Reality Check on Autonomous Cars

Not a week goes by without someone extolling the imminent virtues of autonomous vehicles. It’s gotten to the point where some see them solving pretty much everything. Which, obviously, they’re not going to do – so let’s take a quick look of what impacts we can really expect, and when.

train

What, by the way, is a train image doing on a post about autonomous cars? It’s because trains already provide the user experience that people are likely to most rave about when they get their autonomous car. We’ll return to this later.

Some, like RAND, provide good, balanced reports on autonomous cars. Others, like Accenture, focus on the eccentric (“Autonomous vehicles can expand consumers’ access to banking, using the car to pay for fuel and tolls” – wot?! :)) while yet others go for the utopia-model: this Investopedia article is a good example: autonomous vehicles will supposedly “dramatically reduce the number of cars” and make for “greener urban areas“, among other impacts.

Let me begin by saying I love the concept of autonomous cars, and I believe they will be a net benefit to society and will change a number of things – some dramatically, some less so.

Will they reduce vehicle ownership? Maybe, but it’ll be a reduction, not elimination, and the shift is likely to be generational in timeframe. While fewer young people now own a car, those predicting significant shifts in attitudes to ownership ought to keep in mind humans aren’t exactly logical creatures, and ownership of “stuff” is rarely driven by rational reasons alone. I can also see the reverse trend being possible, such as affluent people buying cars for their kids – kids too young to drive themselves – to get around with.

Will they reduce accidents? Very likely yes, and this is the single biggest human benefit of them. I fully expect that in another 50 years, driving yourself on normal roads is likely to be either illegal or ridiculously expensive because of insurance.

Will they reduce emissions? No. Of course, their driving style might be more efficient, but that alone is not a huge impact – especially when you factor in the increased miles driven (see below). Even if we assume they’ll all be electric, that won’t automatically have a positive impact – because depending on the way your electricity is produced, EVs can pollute more than traditional combustion engine-equipped cars. This is the case here in Victoria for example. Thanks, coal.

Will they reduce miles driven? Almost certainly not. This is even contradictory to the other often expected impact of reducing vehicle ownership.

How so? Barring substantial changes in human behaviour (e.g. dramatically reduced mobility), the only way to reduce the number of vehicles is to use them more efficiently – share them. Given their (then autonomous) movement from one passenger in need of them to the next, they will actually increase miles driven – and as such, also increase emissions, and congestion.

Even if we assume a more conservative “no sharing” deployment of autonomous cars, they’ll be driven more and will worsen congestion. Imagine: you drive – well, are driven – to work. Do you tell the car then to park in the busy CBD area at a cost of, say, $50 per day – or tell it to go find a cheaper spot further away? As long as it’s there to pick you up when you get off work, chances are you’ll send it somewhere cheaper. Or when you need to stop somewhere for 10 minutes and there are no parking spots? Just tell the car to drive around until it’s time to pick you up.

Not to mention that when driving becomes more convenient, people are likely to do it more. For example: why fly from Melbourne to Sydney, when you can just head out in the evening in your comfortable, self-driving vehicle that provides a lie-flat bed for you to sleep in? On the less extreme end of the scale, they will likely make longer commutes more feasible – again leading to more miles driven.

Will they eliminate traffic jams and ease congestion? No, as above. But they will make traffic jams more bearable so I guess that’s something.

What about the user experience; what will that be like? Calling for your car like KITT was summoned in Knight Rider will be neat alright, but the most meaningful impact is elsewhere: we all know driving in traffic jams, in technical terms, sucks. It’s stressful, and for some, road rage ensues. Having an autonomous car will improve that experience significantly – it’ll reduce stress as the “driver” can concentrate on other things: relaxing, working, reading, even sleeping.

Which brings us back to the trains. I suspect something along the lines of “my commutes are SO much better with my self-driving car” will be the most common thing the owners of autonomous vehicles will be raving about.

I find that rather ironic, because that “hey I can read a book or sleep during my commute!“-experience is exactly what users of public transport, where available and done right, have enjoyed for decades. Everything old will be new again 🙂

Over time, Level 4 autonomous vehicles will allow a complete re-design of the car interior which has already led to some exciting concepts. But again: if you make car travel something really enjoyable, it’s likely to lead more of it being done.

Timing

But most of all, none of this will happen overnight. The current commercially sold state-of-the-art vehicles are Teslas, which are “only” Level 3 autonomous vehicles. Level 3, while providing added convenience and safety, allows for none of the significant societal changes to take place yet – cars aren’t really truly autonomous until they reach Level 4, which is still some way off.

A number of manufacturers have stated they will have autonomous models on the market by 2020. Chances are the majority will be Level 3 autonomous. Taking an extremely optimistic assumption, let’s say that Level 4 autonomous capabilities – for all roads and all conditions – are perfected by 2025 (which I think is overly optimistic), and that they will be in every single vehicle sold in 2030.

There is little reason to believe that vehicle replacement cycles have the potential to dramatically quicken – and there would be production bottlenecks to overcome, too. That means that by 2040, “only” approximately 50% of the vehicles will be autonomous and we’d approach 90% penetration only by 2050. Some benefits of autonomous cars, such as increasing road capacity (through smaller distances between cars and potentially higher speeds) won’t reach full potential until the penetration is dominant.

If 2050 seems like “too long”, consider that the average age of vehicles is about 10 years, give or take a couple years (11.5yrs in the USA). And there’s a long tail – did you know there are 14 million vehicles over 25 years old on the road in the USA, and a total of 58 million cars over 16 years old? (58 million is over 20% of the light vehicle “install base” of 258M in the US).

2050 doesn’t sound like an overnight revolution to utopia, now does it? And remember, this is under extremely optimistic assumptions.

In other words, remember Amara’s Law:

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

While realism doesn’t sell papers, urban planners, take note: autonomous cars will not solve your infrastructure woes. Neither will Uber or taxi drivers all become imminently unemployed – although eventually they will, so I wouldn’t recommend it as a long-term career goal for kids.

The bottom line? As fast-moving and exciting as the autonomous cars thing is, it won’t happen overnight – and the impacts are not so clear-cut-positive as many would have you believe.

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The New Media Diet

It’s news to nobody that the news and media industry has gone through, and continues to go through, some tough times. Whether as a result or a cause of it, most content today – excuse my French – sucks. The quality of your average news or other media/content outlet today is shockingly bad.

Sturgeon was such an optimist.

The current situation would easily have you believe that journalism is a lost skill, as there are precious few examples of good journalism around. I cherish the remaining ones that there are, but by and large… *sigh* Among the exaggerating and fear-mongering tabloids to the ostensibly neutral but agenda-driven national newspapers and television to the click-baiting headlines online, I sometimes feel the media industry today deserves every little bit of disruption it’s getting.

Great Guidance – Ignored

It’s not for the lack of good guidance – for example, there’s a good book called Elements of Journalism which outlines the essential principles and practices of good journalism. They are nicely recapped here by the American Press Institute. Go through the guidelines and reflect how well your average media outlet performs – or doesn’t, as it quickly becomes painfully clear most media is essentially failing their own criteria.

The guidelines start off with what ought to be a given; Journalism’s first obligation is to the truth. Except when you spend even a few minutes looking into an average story, you’re likely to find more than your fair share of errors, lies and half truths. Mostly, that criteria is a fail today.

Next up is Its first loyalty is to citizens. One doesn’t need to look very closely at the driving forces of media industry today to see that principle is mostly out the window, too. Governments globally de-funding institutions that are supposed to be unbiased doesn’t exactly help either. So, fail.

It doesn’t really get any better further down the list. Or what do you think of the performance of your average media outlet against principles of Its essence is a discipline of verification, It must serve as an independent monitor of power, It must strive to keep the significant interesting and relevant or It must keep the news comprehensive and proportional. Fail, fail, fail and fail.

These are, if you ask me, all great principles. Unfortunately, the vast majority of what bills itself as journalism today neglects to adhere to most of them. What gives? Do they need a refresher on their own guidelines? Acknowledging that people and organizations are never truly free of all bias, I would like to add one point to the list:

State Your Bias Explicitly

It’s shocking how few media outlets do this. Often the bias is clearly visible to any discerning reader, and yet they media organization claims to be neutral. Newsflash: such bullshit is very transparent. Admit your bias and spell out your values.

As a positive example, I offer The Economist: they are abundantly clear about what they believe in, where their biases lie and how they see the world. I applaud them for that, and wish all media had the ounce of introspective capability to produce a similar statement.

Stating one’s bias alone would be a huge improvement; not only would it show that the outlet acknowledges its limits in being “unbiased”, but it would also allow the reader to filter any information in the proper light.

The New Media Diet

So, media is broken. What to do? Throw hands up in the air, give up and tune into Fox News? With the old guard increasingly letting us down, where does one go to get a balanced view of the world?

A range of places. As Jimmy Wales, the founder of Wikipedia, once said, “You shouldn’t use anything as the sole source for anything, in my view.” One has to develop a diverse list of sources; let’s call it a New Media Diet.

But how? I don’t know, really, but here’s what I currently do in my continually developing quest for the best possible situational awareness:

  • Skip the “breaking news”. Life is better when you pay no attention to the “news news”. The vast majority of it is a) negative, b) meaningless noise and worse, c) bad-quality noise. Skipping all that also saves you a lot of time from focusing on irrelevant things . Besides, if/when there is a 9/11-scale event, you will hear about it anyway, and if your train is late, well, see below.
  • Use custom app alerts. Now, some “breaking news” are useful. I don’t want to hear if there’s a curiosity delay on a freeway I never take, but I do want to know if my train is delayed. I also don’t necessarily want to know about a bushfire 500km away, but I do want to know about one that could get close to home. Luckily, one can usually get an app (or construct an IFTTT rule) for the majority of such situations without getting all the irrelevant notifications.
  • Read quality papers. There are still a few; The Guardian does good work regularly, and New York Times is among the better ones also. Of the weeklies, I would single out The Economist and of monthlies, The Atlantic.
  • Read Books. Pick carefully, and try to find at least two books on any given topic – ideally ones that take contrary views. Good books are invaluable in providing ample context into complex issues and deepening your knowledge on various topics. I prefer physical books, but YMMV.
    duty_calls
  • Use social media wisely. Twitter and other social media tools can provide interesting glimpses into how some people think, what they believe in and even some of those more useful breaking news – all very valuable. There is scope for having interesting conversations, too, but a word of warning is in order: it all depends on who you follow, so be very, very careful there – and don’t get dragged into incessant, pointless arguments which all social media is riddled with. If you can’t resist the temptation of being this guy in the comic, you’re better off not being on social media – or online forums – at all.
  • Read blogs and online sources – selectively. Blogs and other online sources are a good way to find out lots of interesting stuff. I subscribe to several hundred RSS feeds, spanning from expert blogs on technical issues and research organizations to more generalist thinkers and think tanks, to some blogs more focused on cultural observations, some on patents and so on and on. As with any other source, filtering is needed. As a tool to manage this, Feedly works well – so well that I’m kind of happy now that Google Reader was discontinued as it forced me to switch (I wasn’t at the time though).
  • Dive into research, statistics and open data. Scientific journals are good methods of finding out about interesting developments early on, particularly on the advancements of technologies underlying many future products or services. Governments also have bureaus of statistics as well as, as do organizations like the UN and World Bank, open data sources that can be very useful to do some deep dives into.
  • Talk to people. As different and diverse set of people you can find. It can be an eye-opening experience to notice how differently different people see the world. Few things beat a good face-to-face chat.

Keeping tabs of all of that is a lot of work, for sure. But it does, in my opinion, provide a much better view of the world than reading any one newspaper or other source would provide – and a much, much better view than reading one of those “good old” newspapers 20 years ago could ever have offered.

In that sense, maybe media isn’t broken. It’s just that good content is more distributed than before, and for the New Media to be useful, you need to do the mixing yourself.

You may also ask what developing a good situational awareness is good for – but the answer to that is a long list, so maybe a topic for another time.

Thoughts? Additions? I’d welcome any other useful sources and tips that people have.

Posted in Books, Building, Management, Personal, Psychology | Leave a comment

The Real Reason Why Customer Experience Matters

You’ve heard all about how customer experience or CX is critically important. But if you look around you, bad CX (and its cousin, bad UX) are so ubiquitous it begs the question whether it’s really that important. I mean what’s the worst that can happen if your customer experience is not up to scratch?

It’s not just about losing a customer to a competitor; it’s not even about your company going out of business, although both can certainly happen. It’s bigger. If your industry collectively sucks at customer experience, entire industries can falter – or to use the tired buzzword for greater-than-average change, become disrupted.

Really?

Really. Let’s see how that could happen / is happening. Most of us should have no difficulties in coming up with several entire industries that collectively don’t seem to give a damn about customer experience.

Little Love Lost for Utilities

Take energy companies. Exaggerating only slightly, all their customers hate them. For many consumers, they are the epitome of greedy business with powerful lobby groups, vested interests, price-gouging behaviour, limited competition and more. At best, they’re considered a necessary evil.

Whether they really are all that evil (mostly they aren’t) is however irrelevant, because it’s the perception that matters. And the perception is firmly that there is little love lost between utilities and their customers.

That’s a problem.

Now, many of us know the energy sector is facing a number of interesting and potentially quite severe challenges over the coming years. In Australia, some of the key drivers include the incessant rise in solar PV installations and an equally relentless decline in total electricity demand – all the while maintaining the brief peak demand levels.

Add to this already-uncomfortable mix the rapidly improving solutions for household-scale energy storage, and you can see why the energy sector is nervous. It’s slowly starting to dawn on the customers that maybe they are not an absolutely necessary evil after all; that maybe there’s a way to get rid of them.

The ultimate threat scenario is that eventually even suburban households will go off-grid in meaningful numbers, setting off a death spiral. In isolated areas with a high peak/off-peak charge delta, grid-connected household storage is already financially viable. As time goes by, it will only become increasingly so, and viability of off-grid scenarios will follow some years later.

The industry seems to take solace from the fact that for the vast majority of their customers, storage – let alone going off-grid – does not currently offer a good ROI, and won’t do so for some time to come.

They’re right.

But also so, so wrong.

Didn’t We Bury The Rational Consumer Model Already?

They’re right in that going off-grid in areas with existing grid coverage makes, on average, currently little financial sense. And it won’t for years.

They’re wrong in assuming that the economics of it would be the primary driver.

Assuming a standard, neo-classical consumer model is dangerous to begin with, given it has been shown to be dead-wrong time and again. It’s especially dangerous if your customers have a proven, strongly negative perception of your company.

If Your Customer Hates You, ROI Is Secondary

Anecdotally, once “affordable” systems come to market, my #1 motivation of going off-grid would not be based on ROI.

It would be the fact that my distributor is a moron.

While obviously setup affordability is an issue, the primary desire for going off-grid has little to do with financial viability. It’s simply because I would prefer to have nothing to do with my distributor.

(nb. yes yes, personifying a company by calling them morons is not “rational” and maybe not even be fair given they have many hard-working employees. Then again, maybe it is. Also, notably, I have nothing against my retailer, an entirely different company thanks to how the industry is structured here.)

Given the public perception of utilities, I would imagine I am not the only one.

Now, the energy companies could respond to the gathering of dark strategic clouds in an intelligent manner; first, they should urgently fix the customer relationship. Second, they could revamp the connection pricing structure to be based on maximum flux. Third, they could encourage increased usage (How, you ask? Encouraging adoption of electric vehicles is one sure-fire way of massively increasing usage, but it’s not the only one) and demand shifting to make disconnection harder in a positive rather than negative way, while also selling those batteries.

Yet, their main response so far has been substantially less intelligent, and chances are you’ve seen it in your electricity bill (fixed charges up). Long-term, this will just make their problems worse.

It’s Already Happening Elsewhere

If the energy sector scenario above seems far-fetched to you, consider that the same principle of bad customer experience driving big changes has already progressed further elsewhere.

Take taxis and Uber for example – the latter isn’t popular purely or even primarily because of often cheaper pricing, although it certainly helps. People choose Uber over taxis because their customer experience is better.

Or how about telecommunication companies and the so-called over-the-top players? As telcos failed to deliver good new customer / user experiences (anyone remember walled gardens, WAP content, the promise of RCS etc?), others took over a large share of the customer’s attention – and money.

If You Don’t Care, Someone Else Will

Don’t be the kind of company – or industry – that doesn’t care about customer experience. For your sake.

Because if you don’t care, sooner or later someone else will.

After all, all the over-use and debate about the term disruption doesn’t mean it can’t happen to you.

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Are you really data-driven?

Many companies and even individuals pride themselves on being data-driven. Or at least that’s what they claim – it is however clear many are data-driven only when it fits their preferred narrative or their view of how the world works.

They are data-driven only when convenient for them. Using data only when convenient is a lame, modern form of confirmation bias.

Let’s look at just three examples where many so-called data-driven companies completely ignore the actual data:

  • Working hours
  • Diversity
  • Exercise

These are all pretty fundamental building blocks of productivity – and as such, should be of paramount interest to organizations of any size and kind. Yet, the vast majority of activity and policies around these flies directly in the face of evidence – the very data that the said organizations claim guides them.

Let’s look at these, and some of the evidence, one at a time:

Working hours

That long working hours are harmful to productivity has long been known, but equally long mostly ignored by corporations. As evidence keeps piling up that long hours backfire for people and companies and that productivity declines steadily as hours worked increases, what are most companies doing?

Nothing.

At worst, you get reports like the NYT story on Amazon’s culture where companies do exactly the opposite of what research suggests. Or you might get inane stories like BoA Merill Lynch having to exhort their junior bankers to take four weekend days off per month. To say that’s “too little” is a bit of an understatement.

Diversity

Most organizations pay at least lip service to diversity, because it’s perceived bad to be anti-diversity. At the same time, most organizations are hopelessly homogenous – especially on the executive leadership level. What’s worse, most talk about “diversity” is focused on really, really, basic things like gender. But there’s more to diversity than that; studies have shown that companies with 2-D diversity – both inherent diversity such as gender and ethnicity as well as acquired diversity like working in another country or following a divergent education or career path – are much more likely to grow market share and capture new markets.

As if that’s not enough, being around different people also makes people more creative, more diligent and harder-working. Like with working hours, the data on the benefits of diversity is not exactly new; people like Bob Sutton have been talking about the topic for 15 odd years (including in his book from 2002 that I can highly recommend: Weird Ideas That Work).

Exercise

Basically nobody disagrees that sedentary lifestyle is a killer – The Economist recently said it has “reached epidemic proportions”. Many organizations may think that has little to do with them and that the best they can do is offer some gym discounts – and they would be wrong.

A Stanford study showed walking improves creativity by an average of 60%; as arranging walking meetings and the like is not exactly complicated, you’d think this would be encouraged more. It has also been shown beyond any reasonable doubt that sitting is bad for you, so simple things like standing desks have many proven benefits. But when was the last time someone asked you for a walking meeting? Does you workplace have adjustable desks all around?

But we’re an exception!

Of course there are genuine exceptions, but they remain precisely that – exceptions. Despite the masses of evidence, I’m stumped as to why organizations do not act on the data. At best, they’re being hypocrites. At worst, they are literally killing their employees and/or making them miserable and failing to reach business objectives effectively.

One reason could be the belief that all that evidence is fine for everyone else, but that we’re somehow different. There are a host of biases involved here, but two concepts stand out – exceptionalism (a perception that an institution is exceptional in some way and thus does not need to conform to normal rules and general principles) and illusory superiority (a cognitive bias where individuals overestimate their own qualities and abilities relative to others). Both are likely too common.

Alternatively, given all of the above have been known for years and years, it could be that organizations and individuals and just bloody slow learners even when faced with convincing data. In an age where learning, innovation and operational agility are imperative, this is not good news.

So, data-driven – really?

If you’re a genuine exception to the above – i.e. you strongly advocate reasonable working hours, are active in hiring and developing for multidimensional diversity and provide support and guidance to being physically active at work – congratulations! I would love to hear how you manage them, what benefits you have seen and what your employees think.

On the other hand, if you fail to acknowledge the points above – i.e. you believe that working perpetually stupid hours is a net positive, that homogeneous groups are superior in innovating and productivity, and that exercise doesn’t have any benefits – you could be called many things, but data-driven is not one of them.

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