Christensen’s theory is based on examples drawn from buying decisions made by businesses, not consumers. The reason this matters is that the theory of low-end disruption presumes:
- Buyers are rational
- Every attribute that matters can be documented and measured
- Modular providers can become “good enough” on all the attributes that matter to the buyers
All three of the assumptions fail in the consumer market, and this, ultimately, is why Christensen’s theory fails as well…
.. The reality is the company’s significant research and development costs have been paid for by issuing stock and incurring debt, not the profits of high-end models.
.. Tesla is not disruptive. Rather, their error was a repeat of the mistake Christensen made with the iPhone; first, they don’t understand why people buy Teslas, and two, they assume that disruption is the only viable strategy to enter a new market.
Nafta May Have Saved Many Autoworkers’ Jobs
But the autoworkers’ animosity is aiming at the wrong target. There are still more than 800,000 jobs in the American auto sector. And there is a good case to be made that without Nafta, there might not be much left of Detroit at all.
.. “Without the ability to move lower-wage jobs to Mexico we would have lost the whole industry,” said Gordon Hanson of the University of California, San Diego, who has been studying the impact of Nafta on industries and workers since its inception more than two decades ago.
.. The industry lost 350,000 jobs, or about a third of its workers, over the period.
..The surge of Mexican exports in the 1990s was propelled by a sharp devaluation of the peso, which set off the so-called Tequila Crisis. The wave of immigration from Mexico into the United States, which lasted until 2005, was driven by a decline in government subsidies to farmers and an economic collapse that occurred just as millions of young Mexicans were entering their late teens and were desperate for jobs.
.. The truth is that autoworkers in Detroit were not just competing with cheap workers in Mexico. They were also competing with American workers in the union-averse South, where many car companies set up shop. They were competing with robots and more efficient Japanese and Korean automakers.
.. The Honda CR-V assembled in El Salto, Jalisco, for example, uses an American-made motor and transmission. Roughly 70 percent of its content is either American or Canadian, according to government statistics.
.. And if the real concern is China — another target of Mr. Trump’s ire — a truly integrated North American market would help keep it at bay.
..“It’s exactly the wrong time to blow up Nafta,” Professor Hanson argued. “We would be doing China an enormous favor.”
If You’re A Real Grown-Up, Minivans Are Cooler Than Crossovers
Once people know I’m an auto journalist, usually they ask me two things: First, if my parents were able to get over their disappointment, and second, what they should buy if they need a minivan, other than a minivan. Buying a minivan for their minivan needs is out of the question.
This general concept is sometimes called the Minivan Stigma.
.. She’d never buy a minivan, because that would mean she’s “giving up.”
.. SUVs became ubiquitous because a whole generation of people needed minivans but were too insecure to accept that.
.. The idea that a crossover is cool is a complete fabrication devised by marketing departments. What, exactly, are people afraid of “giving up” in a minivan that they somehow retain with a crossover? What are they going to do in that crossover that they can’t do in a minivan? Drive more easily over curbs so they can fight crime, or maybe use that slightly longer hood to bone, vigorously and sweatily, in parking lots? No. They’re not going to do a damn thing differently.
The only thing that they realistically can achieve in a crossover is delude themselves into thinking two things: that they can be driving somewhere and look like they don’t have kids, and that anyone even cares whether they have kids or not.
.. Why did we decide that a vehicle that makes life with a family better and easier is something shameful?
.. A minivan isn’t trying to impress you from the outside; it’s a flexible tool to get things done, and those things can become grand, interesting things if you want.
A crossover, on the other hand, is a vehicle born out of insecurity. A crossover is for people who fear that their identity—as a man, as an individual, as someone with sex appeal or edginess or surprise or whatever—is in danger.
.. It’s time to do away with the minivan stigma. It’s insipid youth-worship that somehow manages to disparage youth, parents, worship, cars, everything. Drive what you want, and drive with pride. Especially if you’re driving a minivan.
Cars and the Future
The problem is that traffic conditions can change rapidly; as of last year, for example, Google’s cars couldn’t handle a temporary stoplight. In other words, it’s not simply that Google needs to map the entire world in far more detail than they have previously — after all, the fact they have already done it shows just how capable the company is! — but rather that the maps need to be updated far more frequently than Google Street view ever needed to be
.. What I suspect is happening with TV is a little more nuanced than long-standing cable customers getting fed up with the cost of bundled TV and cutting the cord. Rather, young people, who have grown up in a very different entertainment environment than their parents — i.e. an online one — are simply not signing up in the first place. The decline, slight as it is, is the older generation that was raised on TV dying off.
.. Instead, the change is gradual. Netflix here, a bit of YouTube there. Or, in the case of cars, first hybrids and assisted parking, later electric vehicles that look and operate like normal cars, and the ability to take your hands off the wheel on the highway.
.. Meanwhile, a new generation that doesn’t understand why you would want to sit behind the wheel — much less own the damn thing — when you could instead be on your smartphone is coming of age. It’s a bit over-used at this point but the Ernest Hemingway quote about bankruptcy seems appropriate:
“How did you go bankrupt?”
“Two ways. Gradually, then suddenly.”