The evolution of a company in the automotive market is like an unknown route with road bumps – prohibitive laws, traffic jams of negotiations, a surging number of market players on the same route striving to overtake you and grab their market share. Moving quickly and purposefully alongside emerging technology start-ups and technologies being developed in house by OEMs, tier 1 suppliers and new market entrants, is not an easy task.
In spite of the rapid growth of automotive venturing, with increasing volumes of capital being deployed, very few new companies can boast of market-ready solutions other than prototypes and pilot versions. Even fewer attract large OEM customers, who are renowned for their conservatism and reluctance to take on new suppliers.
So the question is: how can new automotive technology companies make profits in the world of connected cars and autonomous driving? At Bright Box we have developed a methodology for fast and profitable penetration of new but proven connected and autonomous car solutions, which we recommend to others. Of course, every business is different, and as Tony Cannestra of Denso notes above, “nothing happens quickly” in the automotive industry. But our methodology has served us well and we’re now ready to raise growth capital from corporate VCs with automotive experience and ambitions.
Bright Box growth methodology
- Prioritise customer development over product development
- Make it easy for your customers by offering them subscription-based services
- Identify quick-wins – don’t accept the conservatism of the OEMs
- Use partners for market access, but keep control of your own product development
Prioritise customer development over product development
We communicate with the customer thoroughly and learn everything. Then we develop a new product. We begin development only when confident that the product will be sold. The first step is to develop a minimal viable product (MVP) and quickly launch it into operation. For example, our growth in the Middle East is partly due to our recognition of the customer’s need for remote access to the car’s air conditioning. Thanks to us, drivers open their door to a car that is already cooled and comfortable to drive. We learned that this is a real priority for drivers there, along with remote control of locks, headlights and windows etc. And only after successful launch of MVP, we started adding new features like E-call, Remote diagnostics and Big Data analysis
Make it easy for your customers by offering them subscription-based services
Tier 1 suppliers typically require the OEMs to pay some or all of the cost of a new product or service. This is a mistake because OEMs are under increasing pressure to limit capital expenditure. But it’s an opportunity for new businesses like ours. Our customers pay only for the result; for each activated connected car. They get a subscription-based business model without significant R&D costs. We can provide them with proof of concept in a week at no charge.
Identify quick-wins – don’t accept the conservatism of the OEMs
We all know that it takes a long time for an OEM to develop a new car. To be integrated into a new car, we’re told that a new technology has to prove itself and wait its chance. But at Bright Box, we know that many of the national sales companies (NSCs) – the companies trusted by the OEMs with the task of selling vehicles in different national markets – are impatient to offer connected vehicles to their customers because this is what they want. (Why would you buy a vehicle which isn’t connected when you can wait for one that is?). We therefore, at first, focused on working with NSCs that need to sell connected cars right now. This meant we quickly generated revenues and reached profitability. I’m glad to say that OEMs are now following the lead set by their NSCs and now seeking our services.
Use partners for market access, but keep control of your own product development
We independently develop the entire stack of technologies (Cloud IT platform, mobile and web apps, hardware and the connectivity between them) on top of best of breed technology platforms from Microsoft and Cisco-Jasper. Because we control all key parts of technology, we can adapt out solution very quickly to each new customer, who can start sales of new connected cars just in 3-6 months after our contract is signed. But we do not work alone. In each of our markets, we seek collaborators with different skill sets that can complement our offering. For example, in Europe we work with Luxembourg Post, Luxembourg’s national telecommunications services operator, to submit an excellent mobile network infrastructure and best performance to guarantee high customer satisfaction and an outstanding user experience with Bright box services.
We’ll be using this methodology to launch and grow our services in autonomous driving, which is a natural and inevitable progression from the connected car. We are looking for a strategic investment partner to accelerate the growth of Remoto Pilot, our autonomous driving product, and scale the business of our Connected Car platform as well.
Bright Box fact file
Established: 2012
HQ: Lausanne, Switzerland
Revenues 2016: $11.5m
Profits 2016: $3m
Products and services: Remoto (a turnkey connected car platform), Remoto Pilot (a new self-driving car solution)
Customers and partners: Nissan, Toyota, Honda, Hyundai, Microsoft, Cisco-Jasper, Post Luxembourg, VimpelCom, China Unicom, and several others under NDA
Culture/ethos: We help OEMs to sell more connected cars that are safe and comfortable for car owners
Main markets: Europe, Middle East, Russia and CIS, China
Chairman: Ken Belotsky
Plans: Raise capital from OEM corporate VC(s) in 2017 to accelerate growth of Connected Car platform business and launch of Autonomous Driving technology
Current investors: Leta Capital, Cloud4uto Ventures
Client case studies:
- The new «Nissan SmartCar» solution in Middle East is based on Remoto platform provided by Bright Box. Since 2015, all new SUV Nissan Patrol and the limousine Nissan Maxima are now equipped with the Nissan SmartCar as a standard option.
- Bright Box and Toyota Tsusho Corporation announced the first international integration of connected car solutions.
- With the support of Bright Box, Honda Europe is providing a cutting edge customer retention tool to car retailers.
- Bright Box provides remote car management services for Genesis G90, consisting of certified telematics control units, a web-based car management panel, remote management app for car owners and Remoto Wi-Fi integrated solution for wireless Internet.
- Dubai Police collaborate with Bright Box and Nissan Middle East on a new road safety technology service called “Smart Response”, the first of its kind in the Middle East. In the event of a collision or accident that results in rapid deceleration, the system works in tandem with the patented Nissan SmartCar “control system” to alert Dubai Police, the General Department of Transport and Rescue, so that the car’s occupants may receive immediate assistance.
- Bright Box and POST Luxembourg announced a Joint European Solution Development for OEMs. Together with POST, Bright box is able to offer all European high quality coverage and connection of the Remoto connected car platform and vehicles in all European countries.
- Cooperation between VimpelCom and Remoto with high-quality communication in the CIS, will be able to connect to any number of SIM-cards working with a single web interface.
- With China Unicom Bright Box will offer local OEM customers a global platform through which companies may successfully launch, manage and monetize Connected Car service businesses.
On December 1st 2016, the world’s leading corporate VCs will gather in London for ‘Venturing and the future of mobility and automotive technology’ – www.gcvautomotive.com Then in January at the Global Corporate Venturing and Innovation Summit in California, transportation will be high on the agenda, in both the main programme and break-out sessions. To get involved, please contact me on tom.whitehouse@london-eif.com