that are allergic to risk. We need small start-up companies to break the logjam here.
During the days of the Wild West, progress did not come from big companies in New York but instead from enterprising people that simply got on their horses and rode West. The legal challenges of land ownership, mineral rights, riparian status, and other issues were not even discussed around the campfire. These guys simply took what they needed, and if there was a disagreement, they would settle it. Sometimes they settled it peacefully.
We’re in a similar situation with automotive IoT. Who owns the data collected on cars and drivers? Over the past few years, companies have collected several Petabytes of data, but the privacy status of that data is challenging. A large publicly traded company can get wrapped around its legal axle, trying to sort out the risks. But the fact is that the risk cannot be calculated today. There are no solid legal precedents for many of the upcoming privacy and safety issues related to autonomous cars, usage-based insurance, fleet tracking, and other areas. So, instead of careful, established companies moving slowly, we need small entrepreneurs to step into the unknown, and create legal precedents by simply taking the data and using it.
This approach will end in tears for some people. Just like the Wild West, the stakes are high, and if you make a mistake, somebody can end up dead. But only a cowboy can push through the legal weeds, to blaze a trail for mainstream business to flourish.
After the trailblazers establish a route, the railroads follow. In the automotive market, small companies like Mojio are collecting massive amounts of data today, and working out business models related to advertising, extended warranties, service plans, and of course usage-based insurance. As they break through to significant revenue, we expect larger enterprises to jump in, applying big capital to improvements in the network for better performance: edge computing, low-latency 5G, and other improvements.
In our recent survey, we’ve learned that this market is hindered by big risk-averse companies and governments that move slowly. We need the cowboys to break things loose.