Billy Riggs (00:41)
Welcome to a little European edition of rewiring the American Edge with only seulement Billy Riggs. I've been meeting with the European Commission and ITS or Information Technology Systems Europe this week about jobs.

automation and innovation and changes that our economy might face in lieu of automation and innovation. So I thought it would be good to just keep the flow and maybe express some stuff that I've been thinking and talking about here in Europe. In a little micro,

episode, ⁓ sans Vipul. So welcome to this kind of like 2.5 episode of rewiring the American Edge. So you know today what I want to really focus on is two themes that have really been pertinent into what I focused on in some talks here in the EU and the two themes are

redundancy in the tech stack and that redundancy yielding resilience and then this idea of coopetition and I think these are really big lessons as we move into the future of what I think are gonna be turbulent years and perhaps growth years.

when we think about challenges spurring growth, out of steel is forged and diamonds are compressed through pressure and steel is forged through fire. But I do think that through the next few years are gonna be tough from an economic standpoint when we think about the pressure of

tariffs and what it's going to do to consumer prices and things like that. We're already seeing even in the news today.

which is May 20th, 2025, starting to, and many large American companies starting to say that they will pass on prices to consumers and the bond market's starting to react to increasing debt in the, that'll be debt that's being taken on by the US government and the increasing

derating of the U S bond. the, the lack of confidence in the U S, as a safe haven, for, for lending. and I think that's when we look at what's happening, it's, there is a great concern. but like I said, I think that's, there's also being that I am a optimist and a glass half full.

person, then I think there's room for optimism looking forward. I think so I'll take the lessons that I've been talking about here being resilience and then the lessons of co-opetition. So we'll start off with this idea of systems redundancy. And so when we think about automation and innovation, I think one of the things that

We always talk about in the autonomous vehicles in the city lab and in our automation and innovation lab at University of San Francisco and when we consult at INTNCITY when Dr. Cornet from our lab and from Urban Innovate talks and her stuff and when Vipul, when he consults. Many times what we talk about is

we talk about building redundant systems and we talk about this idea of systems framework. I think it's a large part about what we talk about when we think about design thinking. And I believe that's really important when we think about a value chain and the difficult part when we think about complex, building complex things.

and machines, vehicles, phones, computers. These aren't just pieces of software. You don't just sit in a room and hack away at them. They're not just pieces of code. They have to be shipped around the planet. They have to be fabbed from materials. They have to be transported.

They have to be molded. They have to be pressed. The complexity and the labor and just the sheer effort they take to make and the maker space, the skill that they take, it's unique. And I think that when you consider the potential for

error, but also the potential for breakdown in those systems is large. And so when you get to, when you start to fracture some of those links, there is potential for, there's potential for error, there's potential for breakdown. And that's where, as a company, as a government, you want to build in systems for redundancy. And that's where, when we had, when we have tariffs, when we have

economic breakdown and we have breakdown in systems that can cause disruptions, can cause economic disruption, that can cause supply chain disruption. And that leads to economic escalation, that can lead to supply chain disruption, that can lead to shortage, that can lead to a number of different adverse outcomes on the

Other hand, if you have redundancy in some of those systems, then you can pivot to different suppliers, can pivot to different vendors. One of the examples I cite in my work with automated vehicles is the difference between the different types of companies. For example, we have had a couple different companies in the level four automated vehicle space.

Level four being the highest level of automation. I say there is such thing called level five vehicle, which is the idea that a car can drive anytime, all the time, wherever we want to go. We always say that level five is a myth that doesn't or will never exist. Just like you or I can never drive everywhere, anytime, all the time. OK, so we're just going to put level five and level six. Not even a robot can do that.

know, the companies like Waymo and Cruise and Zoox and this Chinese company, WeRide and Pony, these companies are getting very advanced. But they have different approaches to how they build their technology stack and how they align their products, how they have their self-driving software, how they have their hardware, how they manage their fleet, they manage getting their vehicles out there and how they do their operations.

Some of the companies, they use other companies in parallel with their own. And then they have a bunch of different vehicle manufacturers that manufacture their vehicles. And then some of the other companies, they try to build the vehicles all themselves. And then they try to actually do all the fleet management themselves. And they try to do everything themselves. And you could imagine it's a lot harder to do everything yourself than you have all these other suppliers. So you can think about it as like,

Some of the companies that have tried to do everything themselves have run into problems when things break down. And so when things break down, you can pivot to one from one company to another. Case in point, recently when when there were some some recent tariffs, Waymo, for example, we don't know the whole reasons why. But when recent Chinese tariffs came out, there was this interesting announcement that that occurred. Now, there

couple of reasons why this announcement may have occurred. was strategic in nature, but they had a partnership with a Stockholm owned company, Geely, but there was a lot of Chinese investments, Chinese money involved with this company, Geely Zeekr. Interesting, beautiful vehicle launching in the Bay area. It's a Zeekr car, it's a Waymo, gonna be a Waymo vehicle. But interestingly, they instantaneously launched a partnership with Toyota.

So now they have four vendors they're going to work with. They're going to work with Chrysler. Sorry. They're going to work with Toyota. They're going to with Hyundai. They're going to work with Zeekr. And then they're already working with Jaguar. So they have four of these vendors, whereas like some of the other vendors, only working with some of the other companies are only working with one vendor. So you can see there's all these options they have. that breeds resiliency. They actually have a lot of different things they can do to compress costs.

and to actually explore different options. And that's kind of an example of what you can do. Tesla did the same thing when they actually had a generalized chip in some of their cars where they could play around and we had the chip shortages during the pandemic. And they can mess around with chips in some of their cars and compress costs when there was a chip shortage for vehicle chips during the pandemic. you can see here, redundancy.

help support resiliency. Now, let's talk about co-opitition. The same term, cooperative co-opitition, can apply in this situation where you can have companies that actually work together to compete towards a shared goal. Now, in the same situation, an automated driving company might say, hey, let's work together to build a vehicle. I'm not great at actually

at actually launching, like manufacturing cars. That is not my quote, unquote wheelhouse, right? Like I can build software, but I am not good at assembling drive trains. That's just not my thing. And I'm telling you what, it is really hard to build a car, right? It's complex, right? Brakes and calipers are really hard to do. has BMW. And I think,

Too many people have gotten into self-driving cars and not figured this out. I do not think there will ever be another Tesla. know, Tesla kudos to Elon Musk because he did something that I do not think another person will ever be able to do. Like Rivian has really struggled to do it again. like Elon Musk did something really special.

And we should applaud what he did in terms of building, I think what is probably one of the most successful car companies ever to exist up until, know, other than Ford, it is probably one of the most successful car companies ever to exist. And it's a great product too. It's a transformational product. Once in a generation company.

So, you what does that, what does this mean? Co-opetition. One of the examples I like to talk about with this term is kind of an emerging trend that I've been following where we're seeing a future where companies actually might actually explore more B2B relationships versus B2C relationships. Now, when I was in venture capital,

I always used to think, want to invest in companies that go after businesses, not individuals as customers. And we used to say that when a company was actually going after direct to consumer relationships, that was going to be a really expensive proposition. And my business partner used to say, was like,

That's trench warfare. That's like old World War I warfare. And it really is. It's really cost, it's cost prohibitive and it can really burn a lot of cash. And so for example, in the, in the self-driving car space, a lot of the, the development platforms rely on these, vehicles rely on these native app platforms akin to what you would see.

from Uber or Lyft that are really tied to the development of the unique development of the vehicle. So they're really doing everything vertically aligned with the company. But I think that is really a development in a development platform. I expect that to change because we're seeing a lot more co-opetition between traditional ride-hale companies.

And so when we think about the flattening of this industry from a jobs and jobs automation industry, we are going to see, I think we're going to see a lot more coopetition between a traditional ride share and autonomous or automated ride share where a company like Waymo, a company like Zoox will source their customers through

a traditional ride share platform like Uber, like Lyft, like Grab in Singapore. And they're sourcing an existing pool of riders that don't have the expense of customer acquisition. They can still be very prominent in the app. For example, Waymo brought to you by Uber. They can still charge a premium for that service.

They can still upsell the passenger and have monetization features in the app or monetization features in vehicle. They can still look for monetization and revenue in other ways. But I definitely see that as a potentially cost savings, but also kind of a cooperative relationship. Anyway, so those are a couple kind of...

like tidbits of knowledge that I wanted to impart. There's things that I've been, there's stuff that our lab has been focused on. Of course, we've got some new research that I've been also shopping about how we see flattening in a very attractive market for flattening with public transit and definitely a propensity to connect to transit. We've seen a really attractive market for people that take public transit and

people that connect via last mile to take Waymo and Lyft or sorry, Waymo to public transit. We saw in a recent experiment that Waymo did and our cursor results are showing about of the people that were taking a Waymo to a lift were already taking rideshare to lift. there's this kind of like unmet

Already this kind of this latent unmet last mile trend of people that are already kind of limping to high capacity rail in some of these major markets with rideshare. And so, you know, for part of me as a transportation guy wants to say public transportation, you need to wake up and I'm sorry. I got to be the bearer of mad news, but you know, public transportation systems need to wake up because.

The last mile is being met by rideshare and it's a real big opportunity. It's a big opportunity. And it's a, there's a lot of promise, but there's also a lot of peril because if we don't wake up, I fear it's going to go away because I think the economics, the economics already aren't working. And so we've to figure out the economics. And I think the economics are in this kind of this, these, uh, these last mile automated solutions. So.

More on that, we'll talk more about this. This is a lot in the core of what we do in automation and innovation, and it's what a lot of what my vision was we talk about in Rewiring the American Edge. Talk soon.