Big automotive companies sometimes need help finding the little companies that can move them to innovate.
That's where Liz Kerton comes in.
“What I do is diplomacy,” said Kerton, 47, who along with her husband, Derek, started a Silicon Valley group in 2012 that connects automakers and suppliers with startups.
Kerton said she became a tech-world diplomat after extensive travels, from her birth in Omaha, Neb., to stints in Connecticut, Iran, Saudi Arabia and Russia. And she has a master's degree in diplomacy.
Autotech Council has grown since its launch from about 15 members to close to 100, with big names such as Alpine, Bosch, Honda, Ford, Nissan and Hyundai attached.
It represents a kind of shift in mindset for the automotive industry. Connections between Detroit and Silicon Valley have been increasingly publicized and appreciated in recent years, but that wasn't always the case. Despite a push to develop self-driving vehicles and other high-tech transportation concepts, the automotive industry, fairly or not, has not always been viewed by the wider public as a bastion of collaboration and innovation.
But Kerton described the last few years as an explosion of innovative ideas in areas such as software coming out of Detroit and the Midwest. In addition, Michigan universities and Techstars Mobility, a well-regarded startup accelerator in Detroit, have helped push those with interesting ideas forward.
Kerton described Silicon Valley as a magnet, not necessarily the place where innovative ideas start, but the place where the connections happen that turn them into reality. Silicon Valley draws startups from around the world because they are looking for partners and financiers.
Strength can be weakness
The challenge for the auto industry in dealing with innovation has often related to its strengths, Kerton said.
“The car industry is really great at setting something up and just doing it over and over and over and having this nice, solid process," Kerton said, comparing the need to be flexible to throwing in a monkey wrench.
Enter Autotech Council.
Kerton, who also runs a group focused on innovation in the telecom industry, was surprised when she started seeing automaker representatives at her regular Telecom Council meetings in 2010. She asked whether they worked with startups and got a shrug of the shoulders initially, but she has watched that approach begin to change.
She also noted that the automaker representatives were not leaving town after their meetings because they had already set up offices in Silicon Valley. Kerton said it "opened our eyes to the fact that car guys were looking at small companies."
Kerton cited Ford's use of the Glympse location app — the company officially announced the pairing in 2013 — in its SYNC in car-connectivity system as an early example of the way automakers began embracing connections to startups.
Automakers do not always work directly with startups, Kerton noted, because of the risk of relying on a company with few employees, limited resources or a lack of other customers for a key innovation when it takes years to bring a vehicle to market. Automakers prefer acquisitions of startups, exemplified by General Motors' purchase of self-driving tech startup Cruise Automation, or allowing them into the supply chain through auto suppliers, which is often where Autotech Council helps.
Making their case
Meetings are held at various members' offices. Kerton said attendees basically sit on one side of the table, and "we parade 10 startups in front of them." The representatives of those startups get 15 to 20 minutes to make their case and then another 15 to 20 minutes to work the room.
The innovations being pitched are not automatically of interest to automakers, but may be relevant for a supplier because of the wide array of technologies increasingly finding their way into vehicle parts.
The members themselves do not necessarily represent companies that would appear to be a fit for an automotive and technology council, but the automotive world is expanding quickly. Companies focused on everything from insurance to taxes and semiconductors to "advanced vision hardware" are also members.
Membership is not automatic. Members must be invited to join, and they have to pay a $10,000 annual fee. Kerton said the companies must also be serious about working with startups.
Dragos Maciuca, technical leader at Ford’s Research and Innovation Center in Palo Alto, Calif., said many incubators operate in Silicon Valley, but Autotech Council is unique because of its focus on the automotive industry.
Ford has been working with the council for the last three years, about the same length of time Maciuca has been with Ford. The Dearborn automaker opened its office in Silicon Valley with about 10 people five years ago, and the number of employees is now at about 200. Being in Silicon Valley is important because of the many connections that can be made among startups, venture capitalists, incubators, attorneys who can set up a company, automakers and suppliers, Maciuca said.
“You do need to be here to interact with this ecosystem," Maciuca said. "Silicon Valley is about a lot of chance encounters. ... It's very important to have a strong network and increase the probability of a chance encounter. The Autotech Council increases the chance encounters."
Maciuca said Ford has its own in-house resources dedicated to scouting technology that others might not, but the council provides an additional avenue.
“We do understand exactly that interaction of how do you bring in a technology that you love (when) it’s coming from the two-person startup in a garage and how do you connect them with the supply chain," Maciuca said.
Although much of the focus is on collaboration, competitive pressures continue to exist. Maciuca declined to talk about specific startups that Ford has connected with through Autotech Council.
Hyundai, for its part, noted that the council has helped its Center for Robotic-Augmented Design in Living Experiences (CRADLE), formerly Hyundai Ventures, "to build a network of other firms and individuals in Silicon Valley working on innovations in cars and mobility services.”
Kerton sees a bright future for both Autotech Council and the kinds of collaboration that it is involved in. The number of companies that supply parts and services to the automotive industry and could be part of an organization such as the council is much bigger than the approximately 100 Autotech council members.
"Could be 1,000, maybe more," she said. This type of collaboration is "probably the beginning of a shift in how products are created and launched."
Contact Eric D. Lawrence: firstname.lastname@example.org. Follow him on Twitter: @_ericdlawrence.