What is 37BetterMotors?

Have you ever left your car parked for the night, but then couldn't remember whether or not you locked the doors? Or stepped into your bitterly cold/hot car at the height of winter/summer and wondered "couldn't there be a better way"?

We did and so we came up with 37BetterMotors. For those of you familiar with cars think of it as telematics++. For those less familiar with cars think of it as a remote control for your car, but with infinite reach.

37BetterMotors is 37signals' vision for a better automotive ownership experience. Through a site like 37BetterMotors a car owner could remotely lock or unlock her car, have the car cool the cabin at a pre-determined time, activate or deactivate her car's alarm, check its fuel level, transfer MP3s from a PC to the car, or dozens of other useful tasks. This could all be done from the comfort of home or the backseat of a cab since the service would be accessible via computer or mobile phone.

What's wrong with existing automotive sites?

Most if not all of the content on existing automotive sites is focused on winning new customers vs. keeping existing customers happy and interested in the brand in question. They provide little to no post-purchase support and provide almost no incentive for the customer to maintain contact with the automaker or dealer, which is incredibly shortsighted considering that...

1. an automobile is the second largest purchase that most people make in their lifetimes (second only to a new home)
2. the frequency of automobile purchases/leases is on the rise

What is telematics?

The word telematics can be used to describe any integrated communication and computer system, but it is now used almost exclusively within the context of automobiles. The most popular telematics system is GM"s OnStar, which provides features such as stolen vehicle tracking, remote diagnostics, and remote door unlocking made possible through an integration of an in-car computer, global positioning system (GPS), and mobile phone.

What are the benefits of telematics?

The benefits of present-day telematics systems range from the practical, such as the ability to initiate and conduct "hands-free" phone calls (which is important considering that an estimated 70% of mobile calls originate from within a vehicle ¹, to the more esoteric, such as the ability to make a reservation and get directions to an exclusive restaurant -- all from within your car.

Why hasn't the telematics industry taken off?

While there are approximately 120 million mobile phone users in the U.S. only about 2.3 million Americans have signed on for telematics services² which have been available in one form or another since early 1996. The exuberant estimates of just two years ago that telematics revenue would top $40 billion by 2010 have since been halved.³ Why the lack of consumer interest? There are many problems with existing telematics services and they are, for the most part, rooted in the fact that the telematics industry is currently dominated by automobile manufacturers. The major issues are...

• Cost: GM"s OnStar, for example, adds nearly $700 to the cost of a new car and requires a monthly fee of $17.00 - $70.00 after an initial year of free service. When roughly 75% of new car buyers already own a mobile phone⁴ and are paying an average of $50 a month for mobile phone services⁵, the cost of telematics services quickly becomes a barrier.
• Time to market: It takes automobile manufacturers anywhere from one-and-a-half to four years to bring a new model to market. Compare this to the consumer electronics industry which operates in a six-month product cycle.⁶ This means that even the most cutting-edge embedded electronics will be stale long before a vehicle is rolled off the assembly line. This also invariably leads to a reliance on obsolete technologies. A prime example being that the telematics industry still largely relies on legacy GPS systems and analog wireless networks for service operation.⁷
• Length of ownership: Even the with rising rate of new car purchases/leases, the average length of ownership for a car in the U.S. is between five and 10 years vs. one to three years for electronics such as cell phones.⁸ Given the speed at which wireless technology is advancing who would want to be locked in to an embedded telematics system for up to 10 years?
• Lack of expertise: Automakers lack the level of expertise in wireless access and consumer electronics necessary to provide a compelling suite of telematics services. And, given the most recent revenue projections, automakers no longer have the financial incentive to build the necessary infrastructure and expertise. According to Peter van Alstine, V.P. of telematics for the automotive practice of Cross Country Automotive Services, "Network carriers provide a unique set of services, functionality and applications, and they spend a lot of money to do it...We won't be able to do that...We cannot reinvent the wheel and compete with them...What's the point?"⁹

Why is 37BetterMotors better?

37BetterMotors gives form to a new model for the telematics industry, one which 37signals and many observers outside of the auto manufacturing industry believe is a better way. 37BetterMotors is based on a mobile phone model in which car-based embedded electronics would be unnecessary. Instead, telematics functionality would be provided via a mobile phone, with the automobile acting as the platform from which data is drawn and, in some cases, stored. This approach addresses all of the major issues confronting the telematics industry today, cost being a major one.

A new, high-end mobile phone with a built-in GPS capabilities and the ability to transmit and receive data costs around $200. To add a second phone to an existing mobile phone account costs about $10 a month. Compare this to the $700 price tag on an embedded OnStar system and its requisite $17 - $70 monthly fee and the benefits of a mobile phone-based approach become very clear to the everyday consumer.

A mobile phone-based model also gives consumers the freedom to interact with their cars more frequently. GM's OnStar system requires customers to speak to an OnStar representative to perform any remote functions. So, for example, every time you lock yourself out you have to call OnStar and have an OnStar representative remotely unlock your door for you. You also have to speak to an OnStar representative to get driving directions. Certainly there are occasions when it's necessary to speak to a person, such as in the aftermath of an accident, but in that situation would you want to call your telematics services provider or 911?

With a mobile phone-based model consumers can interact directly with their cars, either through direct dial from a phone or through a web-based interface (see our walkthrough for an illustration of how this system would work). Not only is this more convenient, this direct interaction also provides consumers with a much richer feature-set that would not be possible in the existing embedded electronics model. Potential new features range from the fanciful, such as the ability to transfer MP3 audio files from a home PC to a car, to the mundane (but necessary), such as the ability to have contact information automatically updated between a personal mobile phone and an in-car mobile phone. This is in addition to of all of the existing telematics functionality such as remote diagnostics, remote door unlock, etc.

A final benefit of this approach on the consumer side is that car owners can easily and inexpensively keep up with advances in telematics technology by simply purchasing a new mobile phone. Embedded systems such as OnStar may eventually support some of the functionality described above, but it's more than likely that owners of cars employing the present-day system will be left out in the cold.

On the automakers' side the benefits of this approach include a tremendous increase in the frequency and richness of customer interaction (currently interaction between an auto company and a customer occurs, on average, 1.2 times per year¹⁰) and the ability to keep resources focused on developing great cars. It's estimated that automakers have already sunk billions into telematics, but these investments were based on the heady revenue projections of years past. More recently, analysts from McKinsey & Company have estimated that even in the most optimistic conditions, the returns from telematics revenue would roughly equal those of a good car design, while the risks would be much greater.¹¹ So embracing this mobile phone-based approach would allow automakers to cut their losses while gaining valuable data that could be used to dramatically improve customer relationship management.

This model would also help auto dealers improve post-purchase customer satisfaction. Because 37BetterMotors would allow the car owner to send diagnostic information directly to her dealer's service department, the service technicians would be able to pre-order any necessary parts before the car owner drops her car off for service. This would shorten the duration of service visits and would allow the dealer's service department to handle more appointments through the course of a year, thereby increasing revenues. With less waiting for car owners and increased revenue for car dealers, this is a win-win situation.

As a recent CNET News.com article on the topic of telematics so succinctly put it, "if the automobile industry proceeds with current business plans, the car of the future will include an outdated, malfunctioning jumble of incompatible electronic gadgets."¹² We believe that there is a better way and 37BetterMotors is the embodiment of our ideas.