I just finished watching Who Killed the Electric Car?, a documentary about General Motors and the failed EV1 car, the first electric car to be produced since the 1930s. I will not get into the politics of the movie – you should watch it (or read that Wikipedia entry) and interpret the information as you see fit. But I will say that I think that General Motors missed a phenomenal opportunity to both tap into a new wave of customer demand and create an incredibly powerful positive word-of-mouth movement that they sorely need. This is important on so many levels, not the least of which is that the Millennials (the next generation of 100 million American consumers) are socially and environmentally conscious consumers (as I wrote about in October).
The most insightful part of the movie, as it pertains to word of mouth as well as green products, is to watch the reaction of EV1 leasees (all EV1s were leased until GM proved the market potential) when they realize that they can not buy their EV1 under any condition. They organize, they petition, they beg. Big name actors like Mel Gibson, Tom Hanks, and all other EV1 leasees are turned down. The organizers get together and offer to buy all of the cars for $1.9 million – their request goes with no answer (according to the movie). After finding out that the EV1s are being destroyed, they stand outside of the GM parking lot where EV1s are being stored to watch over the cars to make sure that GM doesn't destroy any more. They literally do this for months on a 24×7 basis. Talk about love for a car! It makes iPod owners look downright disloyal. I guess that is because a car has such a big impact on your life as opposed to an iPod, and the EV1 leasees were so passionately focused on making an impact on the environment. These consumers were a word-of-mouth revolution waiting to be leveraged by GM. But, GM being short-term focused like so many companies that are incentivized to think that way due to the short-term nature of making your numbers for Wall Street analysts, completely misses the boat. [Side note: this short-term focus was really crystallized for me by my friend, Derek Woodgate, who is a corporate futurist and the founder of The Futures Lab, in a discussion we had on why the corporate world needs futurists. He has a great job, in my opinion, but more on that perhaps later.]
One of the big critiques of the EV1, from a consumer perspective at that time, is the short distance that the car can travel on a full charge (only 55-75 miles on the first generation model, due to the early generation batteries used; but the movie states that the average American only drives 29 miles per day although it doesn't seem like the car was ever marketed to highlight that this range would be sufficient for some 90% of American drivers). Another critique is the high production cost of $80,000 per vehicle when the lease payments would net around $34,000 to $44,000, obviously a money-losing proposition for GM. But a former EV1 employee explains that once economies of scale kick in, from good marketing and availability in large metropolitan areas, the production costs would have fallen dramatically and battery technology would have rapidly improved. This seems like a logical argument to me, especially considering the recent success of the Tesla, which can travel up to 250 miles on a full charge. It also helps that the Tesla goes 0-60 in 4 seconds and looks like a well-designed sports car. Unlike the EV1, which had a failed rollout (only leasing 800 units), the Tesla recently sold out their flagship 2007 model in just four months.
I guess my point here is that GM could have figured it out if they stuck with it, and the consumer emotion evoked by the product was simply incredible. And I think it is indisputable that GM missed the boat on the launch of hybrids relative to Toyota (who is projected to pass GM in 2007 as the world's largest producer of autos). In the movie, one of GM's former Board members talks about his support of the EV1 project more from a R&D perspective, given the shift in consumer demand that he saw coming. The success of hybrids and the launch of the Tesla prove that demand is there, if the marketing is well executed then word of mouth could have done the rest of the work.
What does all of this have to do with the title of my blog post? Well, I predict that green products are going to be one of the hottest trends for the next decade. They are ripe for an amazing level of positive word of mouth ("free marketing?"). Obviously coffee and universal access to global information also need little advertising when the product is great (Starbucks invested in their stores and locations, Google invested in the world's best search, and neither invested in advertising – positive word of mouth did that job for them).
There are more and more people that are accepting the consequences of global warming. Just today, it was reported that another enormous ice shelf broke away in the Canadian Arctic. As I first predicted in July of 2006, I wrote that the documentary An Inconvenient Truth would be marked as the most impactful documentary in modern history. After seeing it a month ago for the first time, I have to admit that is a transformational movie. You simply can't see it and not be emotionally moved by the implication of the evidence presented – it truly is "an inconvenient truth". If you haven't seen it and want the quick "cheat sheet", this summary is a good place to start. And 60 Minutes recently had a compelling report – here is an excerpt.
In August, I wrote about Wal-Mart embracing sustainability (and the rapid impact they could have given their immense scale). And I recently learned (when having coffee with one of their heads of eCommerce) that they include a video on what they are doing about it with every copy of An Inconvenient Truth that they sell. Here is an example of one of their recent initiatives, among many.
From Millennials being more socially conscious consumers to Kleiner Perkins investing huge sums of money in alternative energy, there is something major under way here. There is a shift in consumer demand that is just beginning to be felt (look at the Whole Foods stock rise that I wrote about when reporting on Wal-Mart and sustainability). Wal-Mart, the largest company in the world, acting early on this shift is a wake-up call for smaller companies everywhere.
The bottom line is that I truly believe when we look back and assess the long-term economic impact of the events of 2006, it will be that the green movement got underway and rolled like a freight train through the economy for the next several decades. And sparked consumer emotion and word of mouth that had never before been seen. The stakes are simply too high and too broadly felt for it not to.
If you don't have a green strategy, I suggest you start moving now. We'll see a lot more green (both green products and the money made off them) in 2007 and beyond. We can help you rapidly evolve these products by tapping into word-of-mouth analytics and helping you learn what is really resonating (and what isn't) with your customers.
Update on Jan. 2:
I was just catching up on BusinessWeek while at the gym, and noticed that the "green" trend was highlighted in three different "ideas" for the "The Best Ideas of 2006", specifically:
- Super Recycling (also there is a great interview with the CEO of Interface in the good but slanted documentary The Corporation)
- Global Warming
- Green is Good
The only other trend to have as many common ideas is that of user-generated content, a topic near and dear to Bazaarvoice and our clients. Specifically: