We hosted Dr. Edwin Olson, co-founder and CEO of Michigan-based autonomous vehicle technology startup May Mobility for a fireside chat at our Mountain View HQ, where he offered business success strategy tips.
Here are five takeaways from our discussion.
1. Pursue go-to-market strategies that prioritize profit over revenue.
“There are a lot of companies that talk about robotaxis, but as of today, the unit economics of a robotaxi business make no financial sense. The necessary hardware and engineering manpower are extremely expensive. They compete with human taxi drivers in affordable cars, and revenues are really low. It’s easy to end up underwater. To gain an advantage over competitors, seek out a market where there’s a large amount of revenue to be earned while keeping costs low.”
2. Basic data collection, sufficient for most AI models, falls short for autonomous driving.
“The high dimensionality of autonomous driving is a fundamental challenge to offline data training for AVs. Collecting data offline makes it hard to gather enough test set coverage to be confident that every road situation will be similar to those in the training data. Opt for technology that offers online reinforcement training that simulates thousands of outcomes and refines the policy directly on the vehicle instead - it’s great for edge cases and driving in new cities.”
3. Emphasizing a smaller scale, localized go-to-market approach can sometimes be more profitable than expanding reach.
“There’s no need to operate out of major metropolitan areas that would require the most expensive systems, if great partnership opportunities exist elsewhere. For example, the average operational cost of a bus is $150 an hour, but the vast majority of bus lines across North America are empty - especially in more rural areas. Those smaller, seemingly commercially quiet markets are prime areas of opportunity. Look for markets where demand for a product doesn’t justify the high operation costs involved, and offer a more cost effective alternative.”
4. Maintaining a competitive advantage is oftentimes more important than fundraising for startups.
“Operating AVs should be profitable. Fundraising is important, but if a company can focus on strengthening its competitive advantage while keeping burn rates low, it can achieve positive margins, which will make raising the next round of capital will be much easier.”
5. Success in the AV industry is good for all AV companies.
“There shouldn’t be any schadenfreude or over-competitiveness with competitors. There will always be competition for talent and ideas, but no company should ever wish ill on its competitors, especially in major industries. Creating a competitive advantage, like a low burn rate or differentiated technology drives innovation amongst competitors, which drives overall success in the industry. Without that, companies won’t have the opportunity to succeed.”
.webp)
.webp)
