News, Opinions and Discussion
How do we prepare our children better for the future?
At the Zenises Foundation we believe that education is the future for children especially if they have to break the cycle of poverty. With the advancements in Artificial Intelligence (“AI”) and Robotics I was concerned whether the education that the Foundation provides to children will really prepare them for the future. In my recent trip to Silicon Valley I met with many tech insiders and posed them this question – how do we educate our children for a world where by 2035 years 40% of the jobs that will exist are not even conceived yet? Fewer workers will be needed for the jobs we have now, so children must be prepared for the jobs we cannot imagine. My basic conclusion after a week of discussions and interviews was simple. In the future there will be two types of jobs: people who tell computers what to do, and people who are told what to do by computers. So now how do I ensure that our children are the in the former half?!?
If we want our children to ‘rule the machines’ we really need to focus what makes our children individuals. We need to move on from a 19th-century, artisanal model of education — where knowledge resides with each classroom teacher — to a 21st-century personalised experience that technology can replicate on a global scale. The new model should focus on skills, not knowledge you can Google, and abilities that will be needed, whatever the workplace. So what are these abilities?
I believe that the most important things we need our children to focus on are around curiosity, passion and persistence. Rote learning needs to be done with — computers can now do this. Children need to have the interpersonal skills to work in groups, to communicate well, be creative, arrive at an answer in many different ways.
Curiosity is something innate in our children, yet something lost by most adults during the course of their life. Perhaps because we “educate” the curiosity out of our children making them “learn” things they don’t need. In a world of Google, robotics and AI, raising a child that is constantly asking questions and running “A/B Tests” can be extremely valuable. In an age of machine learning, massive data and the Internet of Things, it will be the quality of their questions that will be most important.
One of the most valuable resources our children have is an imaginative and passionate human mind. We need to ensure that we don’t “socialise” that out of them as they grow up. Children are the some of the most imaginative people on the planet. We need to help them find a passion or purpose that is uniquely theirs. Once they do that then they can imagine the world they want to live in. Their passionate mind will then help them create that world. I imagine a relatively near-term future in which robotics and AI will allow any of us, from ages 8 to 108, to easily and quickly find answers, create products or accomplish tasks, all simply by being passionate about what we imagine.
Teaching our children not to give up and to keep trying new ideas for something that they are truly passionate about achieving is extremely critical. Acceptance of failure as an integral part of this process is also key for us to inculcate in our children. I do believe that persistence is one of the most important predictors of and contributors to success. I always joke with my son about how many nights it took for Zenises to become the “overnight” success that people claim it is.
Once our children have the curiosity to ask the right questions, the passion and imagination to be able to drive them and the persistence to keep going there will be nothing that will stop them from ‘ruling the machines’. Einstein once said, “I have no special talent. I am only passionately curious.” And look what he achieved – and that was without the help of AI and Robotics. God Bless our Children – Our Future!
Who will disrupt the Tyre Industry?
People always confuse disruption with innovation. Innovation is evolution, whereas disruption is revolution. Innovation makes the old ways better, whereas disruption makes the old ways obsolete! But most importantly in business, innovation allows you a 10% growth while disruption allows you a 10X growth.
We’ve already seen two technological revolutions in our lifetime that have caused major disruption – the internet and the smartphone. And thanks to the digital revolution, disruption is now happening more frequently and at a faster pace than ever before. So we’re going to experience more disruption than previous generations ever did – disruption that will revolutionise business models and industries in ways that we can’t yet imagine. So who will disrupt the automotive/tyre industry?
In our industry, the last major disruption was the introduction of the motor car in the early 1900s. How many horse and carts do we see on the streets today? Clearly, the car disrupted the horse and cart out of commercial existence. So now our old school, white, male-dominated industry is ripe for disruption and trust me (from the startups that I see as a venture capitalist), it is coming sooner than we think! And moreover, I can tell you that it will not happen as a result of the legacy manufacturers making better tyres, improving distribution systems or selling tyres on the internet. Like in every other industry, disruption in our industry will come from the outside.
Look at the mobile phone industry – Nokia were undoubtedly one of the most innovative companies and arguably the industry leaders in this technology, yet in the space of just a few years, Nokia’s reign was well and truly ended. And this happened because of one reason – disruption, which Nokia just didn’t see coming. Because while Nokia had their eyes on their competitors, Apple came and ate their lunch! Let’s look at the medical industry for another example – CRISPR/CAS9 – (the genome editing tool that will enable scientists to weaponise human cells against cancer) could potentially be a cure for cancer and would ultimately disrupt the medical field. Where did this come from? You guessed it – from outside the medical field. Every industry has such examples!
So who will disrupt our industry? Some industry observers say that Zenises (along with Alzura) is well on its way to disrupting the industry, being the first company in the world to offer tyres as a service across the internet. To those people I argue that what Zenises has done is definitely innovative but not disruptive. To understand disruption in our industry, we really need to understand not just what we do but why we do it. What we do is sell tyres and if we see our industry from that narrow perspective then Zenises is disrupting it. But if we understand the reason why we do what we do, which is to provide mobility, then we can see that we are merely a small fragment of a much larger industry. From this position, we can see that there are many more companies and individuals that have the potential to disrupt our industry. So disruption in the industry could come from the company making flying cars – if that ‘takes off’ and we end up living in a world like ‘The Jetsons’, tyres would become obsolete. Or disruption could happen as a result of tech companies taking virtual reality technology to a level that it negates the need for travel. Perhaps the companies creating personalised drone transport could disrupt the industry, or maybe it will be a company that works with a combination of these technologies or different technologies altogether. Such companies may sound futuristic but they already exist, and two of them have even received investments from our venture capital fund.
My idea here is simply to get my colleagues to start ‘thinking outside the box’ and seeing beyond our industry, as this would perhaps enable them to come up with their own ideas for disrupting it. So what will the Apple or CRISPR for the tyre industry be and how will it work? I don’t know, but you can count on it that there’s a 14 year old kid somewhere outside the industry figuring it out (hopefully one whose company I have already invested in)!
The Rise of Automated Vehicle Technology
The digital revolution has affected the auto industry in many ways, but perhaps one of the most exciting and potentially cataclysmic changes currently taking place is the development of automated vehicle technology. Up until the late 1970s, automated cars, or ‘robo-cars’ as they are otherwise known, only existed within the realms of science fiction. Fast forward to today and some serious advances have been made in perfecting the technology. In fact, during a recent visit to Silicon Valley I was lucky enough to see a Google autonomous car driving right beside me, so it won’t be long before they become a familiar sight on the roads of the world’s major cities.
Volvo for example, have stated that they aim to have 100 automated cars on the roads of Gothenburg by as early as next year, while Tesla have already released their auto-pilot software and plan to offer their customers the full self-driving experience by 2018. And let’s not forget Ford, who have recently tripled their investment in semi-automated systems in order to compete with technology behemoths such as Google ( who just spun out its self driving unit into a separate company called Waymo ) and Apple (who recently confirmed that they are working on an electric iCar to rival Tesla). However, there’s a good argument to suggest that the current leaders in the car industry are Daimler, who have been implementing a similar autopilot technology to that of Tesla in high traffic situations for quite some time. But fundamentally the issue boils down to are the car companies going to build a better car or are the computer companies going to build a better computer and put it on wheels. From what I have seen in the Valley my view is that that the computer companies will win this battle!
Companies such as Uber are also getting involved, having recently completed their first successful 120-mile delivery using a self-driving truck – it was 50,000 cans of Beer just in case you are wondering what they delivered! Industry experts such as Brad Templeton argue that as automated vehicles become more common, car sharing will increasingly start to become the norm. So although Uber may be behind in terms of the technology when you compare them to companies such as Google, they are undoubtedly the innovators when it comes to capitalising on the concept of car sharing. They have already started picking up passengers in Pittsburgh with their self-driving cars – although there is a driver sitting in the car so that the customers feel more comfortable!
So it’s clear that robo-cars are no longer confined to the realms of science fiction, they are very much a tangible reality. Astro Teller, director of ‘X’ (formally ‘Google X’) recently posed the following question “Is there a scenario in the future that doesn’t involve self-driving cars? No. So let’s just do it”, and I’m inclined to agree with him. So, if car/tyre companies wish to survive in an increasingly competitive marketplace, then such technology needs to be embraced and utilised because progression in this area isn’t going to stop to allow those who aren’t already doing so to ‘catch up’.
There are also many benefits to using automated vehicles. Firstly, energy consumption and CO2 emissions will be reduced dramatically, which would have a significant impact on the environment and would perhaps even contribute towards slowing down climate change. Robo-cars would also provide a safer and more efficient driving experience because unlike human drivers, self-driving systems aren’t affected by distractions or ill health, and most significantly of all, robots don’t drink alcohol, which is one of the leading causes of road traffic accidents. In fact, statistics suggest that on average around 3,000 people are killed or seriously injured each year in drink drive collisions in the UK alone, and such accidents could be all but eradicated when robo-cars start to outnumber human drivers.
This technology is equally positive for the tyre industry because put simply, automated cars will increase mobility. Whilst there will be less cars in parking lots there will be more cars around as demand for mobility will increase. As such demand for tyres will increase but it does beg the question who will be the new customer for the tyres? Just imagine a world where driving on demand was accessible to everyone, where you could use your phone to order any car of your choice that perfectly suited your needs in that moment, all in a matter of mere seconds. This is a concept that appeals directly to the younger generations whose attitude towards ownership is completely different to that of their parents’. They don’t think about what car might suit their needs tomorrow, they only think what car will suit their needs today.
Of course, there are some drawbacks; In 2015, hackers worked out how to cut the transmission of a Jeep being driven at speed miles away — sparking a recall of 1.4 million cars. Autonomous vehicles will need a high level of connectivity in order to detect each other: vehicle-to-vehicle communication which — if hacked by terrorists — could cause carnage. Cyber experts routinely talk of “ransomware” attacks in which driverless cars will be hijacked, with a ransom demanded to avert disaster. But I for one think that the pros far outweigh the cons, and what’s truly exciting is that we aren’t even close to unlocking this technology’s full potential.
Using Social Media to Increase Our Social Impact
Social media is a medium that is used by a vast number of people each and every day. Not only does it provide a global platform from which we can highlight important political issues and social concerns, but it also allows us to work and connect with people on the other side of the world in a matter of moments. However, whilst the considerable technological advancements that have been made over recent years have undoubtedly brought many benefits, there are those who think that it has also had other less desirable effects. Some argue that rather than bringing people together, it is actually driving communities and families further apart, as the younger generation especially appear to become increasingly consumed in their digital lives.
Although such concerns are understandable, I think that they are also somewhat short-sighted. Because social media, if embraced and used responsibly, is one of the most powerful tools that we have at our disposal for connecting with our children, uniting the communities in which we live and most importantly increasing our level of social impact.
Social media sites like Facebook and Twitter and messenger apps such as WhatsApp have allowed us to considerably increase our social impact. They enable my wife and I to connect with the children that we ‘adopt and educate’ through the Zenises Foundation in ways that wouldn’t have been possible even a decade ago. Through social media, we are able to communicate directly with these children at any time and from any place in the world. It gives us an invaluable insight into how they think, feel and relate to the world around them. And it is this insight that enables us to support and guide them more effectively on a real time basis.
This increased level of global connectivity enables them to develop their skills and confidence because they know that they can reach out to us at any time and that we will respond. Through the simple act of following my wife and I on social media, these children now feel as much a part of our lives as we do theirs. These are children who could not even speak English a few years ago, and yet through the power of social media, they are now able to ‘friend’ us and ‘poke’ us on Facebook! So it’s clear that this innate desire to connect has only served to fuel their education further.
More importantly, it also allows these children to communicate amongst themselves and build their own communities and support networks. Recently when we were in India meeting with the children, we found that the older children had taken the initiative to set up a Facebook group to interact and keep each other abreast of developments in their schools and personal lives. Even more pertinently, they also used this network to inform each other of the various job opportunities and training available. We couldn’t help but feel overwhelmingly proud to see this network effect of social media that the children themselves had come up with in order to provide support to one other.
Another way in which social media benefits communities is that it enables businesses to spread the message about the philanthropic work that they’re doing. In doing this, companies can inspire others to increase their own efforts, and thus the actions of one business creates a stronger incentive for all businesses to adopt more socially responsible business practices. And just as importantly, businesses can harness the power of social networking to unite with other like-minded companies and organisations, which allows them to increase their social impact even further.
I recently had some first-hand experience of this when I happened to see a post on Facebook and discovered that an acquaintance of mine was working in India helping to provide education to disadvantaged children, in an initiative that seemed to share similar objectives to the Zenises Foundation. What I saw was that they were using innovative applications of technology to further reduce the cost of education in rural India. Upon learning of this fact, I decided to use this as an opportunity to connect with them through social media, and together, we helped to implement some of their educational programmes and introduce new and innovative technology into the existing curriculum. So, if a small company like Zenises can utilise social media to inspire others and affect positive societal change through initiatives such as Z Aspire and T OutReach, then why aren’t more companies doing the same?
A recent article in the New York Times described social media as being a “public space of seemingly limitless potential in which we can find common ground with total strangers and our closest friends, making progress towards solutions to our world’s crises”, and I am inclined to agree. I see the prevalence of social media as being representative of the absolute hunger that people have to connect with each other. Therefore, by choosing to embrace this most revolutionary of technologies, we are choosing to connect with other businesses, our children, our communities and the world at large on a purposeful and meaningful level. And in becoming more connected with those around us, we can achieve greater social impact on an individual, local and global scale.
Does ‘Peak Car’ Spell the End of the Road for Tyre Businesses?
Digital technology has revolutionised almost every aspect of modern life, and the world of the motor business is no exception. The internet has led to the rise of an online ‘sharing economy’ that allows people to rent and share physical and intellectual resources. This cataclysmic change in consumer buying habits has implications for us all, but the effect is particularly significant for the automobile industry.
Some industry experts and social commentators argue that the biggest threat currently facing the European motor industry is a phenomenon known as ‘peak car’, which suggests that the number of cars (and tyres) in circulation will hardly rise any further. There is now a tendency among the younger generations to focus on gadgets and technology rather than being seduced by their first car as a teenager. And as the sharing culture of Airbnb and Uber lead inextricably towards carpooling and ‘on demand’ driving, what does this mean for the future of tyre companies? One thing is for certain – it’s no longer going to be ‘business as usual’. In fact, according to Automotive News, in June 2016 the growth of European car sales had slowed to just 6.5 percent.
The Practicalities of Car Ownership
One of the main issues appears to be that a significant number of Millennials, particularly graduates, currently live in urban areas so car ownership isn’t a priority for many, and for a great many more, owning a car simply isn’t financially viable. Like owning your own home, for the younger generation, car ownership seems very much out of reach. It’s clear therefore, that the auto-industry needs to adapt. But what changes need to be made, and how exactly are brands to appeal to a generation whose interest in car ownership is seemingly at an all-time low?
What we need to remember is that although Millennials aren’t necessarily investing in cars now, they will in the future as their lifestyles inevitably change. When they have swapped urban life for the suburbs and have children that need to be driven to and from school, sports practice and music lessons etc., renting/sharing a car will no longer be practical. Having a family means that your priorities change – this is no less true for Millennials than it was for previous generations. The struggle of trying to balance family life with work and other commitments is a difficult enough task in itself, but as Millennials are now starting to realise, it’s even more difficult when you don’t own your own car.
It is then perhaps of little surprise that recent statistics suggest that Millennial demand for cars is actually rising much faster than anyone anticipated. According to global market researchers, J.D. Power, Generation Y are in fact, buying more cars than the previous generation, with sales rocketing to 27 percent in 2014, from 18 percent in 2010. While it’s worth noting that Millennials do significantly outnumber Generation X by 15 to 20 million people, these statistics demonstrate that the need and desire for car ownership still very much exists, and that it’s a consumer-market that’s just waiting to be tapped into.
Further proof of this is the fact that the growth of car sales isn’t just rising in the European market, growth has also risen exponentially in China and shows no sign of slowing anytime soon. In fact, the growth of car sales in China is still growing so considerably that in Beijing it is difficult to get new number plates allocated to you, even for those who can afford to buy a car. In Qingdao, which is a second tier city in China, they are now considering implementing the odd/even number plate system, which prohibits motorists from using specific thoroughfares on certain days of the week, due to there being such a large number of cars on the roads. So there can be little doubt that car ownership is still clearly growing and forecast to continue doing so – and statistically speaking it’s the Millennial generation who are driving this growth.
Adapting to Meet Changing Consumer Needs
Therefore, it’s more imperative than ever that automobile and tyre businesses focus on building a strong consumer-brand relationship with Millennials to establish themselves as Generation Y’s brand of choice, so that when they are ready to buy, they’ve already decided exactly which brand they’re going to buy from. Generation Y won’t make any purchase unless they can see an immediate and tangible benefit – and more importantly than that, they want to invest in a company with whom they can create a purposeful connection. Therefore, brands need to show that they share the same social concerns as Millennials by focusing on purpose as well as profit, to ensure that they appeal to a generation whose purchase power is still yet to reach its peak.
Indeed, The Deloitte Millennial Survey 2016 found that “Most young professionals choose organizations that share their personal values”. Therefore, brands need to be aspirational by ensuring that their products are at the forefront of technological innovation, but they also need to show that their working practices are economically and environmentally sustainable. They need to show that cars are as necessary, desirable and more importantly, as attainable for Millennials as they were for the generations that preceded them.
Forward-thinking companies such as Zenises in partnership with Alzura have already responded to this change in consumer needs by introducing the Flat Rate Tyre Subscription via the internet. Both innovative and unique to the industry, from just 2.99 euros a month, it is designed to cover all new tyre-related costs, and allows the customer to fit or upgrade tyres without having to worry about expensive on-the-spot payments. It is in essence offering a style of contract that has been popularised by companies such as ‘Netflix’. This concept is of huge appeal to the younger generations because it provides a short-term, cost-based solution to the issues that new motorists encounter, such as the high cost of making initial distress purchases.
Another fast-emerging trend that we are seeing within the auto-industry is that an increasing number of companies are now focusing on developing more environmentally friendly or ‘green’ tyres. Of course, this trend can largely be attributed to brands trying to appeal to the socially conscious value system of Generation Y. However, the introduction of EU labelling legislation in 2012 has also meant that tyre brands have had to focus on developing better quality tyres in a more efficient way, hence the rise of industry 4.0 tyre manufacturing factories. Otherwise known as ‘smart factories’, they are designed to utilise cyber-physical systems and technologies to make the manufacturing process more efficient and environmentally sustainable.
This ‘green’ trend can only be a good thing for the industry and consumers alike, as it means that brands are now creating tyres that have higher fuel efficiency and lower rolling resistance grades than ever before. This not only helps to reduce fuel consumption and CO2 emissions, but also helps to improve the motorist’s entire driving experience due to increased energy performance, which is exactly what Millennials are looking for from the brands that they buy from.
Generation Y will arguably be the most influential consumers in the market. In building this connection with Generation Y through changing business models and appealing to Generation Y values, a company can maximise its chances of longevity and give themselves a huge advantage in an increasingly competitive market.
Redefining Wealth, Success & Ownership in an Ever-Changing World
In a recent interview with Larry King, world-renowned theoretical physicist Stephen Hawking, argued that the biggest threat to humanity isn’t nuclear war or the rise of artificial intelligence, it’s human greed and stupidity:
“Humanity needs to collaborate and change our assumptions of wealth and possessions if it is to tackle challenges like climate change, disease, food production and overpopulation.”
These words are disconcerting to say the least and serve as a rather shocking and worrying indictment of the direction in which humanity may be currently headed. However, thankfully there is one generation who appear to not only share his concerns, but are actively trying to find a solution to a problem that, if ignored, could have catastrophic implications for us all.
Millennials & The Culture of Sharing
Success used to be defined by the house that you lived in, the car that you had on your driveway and the money that you had in your pocket. However, Millennials, having seen the financial achievements of the Baby Boomer generation, have realised that monetary success alone isn’t the answer. As this quote from Forbes demonstrates, “Money is important and they [Millennials] do enjoy making it, however, they long to be part of something bigger than themselves”, Generation Y recognise that there must be a more meaningful and purposeful motivator for success than wealth and possessions alone.
Indeed, the concept of ownership has changed dramatically over the last decade, with an increasing number of young people now choosing to take advantage of the internet’s ‘sharing economy’. This digital economy allows them to rent or borrow physical resources such as cars, electrical appliances and/or recreational goods, and frees them from the ‘burdens’ of ownership. Daniel Arthurson, founder and CEO of Xercion observes that, “Gone are the days of self-serving ownership — community sharing and mass enjoyment are the “now” trends.”
It is perhaps unsurprising then that Hawking, one of the world’s leading thinkers, should also choose to comment on people’s changing attitudes towards ownership in his recent interview:
“People are starting to question the value of pure wealth … is knowledge or experience more important than money? Can possessions stand in the way of fulfilment? Can we truly own anything, or are we just transient custodians?”
In longing to be part of something bigger than themselves, Generation Y are daring to ask the same questions – if money and possessions aren’t the key to happiness and fulfilment then what exactly is? It appears that by being more socially conscious and responsible than any generation that has gone before, Millennials may be one step closer to finding an answer to this question. They understand that if they wish to be the instigators of positive change, then this can only be achieved by holding themselves and others accountable. Ghandi once said that we ‘should be the change that we wish to see in the world’ – Generation Y are embracing this philosophy, and they are inspiring the innovators, leading thinkers and entrepreneurs of our time, as well as the next generation, to do the same.
Focusing on People as well as Profit
Perhaps it could be attributed to the wisdom of youth, but Millennials recognise that money is and can be used as a powerful force for good, and that it can be utilised to create real positive change in society. However, when businesses work with the singular objective of maximising their profit margins and fail to consider their social impact, the pursuit of money becomes blind and the highest of ideals can all-too-quickly descend into greed and avarice.
As the gap between rich and poor only seems to grow wider, the need to find an ‘antidote’ to the insidious nature of greed has never been greater. Generation Y understand that we must start taking a top-down approach to business, in order to create a world where the monetary success of a company will no longer be of benefit to the few rather than the many. Of course those at the top should be able to enjoy the fruits of their hard work and effort, but so too should the employees working within the company, the community in which it was founded and society as a whole.
In other words, big business should be expected to reinvest in the social infrastructure of the communities that made them, and to set up charitable initiatives that benefit the most vulnerable and disadvantaged in our societies. Over time, this will create a ‘drip-down’ or ‘domino’ effect that will ultimately enable individuals and communities to thrive. Millennials don’t only expect, but they demand that this Utopian vision, which many dismiss as being the folly of youth and naivety, become a tangible reality.
Because while those belonging to the older generation may have little belief that our society can ever change, Generation Y refuse to compromise their ideals. They know that if we change our attitudes towards wealth, hold each other accountable and resolve to conduct business in an ethical and socially responsible way, then we can, and more importantly must, create a better and fairer world for everyone.
Zenises and the future of the tyre industry
I’ve been thinking about how the world of tyres might change in the coming ten years or so. That’s not to think about which brands or sizes might be doing better or worse than they are today – except that Zenises and our Z-Tyre will of course be in the ascendant.
It’s more about changes in the way we do business. Tyres made in China are getting better. Today there is still a large gap in price but a much smaller gap in technology performance compared with ‘legacy’ brands (those tyre brands which first established themselves in the Western tyre markets decades ago). That big price gap is no longer justified by the small differences in technology. And the technology gap is shrinking fast. Even today many of our tyre brands can compete on equal performance terms with legacy brands. In a year or two, I expect the difference between ours and legacy brands to be indistinguishable.
On pure performance abilities, we should be charging the same price. The market is probably not ready for that yet, but we can bring that day closer by helping people understand what they could be paying for when they buy a legacy tyre. Just the name – nothing more.
It’s not just happening in car tyres. It is the same story around the world in truck tyres and also in the tyres used on bikes, agricultural vehicles; mining trucks and every other type of vehicle.
Where does that leave the legacy brands?
We’ll be offering great tyres that are largely indistinguishable from legacy brands, except for the name on the side of the tyre. Our prices will be better and our dealer margins will be better. So legacy brands are going to have to find a different way to do business if they want to compete with us.
New business models
There are some recent innovations. In the commercial tyre sector we have seen the move to price per kilometre (ppk) contracts where the fleet manager pays a fixed monthly fee depending on the type of vehicles, distances travelled and so on. Already tyre makers are talking to the suppliers of the telematics boxes. Those are the instruments that measure speed, location distance and can help a fleet manager to minimise costs while maximising up-time for the trucks and drivers. Michelin recently purchased the biggest such company in Brazil.
Here there’s a strategy emerging: Michelin has the Michelin Solutions business; Goodyear has the FleetOnlineSolutions. Bridgestone has its Total Tyre Care programme. Each of these is designed to meet the need for fleets to outsource various services.
In business, we focus more and more on the customer and try to out-source the tasks where we cannot add value through our customer-facing activities.
These fleet management solutions aim to meet that need by providing services to the fleets. Truck tyres are only a small part of the total service package.
If the low-cost, high-performance tyres coming out of China are eroding the legacy brands’ margins, then those legacy brands have to find a way to extract more money from their customers. In the business-to-business world, that means selling more services to help make the customer’s business more efficient.
New strategies in car tyres
In the car tyre business, it’s a bit different. In Germany, in conjunction with our partner Alzura, we have already announced our Z Tyre Flat Rate program whereby customers can pay EUR4.99 per month and we’ll provide them with brand new tyres as a service and even replace them if the tyre gets a puncture. It’s a great service and meets a need and we’re currently the only tyre company in the world to offer a flat rate for tyres.
It might take a while to convert the whole market to this model, but it’s a start. In car tyres, however, I see the legacy tyre makers adopting two key defensive strategies. The first is freezing out the importers by gaining control of the wholesale and distribution and retail system. They originally tried to disrupt new quality brands from China by lobbying for new regulations such as tyre labelling but this backfired. So now they’re now trying to block market access to new entrants by using their considerable financial muscle to buy the market away. The second is controlling the marketing message and using new technology to by-pass the distributors and eventually the retailers that aren’t part of their platform.
The legacy tyre makers know that dealers in many cases receive more profit by selling one of our tyres. They know that most people who walk into a tyre store will buy the tyre recommended by the dealer. They know that long term, this is bad for their business.
Their short- to mid-term strategy is to buy up the distribution and retail companies: Bandvulc and BlackCircles have already been swallowed in the UK; Allopneus in France; Ihle, Meyer- Lissendorf and others in Germany. Following Bridgestone’s acquisition of Speedy there is barely a single independent retail chain left in France. It’s not just Europe – we saw Bridgestone bidding hard to win the Pep Boys chain in the US.
Longer-term, they want to try to change the basis of the consumer’s purchasing decision. Today the purchasing decision is often based on a combination of dealer recommendation; magazine test results as well as availability and the overall price-performance package. That works in favour of a competitive multi-brand environment and against a legacy brand monopoly.
Exploiting social media
A mid- to long-term response is an increasing online participation with social media, webstores, competitions, games, surveys and other infotainment designed to trigger mass sharing and forwarding. Legacy brands are setting up portals to inform consumers about tyres; about what to look for; magazine test results; their ‘green’ credentials and the rest. They are using games and Tweets and infotainment to build a relationship with the customer. They are watching which parts of the site are visited most and which pages contribute to the buying decision.
And then they place a big, bright ‘BUY NOW’ button that encourages the customer to hand over credit card details with no need to visit a dealer.
They believe this approach will make it more difficult for consumers to learn about the alternatives to their brands.
They want to gain control of the communication channels and the message and then to understand the fine-grained needs of the consumer and meet those needs with an outstanding service offer.
That offer includes a mobile fitment van that will visit your place of work, or a street address; it includes a time-slot booking option and it includes feedback like you get on Amazon or TripAdvisor, so that consumers are given confidence that they will get great service as well as great tyres.
If we are to respond, then we need to offer not only great products at great prices, but improve service as well.
Over the shorter term, the battleground is moving to the distribution and retail chains. I think that it will be difficult for importers to compete on that front as they are effectively removed from the distribution channels. But I am convinced that in the longer term as the battleground moves to dominate the social media and internet channels we will be able to compete more effectively and the legacy brands know this.
Zenises’ Z Tyre Has Revolutionised the Industry
In this article you will learn about Zenises’ Z tyre brand…..
New Brand – When was Z tyre introduced and what made it unique?
Design – What aspects of Z tyre’s design contribute to its performance?
Testing – How did the Z tyre hold up under testing?
Innovation – What are the latest Z tyre products?
An Exciting New Tyre Brand
Z tyre is a cost-effective, premium tyre brand that was first introduce to the European scene in 2014. It combines all the best aspects of luxury high performance brands into an affordable, quality tyre and has quickly become a favourite with European drivers. Z tyre was born out of a collaboration between the two great cities London and Dubai, representing the best aspects of old and new luxury. It was tested and designed with the challenges of European roads in mind, making it one of the safest tyres in all types of driving conditions.
The multinational tyre corporation, Zenises Group, is the company behind the Z tyre brand. Founded by CEO and experienced entrepreneur, Harjeev Kandhari, Zenises has been pushing the boundaries of the industry since its inception and now has a presence in thirty different countries. As well as being an innovative business leader, Harjeev Kandhari is passionate about the industry. He began working with tyre design in his family’s company in Dubai, so with Zenises, he knew right away he wanted a brand that would accurately represent the company name.
State of the Art Design
In all aspects except the price, Z tyre is premium high performance tyre geared toward drivers that expect the most. Speed ratings, the measure of how well the car handles at top speed, go all the way up to Y (300 km per hour) on the Z tyre even though most tyres stop at W (270 km per hour). At the same time Z safety and economy ratings are also impeccable with a consistent B level wetgrip in all tyres and a B or C in fuel efficiency depending on the tyre size.
These are some of the features which helped to make the original Z tyre design so versatile and revolutionary.
- Modern Tread Design – the special tread pattern maximises contact with the road. The wide central rib running all the way around the tyre allows for greater stability at high speeds while the contour of the shoulder conforms to the road for optimal handling and high precision driving.
- Asymmetric Tread Pattern – the inside and the outside of the tyre serve different purposes in Z tyre, so they are not designed the same. The inner edge reduces wear and allows for maximum wetgrip performance. Meanwhile the outer rim provides the high performance that discerning drivers expect, with easy steering and a comfortable smooth ride even on the narrow winding roads of Europe.
- Deep grooves – four deep troughs running around the entire circumference of the tyre help to trap and eliminate water. This reduces the tendency to aquaplane, even in lightweight vehicles, and supports Z tyre’s excellent wetgrip rating.
- Silica based compound – the tread compound is another important factor in wet and dry breaking. High silica content in the Z tyre’s surface means that slick roads are no longer a problem.
- Tread wear indicator – this lets the driver know when the tread level is becoming unsafe and it’s time to replace the tyre.
The Z tyre was the result of knowledge, years of experience and careful design. However even the most expert tyre design needs extensive testing to make it one hundred percent road worthy. Every Z tyre has to pass the Z 360 ⁰ testing criteria to make it worthy of the Z logo.
Zenises wants to make sure Z tyres conform to the most objective standards, so testing is carried out by an independent agency, Total Performance Testing, in Idiada Spain. Chris Davidson was part of the team that helped to evaluate the Z tyre. According the Davidson, a high performance tyre like Z tyre should have excellent handling and breaking power at top speed. ‘The sidewall stability is the key thing with this type of tyre.’ Davidson helped conduct a ‘full suite of wet and dry tests’ on the Z tyre in and found the tyre matched very well with top tier companies in both performance and safety. Z tyre has proved that premium tyres don’t need to come from the top brand names, or cost a fortune.
More Tyre Innovation
Harjeev Kandhari didn’t stop with the creation of a state of the art tyre. The Z tyre brand has continued to expand, adding several new product lines in recent years. The Z 1 flat tyre allows drivers to control the vehicle and continue driving safely for a short period of time even with a significant drop in tyre pressure. In the event of a flat, you’ll be able to get to a safe location where someone can help you, instead of being stranded at the side of the road. The Z tyre range also includes SUV sizes, and winter and all season treads will be coming to the Z family soon.
The latest Z innovation available in Germany is a Flat Rate Tyre Subscription which can help to avoid the high up-front cost of purchasing new tyres. For a monthly charge of 4.99 euros, customers are guaranteed all the ‘tyre-related services’ they need. This helps to ensure a long term relationship between the customer and their tyre-professional, but more importantly it promotes driver safety. With the new Z contract, tyres will automatically be replaced once the tread drops below a safe level; drivers don’t even need to worry about checking. This is an important concern, since a recent safety report found that more than a quarter of the cars on the road have tyres that are below legal tread requirements. Z tyres new subscription is just one of the many changes Zenises has brought to the tyre industry, helping to make tyres safer and more economically efficient for customers.
Profit or Purpose, Why Choose?
Making a business succeed is hard enough on its own. So now you want entrepreneurs to also add in aspirations of social impact and other niceties that are ancillary and not directly tied to Profit? Nobel laureate Milton Friedman argued that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits.” Maximizing profits and shareholder value has become conventional wisdom ever since.
But with the global economy brought to its knees by short-term profit maximization Millennials, who are our future, are getting more and more turned off by companies who focus only on profit. Saddled with student debt, they are unable to find work at twice the rate of those over 30 years old; twice as many live in poverty as in the 70s. The unstable nature of the world they are inheriting – and the knowledge that many of them will not share the opportunities their parents had – has led them towards an existential crisis. In the UK, millennials’ average disposable income is just a third of that of pensioners, with home ownership a distant dream.
As a result, millennials are making explicit their universal hunger and innate desire to contribute to something bigger than themselves. The most socially and environmentally conscious generation ever, they have become humanity’s conscience and self-correcting mechanism. They insist on a purposeful connection with companies they buy from, work for and invest in. They want to know why a business exists, what it does, how it treats people and the planet.
Nine out of ten believe that success should be measured by more than financial performance. For them, the idea of going to work with the singular goal of maximizing profits and shareholder value is pointless and abhorrent. They’re willing to put their money where their mouth is: more than half of millennials have ruled out working for an organization because of its values or standard of conduct. More than half have “chosen not to undertake a task at work because it went against their personal values or ethics”, according to a 2016 Deloitte survey. This is something to sit and take notice of as they’ve surpassed the baby boomer generation in size and are expected to own $41 trillion in transferred wealth.
It would be easy to dismiss this as the naivety of youth, were it not for the fact that many of the world’s most successful, admired and enduring companies are purpose-driven. Contrary to conventional wisdom that purpose is a tax on the bottom line, companies such as Patagonia, Virgin, Zenises, Starbucks and Southwest Airlines are demonstrating that purpose-driven enterprises have an inherent market and profit advantage giving them staying power.
The best entrepreneurs I know are the world’s greatest change agents precisely because they share a belief that the fundamental purpose of business is purpose. They view profit as essential oxygen to a company’s ability to survive and thrive, and the fuel that maximizes their impact. As Kickstarter co-founder and CEO Yancey Strickler puts it, “That’s so obvious, it’s not even a thought. It’s how you find long-term success.”
I also want to have considerable social impact and make money. These two goals are clearly complimentary. Social Impact and Purpose lead to greater value creation and that leads to more profit than trying to maximize profit as an endgame. Profit and purpose are force multipliers that reinforce each other. It’s strange that people see them as a dichotomy. I say, It’s best if you have both. It would never be satisfying to me to build something that was successful in either of those dimensions, but not both. Profit allows you to reinvest in purpose.
Great companies aren’t great just because they make lots of money. They make lots of money precisely because they’re great. Imagine a world that understands that purpose and profit are complementary. Imagine a world that unlocks our creativity because we are working toward a higher purpose that is worthy of our life effort. Imagine a world where businesses compete on being best for the world, and where that is precisely what makes them the best in the world.
Zenises Shows How to Inspire with Tyres
Zenises Group is an international corporation that offers a unique approach to tyres. With its headquarters in the UK and a presence in twenty countries, Zenises is focused on spreading a spirit of global partnership through quality tyre products and a philosophy of social responsibility. Its company name combines the words ‘Zen’ and ‘Genesis’ to echo their reflective corporate philosophy. The corporation embodies this purpose in its day-to-day business and through its affiliate organisations which support disadvantaged people around the world.
Zenises was founded, and has been led since by Harjeev Kandhari, an experienced entrepreneur as well as an advocate for corporate philanthropy. Educated at Oxford University with an MBA from INSEAD France, Kandhari had already gained investment experience at Merrill Lynch and globally redesigned his family’s business in Dubai, before he went on to found Zenises. Within six months, Zenises had opened offices in six countries besides the UK, and now operates in South Africa and UAE, as well as throughout most of Europe. Since then, Zenises Group has defined itself as an important voice in the automotive industry, with tyre brands that appeal to adventurous and safety conscious drivers alike.
High quality Products for Every Driver
Zenises’ passion for the industry isn’t just theoretical. Harjeev Kandhari recognises the impact inferior tyres have on a driving experience, pointing out the self-evident, but important fact, ‘tyres are the only connection you have with the road’. Paint and trim might be more noticeable, but tyres are the driver’s instrument. They respond to each intention and control the motion of the car. A good driver depends on tyres like a violinist depends on a Stradivarius violin. Only in this case, safety is at stake as well as performance.
The high performance Z tyre that was unveiled in Europe in 2014 is just one of Zenises’ iconic brands. Z tyres are a favourite among people who love to drive; the Z line offers the highest standard in performance and fuel economy at an affordable price, combining a streamlined aesthetic with the high wet-grip rating and sidewall stability that are essential for narrow roads and close cornering. It didn’t take long for the Z brand to take off, with a second South African launch that included events across several different venues organised by Tyrecor, Zenises’ South African partner. The main gala in Johannesburg was hosted by Harjeev Kandhari, CEO of both companies.
As well as the Z brand, Zenises offers a traditional Westlake line of tyres made by the well-known Hangzhou Zhongce Rubber Company. This company has been manufacturing rubber products in China since 1958. It is the largest tyre producer in that country and ranks among the top ten in world sales. Zhongce tyres are found on every continent, but Zenises commands the European Market with a line of high quality tyres manufactured on state of the art equipment.
Zenises’ products include options for all types of motorists. A newer line of T tyres offers models for drivers who make economic value a priority, with winter grip tyres available for larger vehicles and four wheel drive. Lines from Kapsen and Ardent tyres have the latest in technological design for vans and SUV’s as well as cars. Commercial truck and bus tyres manufactured to fit European regulations are also available through several different brands.
Building Relationships through Tyres
Rather than simply securing individual sales, Zenises is focused on building relationships; quality products offered in a spirit of service inspire customer loyalty through satisfaction. However, Zenises doesn’t just build relationships with its customers. The company philosophy incorporates a belief in giving back to the communities it serves. With an international presence, Zenises defines itself as a global citizen and feels a responsibility to help the disadvantaged communities in those countries. Zenises Foundation was conceived with that goal in mind. The initial programme, Z Aspire, funds education at all levels for underprivileged children and young adults in India. As well as providing schooling, the organisation offers mentorship, job training, and job placement opportunities for those that complete the programme. Z Aspire provides three scholarships to Oxford University, as well as an endowment for a university chair at St Peter’s College. Several newer organisations have been added to further Zenises’ philanthropic purpose: Westlake Wishes works to feed 125,000 people in a single day in the Indian holy city of Amritsar and T Outreach supports problem solving initiatives in the countries where Zenises does business.
Zenises has turned tyre distribution into a compassionate, global way of life. The entire Zenises team offers automotive expertise that is unmatched in the industry, and Harjeev Kandhari’s focus on quality and social accountability has also made the organisation an international leader in corporate responsibility. With an exciting future ahead, Zenises continues to break boundaries and challenge the status quo at all levels.